Newspaper article The Journal (Newcastle, England)

Landlord's Pitfall Addressed at Court

Newspaper article The Journal (Newcastle, England)

Landlord's Pitfall Addressed at Court

Article excerpt


THESE days long-treasured plans for the redevelopment of a property can sometimes have to be put on hold. A case which recently came before the Court of Appeal illustrates an unexpected pitfall for landlords wishing to prevent the tenant from claiming a new lease on its expiry, because of the landlord's development plans.

If a landlord of commercial premises wishes to terminate the lease because it has redevelopment plans, it must ensure that it has a firm intention of doing the work and to do it immediately or shortly after regaining possession of the property.

The Court of Appeal case highlights the problem where the landlord intended to do works, but circumstances changed.

In this case, the lease was to expire on January 31, 2007. The tenant had security of tenure under the 1954 Landlord & Tenant Act, but OFFICES before expiry of the tenancy, the landlord decided to refurbish the property.

This he couldn't do without obtaining possession and so therefore the landlord let the tenant know of its plans, discussing them in detail during April and May 2006.

In June 2006, the landlord served the necessary notice.

In August 2006 the tenant queried whether the landlord still intended to refurbish the property and offered to pay an increased rent if the landlord allowed it to remain in the property. The landlord reaffirmed its position and said that it was not prepared to consider the tenant's offer, as it hoped to get considerably more once the property had been refurbished. Towards the end of September 2006, the landlord decided to put the refurbishment on hold. It didn't change its mind altogether, but it was clear that it would not be carrying out the refurbishment works as soon as the tenancy ended or within a reasonable time afterwards.

In October 2006 the landlord instructed its agent to market the premises and the tenant moved out. It was following the expiry on the lease that the tenant then became aware that the landlord had not carried out the refurbishment works and therefore brought a claim for compensation on the basis that the landlord had misrepresented and/or concealed his decision to postpone the refurbishment works which the landlord disputed. …

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