The problem for the tenant arose because, prior to the actual approval of the new lease, an insolvency administrator was appointed on the landlord`s assets, who then sold the landlord`s real estate interest to a legal successor. This successor then argued that the Article 38A mechanism was introduced in 2003 (amending the procedure established in 1954) and allows the parties to agree that a lease excludes security of ownership of tenants. The exclusion of these provisions means that a landlord can repossess his property without having to justify his actions by a specific loss of tenant or other non-culpable reasons. Without excluding section 38A, a landlord is more likely to have to go to court to recover ownership. The exclusion also removed the landlord`s obligation to pay compensation if possession is restored through no fault of the landlord. For these reasons, it can be seen that the exclusion of section 38A is potentially a very useful tool for a landlord and that it will be important that it is done correctly. When a lease is entered into, it ends with the contractual expiration date – but what if the tenant doesn`t leave by then? Fortunately for the landlords and their lawyers, in this case, the court adopted a negative opinion of a tenant who was trying to evade a valid contractual process. The fundamental effect of section 28 is therefore that if the current landlord and the tenant enter into an agreement on a new lease for the tenant`s premises to be granted at some point in the future, the tenant`s existing lease immediately loses its protection under the 1954 Act and terminates on that date, on which the new lease was agreed. Commercial landlords and tenants are not required to disclose the actual lease date when they "outsource" the security of ownership provisions of the Landlord and Tenant Act 1954, the Court of Appeal confirmed. On the second point, the judge was again "fully satisfied" that the representative in question, Mr. Thompson (who was the company`s retail manager), was indeed authorized to make the statements and that the tenant`s lawyer had stated that Mr. Thompson had such authority by making the statements signed by Mr. Thompson available to the landlord`s lawyer.

who then acted according to that apparent authority. Among other things, the 1954 Act gives tenants the automatic right to a new lease at market rents after the existing lease expires, unless the landlord can object to it for certain legal reasons such as redevelopment intentions, the fault of the tenant or the landlord who wants to occupy the premises. Tenants would therefore have had this automatic right of renewal if the court had found that the contract wording of the 1954 Act was inadequate. 3. The lease shall contain a note relating to the termination of the lessor and the declaration of the lessee, as well as the agreement of the parties that the relevant provisions of the 1954 Act shall be excluded from the lease. If a lease is to be "derived" from the 1954 Act, a special procedure must be followed. Any failure to comply with this procedure means that the tenant will have a legal right of extension. Given the consequences that can result, it is important to seek advice and support from an experienced real estate lawyer.

In summary, however, the procedure can be broken down as follows: The High Court first considered the arguments regarding the alleged lack of authority of the tenant`s lawyer and the tenant`s retail manager as an intermediary to receive the warnings and/or make the statements. Landlords argued that the request for an exact date was overly prescriptive and violated the stated policy objectives of simplifying the procurement process while ensuring that the tenant receives a fair termination and accepts the consequences of signing the contract. They pointed out that in reality, warnings and affidavits are often issued before the exact effective date of the lease is known. A landlord who grants a secured lease to a tenant may terminate the lease and repossess ownership of the premises only by following the procedures set out in ETA 1954. Even then, the landlord must be able to prove one of the limited legal grounds for ownership set out in section 30 of ETA 1954, and successful ownership is likely to involve the payment of compensation to the tenant. The judge noted that the tenant`s lawyers were indeed allowed to accept the delivery of the warnings, as this was part of their instructions to complete the transaction on the terms agreed between the parties and which included the lease. "To pretend otherwise would introduce exactly the kind of rigid formality that the Law Commission and the House of Commons Regulatory Reform Committee wanted to eliminate with the amendment [introduced in 2004 after a review of the 1954 Act]," she said. A tenant who has security of ownership under ETA 1954 is therefore in an extremely strong negotiating position if his landlord wants to acquire a vacant property (for example. B to renovate the premises) and the presence of a protected tenant may result in a delay and a surcharge for each project proposed by the owner. This would clearly have had a very serious impact on the tenant`s business.

Nevertheless, the Stratton case is a concrete illustration of how section 28 can operate to the serious detriment of a tenant. Landlord or tenant and property security – what does outsourcing mean to you? Our commercial property lawyers in Leicester offer this guide as a follow-up to what security of the term of office is. Earlier this month, the High Court issued an important ruling regarding outsourcing procedures for commercial rentals under the Landlords and Tenants Act 1954 (the Act). This decision is good news for owners and reinforces current market practices for subcontracting. Fortunately for landlords, there is a mechanism by which leases can be excluded or "derived" from ETA 1954, and if a tenant has agreed to exclude their lease from ETA 1954, it is important that the landlord ensure that the exclusion is valid. In order to successfully withdraw from the 1954 provisions, a very specific procedure must be applied. An experienced commercial lawyer will be able to advise and manage this accordingly, however, the procedure essentially consists of three stages: the High Court also ruled that the tenant was bound by the actions of professional representatives and workers, since he was effectively allowed to act as he did, which means that the tenant was not able to: to question the validity of the authority of the person making the statements. A commercial tenant had argued in a dispute involving multiple tenancies that the exact date should be included in the declaration signed by the tenant when he withdrew from the law. However, the Court of Appeal upheld a decision of the High Court and ruled that less precise wording such as "the date on which the tenancy is granted" or "a date to be agreed between the parties" was sufficient for the purposes of the legislation. The landlord`s warning must be issued 14 days before the tenant`s contractual obligation to conclude the rental agreement. This effectively serves as a cooling-off period for the tenant to consider their position. After the expiry of the 14-day period, the tenant can make a simple declaration.

However, if the parties are unable or unwilling to wait 14 days, the tenant may sign an affidavit that must be signed and certified by independent counsel. The latter is often the process used, as these are good practices to ensure that the procedure is completed as close as possible to the time when the lease in question is in the final agreed form and that no further changes are made. In order for a commercial lease to be concluded and a reference to the subcontracting procedure to be included in the rental document, one of the following procedures must be followed before entering into the lease: However, the landlord and tenant may agree to exclude these rights and "withdraw" from the provisions of 1954, which means that the tenant will not benefit from the legal right of renewal at the end of the rental period. Tenants and their advisors should therefore be cautious when entering into agreements on a new lease if these agreements do not fully guarantee the tenant`s renewal rights. Unfortunately for the tenant, the court was not in a position to contradict the logic of the successor owner`s reasoning. After the court had concluded that there was a binding agreement under section 28, it inevitably followed that the protection of the 1954 Act was abolished and that the tenant`s rights under the new lease had not been registered, that the subsequent owner was not bound by them and was entitled to compel the tenant to evict. In 2004, a mechanism was introduced that allows a landlord and tenant to opt out of property protection provisions without first having to obtain a judicial explanation. It applies to tenancies "for a certain period of years" only if a "warning" is served on the tenant "in the prescribed form or essentially in the prescribed form". The tenant must then make a simple or legal declaration, depending on the extent to which, before the entry into force of the lease, he has received notification that he has received the warning and accepts the consequences. .