Property Law uk

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Section 26 requests

Section 26

Relevant statutory provisions

Section 26(2) of the Landlord and Tenant Act 1954 provides:
    "A tenant’s request for a new tenancy shall be for a tenancy beginning with such date, not more than 12 nor less than 6 months after the making of the request, as may be specified therein:

    Provided that the said date shall not be earlier than the date on which, apart from this Act, the current tenancy would come to an end by effluxion of time or could be brought to an end by notice to quit given by the tenant."
Prescribed form of notice under s26

Landlord and Tenant Act 1954, Part 2 (Notices) Regulations 2004 (SI 2004/1005).

This is the prescribed form to be used under s26 - Form 3.


"Bogus" s26 request

Sun Life Assurance plc v Thales Tracs Ltd
[2001] EWCA Civ 704

Summary

Tenants served a request for a new lease under s26 of the 1954 Act. They did not actually wish to take a new lease they had found alternative premises. They served the notice simply to preserve their compensation rights, knowing that the landlord wanted to redevelop the site. The notice was nontheless valid.

Key facts
  • Contractual term expired on 24 December 1998.
  • T decided to leave. In November 1997 T exchanged contracts to purchase another site.
  • March 98 T served s26 notices purely for the purpose of obtaining compensation under s37.
  • L served a counter-notice under s26(6) opposing renewal but subsequently withdrew its opposition.
  • No application for new tenancy and T gave up occupation on 23 December 1998.
Held

The notice was valid and, the landlord, having served a counternotice the tenants were entitled to compensation. A tenant is not required to have a genuine intention to take up a new tenancy when he serves his s26 request. Nor do the proposals for a new term stated in the request need to be genuine. Service of the notice is a statutory formality; a performative utterance!

Comment

Compare s25 notices where there is a statement of intention eg under s30(1)(g):
  • L must have an honest belief in the ground: Betty's Cafe; Stadbroke v Mitchell.
  • But if the notice is given in good faith the fact that L is different at the date of the hearing does not matter - s25 is like a pleading (Marks v British Waterways Board [1963] 1 WLR 1008).

Break clauses and s26

Garston v Scottish Widows
[1998] 2 EGLR 73, CA.

A s26 request cannot be used to operate a break clause in a lease and then seek a new tenancy. The date of the new tenancy cannot be earlier than the expiry date in the lease.

Landlord’s break notice

Subsequent service of s26 notice by tenant

Fast Drinks v Cetyl International
[2016] EWHC 3501 (QB)

Summary

The exercise by a landlord of its break right allowed a tenant validly to request a new tenancy, which commenced before the original expiry date of the lease. In such circumstances the proviso in s26(2) does not apply; and the tenant’s section 26 request and its subsequent application to court for a new tenancy were both valid.

Facts

A lease was granted to the tenant (T) by the landlord (Cetyl). The lease was expressed to expire on 16 January 2016. The lease contained a landlord’s break clause. An underlease was granted subsequently to the undertenant (U) for a term expiring on 15 January 2016, and shortly afterwards a sub-underlease was granted to Fast Drinks (SUT) for a term also expiring on 15 January 2016. In due course Cetyl exercised a break right ending the lease to T on 17 July 2014.

On 14 July 2014, SUT served a section 26 request (under the Landlord and Tenant Act 1954, Part 2) for a new tenancy on Cetyl specifying 1 July 2015 as the commencement date of the new tenancy.

Subsequently Cetyl served a s25 notice giving notice to end the tenancy on 30 March 2015. (Note that there is a presumed slip in respect of a date given in the case report.) Shortly after the expiry date of the s25 notice SUT applied to the court for a new tenancy.

Issues

Whether the s26 request was valid:
  • If so, SUT’s application to court was in time; or
  • If not, the s26 request was invalid, in this case then Cetyl’s s25 notice was valid and SUT’s application to court was out of time.
First instance

The County Court held that SUT’s s26 request was invalid. It specified an invalid commencement date for the renewal tenancy; the earliest date the renewal tenancy could have commenced was 16 January 2016 (the original expiry date of the lease). Therefore, Cetyl’s s25 notice was valid, and SUT’s application to court was out of time and it was not entitled to a renewal tenancy under the 1954 Act. SUT appealed.

