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What is today's blog about?
This week we will take a look at some recent landlord & tenant caselaw - essential knowledge for RICS AssocRICS and APC candidates, students and qualified Chartered Surveyors (MRICS/FRICS).
You can also listen to our CPD podcast on Anchor for more free AssocRICS and RICS APC training and support.
What's new?
For lease renewals, there are two recent cases both relating to Section 30 Ground F of the Landlord & Tenant Act 1954:
Waterstones Booksellers v Notting Hill Gate (2016)
S Franses Ltd v Cavendish Hotel (2017)
For rent reviews, there are two recent cases which essentially confirm existing precedent rather than challenging the status quo:
AWG Group Limited v HCP II Properties 101 GP Ltd (2017)
Vivienne Westwood v Conduit Street Development (2017)
Lease Renewal - Waterstones Booksellers v Notting Hill Gate (2016)
In this case, the landlord opposed a tenant's Section 26 notice proposing a new lease on the basis of Section 30 Ground F (landlord's intention to demolish or reconstruct).
Subsequently, the landlord's proposed redevelopment scheme was delayed so they withdrew their opposition as they couldn't satisfy Ground F by the trial date.
Twelve months later, Court proceedings hadn't progressed. The landlord had continued to pursue a viable Scheme and were now in a position to proceed, so they applied to the Court to restore their opposition under Ground F.
Do you think the Court allowed this?
Yes. Is this surprising though?
Caselaw has established that termination notices can't be unilaterally withdrawn or amended, so a landlord who has elected not to oppose renewal cannot change it's mind.
The Civil Procedure Rules do, however, allow amendments to a Statement of Case and the withdrawal of admissions in certain circumstances.
In this case, the Court held that the landlord had acted in good faith when they had withdrew opposition under Ground F. Their position had subsequently genuinely changed and as the Court timetable hadn't progressed substantively in the next year, the tenant would not suffer prejudice if the landlord's opposite was restored.
This would effectively put both parties in the same position they were at the outset of proceedings (i.e. no better and no worse off).
Furthermore, the tenant still had security of tenure and the landlord would still be required by the Court to prove their intentions under Ground F.
The precedent set is considered to be a legally and commercial sensitive decision. In future, similar cases are likely to be decided at the discretion of the Court with each turning on it's own facts.
Lease Renewal - S Franses Ltd v Cavendish Hotel (2017)
In this cases, a landlord opposed renewal, again under Ground F. They had contrived a scheme with the sole purpose of securing vacant possession from the existing tenant (i.e. the landlord needed possession to undertake the works).
Do you think the landlord was successful?
Yes! Opposing a renewal under Ground F relates to intention of the landlord, not motive.
This precedent does not create new law and represents an expensive and challenging option for a landlord seeking to terminate a tenancy under the Landlord & Tenant Act 1954.
Subject to further appeal and issues such as timing and extent of the works requiring vacant possession being resolved, the landlord's opposition under Ground F is likely to be successful.
Rent Review - AWG Group Limited v HCP II Properties 101 GP Ltd (2017)
In this case, time was not of the essence in relation to a rent review. The landlord initiated rent review proceedings over a year after the rent review date.
Do you think that the landlord could still implement the review after the review date stated in the lease?
Yes. Where time is not of the essence, a landlord does not lose the right to review after the rent review date unless they can establish that the landlord has permanently abandoned the right to do so.
The precedent confirmed the importance of including a 'saving provision' in leases to the effect that acceptance of rent after the rent review date at the existing level does not constitute waiver of the landlord's right to trigger the rent review.
This follows the case of Idealview Ltd v Bello (2009) where a landlord successfully triggered a rent review 13 years after the rent review date.
Rent Review - Vivienne Westwood v Conduit Street Development (2017)
In this case, a side letter was agreed between the parties documenting a lower rent (£125,000 p.a.) than the yearly rent reserved by the lease.
Do you think that this constituted binding agreement of the rent review?
No. Demand, payment and acceptance of the rent at the (lower) level set in the side letter did not constitute agreement of the rent review. The rent was subsequently determined by an Independent Expert at an open market rent of £232,500 p.a.
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N.b. Nothing in this article constitutes legal or financial advice.