Section 25 Notice explained - (Landlord & Tenant Act 1954, S25)

A Section 25 Notice is used in England and Wales by a landlord at the end of a commercial lease. Version depends on whether opposing or proposing renewal.

There is no Scottish equivalent.

The Landlord and Tenant Act 1954 broadly gives business tenants security of tenure - the right to renew the tenancy when it comes to an end.

Landlords can oppose renewal of the tenancy for certain limited, specific reasons, for example: failure to pay rent, or if the landlord wants to redevelop the premises or get them back for his own use. Landlords can either apply to the court to end the tenancy, or can oppose the tenant's application for renewal.

To end a current tenancy and propose terms for renewal or prevent the tenant renewing the landlord would need to send the tenant a Section 25 Notice.

There are two different Section 25 Notices depending on whether the landlord is willing to renew the tenancy or not: one opposing renewal and one proposing renewal.

A Section 25 Notice must be sent between 6 and 12 months before the landlord wants the current tenancy to end - which itself must be after the normal expiry date of the lease. It cannot be sent if the tenant has already sent a Section 26 Notice.

What happens next depends on what the landlord or tenant does:

• If the tenant applies to the court for a new tenancy, the landlord will need to oppose the application in court, citing one or more of the specific reasons for ending the tenancy.
• If the tenant does nothing, the tenancy will automatically end on the date set out in the landlord's Section 25 Notice.
• The landlord could apply to the court to end the tenancy. Again, the landlord would have to persuade the court that one or more of the specific grounds applied.

The tenant does not have to respond to a Section 25 Notice, but it would be sensible to get professional advice about the terms for the new tenancy and/or to try to negotiate an agreement to avoid going to court. The court will not order a new tenancy where the landlord successfully argues that one or more of the specific reasons apply. If the landlord is unsuccessful in opposing renewal, the court will order the grant of a new tenancy and settle its terms.

Please note that this form states that if the tenant may be entitled to acquire the freehold or an extended lease, then Form 7 in Schedule 2 to the Landlord and Tenant Act 1954, Part 2 (Notices) Regulations 2004 must be used instead of this form. This refers to situations where the tenant may have rights under the Leasehold Reform Act 1967 where the property is a "house" and the tenant is occupying it as such. We do not provide Form 7 since our commercial lease documents are intended for use with commercial premises such as offices, warehouses or workshops.

None of the above is applicable if the tenant and landlord had opted out of the Landlord and Tenant Act 1954 when the lease was first agreed.