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16 images FEBRUARY 2017
KB BUSINESS DEVELOPMENT
n In January Metro Bank announced that it had ring-fenced £1
billion to lend to new and existing businesses and commercial
customers in 2017.
The bank says it takes a case-by-case approach to lending.
Mark Stokes, managing director of commercial banking at
Metro Bank, said: “Businesses are the very bedrock of the UK
economy and it’s absolutely vital that lenders do what they can
to support their growth.”
n A CBI survey of UK manufacturers at the end of 2016 found
that production growth is at its highest level since 2014, with
expectations for growth in Q1 2017 remaining solid.
Q&A
I ’m looking at leasing a commer-
cial property as a long-term home
for my garment decoration busi-
ness, and I am expecting to spend
some money on making the property
suitable for my print and embroidery
operations. Someone has mentioned
security of tenure to me – what is it,
and will I have to pay more for it?
Security of tenure refers to the right giv-
en by the Landlord & Tenant Act 1954 to
business tenants to remain in occupation
of premises at the end of the contractual
term (that is, the number of years grant-
ed) of a tenancy and to apply to court for
the grant of a new lease.
The rights will only arise where:
n there is a tenancy, usually granted by
a lease (that is, neither a correctly
drawn licence nor tenancy at will
would suffice), giving the tenant
exclusive possession of premises for a
term and at a rent;
n the tenant must be in occupation of
the premises for the purposes of its
business; and
n the rights have not been specifically
excluded (that is, ‘contracted out’)
from the tenancy.
Accordingly, at the end of contractual
term, where the rights apply, a tenancy
occupied, or wanting more certainty,
and can be acquired either on the grant
of a new tenancy or the acquisition of
an existing tenancy.
A tenant should not normally expect
to pay more for security of tenure (for
example, by way of higher rent); how-
ever, in practice that will be a matter of
negotiation.
A tenant occupying under a tenancy
benefiting from security of tenure must
be aware that, generally speaking, they
cannot simply walk away from the ten-
ancy at the end of the contractual term.
If the tenancy has not been brought to
an end by proper service of the correct
notice then it will continue as will the
tenant’s liability under it – for example,
for payment of rent and business rates,
and for repair of the premises.
will continue on the same terms and at the
same rent until terminated in accordance
with the 1954 Act either by the landlord or
the tenant properly serving notice in the
correct form.
If a tenancy benefiting from security of
tenure is terminated by the landlord then
the tenant will have the right to apply to
court for a new lease and there are only
limited grounds upon which the landlord
can successfully oppose the renewal of
a lease. In certain circumstances (that is,
generally where the tenant is not in de-
fault) a business tenant may be entitled to
receive compensation from the landlord
upon being required to vacate business
premises as a result.
Such rights will be particularly impor-
tant to a tenant who is intending to make
a significant investment in the premises
+BUSINESS CLINIC+
Expert advice on the business of running a garment decoration company
Nick Sanders is a partner at Mayo Wynne
Baxter, which provides comprehensive and
personal service to a broad spectrum of local,
national and international clients.
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