7 fleurets.com To oppose, the Landlord must either: To renew, in the Section 25 or Section 26 Notice: Landlord Section 25 Notice Landlord Intends to Oppose Renewal Landlord and Tenant Intend to Renew a) Persistent breach of repair. b) Persistent delay in paying rent. c) Other substantial breach of covenant. d) Landlord has offered alternative accommodation. e) Uneconomic subdivision of the premises. f) Premises are required for redevelopment. g) Owner occupation. Tenant Section 26 Notice Section 30: Grounds of Refusal Remedy or Compensation Dispute Resolution In their Section 25 Notice, state the Section 30 ground on which they intend to refuse a new lease. Within two months of receipt of a tenant’s Section 26 Notice, respond with the ground under S30 on which they intend to refuse a renewal. Grounds A-D can usually be remedied, which could avoid a renewal being opposed. Grounds E-G, if satisfied, will result in compensation paid by landlord to tenant based on length of occupation. Propose terms for the renewal in the Notice. Engage their surveyor to negotiate the market rent and terms for the new lease. The fall back is a renewal on the existing terms at market rent. Rent at renewal can go up or down. Less than 7 years = 1 x Rateable Value. More than 7 years = 2 x Rateable Value. If the tenant does not accept the landlord’s grounds for refusing a new lease, or if agreement of the lease terms or rent cannot be reached, the dispute will be resolved by a court hearing. Determination of rent at court involves surveyors providing Expert Witness evidence and the outcome is determined by a judge. Dispute resolution by court is a time consuming, lengthy and costly process with an uncertain outcome. However, if all terms are agreed apart from rent, an alternative is PACT: Professional Arbitration of Court Terms. PACT is similar to a rent review Arbitration. Surveyors provide Valuation Reports and Replies to an appointed Arbitrator, who awards the rent. PACT is a faster and less costly process, with the rent determined by a property professional rather than judge. Commencing ’54 Act proceedings: 12 months before the contractual expiry at the earliest, the landlord or tenant’s solicitor may serve Notice to end the existing tenancy. The existing tenancy continues until Notice has been served specifying an expiry date. The tenant’s solicitor must register a claim for a new lease with court before the expiry date of the existing tenancy as stated in the Notice. Failure to do so will result in losing rights of renewal. DISCLAIMER: The above is provided as a guide only, on a non-reliance basis; and Fleurets additionally recommend seeking specialist legal advice before commencing the lease renewal process. NO DEAL DEAL Heads of Terms agreed. New lease completed.