Section 25 Notices and Lease Renewals – What Tenants Need to Know

When a commercial lease is coming to an end, a landlord will likely seek to either lock in a new lease or to terminate it. Both of which can be done through them sending a Section 25 notice, which is a formal document issued under the Landlord and Tenant Act 1954, failing to respond to it can lead to serious consequences.  

As a tenant, a clear understanding of how these notices operate is essential to safeguarding your right to remain in occupation of your premises. 

Below are a few practical points that every tenant should make sure they’re aware of: 

1. Ignorance is Not Bliss

A Section 25 notice is a landlord’s formal notice to terminate your protected tenancy and, in most cases, to propose terms for a new lease. The notice includes a strict statutory deadline. Missing that deadline means the tenant loses both the right to renew their existing lease and, once the notice expires, the right to remain in occupation. The landlord may then seek to recover possession. 

To avoid this risk, secure legal advice early and ensure that any protective court application is prepared and issued well before the statutory deadline set out in the notice. Your legal advisers may also be able to negotiate extensions to the deadline, providing additional time for constructive discussions on renewal terms.

2.What Type of Section 25 Notice has Been Served? 

The Good Type: 

Most commonly, a tenant will receive an unopposed Section 25 notice, in which the landlord sets out proposed terms for the renewal lease. However, you should not assume that the terms of your existing lease will simply roll over: the landlord’s proposals may differ significantly from your current arrangements. 

Careful consideration should be given to the landlord’s suggested terms, particularly the proposed rent, the length of the new term, and any break options. It is essential to obtain expert valuation advice from an experienced commercial premises surveyor, as they will understand the local market and help you make an informed decision. 

A lease renewal is also an ideal opportunity to negotiate future‑proofed terms for your occupation. You may wish to secure a break clause, agree a service charge cap (especially in older buildings), or address gaps in the protections included in your original lease. While the landlord is not obliged to accept revised terms, it is important not to overlook the chance to seek improvements that could strengthen your long‑term position.

The Bad Type: 

An opposed Section 25 notice seeks to bring your tenancy to an end on the termination date specified in the notice without offering a new lease. If you wish to remain in occupation, you must issue a court application for a new tenancy before the deadline in the notice and be prepared to challenge the landlord’s grounds for opposition. A landlord may only resist renewal by relying on specific statutory grounds, the most common being an intention to redevelop the premises or an intention to occupy the premises themselves. 

If you receive a hostile Section 25 notice, you should seek legal advice immediately. These matters are highly time‑sensitive, and developing a strategy, gathering evidence, and preparing your case for continued occupation all require careful and early action. 

Conclusion: 

A Section 25 notice can be a daunting legal document to receive. You may be tempted to push it down the priority list or ignore it, but the best action to take is to prepare early and seek expert legal advice as soon as possible. This will give you the best chance of a positive outcome.  

If you require further guidance regarding Section 25 notices, or on commercial leases in general, please contact us to speak to a member of our Real Estate Team. 

If you require further guidance regarding Section 25 notices, or on commercial leases in general, please contact us to speak to a member of our Real Estate Team.