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A person or entity will be a business tenant if:
*possession of the premises is held under a tenancy; and
*the tenant occupies at least part of the premises
*the premises or that part of the premises are occupied for the purposes of carrying on a business.
Business tenants are protected under the Landlord and Tenant Act 1954. Like the statutory codes applying to residential tenancies, there are two main effects to the statute; security of tenure and rent control.
Business tenancies have the general right to have their tenancies renewed. A business trading from a particular location will come to be known in the locality over time, building up goodwill and reputation. This goodwill together with the high costs that can be associated with fitting out commercial properties needed protection. A business tenant will also be entitled to compensation for improvements.
Rent control is provided under the 1954 Act to prevent landlords forcing rent rises on tenants significantly over the market rate. Tenancies under the Landlord and Tenant Act 1954 will be continued automatically and the landlord will need to follow a procedure specified in the Act before the tenancy can be brought to an end.
These rights are similar to those available to tenants occupying under residential tenancies, yet there are important differences between the codes. The codes are mutually exclusive. They provide different security of tenure and procedures for ending the tenancy. A tenant holding a business tenancy under the Landlord and Tenant Act 1954 will generally have greater security than the tenant holding an assured shorthold tenancy under the Housing Act 1988.
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Business Tenancies