Your landlord wants the premises back to redevelop them, perhaps by relying on a break clause and a redevelopment ground. If you are a business tenant in England and Wales, you may have more protection than you think. The key is Part II of the Landlord and Tenant Act 1954, which gives most business tenants security of tenure. Here is what that means and how to respond.
First question: is your lease "inside" or "outside" the 1954 Act?
Most business tenancies are protected by Part II of the Landlord and Tenant Act 1954 unless the arrangement falls outside the Act's scope or the tenancy was lawfully "contracted out" of that protection before it began (using the prescribed landlord's warning notice and tenant's declaration).
- Contracted out (outside the Act): you have no statutory right to renew, and a redevelopment break clause operates according to its own terms. Check the break conditions are met exactly.
- Protected (inside the Act): even if the lease contains a break clause, the landlord generally cannot simply take possession to redevelop, the tenancy continues under the Act, and to defeat your right to a new lease the landlord must follow the statutory procedure and prove a statutory ground.
This distinction is the heart of your rights, so establish it first.
The redevelopment ground: section 30(1)(f)
Where your tenancy is protected, a landlord who wants possession to redevelop must oppose your renewal on ground (f) in section 30(1): that the landlord intends to demolish or reconstruct the premises (or a substantial part), and could not reasonably do so without obtaining possession.
Crucially, the landlord must prove a firm and settled intention to carry out the works. The Supreme Court has confirmed that the intention must be genuine and unconditional, a landlord cannot rely on ground (f) if its real plan is to do works only because that is what is needed to remove the tenant. This is a real evidential hurdle, and a tenant can challenge whether the intention is truly settled (planning permission, funding, contracts and board decisions are all relevant).
The section 25 notice, and how to challenge it
To end a protected tenancy and oppose renewal, the landlord usually serves a section 25 notice. You should check it carefully, because defects can invalidate it:
- Form and content, it must be in the prescribed form, state the landlord's ground(s) (here, ground (f)), and be given by the competent landlord.
- Timing, it must be given not more than 12 nor less than 6 months before the termination date it specifies, and that date cannot be earlier than the contractual expiry.
If the notice is invalid, it may be ineffective, buying you time and leverage.
Your statutory compensation: section 37
Ground (f) is a "no-fault" ground, you have done nothing wrong; the landlord simply wants to redevelop. So if the landlord succeeds only on ground (f) (or the other no-fault grounds (e) or (g)) and you have to leave, you are usually entitled to statutory compensation under section 37.
The compensation is based on the rateable value of the premises:
- normally one times the rateable value; but
- two times the rateable value if you (and any predecessor in the same business) have been in occupation for 14 years or more.
This compensation is automatic where the conditions are met, it is not a discretionary award.
Practical steps for a business tenant
- Check your lease to see whether it is inside or outside the 1954 Act, and read the break clause conditions precisely.
- On receiving a section 25 notice, check its form, timing and grounds immediately, deadlines are strict.
- Test the landlord's intention to redevelop, is it firm, funded and unconditional?
- Quantify your likely section 37 compensation so you can negotiate from an informed position.
- Take advice quickly, missing a statutory deadline can lose valuable rights.
Key takeaways
- Most business tenancies are protected by Part II of the Landlord and Tenant Act 1954 unless the arrangement falls outside the Act's scope or has been lawfully contracted out.
- To redevelop, a protected landlord must use ground (f) and prove a firm, unconditional intention to demolish/reconstruct.
- Scrutinise the section 25 notice, defects in form or timing can invalidate it.
- If you must leave on the no-fault redevelopment ground, you are usually entitled to statutory compensation under section 37 (1× or 2× rateable value).
Sources
- Landlord and Tenant Act 1954, Part II (ss 23–46): security of tenure, s 25 notice, s 30(1)(f) redevelopment ground, s 37 compensation
- Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 (contracting-out procedure)
- Case law on the landlord's intention under ground (f), including the Supreme Court's confirmation that the intention must be unconditional
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.