When to Use a Section 25 Notice and When Not to Use One (Commercial Property – England & Wales)

Section 25 notices under the Landlord and Tenant Act 1954 are critical tools in commercial property management across England and Wales.

However, misusing or misapplying this notice can lead to costly delays or legal disputes.

Understanding when to issue a Section 25 notice—and when not to—is vital for landlords seeking to manage lease terminations or renewals effectively.

What Is a Section 25 Notice?

A Section 25 notice is a formal notice served by a landlord to a business tenant under a commercial lease protected by the Landlord and Tenant Act 1954. It is used to either:

• Propose a new lease (with terms), or
• Terminate the lease and oppose renewal (with or without statutory grounds).

It must be served not less than six months and not more than 12 months before the lease end date (or the proposed termination date), and cannot be served before the contractual term ends if the lease has already expired and is holding over.

When to Use a Section 25 Notice

To Propose Terms for a New Lease

If a landlord wants the tenant to stay but on new terms (e.g. higher rent, different duration), a Section 25 notice must be served proposing those terms. This preserves the landlord’s position and initiates the statutory lease renewal process.

Example: A landlord wants to increase the rent from £30,000 to £35,000 per annum and reduce the lease term from 10 years to 5 years. Serving a Section 25 notice with the proposed terms is the correct approach.

To Oppose Lease Renewal on Statutory Grounds

A landlord may oppose lease renewal only on specific statutory grounds, such as:

• Ground (a): Tenant’s failure to repair
• Ground (b): Persistent delay in paying rent
• Ground (c): Other substantial breaches
• Ground (d): Suitable alternative accommodation available
• Ground (e): Tenancy was created by subletting only part of the property
• Ground (f): Landlord intends to demolish or reconstruct
• Ground (g): Landlord intends to occupy the property

In such cases, a Section 25 notice must state the grounds of opposition clearly.

Example: If the landlord intends to redevelop the property (Ground f), issuing a Section 25 notice opposing renewal is essential to initiate the process of ending the lease.

To Begin Statutory Lease Renewal Proceedings

A Section 25 notice triggers the lease renewal process under the Act. If the tenant does not agree to the proposed terms or opposes the termination, either party may apply to the court for a decision.

When Not to Use a Section 25 Notice

When the Tenant Has Already Served a Section 26 Request

If the tenant serves a Section 26 request (requesting a new lease), the landlord cannot issue a Section 25 notice afterward. The landlord must instead serve a counter-notice opposing the tenant’s Section 26 request within two months.

Mistake to Avoid: Serving a Section 25 notice after a valid Section 26 request will be invalid and may prejudice the landlord’s position.

When the Lease Is Not Protected by the 1954 Act

If the lease is contracted out of the Landlord and Tenant Act 1954, the tenant has no automatic right to a renewal. A Section 25 notice is unnecessary and irrelevant in such cases.

Best Practice: Review the lease terms to check if it is “contracted out” before serving notice.

If Termination Is Agreed Voluntarily

Where both parties agree to terminate the lease or renew it informally (outside the Act), a Section 25 notice is not needed. A formal deed or agreement can be used instead.

When Timing Falls Outside the Legal Window

Section 25 notices must be served 6–12 months before the lease expiry or proposed end date. Serving it too early or too late will make the notice invalid.

Tip: Always diarise key lease dates and consult a solicitor to ensure notices are served correctly.

✅ Section 25 Notices and the 1954 Act:

A Section 25 notice is a statutory notice under Part II of the Landlord and Tenant Act 1954, which only applies to “protected” business tenancies. These are tenancies not excluded (i.e. not “contracted out”) from the renewal rights under the Act.

So ,if the tenancy has not been excluded, the landlord must serve a Section 25 notice to:

• Propose new lease terms, or
• Terminate and oppose renewal.

🚫 If the Lease Is Contracted Out (Excluded from 1954 Act):

If the landlord and tenant agreed to exclude the lease from the 1954 Act before it was granted, the tenant has no statutory right to a renewal, and the landlord does not need to use a Section 25 notice to end the lease.

Instead, the lease simply ends on its contractual expiry date, and the landlord can take possession unless another agreement is reached.

In this situation:

• A Section 25 notice has no effect.
• The landlord is not required to serve any notice under the Act to recover possession.
• The tenant cannot apply to the court for a new lease under Section 24-28 of the Act.

⚠️ Risk of Serving a Section 25 Notice on an Excluded Lease:

If a landlord mistakenly serves a Section 25 notice on a lease that’s excluded from the Act, it may cause confusion or lead to the tenant believing they have statutory rights when they do not. This can result in unnecessary legal costs or disputes.

📌 Frequently Asked Questions -About Section 25 Notices

❓ What is a Section 25 Notice?

A Section 25 Notice is a formal notice issued by a landlord under the Landlord and Tenant Act 1954 to either propose new terms for a business lease or to oppose lease renewal.

❓ When can a Section 25 Notice be served?

It must be served not less than 6 months and not more than 12 months before the date the landlord wants the tenancy to end. It cannot be served if the tenant has already served a valid Section 26 request.

❓ Can a Section 25 Notice be withdrawn?

Technically, once served, a Section 25 Notice cannot be unilaterally withdrawn. However, both parties may agree to disregard it or settle the matter by consent (e.g. agreeing on new lease terms).

❓ What happens after a Section 25 Notice is served?

The tenant can either:

• Accept the proposed terms,
• Negotiate, or
• Apply to the court for a new lease (if the landlord is not opposing renewal).

If the landlord opposes renewal, the tenant may challenge the grounds in court.

❓ Is it necessary to serve a Section 25 Notice for a contracted-out lease?

No. If the lease is “contracted out” of the 1954 Act, the tenant has no statutory right to a renewal, and a Section 25 Notice is not applicable or required.

❓ What if the Section 25 Notice is served too early or too late?

If it falls outside the 6–12 month window, the notice is invalid, and the process must restart with proper timing.

❓ Can a landlord oppose a lease renewal?

Yes, but only on specific statutory grounds under the 1954 Act (e.g. redevelopment, breach of obligations, landlord’s intention to occupy).

❓ Should I use a solicitor to serve a Section 25 Notice?

Yes. Incorrectly drafted or improperly served notices can cause delays, legal disputes, or financial loss. Legal advice ensures compliance and protects your rights.