One point to note under the new procedure (introduced last June) is that L can now make an application to the court for a new tenancy – and thus L can be the claimant under a lease renewal procedure. Moreover, the fact that a notice can be served so far in advance of the contractual termination date, coupled with the fact that L can now be the claimant, has given rise to a potential new position on costs which is potentially beneficial for Ts but detrimental to Ls. This situation might arise where, following an s25 or s26 notice, L makes an application to the court when there is still time left under the contractual term. In that situation, L is the claimant. The problem from L’s point of view is that T could progress the lease renewal proceedings but then subsequently vacate at the termination date (using s27(1A)). In that situation, T could argue that L must file a notice of discontinuance, in which case L would then be liable for T’s costs. In effect, this amounts to a reversal of the old position whereby if T decided to vacate on an unopposed lease renewal it was liable for L’s costs. Thus the new position benefits Ts since they can, while the contractual term still exists, continue to protect their position under the lease renewal proceedings, and then use s27(1A) to vacate just before the contractual termination date – and get their costs.

Once the contractual termination date has expired, T can vacate by serving an s27(2) notice, and it might still be able to argue that L should be liable for its costs, although that is less likely to be received sympathetically by the court. Needless to say, Ls who are considering starting lease renewal proceedings should be made aware of this potential costs downside. See [2005] 147 Property Law Journal 2 . © Practical Lawyer