Written for owners of independent shops and small chains in the UK: convenience and grocery, newsagents and off licences, fashion, gifts, hardware, and garden and farm shops.
The short version
- Find out if the 1954 Act protects you.In England and Wales, a tenant in occupation stays on after expiry, unless excluded or contracted out. Renewal can be opposed only on listed grounds.
- Diarise dates when a lease or notice arrives.Breaks, rent reviews, the s.25 or s.26 window and the claim date. Only a written agreement made before the claim date passes can extend it.
- Cap guarantees and service charge; limit break conditions.Never sign an unlimited personal guarantee. Agree break conditions of basic rent paid and vacant possession only; avoid 'no breaches' or 'all sums paid'.
The lease is one of the costliest risks a shop carries. It fixes your rent and your repairs, and decides whether you can stay when it ends. Most of the damage comes from a handful of clauses and a handful of deadlines.
Are you inside the 1954 Act?
Security of tenure (England and Wales)
A business tenant in occupation stays on at the old rent after the lease ends, and the landlord can oppose a new lease only on the grounds the Act lists. Excluded: terms of 6 months or less (unless renewable or occupied for over 12 months), and leases contracted out by a warning notice at least 14 days before the tenant is bound plus a simple declaration (a statutory declaration if under 14 days). As of Oct 2026.
Landlord and Tenant Act 1954 Part II, ss.24, 30 and 38A
Scotland has only the Tenancy of Shops (Scotland) Act 1949, under which a sheriff can extend for up to 1 year at a time, and tacit relocation. Northern Ireland has its own Business Tenancies Order 1996.
The deadlines you cannot miss
- A landlord's s.25 notice is served 6 to 12 months before the date it ends the tenancy, which can be no earlier than the lease's contractual expiry. Form 1 means the landlord will not oppose a new lease; Form 2 means it will, on a ground in s.30.
- A tenant's s.26 request (for leases over 1 year) is also made 6 to 12 months ahead. The landlord has 2 months to serve a counter-notice with grounds, or it cannot oppose.
- The court claim must be issued on or before the date in the s.25 notice, or by the day before the s.26 date.
- You can extend that deadline only by written agreement made before it passes.
- Interim rent: apply within 6 months of the tenancy ending.
The claim date is fixed by law. The new rent is the open market rent, and whoever wants to change the lease terms has to justify it (O'May v City of London Real Property).
| Rent now | £36,000 |
| Increase to the court's rent | £6,000 |
| New rent, usually payable as interim rent from 30 June 2027 | £42,000 |
On an unopposed renewal, interim rent is usually the new lease rent, payable from the earliest date the notice could have given. Set aside the £6,000 a year difference from 30 June 2027.
Clauses to fix before you sign
- Personal guarantee: never unlimited. Cap it at 6 to 12 months' rent, released when you assign the lease.
- Break clause: agree conditions of basic rent paid and vacant possession only. Avoid 'no breaches' or 'all sums paid'.
- Service charge: ask for a cap, exclusions for replacing capital items and for empty units, and an audit right.
- Repairs: attach a photographic schedule of condition and limit your repairing duty to it.
- Turnover rent: define sales (net of VAT, refunds, staff sales, gift cards until redeemed) and say whether click and collect counts.
- Rent reviews: a collar is a red flag. A ban on upward-only reviews has been passed but is not in force, and existing leases keep their clauses.
Break clauses are applied strictly
Break conditions must be met exactly. Rent paid in advance for a period after the break date is lost unless the lease expressly refunds it.
Marks and Spencer v BNP Paribas [2015] UKSC 72
Where the break depends on 'no arrears of rent or other sums', one unpaid sum defeats it.
If an enforcement agent arrives for rent
Under CRAR, a certificated enforcement agent can take control of goods only for principal rent (plus VAT and interest), never for service charge or insurance, even if the lease calls them rent. At least 7 days' rent must be owed, and 14 clear days' notice of enforcement is needed. As of Oct 2026.
Tribunals, Courts and Enforcement Act 2007 Part 3; Taking Control of Goods Regulations 2013
Other long contracts: card terminals, symbol groups and suppliers
Terminal hire is often a 48 or 60-month non-cancellable rental with a finance house, and it survives a change of card acquirer. For example, a gift shop on a 60-month rental at £39 a month that switches acquirer after a year still owes 48 x £39 = £1,872. Get the total rental cost and the exit terms before signing.
- A symbol group or franchise agreement: check the minimum purchase obligations, tied EPOS and payment suppliers, and exit fees before you sign.
- Seasonal suppliers who take no returns: agree sale or return, or a markdown contribution, before you place the order.
Diarise every lease date the day the lease or a notice arrives: breaks, reviews, the s.25 or s.26 window and the claim date. A property litigation solicitor should handle every notice and the claim.
Asked in Greymill
Form 1: the landlord will not oppose a new lease. Good news, but the clock is still running.
30 June 2027: the last day to issue a court claim. It is fixed by law, and only a written agreement made before it passes can extend it.
£48,000: his proposal, not an agreed figure. The new rent is the open market rent, so get rent evidence from a RICS surveyor to answer it.
The cost people forget: if the court sets the new rent at, say, £42,000, you usually pay it from 30 June 2027. Put the £6,000 a year difference aside from then.
A property litigation solicitor should handle the notice and any claim. I'll list the dates and questions to take to them.
Ask it about your own business
Paste this into Greymill with your own figures, and Contracts & Disputes works it through for your business.
I run a shop in the UK, in [nation]. Here is my lease, or the heads of terms for a [new lease or renewal]: [paste]. Tell me whether it is inside the 1954 Act, list every date I must diarise (breaks, rent reviews, s.25 or s.26 windows, the claim deadline), and flag the guarantee, break, service charge, repair and rent review clauses I should push back on before signing.
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Open the interactive lesson · Every shops and physical retail lesson · What Greymill knows about the trade
Sources
The primary sources behind this lesson, checked Oct 2026.
- s.24; s.43(3) (The shop lease: security of tenure)
- s.38A; SI 2003/3096 Sch 2 (The shop lease: security of tenure)
- s.25; s.26(6) (The shop lease: security of tenure)
- ss.29A, 29B (The shop lease: security of tenure)
- s.27(1A), (2) (The shop lease: security of tenure)
- s.30(1), (2) (The shop lease: security of tenure)
- paras 1.2, 1.3, 1.5 (Rent, service charges, repairs and alienation)
- edition and effective date; para 1.2; mandatory requirements (Rent, service charges, repairs and alienation)
- Marks and Spencer v BNP Paribas [2015] UKSC 72 (Rent, service charges, repairs and alienation)
- LTA 1927 s.18(1) (Rent, service charges, repairs and alienation)
- paras 3.3, 5.2 (Rent, service charges, repairs and alienation)
- LTA 1988 s.1 (Rent, service charges, repairs and alienation)
- www.legislation.gov.uk (Lease law reform watch)
- LURA 2023 Part 10, s.193, s.218 (Lease law reform watch)
- project page (Lease law reform watch)
- landlord guidance; interim response (Lease law reform watch)
- Mandatory Licensing Conditions Order 2010 Sch 1 para 3 (as amended 2014) (Deliverables in house style)