LTA 1954: The Questions Everyone’s Asking

Following our most popular webinar to date, with 3,900 registrants,  Richard Snape, Head of Legal Training, joins host Lizzie Collin to answer the questions our audience most wanted addressed on the Landlord & Tenant Act 1954.

This Q&A-style episode dives into some of the trickiest and most topical areas of lease renewals, including grounds F and G, statutory compensation, and how evolving issues such as green lease clauses are beginning to affect renewal strategy. They also discuss the latest on the proposed ban on upwards rent reviews.

Drawing on case law, the discussion cuts through the theory to focus on what landlords and tenants need to be thinking about now when navigating renewals under the Act — particularly in light of ongoing legislative change.

Relevant cases:
•Kensington and Chelsea London Borough Council v Mellcroft Ltd [2024]
•Ambrose v Kaye [2002]
•Cunliffe v Goodman [1950]
•Gregson v Cyril Lord Carpets Ltd [1963]
•Gatwick Parking Service v Sargent [2000]
•Coppin v Bruce-Smith [1998]
•Betty’s Café Ltd v Phillips Furnishing Stores Ltd [1959]
•Vodafone Limited v Gravesham Borough Council [2025]
•The Gulf Agencies Ltd v Ahmed [2016]
•MVL Properties (2017) Ltd v The Leadmill Ltd (2025)
•Bath v Prichard [1990]
•WH Smith v Commerz Real Investmentgesellschaft [2021]
•Clipper Logistics plc v Scottish Equitable plc [2022]
•O’May v City of London Real Property Co [1983]

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This podcast is for informational purposes only and is not intended to provide legal or professional advice. No liability is accepted by Davitt Jones Bould for any reliance placed on its content.

Transcript

Transcript

Lizzie Collin
Hi, Richard.

Richard Snape
Hello, it's Ian. How have you been since I last saw you?

Lizzie Collin
I am not too bad. Thank you for a very long January, but we're coming to the end of it. But before we do get to the end of January, we want to talk about one of the webinars we've done. The first of the year for our wider sector audience. On the 8th of January and it was all about the landlord and Tenant Act 1954 grounds opposition, renewal terms and compensation. We had a lot of questions. It was our biggest attendance of a webinar to date, so understandably we couldn't get through everything. So let's rattle through some of them now.

Richard Snape
OK.

Lizzie Collin
This thank you very much, the first of which is if a tenant is opposing a section 25 notice on ground F or G, what is the timetable for them to make an application to court? Is it the end of the section 25 notice or is there a fixed timetable?

Richard Snape
Fire away. Yeah, it's it's not something I discussed in the course itself. I mean, time doesn't permit all these. Things if it's a section 25 notice, it's going to be for between 6 and 12 months. Notice terminating no earlier than the end of the fixed term of the tenancy. Any time during the duration of the six to 12 month. Section 25 notice the tenant can apply to. Court if they don't apply to court within that time period, the duration then unless the landlord and the tenant have agreed an extension of the time before the end of the section 25 notice, then the tenants basically lost. So they gotta make a decision by the end of the section 25 notice. Unless the landlord's prepared. If he wants to negotiate along to do so to to have an extension.

Lizzie Collin
Thank you. Next question, Underground G, What constitutes occupation?

Richard Snape
It's some of the cases say it's a question of fact really, I mean. I mean, like companies, you don't have to be physically present yourself. You might be present through managing agents or employees and the likes and still be an occupation. But it is a question of fact and degree. And there was a case we mentioned called Kensington and Chelsea, London Borough Council and Melcroft. Where they wanted to use ground G that the Council, the landlords, it was a commercial premises with a flatter. Clip and came within the 54 act and they want to use grounding because they wanted to house temporarily house homeless people in this premises and Portobello Rd pending a decision to as to whether they can have permanent housing or not and amongst other things the we decided that it's not the landlord is going to be an occupation. It's the handless people, so they couldn't use ground. Gee, I thought it was quite controversial, actually. I remember another case in 2002. It must have been, could appeal case called Ambrose and K, which again, I didn't mean. In the in the course where if it's a company, basically you gotta have a majority of the shares in that company. The controlling interest really in, in, in the shares and the. Landlord wanted to use Ground G and occupy through the company. The company was jointly owned with his. Wife. But what they did during the actual court hearings during the recess is the wife transferred her share capital to the husband and it was held that they could. Use ground. G by the time of the decision, they had a controlling interest. But it is a question of degree.

