1954 Act Lease Renewals: What Commercial Tenants and Landlords Need to Know

The Landlord and Tenant Act 1954 provides crucial security of tenure for business tenants, but it also creates procedural traps for landlords and tenants alike. This guide explains the scope of the Act, the lease renewal process, negotiation pitfalls, and why specialist legal advice matters, especially for Cornwall’s commercial property market.

What Is the Landlord and Tenant Act 1954?

The Act’s Part II grants ‘protected’ business tenants the right to renew their leases on expiry, subject to statutory conditions. Some leases can be ‘contracted out’, removing protection, but only if strict pre-contract formalities are met.

When Does the Act Apply?

The Act applies under the following conditions: the premises must be occupied primarily for business purposes, and while there is no fixed minimum lease duration, even very short leases may qualify. Both parties must also adhere to the notice requirements outlined in the Act. Failing to fully understand these criteria can result in invalid renewal applications or unexpected tenant rights.

The Lease Renewal Process

A Section 25 notice will take two forms:

• A ‘friendly’ notice which brings the existing lease to an end, but confirms that the landlord is prepared to enter a new lease and then sets out the terms the landlord is prepared to accept
• A ‘hostile’ notice which ends the existing lease and opposes a new lease on one of the limited grounds available

In either case, the minimum notice period that a section 25 notice can give is six months, and the maximum is 12 months. In the case of a lease that is approaching its end date, these timelines need to be considered when deciding when to serve the section 25 notice to coincide with the end date in the lease.

A Section 26 Notice, under the Landlord and Tenant Act 1954, is a formal request from a commercial tenant to their landlord for a new lease of business premises in England and Wales. It essentially starts the process for renewing a lease that has security of tenure. The notice must be served within a specific timeframe (6-12 months before the existing lease ends) and include the tenant's proposed terms for the new lease.

Court Application

If terms can’t be agreed, either party can apply to the court to determine new lease terms and resolve disputes. It’s key to note, however, that missing deadlines or serving incorrect notices can invalidate the entire process.

Negotiating Terms: Where It Gets Tricky

Negotiating lease terms may seem straightforward, but it often brings to light complex issues. Rent negotiations can involve market reviews or fixed uplifts, and while shorter lease terms may be advantageous for landlords, longer terms tend to benefit tenants. Break clauses present challenges in providing exit options without unintended consequences, and there is a need to strike a balance between the landlord’s repair standards and the tenant’s responsibilities. As negotiations progress, the heads of terms typically undergo changes during the detailed drafting process.

The 1954 Act and Hourly Billing: Why Fixed Fees Can Be Misleading

Clients often expect a simple renewal lease, however:

• Every deviation from standard terms adds drafting time
• Defending or opposing notices can involve detailed legal research
• Complex negotiations require careful strategy and risk analysis

A fixed-fee quote may cover initial advice and documents, but anything beyond baseline heads of terms demands hourly billing to reflect the true scope of work.

How a Specialist Solicitor Adds Value

Engaging a specialist solicitor helps ensure that you avoid procedural errors, particularly regarding the service of written notices that may be governed by the lease itself. They also assist in negotiating terms that align with your commercial objectives, drafting robust lease clauses to prevent future disputes, and navigating court proceedings if the agreement encounters delays. In high-value or sensitive negotiations, this expertise can ultimately save both time and money.

Why Paddle & Cocks LLP Is Well-Placed to Help

Paddle & Cocks LLP combines local Cornwall insight with national commercial property solicitor expertise, offering:

• Responsive partner-led service, not a faceless platform
• Transparent fee structures for negotiation and drafting work
• Deep experience with 1954 Act renewals and complex lease terms
• Hands-on secretarial and case management support

Whether you’re a landlord or a tenant, our team offers clear guidance and robust legal protection.

Get in Touch Today

Paddle & Cocks LLP is a partner-led commercial property law firm serving Cornwall and nationwide clients. Our lease solicitors specialise in lease renewals under the Landlord and Tenant Act 1954, commercial conveyancing, and bespoke negotiations. 

We combine local market knowledge with transparent fees and real secretarial support. Whether you’re a landlord or a tenant, we protect your interests at every stage, from Section 25 notices to complex drafting and court applications. Trust Paddle & Cocks LLP for responsive advice, clear communication, and strategic guidance.

For dependable advice and tailored solutions, contact us at Paddle & Cocks LLP today. Let our team help you secure terms that align with your business goals and minimise future risk.