Redevelopment lease renewals
A recent case decided by the High Court will (if not overturned on appeal) have potential implications for some commercial tenants seeking renewals of their tenancies.
The case of S Franses Ltd. v The Cavendish Hotel (London) Ltd. involved a dealer in textiles that occupies areas in the ground and basement floors of London’s Cavendish Hotel and which wishes to renew its tenancy relying on the security given by the Landlord and Tenant Act 1954, which gives such tenants the right to renew their tenancies except in certain circumstances.
One of the circumstances in which a renewal can be refused is if the landlord wishes to demolish or reconstruct the premises occupied by the tenant. The landlord (which runs the hotel) claimed that it did and it could not carry out the works it wishes to undertake without gaining possession of the tenanted premises.
What made this somewhat different from the norm was that it appeared that the landlord would not have wanted to carry out the work it used to justify the termination of the tenancy if the tenant had agreed willingly to vacate the building. The tenant claimed that the landlord’s motivation was purely to evict it and therefore the landlord should not be allowed to terminate the lease.
The High Court’s judgment was that there was one core issue: did the landlord really intend to carry out the work? That alone would decide the matter. The landlord’s motivation for doing the work was not in point.
The case isn’t quite over. The County Court has to decide on the extent to which the work specified might be able to be done leaving the tenant in place and also the timescale in which the work should be commenced.
However, it is quite feasible that landlords seeking to remove protected commercial tenants may, if the premises offer a financially suitable redevelopment opportunity, use the works primarily as a device to remove an unwanted tenant.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles
Check out some of the best features and news from Designing Buildings as well as key stories from around the web.
CIOB publishes free template to help assess and manage risks.
ECA's reflections on Party Conference season
Burnham wants to be confident of winning before asking for a fresh mandate.
New Chief Construction and Scientific Adviser
Sergio Cavalaro, Professor of Infrastructure Systems at Loughborough University.
Building safety levy for England
CIAT publish estimator tool for members.
Water sector faces a growing crisis that could slow the delivery of vital infrastructure.
Undervaluing our industrial past
Heritage value changes as taste for building styles changes.
Changing expectations around competence and compliance
New information sheet from CIAT.
Grenfell investigation files passed to CPS
Angela Rayner apologises on behalf of the British state.
Electrical contractors need to understand the practical implications.
The real barrier to getting more value from digital technology.
Your guide to The Construction Reset at UKCW Birmingham.
Accommodating the Victorian and Edwardian working woman. Book review.