Lizzie Collin
Next question was Speaking of longer leases. Can you provide an update on the abolition of upwards only rent reviews under the proposed English devolution and Community Empowerment Bill?

Richard Snape
Yeah, it's still on the cards. It's gone to the House of Commons at the end of October last year, and it's in the House of Lords waiting last I heard. And this is the end of January for committee stage. It's not expected to come into force. They say until 2027 until 20. Right. I mean the one thing that you make with several things that were changed in the House of Commons and one being that you, you have to come within the definition of the 54 act. You know you occupy under a lease at least partly for business purposes to to come within the ban of upward only rent reviews. They've dropped the requirement for occupation. Because. If you've got a sublease, the subtenant has almost certainly the one in occupation. So suddenly the subtenant would have a upward and downward with with you in the in the head tenant wouldn't, which would be a disaster. And they've also allowed options to renew or they'll trigger the things as well as well as options to put the upward and downward. Think of your post it coming into force. So that's the latest.

Lizzie Collin
Thank you very much. Do you have to have planning permission for change of use to occupy for another purpose underground G?

Richard Snape
My pleasure. No, you don't have to actually have planning permission. You have to have, I mean. There's a, you know, the test is. Have you got a real chance? The real possibility? Come left in government from 1951, which actually wasn't the 54 case and and most people seem to think it is about section 18 of the 27 landlord and Tenant Act and Dilapidations claims. But it's gotta be out of the zone of contemplation and into the valley of decision. Those were the days when people spoke like that a. The real chance of real prospect and there was a case back in the 1960s, nineteen 63, Gregson and Cyril, Lord Carpets that said that for the first time. And there's been quite a lot of cases since. Would a personal business take the risk? I mean, there was a case, Gatwick Parking Service Services and Sergeant, which basically said that a real chance of real prospect. I was a case. I remember about the same time in the late 1990s called Coppin, and Bruce Smith were they've already. Failed and they're. Planning applications and likes as a tennis. Courts and they failed on the grounds that we needed sort of sporting facilities and locality. They changed things slightly and made another application. They didn't have a real chance so they failed. But you certainly don't have to have Janet planning permission.

Lizzie Collin
Thank you. Another question here, what if the term of the original lease exceeds 15 years?

Richard Snape
Yeah, if if you go to court, then it's section 33, but they can't award more than a 15 year lease. Which sort of reflects 5 year rent reviews. Basically 3 * 5 being 15. That doesn't mean to say you can't just decide between the two of you for a for a different duration at least, and you can certainly do that. It's just in the event of a dispute, the maximum duration 15 years.

Lizzie Collin
Thank you. Next question, what if the landlord could demonstrate grounds for G but subsequently changes their mind?

Richard Snape
Well, there's nothing wrong again with them. Just deciding you know to, to not. You know, sort of go through the due process and and negotiate for a new lease outside the 54 landlord and Tenant Act, but. You know, sort of just giving you lease and not opposed basically we can't see anything wrong with that.

Lizzie Collin
Thank you. And somebody asking, can you comment on SDLT on renewal and lack of renewal, some tenants tend to stay on without renewing the lease.
Richard Snape
Yeah, the stamp duty, land tax and also land transaction tax in Wales is the thresholds are different, well. In this area. Is pretty much the same the. You pay SDLT on the. On the you know the net present rental value on the on the grant of the lease and the net present rental value to extent extent it exceeds 150,000 lbs for for for commercial properties. And there's a convenient formula that does that for you. I prefer the revenues website myself. If you were to hold over after the end of the fixed term of the tenancy, if you hold over for one day, it's deemed to be a one year link lease. So if you had a 10 year lease, you pay SDLT your transaction tax based on. Net present value on the rent for ten years. Then it's deemed to be another year lease and stay hold over further and then it becomes a 12/13/14 year lease and so on and you're supposed to fill in another line transaction return at the end of the year. Like all things. SDLT it's quite complicated and that's the basic idea I've come across sort. Of people in. Residentially short and short short, ultimately still exist tendencies. They they should have best DLT bills, especially if they've been holding over for a period of time. Quite bizarrely.

