Paragraph 1 “Business tenancy”F1

(1)

A tenancy is a “business tenancy” at a particular time if, at that time, Part 2 of this Act—

(a)

applies to the tenancy, or

(b)

has the potential to apply to the tenancy.

(2)

For that purpose, Part 2 has the potential to apply to the tenancy at a particular time if, at that time—

(a)

Part 2 cannot apply to the tenancy because—

(i)

none of the property comprised in the tenancy is or includes premises which are occupied by the tenant, or

(ii)

property comprised in the tenancy is or includes premises which are occupied by the tenant, but none of those premises are so occupied for the purposes of a business carried on by the tenant or for those and other purposes,

(b)

the terms of the tenancy include terms (the “permitted business use terms”) which would permit the tenant to occupy the premises for the purposes of a business carried on by the tenant (whether the terms permit occupation for the purposes of business generally, a specific business or a specific kind of business) or for those and other purposes, and

(c)

if the tenant were to occupy the premises in accordance with the permitted business use terms (and taking into account all other circumstances), Part 2 of this Act would apply to the tenancy.

(3)

For the purposes of sub-paragraph (2)(b), terms of the tenancy which—

(a)

would prohibit the tenant from occupying the premises for some purposes, but

(b)

would not prohibit the tenant from occupying the premises for other purposes,

are to be regarded as terms which would permit the tenant to occupy the premises for the purposes which are not prohibited.

(4)

Sub-paragraph (2) must be construed as one with section 23(1).

Annotations

Textual amendments

F1: Sch. 7A inserted (29.4.2026 for specified purposes) by English Devolution and Community Empowerment Act 2026 (c. 23), s. 108(1)(6), Sch. 37 para. 2