Renters' Rights Act 2025, Phase 1 commencement
Transition readiness pack
England

Commercial Lease Law

Section 25 Notice UK — LTA 1954 Landlord Termination Guide

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.

12 min readUpdated 7 June 2026Last reviewed: 17 May 2026section-25-noticelta-1954commercial-lease-renewalopposition-grounds

Section 25 Notice — Form, Timing and Service

A section 25 notice must be served by the competent landlord between 6 and 12 months before the proposed termination date specified in the notice; the termination date cannot be earlier than the contractual lease expiry date. Two prescribed forms (SI 2004/1005): Form 1 (hostile) — the landlord opposes renewal and specifies the ground(s) of opposition under s.30(1); Form 2 (friendly) — the landlord does not oppose and sets out the terms on which it is willing to grant a new tenancy. Errors that are immaterial do not necessarily invalidate the notice — but the timing and the termination date must comply with the statutory rules. Service: recorded delivery, personal service, or through the letterbox at the tenant's last known address; on a company, service at the registered office. The competent landlord is typically the freeholder or, in a multi-level structure, the superior landlord able to grant a new tenancy for a term of at least 14 months.

Grounds of Opposition, Tenant's Response and Interim Rent

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) demolition or reconstruction — genuine, firm, and settled intention at date of notice and date of trial (Betty's Cafés v Phillips [1959]); (g) own occupation — 14-month ownership required; genuine, settled intention. Grounds (f) and (g) most commonly relied upon. Tenant's response: must apply to court within 4 months of service of the s.25 notice or the right to a new tenancy is lost; parties can extend the deadline by written agreement under s.29B LTA 1954 before expiry. Compensation: where renewal opposed on grounds (e), (f) or (g) and landlord succeeds — tenant entitled to compensation equal to the rateable value (double if in occupation 14+ years). Interim rent (ss.24A-24D LTA 1954): either party may apply after service of the s.25 notice; in an unopposed renewal, interim rent is presumed to equal the new market rent; runs from the earliest date that could have been specified as the termination date.

Frequently asked questions

What is a section 25 notice under the LTA 1954?+

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. It must be served between 6 and 12 months before the proposed termination date. Form 1 (hostile) is used where the landlord opposes renewal; Form 2 (friendly) is used where the landlord is willing to renew and proposes terms.

What grounds can a landlord rely on to oppose a new commercial tenancy?+

The grounds are in s.30(1) LTA 1954: (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; (g) own occupation (14-month ownership required). Grounds (f) and (g) are most commonly relied upon in contested renewals.

How long does a tenant have to respond to a section 25 notice?+

The tenant must apply to court within 4 months of the section 25 notice being served. Failure to apply in time results in the permanent loss of the right to a new tenancy. The deadline can be extended by written agreement between the parties under s.29B LTA 1954, made before the deadline expires.

Found a gap or disagree with something?

Reply to any LetSafe email or write to Richard@letsafeuk.co.uk. We rewrite guides when we get something wrong, the sooner we hear, the sooner we fix it.

Related landlord guides

Hand-picked by topic overlap with this guide.

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.
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)
Landlord and Tenant Act 1954 UK 2026 — Business Tenancy Security of Tenure, Contracting Out and s.25 Notices
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.
Commercial Property Law
Contracting Out of the Landlord and Tenant Act 1954
LTA 1954 s.38A and RRO 2003 (SI 2003/3096): excluding security of tenure from a commercial tenancy — prescribed warning notice (Sch 1/3); simple declaration (≥14 days, Sch 2) or statutory declaration before independent solicitor (<14 days, Sch 4); lease must record exclusion; each new lease requires fresh procedure; common pitfalls; Scotland has no equivalent.
Commercial Property Law
Tenancy at Will for Landlords UK
Tenancy at will in commercial property: either party can determine without notice; no LTA 1954 Part II security of tenure (Hagee (London) v AB Erikson and Larson [1976] QB 209); arises during lease negotiations (pre-lease occupation) or on holding over; conversion risk — accepting periodic rent payments converts to periodic tenancy with LTA 1954 protection; documentation; tenancy at will vs contracted-out tenancy (s.38A RRO 2003); Scotland tacit relocation.
Landlord Possession Law
Mesne Profits — Damages for Unauthorized Occupation UK
Mesne profits (pronounced 'meen profits'): damages for unauthorized occupation of land after tenancy has ended. Not rent (which requires a subsisting tenancy) — claim in damages for trespass to land. Assessed at open market rental value for period of unauthorized occupation (may differ from expired contractual rent). Arises on: residential holdover after fixed-term expiry/s.21 order; commercial holdover without LTA 1954 application; post-forfeiture occupation during relief application; squatter occupation. Commercial tenants with LTA 1954 protection not in mesne profits territory during statutory continuation — landlord applies for interim rent under LTA 1954 s.24A instead. Limitation Act 1980 s.5: 6 years from each daily accrual. Scotland: 'violent profits' — traditionally double market rent; modern practice: open market value.
Commercial Lease Law
Lease of Part — Letting Part of a Commercial Building UK Guide
A lease of part is a commercial lease of a defined portion of a building — for example, a single floor, an office suite, a retail unit within a shopping centre, or a workshop unit within an industrial estate. Unlike a whole-building letting, a lease of part requires: precise definition of the demise by reference to a floor plan and boundary convention; grant of sufficient access rights over common parts (entrance, lifts, staircases, car parking, loading bays) as easements or contractual licences; extensive landlord reserved rights (development rights; services maintenance; entry; signage control); service charge mechanism (apportioning common parts costs between all occupiers by floor area, rateable value, or fixed percentage); fire safety obligations on the landlord as responsible person for common parts under RRO 2005. Demise boundaries: internal face of external walls; centre line of internal walls shared with adjacent tenants; finished floor to underside of raised floor above (floor slab/ceiling void excluded). Access rights: entrance/lifts/staircases; car parking (allocated or unallocated); loading bays (hours/weight limits); toilets/welfare. Landlord reserved rights: development rights (extend/alter building); services running through demise; entry on notice; signage control; car parking management. Service charge: RICS Service Charge Code (2018) best practice; apportionment by floor area; accounts certified by independent accountant; cap/exclusions possible. Separate EPC required for each self-contained demised unit; MEES compliance required. LTA 1954: applies to commercial lease of part; must be contracted-out in same way as whole-building lease. Building Safety Act 2022: Principal Accountable Person obligations for higher-risk buildings (18m+/7 storeys). Scotland: Scottish commercial leases governed by Scots law; no LTA 1954; Scots law on implied terms and common parts differs from English law.