LTA 1954 Lease Renewal 2026

Commercial Lease Renewal UK 2026 — LTA 1954 Security of Tenure, Section 25 Notice, Section 26 Request, Opposing Grounds and New Lease Terms

Commercial lease renewal guide 2026 under the Landlord and Tenant Act 1954 (LTA 1954): business tenancies protected by Part II LTA 1954 do not end at contractual expiry — they continue under s.24 until validly terminated by the statutory procedure. Key provisions: (1) Continuation tenancy (s.24): protected tenancy continues after contractual expiry on the same terms until terminated. (2) Landlord's s.25 notice: specifies whether landlord opposes renewal and on which ground(s); proposed terms if not opposing; must be served 6-12 months before the specified termination date. (3) Tenant's s.26 request: proactive renewal request specifying proposed commencement date (6-12 months ahead); landlord has 2 months to counter-notice opposing renewal. (4) Opposing grounds (s.30(1)): (a) failure to repair; (b) persistent rent delays; (c) substantial breaches; (d) alternative accommodation; (e) sub-letting of part; (f) demolition or reconstruction — landlord must show fixed, definite intention with planning, finance, and contractor in place; (g) own occupation — landlord must have owned for at least 5 years. (5) Compensation (s.37): for no-fault grounds (e)(f)(g) — 1× rateable value (2× if 14+ years' occupation). (6) Interim rent (ss.24A-24D): either party can apply; typically market rent. (7) Contracting out: exclude LTA 1954 protection by warning notice + statutory declaration before lease is granted.

15 min readUpdated 7 June 2026Last reviewed: 17 May 2026lta-1954commercial-lease-renewalsection-25-noticesection-26-request

Continuation tenancy (s.24), Section 25 notice and Section 26 request

The LTA 1954 applies automatically to most business tenancies in England and Wales. A protected tenancy does not end at contractual expiry — it continues as a 'continuation tenancy' under s.24 on the same terms until terminated by the statutory procedure:

Continuation tenancy (s.24 LTA 1954): a protected business tenancy automatically continues after the contractual term expiry date on the same terms as the original lease — it is NOT a periodic tenancy; it is a continuation of the same tenancy. The landlord cannot end it by simply not renewing; they must follow the statutory procedure. The landlord cannot unilaterally increase the rent during the continuation — they must apply for interim rent under s.24A
Landlord's Section 25 notice: (a) Must be served not more than 12 months and not less than 6 months before the termination date specified in the notice; (b) The termination date must not be earlier than the contractual term expiry date; (c) Must state whether the landlord is opposing renewal — and if so, on which of the s.30 grounds; (d) If not opposing: must set out the proposed terms for the new tenancy; (e) If opposing: the tenant must apply to the court for a new tenancy before the termination date specified (or within 4 months of service, whichever is later)
Tenant's Section 26 request: (a) The tenant can serve a s.26 request proactively specifying the proposed commencement date of the new tenancy (at least 6 months and not more than 12 months after service) and proposed terms; (b) Once a s.26 request is served, the landlord cannot serve a s.25 notice; (c) The landlord has 2 months from service to serve a counter-notice opposing renewal — failure to serve within 2 months bars the landlord from opposing renewal; (d) After the counter-notice (or after 2 months without one), the parties must apply to the court within the time window or their rights lapse
Time limits for court applications: the court application for a new tenancy (by the tenant) or for termination without renewal (by the landlord) must be made before the date specified in the s.25 notice or the proposed commencement date in the s.26 request — or within any extended period agreed in writing. If neither party applies in time, the tenancy terminates and the tenant loses the right to renew

Opposing grounds (s.30), compensation (s.37), interim rent and contracting out

Ground (a): the tenant ought not to be granted a new tenancy in view of the state of repair of the holding, having regard to the tenant's obligations — fault ground; no compensation payable on success
Ground (b): the tenant has persistently delayed in paying rent — fault ground; no compensation
Ground (c): the tenant has been in substantial breach of their other obligations — fault ground; no compensation
Ground (d): the landlord has offered and is willing to provide suitable alternative accommodation on terms reasonably suitable to the tenant's needs — no-fault ground; compensation (1× or 2× RV) payable
Ground (e): where the current tenancy was created by sub-letting part of a building previously let as a whole and the aggregate of rents from separate lettings would be substantially less than the rent from a letting as a whole — no-fault; compensation payable
Ground (f): the landlord intends to demolish or reconstruct the premises comprised in the holding (or a substantial part) at the end of the tenancy and could not reasonably do so without obtaining possession — must demonstrate a fixed, firm, and genuine intention (planning permission; building contract; financing in place; architect instructed) — no-fault; compensation payable
Ground (g): the landlord intends to occupy the holding for the purposes of a business to be carried on by the landlord or as the landlord's residence — the landlord must have owned the interest for at least 5 years before the date of termination (the 5-year ownership rule) — no-fault; compensation payable
Compensation (s.37): for no-fault grounds (d), (e), (f), (g) — 1× the rateable value of the holding; increased to 2× the rateable value if the tenant (and/or their predecessors in the same business) have been in occupation for 14 years or more
Interim rent (ss.24A-24D): during the continuation tenancy period after contractual expiry, either party can apply to the court for an interim rent — typically set at the market rent for the property; payable from the date of the court application
Contracting out: parties can exclude LTA 1954 protection by following the statutory procedure under s.38A and the Regulatory Reform Order 2003: (i) landlord serves a 'health warning' warning notice (prescribed form) at least 14 days before the lease is entered into; (ii) tenant makes a statutory declaration acknowledging the loss of security of tenure; (iii) both steps completed before the lease is granted; a contracted-out lease cannot be renewed — the tenant has no renewal rights or compensation
Scotland: the LTA 1954 does NOT apply in Scotland; commercial leases in Scotland have no equivalent statutory security of tenure; commercial lease renewal in Scotland is governed entirely by the terms of the lease and negotiation between the parties

