Opinion

Useful guidance on landlord's right to oppose tenancy renewal

27th August 2019

Useful guidance on landlord's right to oppose tenancy renewal

The recent case of London Kendal Street No3 Limited v Daejan Investments Limited (2019) provides some useful guidance on what a landlord needs to show in order to successfully oppose a tenant’s right to renew its tenancy on the ground that the landlord intends to demolish or reconstruct the tenant’s premises.

Under the Landlord and Tenant Act 1954 ground (f), a landlord may oppose renewal if:

“on the termination of the current tenancy the landlord intends to demolish or reconstruct the premises comprised in the holding or a substantial part of those premises or to carry out substantial work of construction on the holding or part thereof and that he could not reasonably do so without obtaining possession of the holding”

In order to successfully prove ground (f) a landlord:

  • must have a fixed, settled and unconditional intention, as at the date of trial, to carry out works of redevelopment to satisfy ground (f) (the subjective test); and
  • has to show that it has a reasonable prospect of being able to carry out the works, i.e. a reasonable prospect of obtaining building consents, planning permission and being able to show that it has funding available for the project (the objective test).

In this case the tenant, occupied premises called Park West, on Edgeware Road under four separate leases.

In 2017 the landlord served notice opposing renewal of the tenant’s lease of suite C2 relying on ground (f).

Around the same time, the landlord began significant works to the basement of the premises, which were very noisy and disruptive. As a result, the tenant threatened to obtain an injunction if the works didn’t stop and so the landlord stopped work.

In the meantime, the tenant challenged the landlord’s ability to satisfy ground (f) and this matter eventually came to court in March 2019. The issue of whether the landlord could satisfy the ground (f) test, went to trial and the court was satisfied that the landlord had the necessary funding for the works, had obtained planning permission and had entered into a building contract with the contractor.

However, the tenant argued that the works to suite C2 would repeat the “intolerable disturbance” which had resulted from the basement works and that the tenant would immediately seek an injunction if the works started again, and therefore there was  a “high risk” that the landlord would not be able to do the intended works and couldn’t satisfy the ground (f) test.

Decision

The judge concluded that in spite of the risk of an injunction, the landlord had established a reasonable prospect of being able to carry out its works to suite C2, and had therefore passed the ground (f) test.

For further information please contact Nyree Applegarth or call 0345 111 5050.

 

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