The term was to expire on 25 March 1988. The landlord served a section 25(1) notice to determine the tenancy on 1 March 1989 to which the tenants responded with a notice under section 27(2) to determine the tenancy on 24 June 1988. In fact the tenants vacated the property on or immediately before 25 March 1988 and refused to pay rent for any subsequent period. The landlords sued in the County Court for unpaid rent. The County Court judge determined that the tenants were not liable.
Held: The appeal succeeded.
Dillon LJ said: ‘It is quite plain therefore, under subsection (1) [of s.27], that the tenant for a fixed term who does not want to continue his tenancy under the Act and will be ceasing to carry on business in the premises on the expiration of the fixed term is expected to give notice to his landlord not later than three months before the date on which, apart from the Act, the tenancy would come to an end by effluxion of time. That is in line with the need for a landlord to have reasonable notice of his tenant’s departure, which one can find recognised in other provisions in the Act, such as section 24(3)(a) to which I have already referred. It is inconsistent, in my judgment, with the view adopted by the judge that if the tenant ceased carrying on business on the contractual date and left the premises he could do so without any notice at all because the provisions of the Act would automatically fall away. To my mind the key provision is that section 24(1) which provides that ‘a tenancy to which this Part of this Act applies shall not come to an end unless terminated in accordance with the provisions of this Part of this Act’. It follows that the tenancy, which was a business tenancy that the tenant took under the compromise agreement of December 1987, was a tenancy which could be terminated only in accordance with the provisions of the Act, even during its fixed term. When one comes to section 27(2) one has the opening phrase ‘A tenancy granted for a term of years certain which is continuing by virtue of section twenty-four of this Act’. It is submitted that that, in the present case, could apply only after March 25 1988 if the tenant was still in occupation, but the tenancy by virtue of section 24 is continued by the Act and is from the outset a continuing tenancy. Moreover, section 27(2) envisages a notice under the subsection being given before, as well as after, the date on which apart from the Act the tenancy would have come to an end; that is to say, in the present case, before March 25 1988. That necessarily shows that you cannot look at the tenancy as merely continuing by virtue of the Act after the date on which apart from the Act the tenancy would have come to an end. Subsection (2) envisages the notice given before that date, yet the tenancy is still a tenancy which is said to be continuing by virtue of section 24. That to my mind picks up the opening words of section 24, to which I have already referred, in the manner which I have mentioned. In the present case, therefore, my conclusion is that it was open to the tenant to serve the notice under section 27(2). The tenant was not bound to await the expiration of the landlord’s much longer notice. There is no reason why the tenant should be regarded as locked in by the duration of the landlord’s notice. But the tenant was not entitled to bring its liability to pay rent to an immediate end just by quitting the premises on the original contractual term date. That term date is subject to the provisions of section 24(1).’
 1 EGLR 91
England and Wales
per incuriam – Esselte Ab and British Sugar Plc v Pearl Assurance Plc CA 8-Nov-1996
The tenant was no longer in occupation of the demised premises when he served a s27 notice.
Held: A business tenancy ceases at end of the lease, if the premises are not actually occupied by the tenant despite any notices given. The occupation . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 26 May 2022; Ref: scu.219072