What is a Section 26 Notice?

If you're a commercial tenant in England or Wales and your lease is coming to an end, you may be wondering how to protect your right to remain in your premises. That's where a Section 26 Notice comes in. It allows eligible tenants to formally request a new lease under the Landlord and Tenant Act 1954, giving you a chance to renew your commercial tenancy on terms that suit your business.

Serving or responding to a Section 26 Notice incorrectly could have serious consequences, including losing your rights or facing a legal challenge in court.

If you are looking for a commercial lease solicitor specialising in Section 26 notices, call Moeen & Co. Solicitors on 0203 959 7755 or email info@moeenco.com.

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What Is a Section 26 Notice?

A Section 26 Notice is a formal request made by a commercial tenant to their landlord, asking for a new lease of the premises they currently occupy. It's governed by the Landlord and Tenant Act 1954 and applies only in England and Wales for commercial leases where the tenant has security of tenure. This legal right enables eligible tenants to remain in the property and renew their lease even after the original term has expired.

The Section 26 Notice begins the lease renewal process, enabling the tenant to propose new terms or negotiate fresh conditions with the landlord.

Purpose of a Section 26 Notice

The main purpose of a Section 26 Notice is to give commercial tenants greater control over their lease renewal. Instead of waiting for the landlord to act, tenants can take the initiative by formally requesting a new lease on terms they propose.

Serving a Section 26 Notice gives commercial tenants the chance to secure their long-term business premises and negotiate better lease terms.

Here are some common reasons tenants use it:

• To stay in the same location without interruption
• To propose fairer lease terms, such as lower rent or more flexibility
• To take control of the lease renewal process, rather than waiting for the landlord

It's especially useful when your current lease is nearing its end and you want certainty for your business operations.

When Can a Section 26 Notice Be Served?

A Section 26 Notice must be served between 6 and 12 months before the proposed start date of the new lease and only once the original lease has come to an end. The new lease cannot begin before the end of the existing lease term.

Missing these deadlines can result in the loss of your right to request a new tenancy under this route. It's essential to plan ahead and serve the notice at the correct time.

What Should Be Included in a Section 26 Notice?

If you're a commercial tenant planning to request a new lease under the Landlord and Tenant Act 1954, your Section 26 Notice must include specific information to be legally valid. This isn't just a casual letter; it's a formal legal document, and missing out key details could delay or even invalidate your lease renewal request.

A Section 26 Notice must contain specific details to be valid. These include:

1. Proposed Start Date for the New Lease
2. Details of the Property
3. Your Proposed Lease Terms
4. Your (the Tenant's) Name and Address
5. The Landlord's Name and Address
6. A Statement That the Notice Is Made Under Section 26 of the Landlord and Tenant Act 1954

1. Proposed Start Date for the New Lease

You must clearly state the date you'd like the new lease to begin. This date must fall between 6 and 12 months after the date the notice is served. It gives both you and your landlord a reasonable timeframe to negotiate the new lease terms.

2. Details of the Property

The notice should describe the commercial premises you're occupying in enough detail to identify them, usually including the full address, and possibly even a reference to the existing lease.

3. Your Proposed Lease Terms

Although you don't have to finalise every term upfront, it's important to outline the key terms you're proposing for the new tenancy. These may include:

• The length (duration) of the new lease
• The rent you're offering to pay
• Any changes to repair obligations, use of premises, or break clauses

This helps set the stage for negotiations and shows the landlord you're making a genuine and structured request.

4. Your (the Tenant's) Name and Address

The notice must include your legal name and correspondence address, whether you're a sole trader, a partnership, or a company. This ensures the landlord knows who is making the request.

5. The Landlord's Name and Address

You also need to state the name and address of the landlord you're serving the notice to. This should match the details on the current lease or any updated contact information you've received.

6. A Statement That the Notice Is Made Under Section 26 of the Landlord and Tenant Act 1954

You must confirm that your notice is being made under Section 26 of the Landlord and Tenant Act 1954. This legal reference ensures there's no confusion about the basis of your request and gives your notice legal weight.

Serving a Section 26 Notice with missing or incorrect details can jeopardise your right to renew your lease. That's why it's highly recommended to get legal advice before sending the notice. Our experienced commercial lease solicitor can help you draft a notice that's legally compliant and tailored to your business.

How Should the Landlord Respond to a Section 26 Notice?

Once a Section 26 Notice is served by a commercial tenant, the ball is in the landlord's court. The law gives landlords a strict two-month window to respond to the notice, and their reply plays a crucial role in deciding whether the lease will be renewed or not.

Here's what landlords need to know about responding:

1. The Landlord Has Two Months to Respond

From the date the Section 26 Notice is served, the landlord has exactly two months to issue a formal response. Missing this deadline could result in the tenant gaining the legal right to a new lease, whether or not the landlord agrees.

2. Two Possible Responses: Agree or Oppose

Landlords have two main options when responding to a Section 26 Notice. They can either agree to the renewal and begin negotiating new terms or oppose the renewal, but only on specific legal grounds.

If the landlord chooses to oppose the new lease, they must clearly state their reasons in a counter-notice served within those two months.

Grounds on Which a Landlord Can Oppose

A landlord cannot oppose a Section 26 Notice without valid reasons. The law sets out specific grounds they must rely on, including:

• The tenant has breached their current lease, for example, by failing to pay rent or causing damage
• The landlord wants to redevelop the property and needs vacant possession to do so
• The landlord intends to occupy the property themselves for business purposes

If the landlord's grounds are challenged, the dispute may end up in the County Court, where a judge will decide if the opposition is valid.

Security of Tenure for Commercial Tenants

Section 26 Notices only apply to commercial tenancies that have security of tenure under the Landlord and Tenant Act 1954. This means the tenant has a legal right to renew the lease, provided certain conditions are met.

However, not all commercial leases include this right. In some cases, landlords and tenants agree to "contract out" of the 1954 Act when the lease is granted, which removes the tenant's renewal rights. If your lease is excluded from the Act, a Section 26 Notice cannot be used.

How Does a Section 26 Notice Relate to a Section 25 Notice?

It's important to understand the difference between a Section 26 Notice and a Section 25 Notice:

• A Section 26 Notice is used by the tenant to request a new lease
• A Section 25 Notice is used by the landlord to either propose a new lease or end the tenancy

You cannot serve a Section 26 Notice if the landlord has already served a valid Section 25 Notice. In that case, the renewal process would follow the terms set out by the landlord instead.

Why Legal Advice Is Essential

Serving a Section 26 Notice correctly is vital if you want to protect your tenancy rights and avoid costly mistakes. Errors in the notice or failure to follow the right process can lead to your request being rejected, or worse, losing your premises altogether.

A commercial lease solicitor can guide you through:

• Drafting and serving the Section 26 Notice
• Responding to a landlord's opposition
• Negotiating lease terms
• Making an application to the court if required

Need Help with a Section 26 Notice?

At Moeen & Co. Solicitors, our team advises on all aspects of commercial lease renewals, negotiations, or terminations, including Section 26 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 26 notice, call Moeen & Co. Solicitors on 0203 959 7755 or drop us an email at info@moeenco.com.