Commercial Property
By Emma McCaul
Latest News

Business Tenancies (Northern Ireland) Order 1996

For some businesses in Northern Ireland, their location is their greatest asset. Are all business owners that rent their premises aware of the protection afforded to them by law?

Business Tenancies are governed by the Business Tenancies (Northern Ireland) Order 1996 (“the BTO 1996”).

Under the BTO 1996, any business tenancy which term is greater than 9 months is protected and the Tenant will have security of tenure and the Landlord and Tenant cannot ‘contract out’ of the provisions of the BTO 1996.

Once a Tenancy comes to an end, the Landlord may only oppose a tenancy application by the Tenant on limited grounds, namely:-

A. There has been a substantial breach of the Tenant’s repair and maintenance obligations under the Lease;

B. The Tenant has persistently delayed in paying rent which has become due;

C. There have been other substantial Tenant breaches under the Lease;

D. The Landlord has offered and is willing to provide or secure the provision of alternative, suitable and available accommodation for the Tenant;

E. Where the current tenancy was created by the subletting of part only of the property and the Landlord requires possession of the holding for the purpose of letting or otherwise disposing of the property as a whole;

F. That on termination of the current Tenancy, the Landlord intends to demolish a building or carry out substantial works;

G. The Landlord intends the holding to be occupied for a reasonable period for the purposes of a business to be carried on by the Landlord;

H. That the Landlord is a company and that on termination of the current tenancy, a person with a controlling interest in the company intends to occupy the holding for a reasonable period for the purposes of a business to be carried on by him or the company;

I. Where possession of the premises is reasonably necessary for a public authority to carry out its functions under any statutory provision or rule of law;

Compensation is payable to the Tenant if the Landlord successfully opposes the grant of a new Tenancy under grounds E, F, G, H or I detailed above. The Landlord cannot rely on grounds G and H unless he has owned the premises for a period of 5 years as of the time the Tenancy is terminated.

The compensation payable to the Tenant is calculated by multiplying the net annual value of the holding by a multiplier based on the qualifying periods (i.e. the length of years the property has been occupied for). The multiplier ranges from 0.31 for a qualifying period not exceeding 5 years to a multiplier of 1.26 for a qualifying period exceeding 15 years.

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