Commercial leases in England and Wales often come with security of tenure under the Landlord and Tenant Act 1954. This means a tenancy continues after expiry until formally ended using Section 25 or Section 26 notices.
In this newsletter, we outline how these notices work, how they differ, and recent legal developments landlords and tenants should be aware of.
Security of tenure explained
Under the 1954 Act, most commercial tenants have the right to renew their lease unless the landlord can rely on specific statutory grounds to oppose renewal, such as intending to redevelop the property or take occupation themselves. If neither party takes action, the lease continues on the same terms after it expires. Ending or renewing the tenancy requires one of the formal notices described below.
What is a Section 25 notice?
A landlord may serve a Section 25 notice to bring the tenancy to an end. It can either propose a new lease or oppose renewal altogether.
The notice must give between 6 and 12 months’ notice, cannot take effect earlier than the lease expiry date, and must state valid grounds if the landlord opposes renewal. A tenant who wishes to stay must agree terms or apply to the court before the termination date.
What is a Section 26 notice?
A Section 26 notice is served by a tenant who wants to request a new tenancy agreement. It can only be used if the landlord has not already served a Section 25 notice.
The request must also give between 6 and 12 months’ notice, propose terms for the new lease, and trigger a two-month deadline for the landlord to respond if they intend to oppose renewal. If no counter-notice is served, the tenant is entitled to a new lease in principle.
Key differences between Section 25 and Section 26
Section 25 notices are served by landlords and can either propose a new lease or oppose renewal. Section 26 notices are served by tenants and always request a new lease. If the landlord intends to oppose, they must respond with a counter-notice within two months.
The first notice served sets the process in motion. Landlords propose terms in Section 25 notices, while tenants do so in Section 26 notices. Only one notice can be valid at a time.
Using Section 25 and Section 26 notices effectively
For landlords, a Section 25 notice helps control timing and prevents a tenancy from continuing indefinitely. It allows them to propose new terms or oppose renewal on valid grounds, such as redevelopment or intended occupation. Courts now expect clear evidence, particularly where redevelopment is claimed.
For tenants, a Section 26 notice can pre-empt the landlord’s action and propose preferred lease terms. It is a useful tool, but timing is crucial. If the landlord serves a counter-notice and the tenant misses the court deadline, renewal rights may be lost.
Both parties should plan strategically. Missed deadlines or weak evidence can put their position at risk.
Recent case law and developments
A key 2024 case, Sainsbury’s Supermarkets Ltd v Medley Assets Ltd, confirmed that landlords must provide solid evidence when relying on redevelopment to oppose renewal. The court held that vague or speculative plans were not enough.
In Spirit Pub Company v Pridewell Properties [2025], the landlord’s claim also failed. Although there was genuine intent, the court found a lack of proof around funding and the ability to carry out the works. The tenant was granted a renewal lease.
By contrast, in the recent 2025 case of MVL Properties (2017) Limited v The Leadmill Limited the landlord was successful in re-claiming the premises by demonstrating a clear, settled and realistic intention to occupy the property for the purposes of its own business even though the tenant had shown that it had built up considerable goodwill from trading from the premises.
The Law Commission is also reviewing the 1954 Act. While no changes are confirmed, landlords and tenants should stay informed, as the renewal process may change.
How 3CS can help
Section 25 and Section 26 notices come with strict rules and deadlines, so careful planning is crucial. For practical guidance or support with serving or responding to a notice, feel free to contact the commercial property team at 3CS Solicitors.
