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The Landlord and Tenant Act 1954 section 24 gives commercial tenants in the UK security of tenancy, which means that they can continue occupying the premises even after the lease has expired unless it is done properly. This law grants continuity to businesses and prescribes well-defined procedures to landlords to get back possession. It is actually a crucial aspect of property law to both tenants and landlords since approximately 60 percent of commercial leases in England and Wales are subject to this Act. In this article of Section 24 landlord and tenant act, we are going to explore what this section really covers, the legal features of, and how it affects the landlord. So, keep reading to get in-depth information about it.
Section 24 of the Landlord and Tenant Act 1954 permits the commercial tenants to go on with occupying the premises after the expiry of the lease period unless the landlord provides a legal notice of renewal or otherwise. It grants tenants a right to renew the tenancy and also makes landlords take a formal route to reclaim possession. This protection is only subject to leases that are not contracted outside the Act.
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Under the Landlord and Tenant Act 1954, there are various significant types of protection and obligations that are stated between the landlords and business tenants. These legal aspects make the termination of a commercial lease fair and accurate. Legal features of section 24 are:
When a lease period expires, tenancy does not come to an automatic end. Rather, it drags on under the same conditions until one of the parties instituted formal legal proceedings. This offers security and stability to the business operations.
The business tenants have the legal right to continue staying on the premises and make a renewal application for the lease. This is called security of tenure, and it helps with long-term planning as it ensures that a person is not evicted suddenly.
In case landlords want to terminate or object to renewal of the lease, they are supposed to provide a Section 25 notice. This should be in accordance with certain legal grounds, which include redevelopment or Non-compliance by tenants, and should be served within the right time period.
Alternatively, tenants may also start the renewal procedure by providing a Section 26 notice. This enables forward planning and negotiation of the lease.
They only cover commercial tenancies (shops, offices, and industrial premises) and not residential leases.
Before signing the lease, landlords and tenants may come to an agreement to exclude the security of tenure rights. This contracting out has to have a proper legal procedure that has to be served with a formal warning notice as well as a declaration.
In the case of landlords, this part of the Landlord and Tenant Act presents landlords with new possibilities as well as restrictions in the management of commercial properties:
Section 24 can affect the landlord in the scenario that the tenant cannot free the house after the expiration of the lease contract. The landlords need to follow the proper notice period process for this. This thing might be frustrating in the landlord's case. To do this, the landlord must apply for the notice period under section 25.
Section 24 affects the landlord in case of applying for the notice period, which obviously takes more time after the expiration of the lease contract, but it also protects the rights of the tenant. Now, in the situation of commercial properties, this section provides help by protecting tenants' rights. Moreover, the landlord cannot evict the tenant without following the notice period. Under this section, the tenant has the legal right to renew the lease until the landlord gives a valid reason, such as demolishing the property, making changes to it, and so on.
There are the common disadvantages that become the most questioned thing under section 24;
The landlord cannot evict the tenants without providing any notice period and valid reason for refusal to renew the lease contract. This thing restrains the rights of the landlord.
Section 24, on one side, plays the role of long-time commitment. By this, the landlord and tenant become part of the pack until section 25 is not applied.
This section clears all the rights of landlords and tenants to avoid any disputes in the future. Moreover, if the landlord does not follow the rules and regulations, then the tenant has the right to file any legal complaint against the landlord.
If the property is under section 24, then the landlord cannot deduct the mortgage interest from the rental income, which makes it less attractive for investors to invest in this. Furthermore, the tax on the rental income makes it more unattractive for investors.
In a nutshell, "Section 24 landlord and tenant act" provides many facilities to both tenant and landlord. This part of the 1954 act protects the rights of both parties and makes the tenancy period smooth for them. Additionally, Visit Proptino Manager for more information!
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No, section 24 cannot apply to limited companies, but in this situation, if the buyer buys the property from the company, there is still a mortgage interest deduction.
Yes, some landlords use multiple strategies to avoid this Act, such as by transferring the property to private limited companies or spousal transfers to reduce the taxes that come on income level.
No, this is applied by law, and each individual who buys the property opts to follow the rules and regulations that come under this section.
Yes, the landlord has the right to do that. He/she can do it by increasing the rent, shorter lease terms, or adding new clauses.
Well, it depends on the nature of the property. If the property is commercial, then the tenant has protection under the 1954 section. Landlords cannot refuse to renew lease agreements until they have some valid reasons.
