Opposing a Lease Renewal under the Landlord and Tenant Act 1954

Business tenants occupying premises protected by the Landlord and Tenant Act 1954 (the 1954 Act) benefit from a valuable statutory right: the right to renew their lease at the end of the contractual term. That right, however, is not absolute.

A landlord may oppose renewal by relying on one or more of the statutory grounds set out in section 30(1) of the 1954 Act. This is done by serving a hostile Section 25 notice (or a counter-notice in response to a tenant’s Section 26 request). While the notice itself is a formal document, the issues it raises are rarely straightforward. For both landlords and tenants, the real battleground is whether the stated ground of opposition can withstand scrutiny.

The 1954 Act provides seven grounds on which a landlord may oppose a lease renewal:

• Ground (a): disrepair
• Ground (b): persistent delay in paying rent
• Ground (c): other substantial breaches of covenant
• Ground (d): suitable alternative accommodation
• Ground (e): tenancy created by a sub-letting
• Ground (f): intention to redevelop
• Ground (g): intention to occupy

Some of these grounds are discretionary, meaning the court may still grant a new lease even if the ground is established. Others are mandatory, meaning that if the landlord proves the ground, the court has no choice but to refuse renewal. This distinction matters as it affects the strength of a landlord’s negotiating position, the tenant’s prospects of resisting opposition, and whether the tenant will be entitled to statutory compensation.

Choosing the wrong ground, or failing to evidence it properly, can fundamentally undermine a landlord’s position.

In practice, the most contentious cases tend to involve Ground (f) (redevelopment) and Ground (g) (occupation). These are mandatory grounds, but they are also evidentially demanding.

Ground (g): Intention to Occupy

To rely on Ground (g), a landlord must show that, at the relevant time, it genuinely intends to occupy the premises itself (or through a qualifying structure) for the purposes of its business or as a residence.

This involves more than a stated desire to move in. The landlord must demonstrate:

• a firm and settled intention, not a provisional or tactical plan; and
• a reasonable prospect of being able to carry that intention through.

The court will look closely at what the landlord has actually done. Evidence may include internal decision-making, business planning, funding arrangements, planning considerations, and who within a corporate or group structure will occupy the premises. Special statutory rules apply where the landlord is a company, part of a group, or subject to recent changes in ownership.

There are also timing and eligibility issues. In some circumstances, a landlord will be barred from relying on Ground (g) altogether if it has not owned the relevant interest for long enough.

Ground (f): Intention to Redevelop

Ground (f) allows a landlord to oppose renewal where it intends to demolish, reconstruct, or carry out substantial construction works that cannot reasonably be done without possession.

This ground is frequently misunderstood and not all works qualify. The court will examine:

• the nature and extent of the works as a whole;
• whether they affect the part of the premises actually occupied by the tenant for its business;
• whether the works go beyond repairs or works already permitted under the lease; and
• whether legal possession is genuinely required to carry them out.

As with Ground (g), intention is central. The landlord must show that its redevelopment plans have moved beyond contemplation into decision. Conditional or artificial schemes, particularly those devised solely to defeat a lease renewal, are vulnerable to challenge.

Tenants also have specific statutory protections. In some cases, a tenant may defeat Ground (f) by being willing to accept:

• a new lease that allows the landlord access to carry out the works; or
• a new lease of an economically separable part of the premises.

Whether these options are realistic depends on detailed factual and commercial analysis.

Be prepared

A hostile Section 25 notice is not simply an opening gambit. Once served, the landlord is committed to the grounds stated. Generally, new grounds cannot be added later, and misrepresenting a position carries serious consequences.

The court process places a premium on evidence. Disclosure obligations are extensive and ongoing, with tenants entitled to see documents that go to the heart of the landlord’s stated intention, including internal communications, plans, and expert advice (subject to privilege). Witness evidence and, in many cases, expert evidence will be required.

For landlords, early advice can identify the most appropriate ground (or combination of grounds), to ensure the chosen strategy is evidentially robust and avoid fatal missteps that cannot later be corrected.

Likewise, for tenants, informed advice can reveal weaknesses in a landlord’s stated intention and opportunities to resist or narrow the landlord’s opposition to renew the lease.

If you are a commercial landlord considering opposing a lease renewal, or a business tenant faced with a hostile Section 25 notice, early specialist advice can be critical. The Dispute Resolution team at BHW has extensive experience advising both landlords and tenants on contested renewals under the Landlord and Tenant Act 1954. If you would like to discuss your position or explore your options, please contact a member of our Dispute Resolution team on 0116 289 7000 or email info@bhwsolicitors.com.