You snooze, you could lose.
I met my old friend Jim down the pub last night. Jim owns a gorgeous vintage clothes store and has leased a shop facing the main square of a delightful nearby town for the last five years. Our conversation went a little like this:
Jim: I did a spot of tidying up and found a letter with a notice from my landlord.
Me: What was it?
Jim: A Section 25 Notice under the Landlord and Tenant Act 1954.
Me: What’s the termination date in the notice?
Jim: A few days ago. Is that bad?
Me: When did you receive it and why didn’t you get advice when you got it?
Jim: I got it 7 months ago before I left for holiday and totally forgot about it until I found it last weekend under a pile of magazines.
Me: Well you’ve now lost your security of tenure and your statutory right to a renewal lease because you have not completed a new lease with your landlord, you didn’t agree an extension of time with your landlord and you didn’t make any application to court for a renewal lease before the termination date.
Jim: Am I in trouble? What can the landlord do?
Me: If you remain in occupation after the expiry of the notice, you are a trespasser. If you do not vacate on the landlord’s request, he can start court proceedings for possession or re-enter the premises and change the locks.
Jim: What happens if I just stay on, keep paying the rent and the landlord doesn’t do anything?
Me: The more time that passes between the Section 25 notice expiring and your landlord taking action, or if the landlord demands or continues to accept rent following the expiry of the Section 25 notice, your continued occupation could be deemed to be a tenancy at will or periodic tenancy,
A tenancy at will is not secure and can be terminated at any time by the landlord demanding possession or by you giving up possession. He could just demand the keys back from you or state that the tenancy is at an end and that possession is to be given back immediately. However, he must give you a reasonable time to enter the property after the termination to remove your goods.
A periodic tenancy could be created the longer you remain in occupation and rent is demanded and paid by reference to a particular time period. If a periodic tenancy is created, you will acquire rights under the Landlord and Tenant Act 1954 and your landlord will have to serve another Section 25 notice in addition to notice to quit to terminate the periodic tenancy and to obtain possession.
Jim: What other horrors could lie in store?
Me: A landlord might be able to claim for double value under Section 1 of the Landlord and Tenant Act 1730 if you wilfully hold over when a demand for possession has been made and notice in writing has been given by the landlord. Double value does not necessarily mean double rent. The value is what an occupier would give, and the landlord would otherwise have received, for the use of the freehold and everything connected with it, during the time that possession is withheld, so it could be well expensive.
Jim: I think it would be best if I arrange a meeting with my landlord tomorrow to negotiate terms for a new lease. I think we get on fairly well and I’ve always paid my rent on time. I don’t want to lose the shop.
Me: Yes perhaps you should. You don’t want to lose that lovely shop on that square do you!
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