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A recent case has highlighted the importance of complying with the terms of a lease when serving notices on the other party regardless of whether or not those terms make sense!
In Ropemaker Properties Ltd v Bella Italia Restaurants Ltd the tenant tried to terminate an agreement for lease on the basis that it had not become unconditional by the long stop date. The agreement required the terminating party to serve notice on the other party and the tenant’s guarantor to validly terminate the agreement. This provision makes sense in the event that it is the landlord serving the notice, but seems unnecessary when the tenant is attempting to bring the lease to an end.
The tenant and the guarantor were group companies and the guarantor had been made aware of the tenant's decision to terminate the agreement in a board meeting and had also received a copy of the tenant's notice by email, however the agreement was clear that notices could not be served by email and no hard copy was served on the guarantor by post (in accordance with the requirements of the agreement). The Court found that the guarantor had not waived its requirement for formal notice to be received and although the terms of the agreement requiring the notice to be served on the tenant's own guarantor seemed unnecessary, they were still a clear requirement. As the terms of the agreement had not been complied with, a valid notice had not been served on the guarantor and the agreement had therefore not been brought to an end. Unfortunately for the tenant, the landlord subsequently served notice to make the agreement unconditional and the tenant was therefore legally required to enter into the lease.
This case highlights the importance of paying proper attention to the requirements of notice clauses and ensuring that they are properly complied with (even if sometimes they may appear ridiculous!). Our experienced Commercial Property team are used to dealing with these situations. If you are thinking of taking or granting a lease please do not hesitate to contact us on 0161 941 4000 or email us at firstname.lastname@example.org.