Indigestion for landlords: a new acid test for redevelopment under ground (f)

In October, we wrote about the Supreme Court case S. Franses Ltd v The Cavendish Hotel (London) Limited [2018] UKSC 62, concerning a landlord’s ability to oppose a lease renewal under the Landlord and Tenant Act 1954 (the “Act”) using ground (f) (redevelopment). Yesterday, the Supreme Court handed down judgment in favour of the appellant tenant. On face-value, the implications of this case seem to be tenant-friendly; however, here we discuss further the commercial implications of the ruling for both landlords and tenants. Continue reading

Landlords’ motives for redevelopment – good, bad or irrelevant?

Today the Supreme Court will hear the case of S. Franses Ltd v The Cavendish Hotel (London) Limited, a case which property litigators have been following closely since last year. The case concerns a landlord’s ability to oppose a lease renewal under the Landlord and Tenant Act 1954 (the “Act”) using ground (f) (redevelopment). If the tenant is successful in today’s hearing, the evidential burden on landlords contemplating redevelopment could increase dramatically. Continue reading

When quiet enjoyment means just that

Author: Julian Pollock, Partner, Real Estate, London

Earlier this year, the courts decided that, even if there is an express right to carry out works in a lease, a landlord cannot ride a coach and horses through a quiet enjoyment covenant or the obligation not to derogate from grant.  They must take all reasonable steps to minimise disturbance to their tenants, including:

  • notifying the tenant as part of lease negotiations of any intended works;
  • keeping the tenant notified of the programme of works, how long they will last and, how disturbance is proposed to be minimised;
  • ensuring that all practical measures are implemented by the contractor and project manager; and
  • bearing in mind that a higher standard of reasonableness may be required where the landlord is carrying out works for its own benefit.

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Do you have any ‘suitable alternative accommodation’ to offer? Terminating a business tenancy using ground (d)

Authors: Matthew Bonye, Partner and Head of Real Estate Dispute Resolution and Rhian Arrenberg, Professional Support Lawyer, Real Estate Dispute Resolution, London

In this post we consider we consider one of the options open to a landlord who wishes to regain possession of a business premises, without having to pay the tenant statutory compensation for disturbance.

When a landlord wishes to regain possession of business premises which are occupied pursuant to a lease which is within the security of tenure provisions in the Landlord and Tenant Act 1954 (the "1954 Act"), it will usually turn to the statutory ground under section 30(1)(f) to oppose the grant of a new tenancy. Indeed the ground (f) demolition or redevelopment ground seems by far the most obvious when development works are contemplated. The landlord can, however, use one of seven grounds either on their own or in combination, including the much underused ground (d). Ground (d) would, if proved, mean that the landlord would not pay the tenant statutory compensation for disturbance.   This is so even if the landlord is also relying on other grounds that do trigger compensation, for example ground (f).

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Lease Renewals: Landlord & Tenant Act 1954 and Ground (f): Ensure the landlord at the time of the court hearing is the entity with the intention to carry out the works!

Author: Rachel Croft, Senior Associate, Real Estate Dispute Resolution, London

This post follows from our previous posts on a landlord's right to oppose a tenant's request for a lease renewal (under the Landlord and Tenant Act 1954).  Here we look at what happens if the landlord disposes of its interest before trial or if it will be instructing third party building contractors to do the works, either under a building contract or by granting them a building lease.

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Terminating a business tenancy using the redevelopment ground – Part 1: Showing the landlord’s intention to redevelop

Author: Frances Edwards, Senior Associate, Real Estate Dispute Resolution, London

One of the most common questions we are asked by developers at the land assembly stage of their scheme is what they need to show in order to be certain of successfully terminating a lease that has the protection of the Landlord and Tenant Act 1954 ("1954 Act").  It is not always an easy question to answer as each development will have different issues.   However, some general pointers can be given.

The "redevelopment ground" of opposition to the grant of a new lease is set out in section 30(1)(f) of the 1954 Act and is often just referred to as "ground (f)" and the best starting point when considering whether the nature and extent of the work will enable possession to be recovered is the wording of the statute.  Ground (f) provides that the landlord may oppose an application for renewal of a lease on the ground "that on the termination of the current tenancy the landlord intends to demolish or reconstruct the premises comprising the holding or a substantial part of those premises or to carry out substantial work of construction on the holding or part thereof and that he could not reasonably do so without obtaining possession of the holding". 

As is clear from the wording, it is necessary to consider both the landlord's intention and also the nature of the works.  In this first article, we look at the landlord's intention.  Issues surrounding the nature of the works will be considered in the second article.

Landlord's intention

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Are landlords entitled to a redevelopment break in leases being renewed (Landlord and Tenant Act 1954)?

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Author: Stephanie Trompeter, Senior Associate, Real Estate Dispute Resolution, London

In this post I am writing about the court's approach to a new business tenancy where the parties cannot agree on the terms of a renewal lease with a landlord's break right.  The court will need to consider the existing lease and will also need to weigh up allowing the landlord to redevelop the premises and the tenant's security of tenure. 

By way of background, a tenant of a business lease has a statutory right to a new lease at the end of the contractual term, if it satisfies certain criteria under the Landlord and Tenant Act 1954 (the 1954 Act).  It is open to the parties to agree the terms of the renewal lease but if the parties cannot reach agreement, either the landlord or tenant must apply to court, and the court will determine the terms of the new lease.

The focus of this piece is a scenario in which the tenant's existing lease does not contain a landlord's break clause, but the landlord needs one in the renewal lease so that he has the option to redevelop during the term of the new lease. The question is whether the courts would order a landlord's break clause in these circumstances.

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