Why Security of Tenure Matters
LTA 1954 Part II: qualifying business tenant has right to remain in occupation and apply for a new tenancy at term end. Landlord can only oppose on grounds s.30(1)(a)–(g); grounds (e)(f)(g) trigger statutory compensation (s.37). Without contracting out, lease does not automatically expire — landlord must serve s.25 notice and litigate if contested.
The Three-Step Exclusion Procedure
RRO 2003 (from 1 June 2004): (1) landlord serves prescribed warning notice; (2) tenant makes simple or statutory declaration; (3) lease records that ss.24–28 are excluded. All three steps must be completed BEFORE the tenancy is granted or before any binding commitment to grant it.
Warning Notice — Form and Timing
Prescribed form: Schedule 1 (new tenancy) or Schedule 3 (continuation tenancy) to RRO 2003 — no departure permitted. Must be served on tenant directly. Timing determines which declaration is required: ≥14 days before grant → simple declaration; <14 days before grant → statutory declaration before independent solicitor.
Simple vs Statutory Declaration
Simple declaration (≥14 days): unsworn; Schedule 2 form; signed by tenant or authorised company officer. Statutory declaration (<14 days): sworn before an independent solicitor (not the landlord's solicitor); Schedule 4 form. Lease must record (a) warning notice served, (b) declaration made, (c) ss.24–28 excluded.
Common Pitfalls
Warning notice after exchange: parties already committed — exclusion void. Wrong declaration form for the timeframe: exclusion void. Each new lease requires fresh procedure — no automatic carry-forward. Periodic occupation after expiry without fresh exclusion: LTA 1954 Part II may apply. Scotland: LTA 1954 does not apply; no procedure required.