Quirk in s.64 nothing to get excited about

  • Author : Samuel Hopper - 08-08-2011

A quirk in s.64 of the Retail Leases Act 2003 has caused some excitement. recently. Section 64 applies where a retail premises lease does not have an option to renew the lease for a further term.

At least 6 months and no more than 12 months before the lease term ends the landlord must give written notice to the tenant either offering the tenant a renewal of the lease or informing the tenant that the landlord does not propose to offer the tenant a renewal (“initial notice”)(s.64(2)) . If the landlord fails to give the initial notice the landlord must give the tenant a notice containing the same information as the initial notice (“the second notice”) and the lease continues until the day specified in the second notice which must be at least 6 months after the second notice is given or the tenant gives the landlord a notice under s.64(5) (“the tenant’s notice”) (s.64(4)). If the landlord fails to give the inital notice the tenant may, irrespective of whether the landlord has given the later notice, give the tenant’s notice terminating the lease “from a day that is not earlier than the day on which the term of the lease expires” (s.64(5)).

 The section does not specify the latest date by which the tenant can terminate the lease. The question arises whether the tenant’s notice can nominate a day many years in the future for the termination of the lease. In my view, the answer is no: if the tenant gives a tenant’s notice after the landlord has given the second notice the tenant’s notice  can terminate the lease from a date earlier than that specified in the second notice, but cannot extend the date referred to in the second notice; in my view the purpose of the tenant’s notice is to enable the tenant to terminate the lease from a day earlier that that specified by the landlord. If the landlord does not serve the second notice and the tenat serves a tenant’s notice the date specified in the tenant’s notice will be the date the lease expires; however, if the landlord then serves the second notice the date specified for termination of the lease will be the relevant date provided it is at least 6 months after the second notice is given.

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Samuel Hopper

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