Understanding the Landlord and Tenant Act 1954: key considerations for landlords and tenants

Losing your business premises, facing unexpected costs, or limiting future plans are all real risks when dealing with lease renewal under the Landlord and Tenant Act 1954. Recent case law highlights that outcomes often depend not just on the law itself, but on timing, preparation, and the strength of each party’s position.

While the Act provides important protection, renewal is not guaranteed. For both landlords and tenants, the process can significantly affect commercial certainty, financial exposure, and long-term strategy, making it essential to understand how the Act operates in practice before taking any formal step.

The grounds of opposition

A landlord may oppose a tenant’s request for a new lease on specific statutory grounds, including both tenant fault and “no fault” grounds.

The most commonly relied upon “no fault” grounds are:

Intention to demolish or reconstruct the premises
Intention to occupy the premises for the landlord’s own business

What this means in practice:

For landlords: success depends on demonstrating a genuine and well-evidenced intention
For tenants: renewal is not guaranteed, and opposition may succeed where the landlord is properly prepared

Intention to demolish and reconstruct

To rely on this ground, landlords must show a genuine intention to carry out works that cannot reasonably be completed with the tenant in occupation.

In Spirit Pub Co Ltd v Pridewell Property Ltd (2025), the court accepted the landlord’s opposition, finding that the proposed redevelopment was supported by a clear, credible, and deliverable scheme.

What this means in practice:

For landlords: detailed evidence such as planning progress, funding, and a defined scheme will strengthen reliance on this ground
For tenants: there may be scope to challenge proposals that are insufficiently developed or lack a realistic prospect of delivery

Timing of works following termination

The same case also highlighted that intention alone is not enough. The court will consider whether the landlord’s timeline for commencing works is credible.

What this means in practice:

For landlords: delays or uncertainty around funding, planning, or contractor engagement may weaken the case
For tenants: unclear or unrealistic timelines may provide grounds to challenge the landlord’s stated intention

Landlord’s occupation for their own purpose

A landlord may also oppose renewal where they intend to occupy the premises for their own business.

In MVL Properties (2017) Ltd v The Leadmill Ltd (2025), the court supported the landlord’s opposition, concluding that the proposed occupation was genuine and commercially viable.

What this means in practice:

For landlords: a firm, realistic, and evidenced plan to occupy is essential
For tenants: even long-standing occupation may not prevent opposition where the landlord’s intention is proven

Renewal terms and emerging issues

Where renewal proceeds, the court will determine lease terms if the parties cannot agree.

Two areas currently attracting particular attention are:

Turnover rents, particularly in retail and hospitality sectors, where disputes may arise over calculation, transparency, and reporting obligations
Energy performance requirements, with increasing focus on EPC compliance and responsibility for improvement works

What this means in practice:

For landlords: leases may need to accommodate regulatory requirements and evolving market practice
For tenants: renewal terms may introduce additional financial and operational obligations

Break clauses and renewal terms

Break clauses are often a key point of negotiation in renewal leases.

In Ministry of Sound Ltd v The British and Foreign Wharf Co Ltd (2025), the court held that a landlord’s redevelopment break clause should be included in the renewal lease, reflecting a real prospect of redevelopment during the term.

What this means in practice:

For landlords: the decision supports inclusion of redevelopment breaks where future plans are credible
For tenants: renewal does not always provide long-term certainty, particularly where redevelopment is a realistic possibility

Interim rents and market rents

During renewal proceedings, the court may determine an interim rent payable from lease expiry until a new lease is agreed.

This is typically based on market conditions at the relevant date, which may differ from the rent ultimately agreed.

What this means in practice:

For landlords: interim rent may not reflect anticipated increases if market conditions change
For tenants: there may be exposure to higher interim rent depending on market evidence

Compensation for disturbance

Where a landlord successfully opposes renewal on a “no fault” ground, tenants may be entitled to statutory compensation.

This is generally:

One times the rateable value
Two times the rateable value where the tenant has occupied for 14 years or more

What this means in practice:

For landlords: compensation is a fixed statutory cost that must be factored into redevelopment or occupation decisions
For tenants: compensation may not fully reflect the commercial impact of relocation or business disruption

Final thoughts

The Landlord and Tenant Act 1954 continues to provide important protection, but recent cases demonstrate that outcomes often depend on detailed evidence and careful preparation.

Both landlords and tenants should seek advice at an early stage to understand their position and avoid unnecessary disputes.