Section 25 Notices and commercial lease renewals: strategy for landlords and tenants

24th Jun 2026

Author: Paige Lester

The end of a commercial lease is often a strategic point for both landlord and tenant.

A landlord may be considering redevelopment, owner occupation, a revised rent, a different tenant mix or updated lease terms. A tenant may be weighing up business continuity, relocation costs, customer disruption, fit-out investment and the commercial value of remaining in the premises.

A Section 25 Notice is not simply an administrative step. It can set the timetable for renewal discussions, affect each party’s negotiating position and determine what must happen next. For that reason, it should be considered early and in the context of the wider commercial objective.

Paige Lester, a specialist in our Property Dispute Resolution Team, explains what a Section 25 Notice is, when it is used and why getting it right matters.

What is a Section 25 Notice?

A Section 25 Notice is a formal notice served by a landlord under the Landlord and Tenant Act 1954. It applies where a business tenancy has security of tenure. This mean the tenant may have a statutory right to remain in occupation and request a new tenancy when the contractual lease term ends.

The notice brings the current protected tenancy to an end on a stated date. It will either:

• propose terms for a new tenancy
• state that the landlord opposes renewal and explain the statutory ground or grounds relied upon

A Section 25 Notice is only relevant where the lease is protected by the 1954 Act. If the lease was validly contracted out before it was granted, the tenant will not usually have the statutory right to renew and a Section 25 Notice should not be needed.

Why timing matters commercially

A Section 25 Notice must give at least six months’ notice and no more than twelve months’ notice. The termination date cannot be earlier than the contractual expiry date of the lease.

That timing window can be commercially significant. Serving too late may delay a landlord’s plans. Serving too early, without a clear strategy, may put pressure on the landlord before it has the evidence or commercial position it needs.

For tenants, the notice starts a timetable that must be managed carefully, particularly where alternative premises, funding, fit-out, staffing or customer access are relevant. From a tactical perspective, tenant’s may wish to serve a Section 26 first so they can start the process with a longer notice period (up to 12 months), giving them more time for negotiation.

A landlord cannot serve a valid Section 25 Notice if the tenant has already served a valid Section 26 request for a new tenancy. The two procedures do not run together. In broad terms, the first valid step usually determines the route that follows.

Using a Section 25 Notice as part of a wider property strategy

For landlords, the question is not only whether a notice can be served. The more important question is what the notice is intended to achieve.

If the landlord is prepared to renew, the proposed terms should be commercially thought through. Rent, term length, break rights, repair obligations, rent review provisions, permitted use and service charge arrangements may all affect the value and flexibility of the asset.

If the landlord wants to oppose renewal, the position needs to be tested before the notice is served. The statutory grounds under the 1954 Act include, for example, certain tenant breaches, redevelopment and the landlord’s intention to occupy the premises. Where the landlord relies on redevelopment or occupation, it will need evidence that the plan is real, settled and capable of being carried out.

That may involve considering planning, funding, professional reports, internal approvals, timescales and whether vacant possession is genuinely required. A weak or poorly prepared opposition can lead to delay, cost and uncertainty.

Why tenants should treat a Section 25 Notice as a business-critical deadline

For tenants, receiving a Section 25 Notice should prompt immediate review. Even where the landlord appears willing to renew, the notice sets a timetable that can affect the tenant’s right to remain.

The tenant should consider whether the notice is valid, whether the proposed terms are commercially acceptable and whether the landlord is opposing renewal. If terms are not agreed, or if the landlord’s opposition is disputed, court proceedings may need to be issued before the deadline expires unless a valid written extension is agreed.

If the tenant misses the deadline, it will lose the statutory right to a new tenancy. That can create significant commercial risk, particularly for businesses where location, goodwill, staff access, customer footfall or operational continuity are central to trading.

Early advice also helps tenants assess their options. In some cases, the priority may be agreeing a renewal. In others, the tenant may want to use the timetable to negotiate exit terms, plan relocation or challenge the landlord’s proposed terms.

Can the deadline be extended?

Yes, but it must be done properly.

Landlords and tenants often continue negotiating after a Section 25 Notice has been served. The deadline can be extended by written agreement before the existing deadline expires. Informal discussions or a shared expectation that matters will be resolved are not enough.

Any extension should be clearly recorded, agreed by the correct parties and diarised. This protects both sides and avoids an unnecessary dispute about whether the tenant’s renewal rights have been preserved.

Practical points for landlords and tenants

A Section 25 Notice should be approached with both legal and commercial discipline.

Landlords should check the lease, confirm whether the 1954 Act applies, decide whether renewal is opposed or supported and prepare evidence before relying on any opposition ground. They should also make sure the notice is served correctly and that records of service are kept.

Tenants should take advice as soon as the notice is received. They should not assume that negotiations alone will protect their position. Key dates should be diarised immediately and the proposed terms should be reviewed against the needs of the business, not just against the existing lease.

Both parties should also consider valuation evidence at an early stage. If rent is in dispute, evidence of market rent can shape negotiations and help avoid delay.

Should this be handled as a dispute?

Not always. Many Section 25 Notices lead to agreed renewals. However, even a cooperative renewal can become difficult if deadlines are missed, the proposed terms are unclear or one party has not prepared properly.

Where the landlord opposes renewal, or where the parties are far apart on rent or terms, the matter should be treated as a potential dispute from the outset. That does not mean taking an aggressive approach. It means protecting your position, understanding the evidence and making decisions with the full picture in mind.

How Butcher & Barlow can assist

If you are a commercial landlord considering serving a Section 25 Notice, or a business tenant who has received one, early advice can make a real difference.

Our Property Dispute Resolution Team advises landlords and tenants on Section 25 Notices, lease renewal disputes and related commercial property issues. We will help you understand the timetable, assess your options and protect your commercial position.

To speak to Paige or a member of our Property Dispute Resolution Team, please get in touch on 01606 334309 or email Paige at plester@butcher-barlow.co.uk

 

 

 

 

 

 

 

 

 

 

 

 

The information in this article was correct at the time of publication. The information is for general guidance only. Laws and regulations may change, and the applicability of legal principles can vary based on individual circumstances. Therefore, this content should not be construed as legal advice. We recommend that you consult with a qualified legal professional to obtain advice tailored to your specific situation. For personalised guidance, please contact us directly.