business tenancy

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A tenancy of premises that are occupied for the purposes of a trade, profession, or employment. Business tenants have special statutory protection. If the landlord serves a notice to quit, the tenant can usually apply to the courts for a new tenancy. The landlord wishes can only oppose the grant of a new tenancy on statutory grounds, which may include breaches of the tenant's obligations under the tenancy agreement or the provision of suitable alternative accomodation by the landlord. Otherwise the court will grant a new tenancy on whatever terms the parties agree or, if they cannot agree, on whatever terms the court considers reasonable. When the tenancy ends, the tenant may claim compensation for any improvements made.

Under the Landlord and Tennent (Covenants) Act 1995 when business tenancies are assigned (see assignment of lease) the new tenant generally takes over the covenants (or promises and warranties) of the first tennant in the lease except when otherwise agreed. Previously the old tenant was always liable if a subsequent tenant defaulted on the lease.

Subjects: Business and Management — Law.

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