Lizzie Collin
Okey dokey. Thank you. A question here about one of the cases you mentioned in the session would oh may be applicable when considering a 54 act lease to electronic Communications Code 2017 agreement.

Richard Snape
Yeah, May is probably surely one of the two most important 54 cases of all. It basically says it's about section 35, the act and. You know, how do you decide terms besides property rent and duration? Well, you're supposed to have regard to the terms of the current tenancy and have made the House of Lords said that that means that you know the starting point as the old lease is the basis of the new lease, and it's gotta be just an equitable between the parties to change the terms. And just because there's a change in the law, for instance, or you want to update upgrade to modern standards doesn't make it necessary that necessarily the case that the lease should be changed on the renewal. There has been a case on. On renewals and the 54 act and the Electronic Communications Code, communications equipment is a law and to itself, quite literally. But there's a case called Vodafone and Gratian Borough Council. About a block of flats with a mobile phone last a high rise block of flats with the building safety out with mobile phone mast on the on the roof and the landlords the the Council wanting to change the terms. On a renewal to reflect the fact that they have to have risk assessments and method statements in relation to safety on these premises and to some extent, the Court accepted that or it was accepted, but they wanted to reduce the land, the tenants ability to upgrade the equipment and like and they failed. On that. So it does depend to some extent on its circumstances, but the starting point is that the old lease is the base is the new lease and. Upgrading to modern standards is not an automatic. There are lots of cases which have said otherwise.

Lizzie Collin
The next question is, does the landlord need to pay statutory compensation if the tenant agrees an early surrender at a surrender premium?

Richard Snape
Yeah, you're only entitled to compensation for disturbance and non fault ground DFG if you. Occupied the premises, you know, for the well you get double compensation if you've occupied for 14 years before the lease came to an end for the purpose. That you get mostly a lot of institutional leases exclude compensation for disturbance, but if you can show five years occupation before the lease came to an end for. The. Purpose of the act. Then you lose that ability. So if you're not there, I'm not sure I've answered the question, but if you're not there for those time. Periods with the sort of you know. Discretion. You know, a day or two, then you won't be entitled to state compensation.

Lizzie Collin
The next question is an intention to demolish enough or do you have to have planning permission for what you intend to construct on site?

Richard Snape
It's the same as as ground G, which they they're kind of very similar. You have to have for the date of the court hearing. That's Betty's Cafe and Phillips furnishing stores. You have to have a genuine intention to actually construct. But you know, it's going to be out of the zone of contemplation into the value of decision, the real prospect or. Chance of getting planning permission but not actual Planning Commission. So very similar to ground G.

Lizzie Collin
Thank you. Next one, is it tactically unwise for a landlord to use a number of grounds to oppose a new lease?

Richard Snape
I wouldn't say so, because I mean, especially if you're trying to use grounds, EF4GE is pretty rare, but demolition reconstructing or G occupation for your own purposes, because you might have to pay compensation for disturbance as we mentioned. And if you can slot in a a ground where there's the tenants at 4, like a serious disrepair or B persistent delay in paying the rent, you might not have to pay the compensation. I don't think it's a bad idea at all.

Lizzie Collin
Thank you. Can a local authority use ground G to use the property for them, providing social or temporary housing? Or would they need ground F as significant works?

Richard Snape
Well, that's that. Kensington and Chelsea and Melcroft a case again that it was held that you weren't intending to occupy yourself. It was the homeless people who were who were going to be the occupiers. And so you couldn't use grungy in those circumstances, although I've, I say I've got my doubts about it, but that's what they said in that particular case. So the answer is no, you can't. You'd have to think about ground F, but if it's just a series of small bits of work you need on the premises. In the cases you know, a case called Bath and Pritchard which said if it's none of them in their own right are are sort of demolish and reconstructing. Therefore you you couldn't use ground if you're doing things like putting partitions up and a new boiler system and new wiring, you'd have to be a bit more significant than that to be able to use Grand Theft.

