A tenant who wishes to obtain a new tenancy, and
who has not got one by agreement with the landlord, must apply
to the court. The application has to be made at least two months,
but not more than 4 months, after the landlord gave a section
25 notice to end the tenancy or the tenant gave a section 26 request
asking for a new tenancy.
Failure to observe these time limits will result in the tenant
losing his right to apply for a renewal of the tenancy. The court
has no jurisdiction to extend the time limits. The parties can
by agreement waive the time limits, but they cannot do so after
the tenancy has ended.
The strict time limits are intended to prevent a
party from using deliberate delaying tactics to the detriment
of the other. However, the negotiations for a new lease often
cannot be completed before the time limit for making a court application
expires. A tenant must in such a case make a court application
in order simply to preserve his rights, even in a case where agreement
has virtually been reached. Once an application is made, the tenancy
is extended until 3 months until after the application has been
finally disposed of.
These strict limits have been criticised on two grounds.
First, they have proved a trap: a number of tenants lose the chance
to renew because they or their professional advisers have not
made an application in time. Second, a large number of court applications
are made purely as a precautionary measure and then abandoned
if the parties have reached agreement on renewal terms.
The Law Commission's proposals for rationalising
the renewal procedure, which have been adopted by the Department,
are guided by two considerations: first, that neither party should
be able to cause unreasonable delay in the renewal process; and,
secondly, that unnecessary court applications should be eliminated.
The main proposals are as follows:
- Either party - the tenant or the landlord - should
be able to apply to the court for the renewal of a tenancy. This
would discourage unnecessary delay, since it would give either
party the chance to take the initiative in bringing the matter
to the court.
- A landlord should be able to initiate proceedings
to terminate the tenancy without renewal.
Additionally, there are three further proposals,
all aimed at ensuring that proceedings under the Act should not
proliferate and impose an unnecessary burden on the parties and
on court resources:
- If a landlord is unsuccessful in proceedings
to end a tenancy without renewal, it should not be necessary for
the tenant to start new proceedings an order for the grant of
a new tenancy. In these circumstances, the court should be able
to order the grant of a new tenancy and settle its terms.
- In order to prevent duplication of proceedings,
neither party should be able to bring an action if the other had
already begun proceedings. This would mean that a party would
be precluded from making a renewal application if the other had
already made such an application, or if the landlord had applied
to terminate the tenancy without renewal. Nor could the landlord
apply to terminate the tenancy without renewal if either party
had made a renewal application.
- The landlord should not be able to withdraw his
application (for renewal or termination of the tenancy without
renewal) without the tenant's consent. This is intended to be
a safeguard for the tenant. The rule preventing concurrent proceedings
(see bullet point immediately above) would be open to abuse if
the landlord could start proceedings and immediately discontinue
them so as to stop the tenant from renewing his tenancy.
The Department has also put forward proposals regarding
the time limits for applications to court. One effect of the current
stringent time limits is that many court applications are started
as a purely precautionary measure, but later abandoned. The Department's
proposals (which follow the Law Commission's recommendations)
are aimed at eliminating unnecessary court proceedings (thereby
achieving savings in costs and court resources).
- the landlord or the tenant would be able to apply
to the court at any time before the date specified in the landlord's
section 25 notice to terminate the tenancy, or the tenant's section
26 request for a new tenancy.
This would itself have the effect of extending the period currently
allowed by at least 2 months.
- the landlord and tenant would then be able to
agree to extend the date by which an application may be made.
The proposal also deals with the question of whether
there should continue to be a time before which an application
cannot be made. At present an application made less than
2 months after service of the landlord's section 26 notice or
the tenant's section 26 request cannot be entertained by the court.
In accordance with the Law Commission's recommendations, the Department
propose to modify this requirement. The guiding principle is that
there is no sound procedural reason for requiring an application
to be delayed once it is clear whether the landlord intends to
oppose a renewal and, if so, on what ground.
- once the landlord has given a section 25 notice,
a party would not have to wait for two months before making an
application to the court
- if the tenant serves a section 26 request, a
party would have to wait for two months before making an application
to the court unless the application is made after the landlord
has given a counternotice within that period.
The reason for these two slightly differing rules
stems from the fact that in the situation mentioned in the first
bullet point above, the tenant will no longer be required to serve
a counternotice in response to the landlord's section 25 request.
This being so, there is no reason for requiring an application
to the court to be delayed. On the other hand, as indicated earlier,
the landlord's counternotice in response to a tenant's section
26 notice is to be retained.
If the tenant serves a section 26 request, the landlord may within
two months give a counternotice that he will oppose a renewal
and state the grounds of opposition. In this case proceedings
should not be started until the position is clear, and as a result
it is necessary to wait for the service of the landlord's counternotice
(or the expiry of the time allowed for its service).
Removal or reduction of a burden
The proposals would remove a burden by allowing landlords
to apply to the court either for renewal of the tenancy or for
termination without renewal, neither of which are currently possible
(the initiative in respect of court proceedings being entirely
with the tenant). They would also significantly relax the time
limits within which applications may be made.
A number of consultees suggested that there was in
fact no need for any time limits. In response, the Department
accepted that the retention of time limits for applications to
the court may not be procedurally necessary. However, it went
on to argue that "the abolition of time limits would require
amendments to sections 24 and 25 of the Landlord and Tenant Act
1954, with potential repercussions well beyond the scope of the
March 2001 consultation paper." As a result, it does not
intend to abolish the time limits altogether, but rather to keep
the position "under review."
We look forward to seeing the Department's conclusions regarding
these time limits in its review of the working of the order.
We are satisfied that the proposals would not
remove any necessary protection. The
proposals at paras 75 and 76 above would ensure that neither landlord
nor tenant would be able to cause unreasonable delay in the renewal
process. They would also have the effect of preventing unnecessary
court proceedings. The proposals at paragraphs 78 and 80 would
replace the present rigid time limits for court application (which
have proved to be a trap for the unwary tenant, and which have
also resulted in a large number of court applications being made
purely as a precautionary measure) with a more flexible regime
which would avoid these problems.