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New lease terms


When a new is granted what should be its terms? There are specific provisions in the 1954 Act relating to duration (s33) and rent (s34) but what of the other terms? If the lease was granted many years ago can the landlord insist on a new modern lease, and to what extent? The key provision is section 35 of the Landlord and Tenant Act 1954, which is in the following terms:
    : (1) The terms of a tenancy granted by order of the court under this Part of this Act (other than terms as to the duration thereof and as to the rent payable thereunder) shall be such as may be agreed between the landlord and the tenant or as, in default of such agreement, may be determined by the court; and in determining those terms the court shall have regard to the terms of the current tenancy and to all relevant circumstances.

    (2) In subsection (1) of this section the reference to all relevant circumstances includes (without prejudice to the generality of that reference) a reference to the operation of the provisions of the Landlord and Tenant (Covenants) Act 1995.


The leading case on how the court will approach the question of the new terms in a lease is O’May v City of London Real Property Co Ltd [1983] 2 A.C. 726.


The landlord wanted the new lease to be a “clear lease”; ie a lease under which T would be required to pay a variable service charge to cover all L’s expenses on the building. L was prepared to offer a lower rent. However, this was not the position under the old lease and T did not wish to accept such a lease.


The House of Lords held that the onus was on L to justify the alteration in the terms of the tenancy and that it had not done so.


The key citations in that case are probably as follows:
    Lord Hailsham

    “From these sections I deduce three general propositions.
    (1) It is clear from section 34 that, in contrast to the enactments relating to residential property, Parliament did not intend, apart from certain limitations to protect the tenant from the operation ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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