Newham London Borough Council v Thomas-Van Staden [2008] EWCA Civ 1414 Facts

The Lease contained a fixed term from 1 January 2003 to 28 September 2004 and included wording stating: ‘any period of holding over or extension…whether by statute or at common law or by agreement’. After the fixed term of the Lease expired the Tenant continued to occupy the Premises and the Landlord subsequently sought possession.

The Lease was excluded from the security of tenure provisions of the Landlord and Tenant Act 1954 (“the Act”). The security of tenure provisions in the Act allow the Tenant to a statutory right to renew the Lease at the end of the Term unless the requirements for expressly excluding it are followed. The Tenant argued that she was protected by the Act as she remained in possession under a periodic business tenancy and the exclusion of the security of tenure provisions in the Lease were invalid.
 
Held
It was held on appeal that the Lease did not validly exclude the security of tenure provisions because the exclusion is only valid if the term is defined as a fixed term. This is a requirement under Section 38(4) of the Act. The term in this Lease was not of a fixed term as it included any period of holding over or extension.  Therefore, the Tenant was entitled to protection under the Act.
 
 

Practice points:• Given the substantial ramifications for the Landlord (inability to regain possession of the premises to redevelop the area without paying compensation to the Tenant) and the fact that the intentions of the parties were not taken into account by the Court, it follows that if the parties intend to exclude the security of tenure provisions then the term of the Lease must be drafted as a fixed term with no allowance being provided for any hold over period.
• If the tenant is protected by the security of tenure provisions then the landlord must ensure that it terminates the tenancy by serving a Section 25 notice under the Act.
• At the end of the fixed term the landlord must either regain possession of the premises promptly or, if the landlord allows the tenant to remain in occupation, enter a new fixed term lease (which excludes the security of tenure provisions of the Act) as soon as possible and should not accept rent under the old lease in the interim.