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Can a tenant leave premises too empty?

23rd November 2020

Can a tenant leave premises too empty?

Ever had that empty feeling? Here Nyree Applegarth, Partner in the Higgs & Sons Dispute Resolution team, looks at a recent case where a tenant was penalised for stripping out too much of a premises before handing back the keyes.

In the Higgs & Sons Dispute Resolution team, we’re well used to dealing with landlord vacant possession issues when tenants fail to remove everything they should when handing back premises.

But an interesting case caught my eye this week when a tenant found themselves in muddy waters when they actually took too much away.

In Capitol Park Leeds Plc v. Global Radio Services Limited [2020] EWHC 2750 (Ch), the tenant exercised its right to break the lease early and was obliged to give vacant possession of the premises to the landlord on the break date.

The tenant sought to give back the property in repair and in accordance with the lease obligations but stripped out significant elements of the building and the landlord's fixtures including radiators, lighting, ceiling tiles and grids.

The stripping operation included 17 original fittings that pre-existed its occupation which could reasonably be assumed to have belonged to the landlord.

A dispute then ensued when the landlord argued that the tenant had not complied with its obligation to give back vacant possession because it had stripped out too much of the premises, effectively taking it back to base build.

The Court held against the tenant and found that they had given back an empty shell of a building which was dysfunctional and unoccupiable. The tenant had failed to deliver the premises as defined in the lease and, therefore, had not properly determined the lease. Consequently, the lease continued.

This is a salutary lesson to any tenant seeking to operate a break clause and give back the premises in compliance with the lease covenants. In this case, the consequence of the actions of the overzealous tenants means that the lease and the tenant's liabilities continue until the next opportunity to terminate. It was an expensive mistake.

Permission to appeal to the Court of Appeal has been granted, so it’s one I will be keeping a keen eye on.

If there is any doubt, then advice should always be taken from a solicitor and a surveyor in a situation such as this.

The case also emphasises the importance of minimising break conditions when contracts are signed.

For more information, contact me on 01384 327151 or nyree.applegarth@higgsandsons.co.uk

 

 

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