MAKE YOUR FREE Landlord's Notice to Exclude Security of Tenure
What we'll cover
What is a Landlord's Notice to Exclude Security of Tenure?
Security of tenure gives a commercial tenant the right to remain in a commercial property (ie to renew their tenancy and take on a new Commercial lease when their existing commercial lease ends).
A Landlord's Notice to Exclude Security of Tenure can be used by commercial landlords to exclude this statutory right. Landlords’ Notices to Exclude Security of Tenure are formal legal notices served under the Landlord and Tenant Act 1954.
For use in England and Wales only.
When should I use a Landlord's Notice to Exclude Security of Tenure?
Use this Landlord's Notice to Exclude Security of Tenure:
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for a lease of business premises
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where the tenant will not have an automatic right to another Commercial lease when their original lease ends
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when the lease is agreed on and ready for signature, but not yet completed
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when the tenant is not yet in the property
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for commercial properties located in England or Wales
Sample Landlord's Notice to Exclude Security of Tenure
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NOTICE THAT SECTIONS 24 TO 28 OF THE LANDLORD AND TENANT ACT 1954 ARE NOT TO APPLY TO A BUSINESS TENANCY
TO:
("the Tenant")
FROM:
("the Landlord")
PROPERTY:
,
IMPORTANT NOTICE
You are being offered a lease without security of tenure. Do not commit yourself to the lease unless you have read this message carefully and have discussed it with a professional adviser.
Business tenants normally have security of tenure - the right to stay in their business premises when the lease ends.
If you commit yourself to the lease you will be giving up these important legal rights.
- You will have no right to stay in the premises when the lease ends.
- Unless the landlord chooses to offer you another lease, you will need to leave the premises.
- You will be unable to claim compensation for the loss of your business premises, unless the lease specifically gives you this right.
- If the landlord offers you another lease, you will have no right to ask the court to fix the rent.
It is therefore important to get professional advice - from a qualified surveyor, lawyer or accountant - before agreeing to give up these rights.
If you want to ensure that you can stay in the same business premises when the lease ends, you should consult your adviser about another form of lease that does not exclude the protection of the Landlord and Tenant Act 1954.
If you receive this notice at least 14 days before committing yourself to the lease, you will need to sign a simple declaration that you have received this notice and have accepted its consequences, before signing the lease.
But if you do not receive at least 14 days notice, you will need to sign a "statutory" declaration. To do so, you will need to visit an independent solicitor (or someone else empowered to administer oaths).
Unless there is a special reason for committing yourself to the lease sooner, you may want to ask the landlord to let you have at least 14 days to consider whether you wish to give up your statutory rights. If you then decided to go ahead with the agreement to exclude the protection of the Landlord and Tenant Act 1954, you would only need to make a simple declaration, and so you would not need to make a separate visit to an independent solicitor.
About Landlords' Notices to Exclude Security of Tenure
Learn more about making your Landlord's Notice to Exclude Security of Tenure
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How to make a Landlord's Notice to Exclude Security of Tenure
Making a Landlord's Notice to Exclude Security of Tenure online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all of the details prepared in advance, making your document is a quick and easy process.
To make your Landlord's Notice to Exclude Security of Tenure you will need the following information:
Party details
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What are the landlord’s details (eg legal structure, name and address)?
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If the landlord is a company, LLP or partnership, who will sign the Notice on the landlord’s behalf?
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What are the tenant’s details (eg legal structure, name and address)?
Address
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What is the address of the property the landlord is letting to the tenant?
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Common terms in a Landlord's Notice to Exclude Security of Tenure
A Landlord's Notice to Exclude Security of Tenure excludes a commercial tenant’s automatic right to be granted another commercial lease when their existing lease comes to a natural end. As a result, this Notice to Exclude Security of Tenure covers:
The Notice itself
The body of the Landlord's Notice to Exclude Security of Tenure informs the commercial tenant that sections 24 to 28 of the Landlord and Tenant Act 1954 are not to apply to this business tenancy. It also provides the details of the commercial landlord, tenant and property.
Important notice
This part of the Landlord's Notice to Exclude Security of Tenure sets out the details commercial tenants are legally required to receive when security of tenure is being excluded. This includes:
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highlighting that the commercial lease is being offered without security of tenure
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providing details on the legal rights the commercial tenant is giving up by entering into a lease without security of tenure
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encouraging the tenant to seek professional advice (eg from a qualified surveyor, lawyer or accountant) before signing the commercial lease
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setting out the steps required from the tenant to commit themselves to the commercial lease (this will depend on whether the commercial tenant is receiving 14 days’ notice of the exclusion of security of tenure or less)
If you want your Landlord's Notice to Exclude Security of Tenure to include further or more detailed provisions, you can edit your document. However, if you do this, you may want a lawyer to review or change the Landlord's Notice to Exclude Security of Tenure for you to ensure it complies with all relevant laws and meets your specific needs. Ask a lawyer for assistance.
