UK: Court Applications Following the Reforms to the Landlord and Tenant Act 1954

The Regulatory Reform Committee has stated that the aim of the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003, which comes into force on 1^st June 2004, is to improve the operation of the Landlord and Tenant Act 1954 by making the procedures "quicker, easier, fairer and cheaper". Overall, it is anticipated that the need for Court applications will be reduced, and whereas under the current system applications for new tenancies may only be made by tenants and applications for interim rents may only be made by landlords, following the reforms both parties will be permitted to make them. Also, the strictly-construed time limits relating to the making of applications for new tenancies will be relaxed with the consequence that there will be less chance of tenants losing their rights to a new lease.

• For the first time, either a landlord or a tenant may apply for a new tenancy unless the other party has already made and served such an application or the landlord has made and served an application for a termination order.
• If a landlord makes an application for a new tenancy, that application may not be withdrawn without the tenant’s consent. This will protect the tenant’s right to claim a new tenancy.
  Applications for a new tenancy must be made before the date specified in the landlord’s Section 25 notice or prior to the date specified in a tenant’s Section 26 request. This provision removes the current requirement to make the application within a two month window which has resulted in lost rights for many tenants.
• The parties may agree more than once to extend the time for making an application to the Court, but to preserve the right to make the application it must be made during the currency of the extension and any subsequent extension must be agreed before the previous extension of time has expired. The purpose of this is to lessen the chance of a tenant’s rights being lost and to reduce the number of Court applications which currently need to be issued on a protective basis, even if a negotiated settlement is likely.

• A landlord may make an application to the Court for an Order terminating the current tenancy on one of the grounds in Section 30(1) of the 1954 Act if he has given notice under Section 25 that he is opposed to the grant of a new tenancy or if he has given a negative counter notice to a tenant’s Section 26 request. However, he may not make such an application if the tenant has already made and served an application for a new tenancy.
  However, if a landlord fails to prove the ground(s) of opposition, the Court will make an Order for the grant of a new tenancy.
• If a landlord has applied for a termination Order, that application cannot be withdrawn without the tenant’s consent. This will protect the tenant’s right to claim a new tenancy.
  An application for a termination Order must be made before the date specified in a Section 25 or Section 26 notice unless this period is extended by agreement.

• The 1954 Act was amended by the Law of Property Act 1969 to permit a landlord to make an application to the Court for the determination of an interim rent. The 2003 Order introduces an amendment enabling a tenant to apply for the determination of an interim rent, thereby addressing a much-criticised anomaly in the system.
• An application for an interim rent must be made within 6 months of the termination of a tenancy.
• Interim rent is payable from the earliest date of termination which could have been specified in a landlord’s notice or the earliest date which could have been specified in a tenant’s request.
• Where a landlord does not oppose the grant of a new tenancy, the rent payable under and at the new tenancy shall be the same as the interim rent, unless either party can show that movements in the rental market or substantial differences in the terms of the new tenancy from the old one justify the interim rent being set at a different level.
• Where a landlord was opposed to renewal, the Court will have regard to the rent payable under the terms of the new tenancy and the rent payable under any sub-tenancy of part, otherwise Section 34 of the 1954 Act will apply.

It will no longer be necessary to apply to the Court to exclude the provisions of the 1954 Act. It will be possible to exclude Sections 24 – 28 by agreement and following service of a "health warning" notice by the landlord and the signature by the tenant of a declaration that he understands the implications of contracting out of security of tenure. Similar provisions will apply in relation to agreements to surrender.

© RadcliffesLeBrasseur

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