A Section 25 notice is used in commercial tenancies in England in several different situations. Section 25 is regulated by the Landlord and Tenant Act 1954 (Part 2), as well as by the Regulatory Reform (Business Tenancies) Order 2003. These regulations apply to commercial tenancies in England and Wales.
There are two types of Section 25 notices. The first is "L&TA 1954 Section 25 notice, landlord not opposing new tenancy," which informs the tenant that there's no opposition to a new tenancy. The tenancy can be renewed under the same terms as the current tenancy, or new terms can be introduced. The second type is "L&TA 1954 section 25 notice, landlord is opposing new tenancy," which is the form used when a landlord opposes a renewal of tenancy. A landlord can oppose the tenancy for three reasons only: a desire to develop the property himself, a tenant who's delinquent on the rent, or a tenant who has defaulted on lease terms.
A landlord opposing renewal may not have to go to court if a tenant doesn't respond to an opposing Section 25 notice; the tenancy simply ends on the date specified in the notice. If the tenant responds, the landlord must defend his reasons for ending the tenancy in court. The landlord must prove the termination of tenancy is legal under the Landlord and Tenant Act 1954.
The Section 25 notice has to be served to the commercial tenant between six and 12 months before the current lease ends. A tenant has a duplicate of the Section 25 notice, called the Section 26 notice. This notice is exactly the same as a Section 25 notice, save that the tenant serves it to the landlord. There are no differences between the two forms. If the tenant gets his notice out first, the landlord cannot send his Section 25 notice.
In situations where the landlord and commercial tenant have different ideas on what lease terms are acceptable, either party can file for a court case or simply negotiate out of court with the other party. The court decides the contested lease terms and orders a new tenancy to be established based on those terms.
Waiving the Landlord & Tenant Act 1954
A commercial landlord can avoid any requirements to file a Section 25 notice or respond to a Section 26 notice by instructing a tenant to waive his rights under the Landlord & Tenant Act 1954, which then makes all lease negotiations subject to the lease terms alone. These rights must be waived before the tenant signs the lease agreement. A tenant waiving these rights loses the ability to pursue legal recourse rights given by the act.