Section 25 Notice by a Landlord to End a Business Tenancy

A Section 25 Notice is a formal notice served by a commercial landlord to end an existing business tenancy and either offer a new lease or oppose renewal under the Landlord and Tenant Act 1954. It sets out the landlord's position and starts the statutory commercial lease renewal process.

A Section 25 Notice must follow strict legal requirements and be served within the correct timeframe. Errors in the notice can affect the landlord's ability to terminate the tenancy or oppose a tenant's renewal rights.

Need help preparing or responding to a Section 25 Notice? Contact Moeen & Co. Solicitors today on 0203 959 7755 for expert commercial property advice.

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What Is a Section 25 Notice?

A Section 25 Notice is a notice served by a commercial landlord under Section 25 of the Landlord and Tenant Act 1954 to bring a business tenancy to an end. The notice either proposes terms for a new lease or states that the landlord intends to oppose renewal.

A Section 25 Notice:

• Is served by the landlord.
• Applies to protected business tenancies.
• Starts the statutory lease renewal process.
• Sets out whether renewal is offered or opposed.
• Gives the tenant information about the next steps.

It is commonly used for:

• Shops and retail premises
• Offices
• Restaurants and hospitality units
• Industrial units
• Commercial buildings

What Does Section 25 Mean?

Section 25 refers to Section 25 of the Landlord and Tenant Act 1954, which allows landlords to end a protected business tenancy and manage the renewal process.

The purpose of Section 25 is to:

• Allow landlords to recover possession where permitted by law.
• Provide a formal process for lease renewal.
• Allow landlords to propose new lease terms.
• Give tenants notice of the landlord's intentions.

Why Would a Landlord Serve a Section 25 Notice?

A landlord serves a Section 25 Notice to end the existing commercial tenancy and either negotiate a new lease or recover possession of the property where permitted.

Common reasons include:

• The landlord wants to renew the lease on revised terms.
• The landlord wants to increase the rent.
• The landlord intends to redevelop the property.
• The landlord wants to occupy the premises themselves.
• The landlord does not wish to grant a further tenancy.

What Are the Two Types of Section 25 Notice?

A Section 25 Notice can either propose a new commercial lease or oppose the tenant's right to renewal. The type of notice determines what happens next in the lease renewal process.

The two types are:

#1: Section 25 Notice Offering Renewal

The landlord agrees in principle to grant a new lease and sets out proposed terms, including:

• New rent
• Lease length
• Other lease conditions

#2: Section 25 Notice Opposing Renewal

The landlord states that they do not intend to grant a new lease and relies on one or more statutory grounds under the Landlord and Tenant Act 1954.

When Can a Landlord Serve a Section 25 Notice?

A landlord can usually serve a Section 25 Notice before the end of a protected commercial tenancy, but strict statutory time limits apply.

Key timing rules:

• The notice must give the tenant at least 6 months' notice.
• It cannot be served more than 12 months before the termination date specified.
• It must not expire before the contractual expiry date of the lease.
• It cannot usually be served after the tenant has already served a Section 26 Notice.

What Information Must a Section 25 Notice Include?

A valid Section 25 Notice must contain specific information required by law, including details of the tenancy and whether the landlord is offering or opposing renewal.

The notice should include:

• Landlord's details
• Tenant's details
• Property address
• Termination date of the existing tenancy
• Proposed terms of a new lease (if renewal is offered)
• Grounds for opposing renewal (if applicable)

An incorrectly drafted notice may be challenged and could affect the landlord's rights.

How Does the Section 25 Notice Process Work?

The Section 25 Notice process allows a landlord to formally end a protected business tenancy and begin negotiations for renewal or possession.

The process usually involves:

Step 1: Landlord Serves Section 25 Notice

The landlord serves notice setting out whether they offer renewal or oppose it.

Step 2: Tenant Reviews the Notice

The tenant considers whether to:

• Accept renewal terms
• Negotiate changes
• Challenge opposition
• Apply to court if necessary

Step 3: Negotiation

The parties negotiate:

• Rent
• Lease duration
• Repair obligations
• Break clauses
• Other commercial lease terms

Step 4: Court Proceedings (If required)

If agreement cannot be reached, either party may apply to the court for a decision.

How Long Does a Tenant Have to Respond to a Section 25 Notice?

A tenant does not have a fixed statutory deadline to respond to a Section 25 Notice. However, if they wish to obtain a new commercial lease, they must apply to the court before the termination date specified in the notice.

Key points:

• There is no requirement to serve a formal counter-notice.
• The tenant can negotiate renewal terms with the landlord.
• Court proceedings must be issued before the termination date if no agreement is reached.
• Missing the deadline may result in the loss of statutory renewal rights.
• Early legal advice can help protect the tenant's position and avoid costly mistakes.

Can a Landlord Refuse to Renew a Commercial Lease Under Section 25?

Yes, a landlord can oppose renewal under a Section 25 Notice, but only on specific grounds listed in the Landlord and Tenant Act 1954.

Common grounds include:

• The landlord intends to demolish or redevelop the premises.
• The landlord intends to occupy the property themselves.
• The tenant has breached lease obligations.
• The tenant has persistently delayed rent payments.
• The tenant has failed to comply with repair obligations.

What Happens After a Section 25 Notice Expires?

If the tenant and landlord have not agreed a new lease and no court application has been made before the deadline, the tenant may lose the right to a statutory renewal.

After expiry:

• The landlord may regain possession in some circumstances.
• The tenant's security of tenure rights may be affected.
• Court deadlines may no longer be available.
• Urgent legal advice should be obtained.

What Is the Difference Between a Section 25 Notice and Section 26 Notice?

The difference between a Section 25 Notice and a Section 26 Notice is that a Section 25 Notice is served by the landlord to end a business tenancy and propose or oppose renewal, while a Section 26 Notice is served by the tenant to request a new commercial lease.

Both notices form part of the commercial lease renewal process under the Landlord and Tenant Act 1954 and are subject to strict legal requirements and deadlines.

Do I Need a Solicitor for a Section 25 Notice?

Yes, obtaining advice from a commercial property solicitor can help landlords and tenants understand their rights, comply with deadlines, and avoid costly mistakes.

A solicitor can help with:

• Drafting Section 25 Notices.
• Reviewing the validity of notices.
• Advising on renewal rights.
• Negotiating lease terms.
• Opposing or defending renewal claims.
• Commercial property disputes.

How Can Moeen & Co. Solicitors Help?

Moeen & Co. Solicitors provide expert advice on commercial lease renewals, landlord and tenant matters, and disputes under the Landlord and Tenant Act 1954.

Our Commercial Property Solicitors can assist with:

• Section 25 Notices
• Section 26 Notices
• Commercial lease renewals
• Lease negotiations
• Rent reviews
• Security of tenure advice
• Landlord and tenant disputes
• Commercial property litigation

We help landlords and businesses protect their interests and achieve practical solutions in commercial property matters.

Need Help with a Section 25 Notice?

A Section 25 Notice can significantly affect your rights and obligations as a commercial landlord or tenant. Early legal advice can help ensure the notice is valid, and the renewal process is handled correctly.

Contact Moeen & Co. Solicitors today on 0203 959 7755 for expert advice on Section 25 Notices, commercial lease renewals, and landlord and tenant matters.