What landlords need to know about the Landlord & Tenant Act 1954 Sections 24 to 28

When a commercial lease reaches its contractual expiry date, it doesn’t necessarily mean that the tenant must leave the property immediately. If the tenancy is protected by Part II of the Landlord & Tenant Act 1954, it can continue until the correct statutory process has been followed.

This is where the Landlord & Tenant Act 1954 Sections 24 to 28 become important. Together, these sections explain how a protected tenancy continues, how landlords and tenants can begin the renewal process, how a tenant can bring the tenancy to an end, and what happens when a new lease is agreed. 

Here, we’ll explain how each section works and the main decisions you’ll need to make when a commercial lease is approaching expiry. If you’re new to letting business premises, it may also help to familiarise yourself with the basics of commercial landlord responsibilities before beginning the renewal process.

Does the Landlord & Tenant Act 1954 Apply?

Before serving a notice, you’ll need to establish whether the tenancy is protected by Part II of the Act.

Many qualifying business tenancies have security of tenure automatically. This generally means that the tenant can remain in occupation after the contractual term expires and may have the right to request a new tenancy.

However, the lease may have been “contracted out” before it was granted. Where the correct contracting out procedure was followed, the tenant will not usually have an automatic right to remain or renew when the fixed term ends.

Make sure you check the lease and any associated warning notice or declaration well before the expiry date. You should not assume that the tenancy is protected or unprotected without reviewing the paperwork, as the commercial property rights available to tenants will depend heavily on whether the lease is protected by the Act. (gov.uk)

Section 24: The Tenancy Continues After Expiry

Section 24 is the starting point for the statutory renewal process. It provides that a protected business tenancy does not simply end when the contractual term expires. Instead, it continues until it is ended in one of the ways permitted by the Act.

This is often referred to as statutory continuation or “holding over”. During this period, the tenant remains in occupation under the existing tenancy rather than automatically moving onto a new lease.

The contractual expiry date is therefore not automatically a possession date. (gov.uk)

Section 25: When the Landlord Starts the Process

Section 25 allows you to start the formal process by serving notice on the tenant.

The notice must specify the date on which the current tenancy is intended to end. This date must generally be no less than six months and no more than 12 months after the notice is served. It cannot be earlier than the contractual expiry date.

Before serving the notice, you’ll need to decide whether you are willing to grant the tenant a new lease. (gov.uk)

A Non-Opposing Section 25 Notice

If you are prepared to renew the tenancy, you can serve a non-opposing Section 25 notice. This will state that you are not opposed to the grant of a new tenancy and will usually include your initial proposals for the renewal.

The notice will usually include proposals for the rent, lease length, property, and other terms. These are a starting point for negotiation rather than a completed agreement. (gov.uk)

An Opposing Section 25 Notice

If you do not want to renew the lease, the Section 25 notice must state that you oppose the grant of a new tenancy. It must also identify the relevant statutory ground or grounds under Section 30 of the Act.

You cannot usually oppose renewal simply because you would prefer another tenant or believe that a different occupier would pay more rent. You must rely on one of the grounds permitted by the Act.

These grounds can include serious lease breaches, persistent delays in paying rent, redevelopment plans, or your intention to occupy the premises yourself. Each ground has its own legal requirements, so make sure that you have evidence to support your position before serving notice. Our guide explaining when a landlord can refuse to renew a commercial lease looks at these Section 30 grounds in more detail. (gov.uk)

Section 26: When the Tenant Requests Renewal

The tenant does not have to wait for you to serve a Section 25 notice. Section 26 allows an eligible tenant to make a formal request for a new tenancy.

The request will include a proposed commencement date and the tenant’s suggested terms for the new lease. The proposed date must generally be between six and 12 months after the request is made and cannot be earlier than the contractual expiry date.

A Section 26 request cannot normally follow a valid Section 25 notice, and a Section 25 notice cannot normally follow a valid Section 26 request. The party acting first will therefore usually determine the route followed.

Responding to a Section 26 Request

When you receive a Section 26 request, record the date immediately and check that the request is valid. You’ll then need to decide whether you are willing to renew.

If you are happy for the tenant to remain, you can begin negotiating the rent, lease term and other conditions.

If you want to oppose renewal, you must generally serve a counter-notice within two months of receiving the request. The counter-notice must identify the Section 30 ground or grounds on which you intend to rely.

This is a strict deadline, so a Section 26 request should be reviewed promptly rather than treated as routine correspondence. (gov.uk)

Section 27: When the Tenant Wants to Leave

Section 27 covers situations where the tenant does not want the protected tenancy to continue.

If the tenant plans to leave when the contractual term expires, they can generally give you at least three months’ written notice before the expiry date. This prevents the tenancy from continuing under Section 24.

A tenant may also prevent statutory continuation by stopping business occupation before the term ends, although you should take advice before relying on this.

If the expiry date has already passed and the tenancy is continuing under Section 24, the tenant can serve a Section 27 notice to bring it to an end. This will generally need to give at least three months’ notice.

When a tenant confirms that they are leaving, you’ll need to check the termination date, inspect the condition of the property, and arrange for any outstanding rent, repairs or reinstatement work to be dealt with. Following a clear commercial property notice to vacate process will help reduce the risk of confusion over the tenant’s final obligations and departure date. (gov.uk)

You should also check:

• Whether the required notice has been given.
• Whether rent and service charges are outstanding.
• Whether repairs or reinstatement work are needed.
• When the final inspection and return of keys will take place.

Section 28: When a New Lease Is Agreed

Not every renewal needs to result in a disagreement or court application. In many cases, you and the tenant will negotiate and agree on the terms of a new lease.

Section 28 deals with renewal by agreement. Where the parties enter into a binding agreement for a future tenancy, the existing protected tenancy continues until immediately before the new tenancy begins.

The agreement should clearly record the commencement date, rent, term, property, responsibilities, break clauses, and whether the new lease will remain protected by the Act. Avoid relying on informal conversations or unclear emails. (gov.uk)

How Do Sections 24 to 28 Work Together?

The easiest way to understand the Landlord & Tenant Act 1954 Sections 24 to 28 is to view them as one connected lease-expiry process.

Keep Track of the Statutory Deadlines

The renewal process depends heavily on dates. Negotiations do not automatically pause the statutory timetable, so record every notice and seek advice before a deadline expires.

You should also make sure that the correct prescribed form is used. A mistake in the notice, dates, or service process can affect whether the notice is valid.

Common Mistakes for Landlords to Avoid

Sections 24 to 28 can cause confusion because each notice affects what the other party can do next. Common mistakes include:

• Assuming that the tenancy ends automatically on the lease expiry date.
• Failing to check whether the lease was contracted out.
• Using the wrong notice or serving it on the wrong party.
• Choosing a date outside the permitted notice period.
• Missing the two-month response deadline for a Section 26 request.
• Opposing renewal without evidence to support a Section 30 ground.
• Assuming that negotiations stop the statutory deadlines.
• Agreeing to renewal terms without documenting them properly.

Where possible, start reviewing the tenancy 12 to 18 months before the contractual expiry date. This gives you time to check whether the Act applies, consider your plans for the property, and review the tenant’s compliance before either party serves a notice.

By reviewing the tenancy early and keeping a clear record of every notice and deadline, you’ll be in a much stronger position to manage the expiry or renewal of a commercial lease.

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