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FASTER BUSINESS TENANCY RENEWALS GOOD NEWS FOR LANDLORDS AND TENANTS

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New measures to streamline procedures for renewing business tenancies ...
New measures to streamline procedures for renewing business tenancies

or bringing them to an end was signed by planning minister Keith Hill

yesterday.

The Order, aimed at speeding up the process and reducing the number

of cases which go to court, will remove the current need for

landlords and tenants who have agreed to waive security of tenure to

get court permission. It will be replaced by a simpler 'health

warning' notice, written in plain English, served on the tenant.

The minister said:

'Our reforms will make the process of renewing or ending a business

tenancy quicker, easier, fairer and cheaper. Both owners and

occupiers of commercial property stand to benefit.

'Our reforms mean landlords and tenants about to take out a lease

will no longer need to get court permission for an agreement to waive

the tenant's normal rights of security of tenure. This was a

bureaucratic and sometimes costly process which our research has

shown is not an effective safeguard for business tenants giving up

their right to renew their tenancy.'

The Order requires the landlord to serve a 'health warning' notice on

the tenant, explaining the loss of rights and the importance of

getting professional advice. The tenant must sign a declaration that

they have read the 'health warning' and accepted its consequences.

The landlord must give the tenant at least 14 days' notice otherwise

the tenant must visit an independent solicitor to make a special

'statutory declaration'.

The Order contains a number of other useful provisions, such as:

making the rules on interim rent (rent payable pending renewal of the

tenancy) fairer; clarifying how a tenant may bring a business tenancy

to an end; and improving the arrangements for the parties to obtain

information from one another before embarking on renewal or

termination procedures.

The new arrangements will come into effect on 1 June 2004.

Notes

1. The n ew Order, the Regulatory Reform (Business Tenancies) (England

and Wales) Order 2003, has made a number of detailed amendments to

Part 2 of the Landlord and Tenant Act 1954. The Order and Part 2 of

the 1954 Act, as amended, may be found at www.odpm.gov.uk.

2. The changes stem mainly from the Law Commission report Business

Tenancies: A Periodic Review of the Landlord and Tenant Act Part II

(Law Com No 208, published in 1992). They were refined in the course

of subsequent consultation exercises by the Department of the

Environment (1996) and the Department of the Environment, Transport

and the Regions (2001).

3. The Order underwent detailed parliamentary scrutiny in autumn

2002. The House of Commons Regulatory Reform Committee were content,

subject to some minor amendments which the government accepted. The

House of Lords Committee on Delegated Powers and Regulatory Reform

had some concerns about the revised arrangements for agreements to

exclude security of tenure. In response, ODPM carried out some

research on the existing procedures and further consultation of small

business representative bodies, which met the committee's concerns.

The Order underwent final parliamentary scrutiny, with subsequent

approval by both Houses, in autumn 2003.

4. The Order applies to England and Wales. The National Assembly for

Wales gave plenary consent to the Order on 4 November 2003.

5. The new provisions come into effect on 1 June 2004. In

preparation, ODPM will be amending the current statutory notices

provisions, as a Statutory Instrument under the Landlord and Tenant

Act 1954. It is also preparing information and detailed guidance

material for users and their professional advisers.

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