Frequently asked questions

Does a commercial tenant automatically have the right to renew their lease under the LTA 1954?+

Yes — if the tenancy is protected by the LTA 1954 (not contracted out), the business tenancy does not end at the contractual term expiry. It continues under s.24 LTA 1954 on the same terms until the landlord follows the statutory procedure. The tenant has the right to apply to the court for a new tenancy. The landlord can only prevent renewal by successfully opposing on one of the seven statutory grounds in s.30.

What is the timing requirement for a Section 25 notice?+

A valid Section 25 notice must be served not more than 12 months and not less than 6 months before the termination date specified in the notice. The termination date must not be earlier than the contractual term expiry. The notice must state whether the landlord is opposing renewal — and if so, on which of the s.30 grounds. Errors in timing or form can invalidate the notice.

On which grounds can a landlord oppose commercial lease renewal?+

The seven grounds in s.30 LTA 1954 are: (a) state of repair; (b) persistent rent arrears; (c) substantial breaches; (d) suitable alternative accommodation; (e) sub-letting of part where aggregate rents are lower; (f) demolition or reconstruction (must show fixed, firm intention with planning permission, building contract, and finance in place); (g) own occupation (landlord must have owned for at least 5 years). For no-fault grounds (d), (e), (f), and (g), the tenant is entitled to compensation of 1× (or 2× for 14+ years' occupation) the rateable value.

Can the parties exclude LTA 1954 security of tenure on a new commercial lease?+

Yes — by following the contracting-out procedure under s.38A LTA 1954: (i) the landlord serves a prescribed 'health warning' notice on the prospective tenant at least 14 days before the lease is entered into; (ii) the tenant makes a statutory declaration acknowledging the loss of security of tenure; (iii) both steps are completed before the lease is granted. A contracted-out lease gives the tenant no right to renew and no compensation when it ends. Both steps must be completed before the lease is signed — failure to follow the procedure leaves the tenancy fully protected.

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LTA 1954 Part II: Business Tenants Have Statutory Right to Renew Lease — Landlord Opposes on s.30 Grounds (a)-(g) — s.25 Notice (6-12 Months) — Contracting Out (s.38A Warning Notice + Statutory Declaration) — Compensation on No-Fault Grounds (e)(f)(g)

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Landlord and Tenant Act 1954 Part II applies to commercial tenancies (premises occupied for business purposes). Business tenants have statutory security of tenure (right to renew lease at end of contractual term). Landlord can oppose renewal on s.30(1) grounds: (a)-(c) fault grounds; (d)-(g) no-fault grounds. s.25 notice (landlord terminates): 6-12 months; must state whether opposing and on which grounds. Contracting out (s.38A): formal warning notice + tenant statutory declaration before lease granted. Compensation payable only on no-fault grounds (e)(f)(g): 1× rateable value (2× after 14 years). NI: Business Tenancies (NI) Order 1996. Scotland: no statutory equivalent.

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A section 25 notice is the formal notice by which a commercial landlord terminates a business tenancy protected by the Landlord and Tenant Act 1954 (LTA 1954) and either proposes terms for a new tenancy or opposes renewal on a statutory ground. Key features: served between 6 and 12 months before the proposed termination date; Form 1 (hostile — opposing renewal) or Form 2 (friendly — proposing new tenancy terms). Grounds of opposition (s.30(1)): (a) breach of repair; (b) persistent delay in rent; (c) other substantial breach; (d) alternative accommodation; (e) uneconomic sub-tenancy of whole; (f) intention to demolish or reconstruct (genuine, firm, settled intention required at date of notice and trial); (g) own occupation (14-month ownership required). Tenant's response: court application within 4 months of s.25 notice or right to new tenancy lost; deadline can be extended by written agreement under s.29B LTA 1954. Compensation (ss.37, 37A): where renewal opposed on grounds (e), (f) or (g) and landlord succeeds — rateable value; double rateable value if tenant occupied 14+ years. Interim rent (ss.24A-24D LTA 1954): either party can apply; runs from earliest possible termination date in s.25 notice. Scotland: LTA 1954 does not apply — tacit relocation governs commercial lease renewal.

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