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Interesting development where residential premises are used as business premises

The Small Business, Enterprise and Employment Act Regulations 2015 were made on 15 September 2015 which bring into force (on 1 October 2015) some interesting provisions for landlords and tenants.

Sections 35 and 36 are of particular interest because they make changes to the Landlord and Tenant Act 1954 (LTA 1954) to exclude residential properties used as home business premises from the security of tenure provisions of the LTA 1954. The LTA 1954 has been amended to deal with leases that allow tenants to use premises for "home business", the aim being to encourage business by allowing landlords to permit tenants to use their homes as business premises without the risk of the tenant acquiring security of tenure rights (i.e. the right to the grant of a new lease at the end of the term (subject to conditions)). However, Section 23(4) of the LTA 1954 states that a tenancy does not attract security of tenure where the business use is in breach of a term of the tenancy, unless the landlord has consented to, or acquiesced in, the breach.

An interesting development!