Jurisdiction(s):
United Kingdom

LTA 1954: Landlord’s break does not prevent sub-tenant’s section 26 request; section 25 notice still required (Fast Drinks v Cetyl)

Published on: 02 February 2017

Published by a LexisNexis Property expert

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Article summary

Original news

Fast Drinks Ltd v Cetyl International Group Inc [2016] EWHC 3501 (QB). The newly released transcript of this notable ex tempore ruling has now appeared. On appeal, the question was whether the sub‑tenant, Fast Drinks, could properly make a section 26 request for a new tenancy naming 1 July 2015 as the start date, even though the contractual term would otherwise have ended on 15 January 2016. The dispute centred on timing under section 26, given a later contractual expiry in mid‑January 2016 instead.

What are the practical implications of this case?

The decision cautions landlords holding break options that a break operated lawfully brings only the contractual term of the headlease and any sub‑leases to an end. But any statutory continuation tenancy or tenancies persist unless and until a Landlord and Tenant Act 1954 section 25 notice is served, citing one of the section 30 grounds, following the standard approach. Ideally, this should be planned from the start: where a landlord enjoys a break right, the lease ought to be contracted out of the 1954 Act’s security of tenure regime, with a requirement that any sub‑leases are likewise contracted out.

What were the facts of the case?

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