Decision on Appeal

The High Court allowed the appeal. It held that the proviso to s26 was broadly designed to ensure that a tenant cannot bring a lease to an end early by applying for a new lease to commence before the expiry of the contractual term. However, this did not apply where the original lease had been brought to an end earlier than the term expiry date by the landlord's own actions.

Given that when Cetyl terminated the headlease by the exercise of its own break right, all underleases, including that of SUT came to an end (subject to any right to apply for a new tenancy under the 1954 Act) SUT’s sub-underlease could not be said to have an effluxion date after that time, and accordingly Morris J held that if,
    “there is no effluxion date then there can be no date ‘not earlier’ than an effluxion date and so the [s26] proviso cannot operate at all”.
Accordingly, SUT’s s26 request was valid, and its application to court for a new tenancy had been made in time and was therefore valid.

Comment

The case is particularly important because, as Morris J pointed out, “This is a novel point which…has not previously been the subject of decision or consideration”. It clarifies the position relating to when a renewal lease can commence in a situation where the landlord exercises a break right and the tenant wishes to apply for a new lease.


Last day

Making the calculation

Tegekac v Emmott
[2008] PLSCS 186 (Bournemouth County Court)

Facts

T served a s26 request on L claiming a new tenancy of the premises commencing on 9 December 2006. The landlord contended that, as a matter of construction, the lease expired by effluxion of time that day. Accordingly, the request had specified a date for commencement that was “earlier than the date….the current tenancy would come to an end by effluxion of time” for the purposes of the proviso to section 26(2).

Decision

The county court judge held that the request did not contravene section 26(2). The date was not earlier than 9 December 2006. A s26 request specifying the last day of the existing lease was doing no more than asking for a new tenancy at the end of the lease.

Comment

It is difficult to reconcile the judge’s reasoning with the effect of s26(5), which is to terminate the current tenancy “immediately before the date specified in the request for the beginning of the new tenancy”.

By contrast, where the current tenancy is brought to an end by means of a s25 notice, the tenancy ends on the date stated as the date of determination. It has therefore been held that a s25 notice that specifies the last day of the term is good.


Term certain exceeding one year required

Manton Securites Ltd v Nazam
[2008] EWCA Civ 805

Summary

This case contains a reminder that it is not possible for a tenant to serve a request for a new tenancy under s26 of the Landlord and Tenant Act 1954 unless the lease is for a "for a term of years certain exceeding one year"; and of course that a s26 request cannot state a date for commencement of the new tenancy earlier than the date on which the contractual term would expire.

Citation

Rimer LJ:
    "The first oddity is that, so it appeared to us, on neither basis that Mr Nazam claimed to occupy the premises did he have an entitlement to serve a section 26 request for a new tenancy. Section 26(1) provides that such a request may only be made by a tenant who has a tenancy "… for a term of years certain exceeding one year, whether or not continued by section twenty-four of this Act, or granted for a term of years certain and thereafter from year to year." The claimed quarterly tenancy was not such a tenancy. As for the claimed equitable tenancy, assuming (which I doubt, but do not decide) that an equitable claim of that nature gave Mr Nazam a "term certain" for section 26 purposes, that did not entitle him to serve his section 26 notice either. By section 26(2), such a notice is by way of a request for a new tenancy:
    '… beginning with such date, not more than twelve nor less than six months after the making of the request, as may be specified therein: Provided that the said date shall not be earlier than the date on which apart from this Act the current tenancy would come to an end by effluxion of time or could be brought to an end by notice to quit given by the tenant.'
    Mr Nazam's notice purported to request a new tenancy commencing on 25 April 2007. But his equitable tenancy would not expire until 2018 and he had no right to terminate it by a notice to quit before them.


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