Section 40 Notice

Introduction

Before landlord and tenant make decisions on whether to renew or end a business lease, a section 40 notice can be served on the other party in order to gather information as to the lease. This information then helps that party to assess the situation and either renew or end the lease.

When can a section noticed by served?

It can be served at any time although it is most common to serve one towards the end of the current lease and certainly within enough time for the other party to respond and for appropriate decisions to be made prior to the expiry of the lease.

Must I respond?

Both tenant and landlord must respond within month of the notice being served. Parties must accordingly keep that information up to date for a further six months, if for any reason, it changes. The notice bringing the other party up to date must be provided within one month of the party becoming aware of it.

If you are the recipient of a Section 40 notice, however, have previously transferred your interest in the property and given notice of the transfer and the name and address of the transferee, you will cease to be under any duty imposed by Section 40.

What information must the notice provide?

• A Section 40 notice served by a landlord on a tenant seeking information will require the tenant to state whether there has been a contracting out of any sub-letting or whether a Section 25 or Section 26 notice has been served;
• A Section 40 notice served by the tenant on the landlord will require the landlord to state, where there is a superior lease, whether a Section 25 or Section 26 notice has been served.