Landlords and tenants of commercial premises will be familiar with the Landlord and Tenant Act 1954 (‘the Act’) which, if they have not been ‘excluded’, permits the tenant of commercial premises to serve notice requesting a new tenancy at the end of their current lease. The landlord can only oppose the tenant’s claim for renewal of the tenancy on specific grounds. These grounds are set out in Section 30(1) of the Act and 30(1)(f) (‘Ground F’) focuses on the landlord’s right to regain possession of the premises to demolish, reconstruct or redevelop. If a landlord objects to the grant of a lease on Ground F the tenant may challenge the landlord’s opposition through the court. There are limited case authorities of significance in this area and most are favourable to the landlord on the question of ‘motivation’. However the recent Supreme Court decision in S Frances Ltd –v- The Cavendish Hotel (London) Ltd [2018 UKSC62] is a rare occasion when the court found in favour of the beleaguered tenant.
Previous cases concerning development or re-construction only required the landlord to show a ‘firm and settled intention’ as the basis for their Ground F objection. The Supreme Court said in this case that the ‘acid test’ was whether the landlord had intended to carry out the work even if the tenant was prepared to vacate voluntarily. The court found that the landlord needed to establish its intention entirely independently of the tenant’s claim to a new lease. Here it was clear that the landlord had designed the scheme to defeat the tenant’s right to claim a new lease under the Act.
Whilst landlords with genuine and fixed intentions to carry out re-development work will not feel unduly concerned, those with an eye to promoting a ‘paper’ exercise in the hope of getting back possession of the premises voluntarily, may find it necessary to revisit their motives rather more carefully.
Please read Reliance on information posted in our Terms of Website Use - see Legal section - before relying on this commentary.