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Legal tips for making a Landlord's Notice to Exclude Security of Tenure
Discuss security of tenure in early negotiations
The landlord’s wish to exclude security of tenure (also known as ‘contracting out of security of tenure’) should be discussed during the commercial lease negotiations. Doing so will help prevent any lengthy renegotiations with the commercial tenant and ensure that everyone is on the same page. You should generally record your intention to exclude security of tenure in your commercial lease heads of terms.
Understand the process for contracting out of security of tenure
Even if the parties agree to exclude security of tenure during the initial negotiations, it is fundamental that the correct process is followed to contract out of security of tenure. This includes:
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the landlord serving a Landlord's Notice to Exclude Security of Tenure on the tenant before signing the commercial lease
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the tenant signing and providing to the landlord a Tenant's agreement to exclude security of tenure (either as a simple declaration or statutory declaration, depending on when the Landlord's Notice to Exclude Security of Tenure was provided to them)
For more information, see the FAQs ‘When should a Landlord's Notice to Exclude Security of Tenure be sent?’ and ‘What should the tenant do after receiving a Landlord's Notice to Exclude Security of Tenure?’ and read Security of tenure.
Understand when to seek advice from a lawyer
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if there are multiple landlords or tenants
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for advice where the tenant needs urgent access to the property
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where there is a guarantor under the lease
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for commercial property located in Scotland
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Landlord's Notice to Exclude Security of Tenure FAQs
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What is included in a Landlord's Notice to Exclude Security of Tenure?
This Landlord's Notice to Exclude Security of Tenure covers the:
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landlord’s notification to exclude security of tenure from the lease
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legal information that must be given to the tenant
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Why do I need a Landlord's Notice to Exclude Security of Tenure?
If you do not expressly exclude security of tenure from your Commercial lease, the tenant will have a statutory (ie legal) right to a new lease once the original lease comes to an end. Where security of tenure applies, you can only refuse to grant a new lease on certain strict grounds (eg because there have been repeated delays in the tenant paying rent or the tenant has failed to keep the property in good repair).
Issuing a proper Landlord's Notice to Exclude Security of Tenure ensures that the tenant waives their right to stay in the premises when the lease ends. This gives you greater flexibility as it enables you to choose how to re-let the commercial property once the original lease ends. You could, for example, let the premises to another commercial tenant or renegotiate the terms of a new commercial lease with the current tenant. In other words, by excluding security of tenure from a commercial lease, you have complete discretion as to whether or not to offer a new lease.
For more information, read Security of tenure.
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What are the consequences of excluding security of tenure?
By forfeiting their right to security of tenure, a tenant will:
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have no right to stay in the premises when their lease ends
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need to leave the premises, unless the landlord chooses to offer another lease, and
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be unable to claim compensation for the loss of their business premises (unless their lease specifically gives such right)
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When should a Landlord's Notice to Exclude Security of Tenure be sent?
The decision to exclude security of tenure should be made at the start of negotiations between the landlord and the tenant when the tenant has not yet moved into the property.
The Landlord's Notice to Exclude Security of Tenure should be issued at least 14 days before the start of the lease. This is when the commercial lease is agreed upon and the lease agreement is ready for the parties’ signatures, but has not yet been completed.
The correct process must be followed when excluding security of tenure. Failure to do this can result in security of tenure not being excluded and a commercial tenant having the right to remain in a property.
For more information, read Security of tenure.
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What should the tenant do after receiving a Landlord's Notice to Exclude Security of Tenure?
If a tenant receives the Landlord's Notice to Exclude Security of Tenure at least 14 days before committing to the lease (ie signing the lease), they'll need to sign a simple declaration stating that they have received the Notice and that they accept its consequences. They will need to do this before they sign the lease.
If the tenant receives the Notice less than 14 days before committing to the lease, the landlord must serve a warning notice on the tenant and the tenant must complete a statutory declaration (in the presence of someone empowered to administer oaths, like a solicitor) stating that they have received the Notice and that they accept its consequences. Again, this must be done before signing the lease.
A Tenant's agreement to exclude security of tenure can be used for both simple and statutory declarations.
For more information, read Security of tenure.
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