Section 25 Notices (Landlord & Tenant Act 1954): What Commercial Landlords and Tenants Must Know

Section 25 Notices (Landlord & Tenant Act 1954): What Commercial Landlords and Tenants Must Know

A Section 25 notice is one of the key mechanisms used to start, and control, the lease renewal process. This article summarises the key points and how our commercial property team can assist.

What is a Section 25 notice?

A Section 25 notice is a formal notice served by a landlord under the LTA 1954 to bring a protected business tenancy to an end on a specified date and, at the same time, to either propose terms for a new tenancy; or oppose the grant of a new tenancy by relying on one or more statutory grounds (under section 30 of the LTA 1954).

Does the Act apply to every commercial lease?

No. The LTA 1954 generally applies where the tenant occupies the premises for business purposes, but it will not apply where the parties have validly contracted out of security of tenure before the lease was granted.

A threshold point is therefore whether the tenant has LTA 1954 protection at all. If the lease is contracted out, a Section 25 notice is not the relevant process.

Timing: the most common risk area

Section 25 notices must comply with a strict timing rule. The termination date specified in the notice must be at least 6 months after the notice is served; and no more than 12 months after the notice is served. If the dates are miscalculated, the notice may be open to challenge which can derail delay negotiations and increase costs.

Section 25 vs Section 26

A Section 25 notice triggers the start of the renewal process for the landlord. The tenant uses Section 26, which is a request for a new tenancy. Tenants may serve Section 26 where a landlord is not engaging, or to prompt negotiations on renewal terms.

The interaction between these notices can be technical. Any missteps will cause delay.

Opposing renewal: the statutory grounds (Section 30)

If the landlord intends to oppose a new tenancy, the Section 25 notice must state the ground(s) relied on. Common opposition grounds include:

  • Redevelopment: the landlord intends to carry out substantial works and cannot do so without obtaining possession.
  • Landlord’s own occupation: the landlord intends to occupy the premises for its own business purposes.
  • Tenant breach grounds: including disrepair, persistent delay in paying rent, or other substantial breaches.

Where renewal is opposed on certain grounds, the tenant may also be entitled to statutory compensation (depending on eligibility and length of occupation). This is frequently a key commercial point in negotiations.

The court application deadline: protecting your position

A Section 25 notice sets the timeline for any application to the court for a new tenancy. If the parties do not complete a renewal by agreement, the tenant generally needs to issue a court application within the statutory window to preserve renewal rights.

Validity and service: small errors can have big consequences

Disputes frequently arise around whether a notice is validly served and correctly completed. Common issues include:

  • serving the notice by an incorrect entity (e.g. after a change in ownership);
  • inaccurate property descriptions;
  • termination date errors (outside the 6–12 month window);
  • service problems (method, timing, evidence of delivery).

Ensuring that the correct landlord serves the notice and that service is properly evidenced is an essential risk-management step.

8) How our commercial property team can help

Our specialist commercial property department here at Tolhurst Fisher can support both landlords and tenants by providing end‑to‑end assistance, including:

  • For landlords
  • drafting and serving Section 25 notices (whether opposed or unopposed)
  • negotiating renewal terms, including rent review mechanics, break clauses, repair, alienation, ESG provisions, and service charge;
  • coordinating with agents, surveyors, and, where necessary, dispute resolution specialists.
  • For tenants
  • reviewing the lease status (protected vs contracted out) and advising on renewal strategy;
  • responding to a Section 25 notice, negotiating terms, and managing key dates;
  • protecting the tenant’s position where negotiations are ongoing, including deadline management and documentation of extensions;

Practical takeaway

If a lease renewal is on the horizon, the most important practical steps are:

  • confirming whether the lease is protected by the LTA 1954;
  • to diarise the earliest/latest dates to serve notices; and
  • to take early legal advice on strategy to avoiding any validity and deadline issues.

Author: David Senga