• the competent L is the first person up the chain with an interest of not less than 14 months unexpired;
• if L has a reversionary interest of less than 14 months unexpired, but is himself a business T (whose tenancy is not being ended), then he will be treated as the competent L until an s25 notice is served on him (or until he serves an s26 request). This is because his tenancy will continue automatically until the date specified in such a notice or request. Needless to say, this will only arise where the intermediate T has sublet part of his demise to a business occupier (eg, a shop with offices above, where a retailer has a lease of the whole and sublet the offices);
• an intermediate T who serves an s26 request on his L will then cease to be the competent L of his sub-Ts. If the intermediate T serves a valid and effective s25 notice upon his sub-Ts, and then serves an s26 request on his L, the sub-Ts must serve their counter-notices on the superior L;
• an intermediate business T who has less than 16 months of his lease left must notify his immediate L of any s25 notices served by him on the sub-Ts (or of any s26 requests received);
• the superior L who becomes a competent L (ie by serving an s25 notice on the immediate T, or as a result of the immediate T serving an s26 request) has a period of two months after the giving of the s25 notice by the intermediate L to withdraw it, and then serve his own. Thus, a new competent L can object to renewal even though the former competent L did not (or he can object on other grounds);
• in a chain of tenancies, each intermediate T must notify his L in turn.

Illustration: In practice, it is not usually as complex as it sounds above. For instance, suppose L owns the building, and then lets the whole building to T on an LTA 1954 letting. T then sublets the whole building to a sub-T. In that situation, T has no renewal rights and L is the competent L of sub-T. On the other hand, suppose T sublets part to sub-T, and remains in occupation of the rest. In that situation, T will have renewal rights. Accordingly, unless and until L serves s25 notices on T (or T serves an s26 request on L), T will be the competent L of sub- T. But, as soon as one of those events happens, L becomes the competent L of sub-T. Bear in mind that T can only require L to grant him a lease of the part occupied by T, although L can insist that the court orders T to take a new lease of the whole building (in which case T’s only alternative would be not to renew at all).

Source: the excellent ‘Renewing Business Tenancies’ (Graham Fife, Brian Hilditch; 3rd edition; Jordans £45).