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EXCLUDING THE LANDLORD AND TENANT ACT 1954
From 1 June 2004, the procedure changed for excluding
the security offered to business tenancies by sections 24
to 28 of the Landlord and Tenant Act 1954.
It is no longer necessary to apply to the Court to obtain
an Order authorising the agreement reached by the landlord
and tenant to exclude the security of tenure provisions. Instead,
the new procedure to be followed involves compliance with
the three steps set out below. A failure to follow this procedure
risks the tenant acquiring the security of tenure protection
offered by the Landlord and Tenant Act 1954.
Step 1 - Notice
The landlord must serve on the proposed tenant a notice in
the prescribed form containing a "health warning".
The "health warning" explains to the proposed tenant
the effect of entering into a contracted-out tenancy, the
most important point being that the tenant will have no right
to stay in the premises once the lease ends.
The notice must be served before the new tenancy is
entered into or the tenant becomes contractually bound to
enter into it. However, the landlord should only serve the
notice on the tenant once the terms of the new lease have
been agreed (or the lease is substantially in its final form)
so as to avoid the risk of the notice subsequently being held
to be invalid. Whilst not specifically required, it is good
practice to attach a copy of the draft lease to the notice
itself.
Step 2 - Declaration
Once the notice has been served, the proposed tenant must
either sign a declaration or swear a statutory declaration.
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Notice served at least 14 days before the
tenancy is granted/tenant becomes contractually bound:-
tenant signs declaration
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Notice served less than 14 days before the tenancy
is granted/tenant becomes contractually bound:- tenant
swears statutory declaration before a solicitor
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Both the declaration and the statutory declaration must be
in the prescribed form. Both declarations confirm that the
tenant has received the landlord's notice containing the "health
warning", that the tenant has read that notice, and that
the tenant accepts the consequences of entering into a contracted-out
tenancy.
Step 3 - Note in lease
The new lease must refer to:
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the service of the landlord's notice; |
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the declaration or statutory declaration
made by the tenant; and |
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the parties' agreement to exclude the provisions
of sections 24 to 28 of the Act. |
It is good practice to store copies of the landlord's notice
and the tenant's declaration/statutory declaration with the
lease.
For further information or advice please contact propertylitigation@charlesrussell.co.uk
These notes represent only an outline summary
of relevant principles and detailed advice should always be
sought in particular cases.
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