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A landlord cannot oppose a lease renewal and seek to rely on a scheme of redevelopment works which it plans to carry out if they have no purpose other than to get rid of the tenant. Landlords should tread carefully if they are considering adopting this approach to avoid the renewal of a protected lease.
This blog follows on from our previous article covering the High Court decision of the case of S Franses Ltd v The Cavendish Hotel (London) Ltd. That judgment has been superseded by the recent Supreme Court decision. Here is a link to our previous article for further details on the background to the case.
The landlord had devised a scheme of works specifically to satisfy ground (f) of section 30(1) of the Landlord and Tenant Act 1954 to oppose the tenant’s application for a lease renewal. The landlord admitted under cross examination that it would not carry out the works if the tenant left voluntarily and so it was clear to the parties that the purpose of the works was to get the tenant out. However, the landlord provided an undertaking to the court that it would carry out the entirety of the works if the court ruled in its favour. The High Court was satisfied that the landlord would genuinely carry out the works and found in its favour. This meant that a landlord’s motive for opposing a renewal lease was not relevant to establishing ground (f). The tenant was given leave to appeal to the Supreme Court.
The Supreme Court had to consider whether the use of a landlord’s scheme of works and the landlord’s motive is relevant when opposing a renewal using ground (f). They decided that the landlord’s motive should be taken into account. The Act is there to protect tenants and ground (f) should not be abused just in order to gain vacant possession. The acid test is whether the landlord would intend to do the same works if the tenant left voluntarily. This means that a landlord has to show that they have a firm and settled intention to do the works and the tenant’s right of occupation under a new lease is genuinely an obstruction to their intention. Would the landlord be doing the works if the tenant were to leave voluntarily? If the answer is no, then the landlord has failed to show it had a fixed and settled intention to carry out the works. Tenants will welcome the decision of the Supreme Court as it strengthens their ability to challenge the landlord’s intended works.
At Myerson our property team has extensive experience in acting for all parties in connection with landlord and tenant issues and would be delighted to provide further advice in this area should you require it. Please call our Commercial Property team on 0161 941 4000 or email us via firstname.lastname@example.org