What Happens When a Section 25 Notice Expires?

If you're a business tenant or commercial property landlord in the UK, you may already be familiar with a Section 25 notice. This formal notice, issued under the Landlord and Tenant Act 1954, is used by landlords to bring a commercial lease to an end or to propose new terms for a lease renewal.

But what actually happens when a Section 25 notice expires, and no agreement or action has been taken?

If no new lease is agreed before a Section 25 notice expires, the tenant can lose their legal right to remain in the property or renew their tenancy.

To protect their position, the tenant must either agree to a new lease, extend the deadline in writing, or apply to the court for a lease renewal before the notice expires. If they don't, their lease ends, and they may be treated as an unauthorised occupier.

If you've received a Section 25 notice and need advice, speak to a specialist at Moeen & Co. Solicitors by calling 0203 959 7755 or emailing info@moeenco.com.

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What Is a Section 25 Notice?

A Section 25 notice is a formal document a landlord serves to a tenant to end a protected commercial tenancy, and either propose new lease terms or refuse a renewal altogether.

A Section 25 notice must be served between 6 and 12 months before the intended termination date. The purpose is to give the tenant time to decide whether to negotiate, accept the proposed terms, or contest the notice by applying to court.

What Happens If a Section 25 Notice Expires?

Letting a Section 25 notice expire without taking appropriate action can have serious consequences for the tenant. Once the notice deadline passes, the legal protections under the Landlord and Tenant Act 1954 may no longer apply.

If a Section 25 notice expires and the tenant hasn't agreed to a new lease, requested an extension in writing, or applied to the court, the lease legally ends on the date stated in the notice. This means the tenant loses their statutory right to lease renewal under the Landlord and Tenant Act 1954 and becomes an unauthorised occupier. In such cases, the landlord is within their rights to seek possession of the commercial property or pursue compensation. This is why it's crucial to get commercial tenancy advice well before the notice deadline.

Lease Automatically Ends

If no new lease is agreed and the tenant has not applied to the court or agreed to an extension, the lease automatically terminates on the date specified in the notice.

Loss of Right to Renew

A key consequence is the loss of the statutory right to renew the lease. This means the tenant may no longer have a legal right to continue occupying the premises.

Risk of Becoming an Unauthorised Occupier

When the lease ends and no new arrangement is in place, the tenant may become an unauthorised occupier. This opens the door for the landlord to:

• Begin possession proceedings
• Refuse further negotiation
• Seek damages or interim rent for the continued use of the property

Tenant's Options Before the Expiry Date

Before the Section 25 notice expires, the tenant has three main options:

1. Negotiate and Agree to a New Lease

The tenant can negotiate terms for a new commercial lease with the landlord. If both parties agree, the new lease replaces the old one, and the business can continue occupying the premises without disruption.

2. Agree to Extend the Notice Period

If more time is needed, the tenant and landlord can mutually agree in writing to extend the Section 25 notice deadline. This gives the tenant breathing room to finalise lease terms or explore alternatives without losing their rights.

3. Apply to the Court for a New Lease

If negotiations fail or the landlord refuses to renew the lease, the tenant can apply to the court before the expiry date. This is known as issuing court proceedings for a new lease. The court can then decide whether the tenant is entitled to a renewal and under what terms.

Legal Consequences of Ignoring a Section 25 Notice

Doing nothing is one of the costliest mistakes a tenant can make. If no action is taken before the notice deadline, the commercial lease terminates, and the tenant may be forced to vacate. Additionally, the landlord can request interim rent or compensation for unauthorised occupation. The longer the tenant delays, the fewer legal options remain. This is why engaging a commercial property solicitor early on is strongly recommended.

Failing to respond to a Section 25 notice in time can put the tenant in a legally vulnerable position. Here's what could happen:

Eviction Risk

The landlord can initiate eviction proceedings to remove the tenant from the premises if the tenant has remained after the notice expired.

Paying Interim Rent or Damages

The landlord may demand interim rent, which could be higher than the previous lease rate, especially if market conditions have changed.

Legal Action

The landlord can take legal steps to recover possession of the premises. In some cases, they may also seek compensation for any financial loss caused by the unauthorised occupation.

Business Disruption

For many businesses, losing premises due to a missed Section 25 notice deadline can cause severe disruption, affecting customers, staff, and operations.

Can a Tenant Still Stay in the Property After a Section 25 Notice Expires?

Technically, if no agreement or court application has been made before the Section 25 notice expiry, the tenant has no legal right to stay. Remaining in the property after the commercial lease has ended may result in the tenant being treated as an unauthorised occupier, facing potential eviction and interim rent charges.

To avoid this, it's essential to act early and consult our commercial lease solicitor to protect your business premises and tenancy rights.

How a Commercial Lease Solicitor Can Help

Our commercial lease solicitor can provide expert guidance on your rights and options after receiving a Section 25 notice. We can negotiate with the landlord, help you draft or renew lease terms, and ensure court applications are submitted in time if needed. With our help, you can avoid becoming an unauthorised occupier and protect your business's future. Whether you need lease renewal support or advice on commercial lease termination, legal guidance is invaluable.

Navigating commercial lease renewals and Section 25 notices can be complex and time sensitive. Our specialist commercial lease solicitor can:

• Review your Section 25 notice
• Negotiate with the landlord on your behalf
• Draft a lease renewal or extension agreement
• File court applications if necessary
• Advise on your rights as a tenant under the Landlord and Tenant Act 1954

Whether you're a tenant facing a notice or a landlord seeking clarity, early legal advice can help you avoid costly mistakes.

Need Legal Help with a Section 25 Notice?

If you've received a Section 25 notice or are unsure about your rights and next steps, it's vital to get expert legal advice as early as possible. Our solicitor, experienced in commercial lease disputes, can help you negotiate favourable terms, protect your rights, and avoid serious consequences.

If you need help with a Section 25 notice, call Moeen & Co. Solicitors on 0203 959 7755 or email us at info@moeenco.com for tailored commercial lease advice.