What is a Section 25 Notice?

If you're a landlord looking to end or renew a commercial lease, understanding how a Section 25 Notice works under the Landlord and Tenant Act 1954 is crucial. Whether you're proposing new lease terms or seeking to regain possession of your property, serving the notice correctly and within the legal timeframe is essential to protect your position.

Getting the process wrong can lead to costly delays or disputes, which is why having the right legal support matters. At Moeen & Co. Solicitors, our specialist commercial lease solicitors in London are here to guide you through every step.

If you are looking for a commercial lease solicitor specialising in Section 25 notices, call Moeen & Co. Solicitors on 0203 959 7755 or email info@moeenco.com.

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What is a Section 25 Notice?

A Section 25 notice is a formal document that a commercial landlord serves on their tenant to initiate the process of ending or renewing a commercial lease.

Section 25 notice is part of the Landlord and Tenant Act 1954, which aims to give commercial tenants security of tenure. This means most business tenants have the legal right to remain in the premises when the lease ends unless the landlord has a valid reason to object.

Serving a Section 25 notice is the landlord's formal way of initiating this legal process, whether they wish to retain or vacate the tenant.

Purpose of a Section 25 Notice

The main purpose of a Section 25 notice is to formally inform the tenant that their current lease is ending and to explain what the landlord plans to do next. It is used to:

• Propose a new lease agreement with updated terms (such as a different rent or lease length), or
• End the lease and indicate that the landlord does not wish to renew it.

This is an important legal step for landlords who want to either negotiate new terms or regain possession of the property.

Using A Section 25 Notice to End a Business Tenancy

The core reason for serving a Section 25 Notice is to end a business lease formally. This is something only the landlord can initiate. However, ending the lease doesn't necessarily mean the tenant has to leave; it can also open the door for negotiating a new lease.

By serving this notice, the landlord makes their intentions clear: either they want the tenant to stay under new terms, or they want the tenant to vacate the property.

Using a Section 25 Notice to Negotiate New Lease Terms

A Section 25 Notice can be what's known as a "friendly notice", meaning the landlord wants to offer the tenant a new lease, but on revised terms.

These terms might include:

• A change in the rent amount
• A different lease length
• New clauses around repairs, service charges, or rent reviews

This allows landlords to modernise lease terms or adjust rent to reflect current market conditions, while still retaining their tenant.

Using a Section 25 Notice to Regain Possession of the Property

In some cases, a landlord doesn't want to renew the lease at all. If they wish to end the tenancy completely, they must issue a "hostile notice" under Section 25 and clearly state the legal grounds for refusing a new lease.

These grounds may include:

• The tenant has breached lease terms, such as failing to carry out repairs or paying rent late
• The landlord wants to redevelop or demolish the premises
• The landlord intends to occupy the property for their own use

In such cases, the notice must clearly explain why the landlord is refusing to grant a new lease, and these reasons must be based on valid legal grounds under the 1954 Act.

A Section 25 Notice Starts the Legal Process

Serving a Section 25 Notice isn't just a formality; it is the first official step in the legal process of ending or renewing a commercial lease under the Landlord and Tenant Act 1954.

Once the notice is served:

• It sets a strict timeline for negotiations or legal action
• The tenant must respond before the notice expiry date, either by agreeing to new terms or applying to the court for a new lease
• If no action is taken by the deadline, the tenant could lose their statutory right to a lease renewal

Because of its legal significance, both landlords and tenants should take Section 25 Notices very seriously and seek professional legal advice when one is served.

When Should a Section 25 Notice Be Served?

A Section 25 notice must be served by the landlord 6 to 12 months before the lease ends to be valid under the Landlord and Tenant Act 1954. Timing is key, as serving it too early or too late can make it invalid.

For example, if the lease ends on 30th June 2026, the Section 25 notice must be served between 30th June 2025 and 31st December 2025.

Failing to serve the notice within this window can delay the process or affect the landlord's ability to end the lease.

What Should a Section 25 Notice Include?

A valid Section 25 notice must be clear and specific. It should outline:

• Whether the landlord wants to offer a new lease, and if so, what the proposed terms are, such as rent, duration, and any changes to the agreement, or
• Whether the landlord is opposing a lease renewal, and if so, the reasons for opposition.

The notice must follow the correct legal format. If it's incorrect or incomplete, it may not be valid and could be challenged by the tenant.

Grounds for Opposing Lease Renewal

A landlord can only refuse to grant a new lease on certain legal grounds as set out in the Landlord and Tenant Act 1954. These include:

1. Tenant's failure to repair the property.
2. Persistent delay in paying rent.
3. The landlord intends to occupy the property themselves for business purposes.
4. The landlord wants to redevelop, demolish, or reconstruct the building.
5. Other breaches of the lease, such as unauthorised subletting or use.

The landlord must clearly state which of these grounds they're relying on. If the case goes to court, they'll need to provide evidence.

Types of Section 25 Notice: Friendly vs Hostile

A Section 25 notice under the Landlord and Tenant Act 1954 can be either "friendly", proposing a new lease, or "hostile", opposing renewal.

Section 25 notices fall into two main categories:

1. Friendly Notice

The landlord wants to renew the lease and is proposing new terms. This opens the door for negotiations.

2. Hostile Notice

The landlord doesn't want to renew the lease and is seeking to end the tenancy. This often leads to legal proceedings if the tenant disputes the decision.

Whether the notice is friendly or hostile, it starts the formal process and must be taken seriously by both parties.

Why is a Section 25 Notice Important?

A Section 25 notice plays a critical role in the commercial lease renewal process. For landlords, it's the legal route to either propose a new lease or regain possession of their property. For tenants, it's the trigger that lets them know their current lease is ending and gives them a chance to negotiate, respond, or take legal advice.

Failing to understand or respond to a Section 25 notice properly can result in losing business premises or missing the opportunity to secure better lease terms.

Need Help with a Section 25 Notice?

Whether you're a landlord looking to serve a valid notice or a tenant facing potential eviction or lease renegotiation, it's essential to get expert legal advice. Commercial property law can be complex, and a mistake in the process can be costly.

At Moeen & Co. Solicitors, our team advises on all aspects of commercial lease renewals or terminations, including Section 25 notices. We make sure that landlords and tenants understand their rights under the Landlord and Tenant Act 1954.

If you need help serving or responding to a Section 25 notice, call Moeen & Co. Solicitors on 0203 959 7755 or drop us an email at info@moeenco.com.