Lizzie Collin
With the second limb in the golf agency case, it mentions change of use. However, what would be the case if the landlord wanted to use the property for the same? Use as the tenant.

Richard Snape
Well, that's the golf agencies on Ahmed where? The landlord intended to use for their combined solicitors practise mini cab business and don't know if you've had a word about that possibilities, yeah.

Lizzie Collin
It's definitely a good idea.

Richard Snape
And anyway they. And they said, you know, it's a two stage process. You must have a genuine intention and you must have an ability to come to fruition again. A real chance of real prospect. And yeah, the landlord doesn't need to. I mean, if he doesn't need planning permission, he doesn't need to get planning permission. And there are cases such as that MVL and the lead mill. Do you remember that one, Lizzie, the lead mill, new venue which I have been to in Sheffield?

Lizzie Collin
Yeah.

Richard Snape

Because that's the kind of guy I am. They they, they successfully use ground G though they were running exactly the same business. It's not the only case to say that tried to argue it was a breach of. Human rights. And they failed on that.

Lizzie Collin
Okie Dokie, thank you. Next question if a tenant has several units on an industrial site, all of which are on three-year terms, can they apply to court for longer leases of say six or nine years and be successful even if the landlord opposes their renewal of of the of all the leases?

Richard Snape
Ohh, I mean if the landlord. Fails in his opposition, I mean the tenants entitled and the there's no agreement between the. Up to a 15 year lease, there's a lot of exceptions to this, but if you look at some of the textbooks, the tenants usually get what they're asking for as long as they are asking for no more than 15 years or the duration of the original lease. That was the Court of Appeal decision, not the House of Lords decision and Betty's Cafe and Phillips furnishing stores said that. So you're a bit at the whim of the court if needs be, but if the original lease was only three years. The landlord objects. You might not be able to get longer than the three-year lease even if the landlord doesn't successfully oppose. Yes.

Lizzie Collin
Why is ground D not used as much as other grounds for opposition?

Richard Snape
I don't know to tell you the truth, it's where you offer reasonably suitable alternative accommodation. I can't think of reported case on it and the answer is I don't know. It seems quite a sensible thing to do with you, especially if you've got sort of over occupation or something. The tenants don't need that particular size. When I say she offered a suitable alternative. But the answer is I don't know.

Lizzie Collin
OK. Thank you, Richard. Next question is about Section 36 of the Act. If there is a court order and the tenant ask for the Court to revoke, can the landlord claim all of their costs?

Richard Snape
You know that it's basically it's if. The tenant is not bound by the the courts decision for a new. A lease if they don't like the terms, they can give two weeks notice not to be bound. What the provision says is that in those circumstances, any order of costs will remain, but the courts can basically vary the order of costs. So they've got a discretion. If you like to to require the tenant to pay the landlord's costs in those circumstances.

Lizzie Collin
OK, thank you. Somebody asking. Well, they're saying we're under a section 25 notice with no court application and the landlord has inserted green lease clauses. Can we refuse?

Richard Snape
In explosives are obviously getting very popular in leases. There's a couple of county court decisions which are not really precedents. 1 was the WH Smiths comments, real investment gazelle shaft. If you remember that one, Lizzie. But the Double H Smiths in the in Shepherds Bush and the.

Lizzie Collin
One place.

Richard Snape
Another century. It's called. The and that's and in that particular case, the landlord wanted to change the clauses whereby the tenant would be responsible to pay for a new EPC, and they would be responsible for have print out an energy audit and the you would and the landlord could charge. The tenants and they'll be responsible for bringing it up to energy efficiency. Landlords tend to do it on the basis. That. You know, we'll all be happy because you're gonna reduce energy bills, which is, you know, if you've got a short 54 at excluded lease or. Whatever. I'm not sure that's the case. And in that particular case, the. Bought applied Domain City of London Real property company. It wasn't in the original lease, so it shouldn't be in the new lease and the fact that you know, Green lease clauses weren't used at the time of the original lease was an irrelevance. There was another case called Clipper Logistics County Court case and Scottish Equitable. We said the same thing. So on the face of it, on the basis of these dollar county court decisions. You could object, but I don't think we've heard the last of green these clauses on these renewals. That's it, Lizzie.

Lizzie Collin
Thank you very much, Richard.