Defeating 1954 Act renewal rights with a proposal to redevelop
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Defeating 1954 Act renewal rights with a proposal to redevelop
A tenant occupying premises for business purposes with the protection of Part 2 of the Landlord & Tenant Act 1954, will have a statutory right to a renewal lease unless the landlord is able to establish one of a number of statutory grounds set out in section 30 of the Act. One of the grounds applies where a landlord intends to redevelop premises as set out in Section 30(1)(f) of the Act.
The provisions of the 1954 Act were amended in 2004 by a Regulatory Reform Order. A case recently brought before the Court of Appeal (Hough v Greathall Ltd) explored whether the 2004 Order had altered the previously established case law, that a landlord must have the necessary intention to redevelop at the date of the court hearing (as opposed to the date at which any notice was served).
The case hinged upon the changes made to Section 25(6) of the 1954 Act which originally stated that in any Section 25 notice served by a landlord it had to state whether it “would” oppose an application for the grant of a new tenancy. The wording inserted by the 2004 Order requires the landlord to state whether it “is” opposed to the grant of a new tenancy. The tenant argued in Hough that this meant a present (i.e. at the time of service of a notice) as opposed to the date of any subsequent Court Hearing.
The Court of Appeal considered the established case law (which affirmed that the necessary intention had to be formed at the date of any hearing) and rejected the idea that a landlord had to prove the necessary intention to redevelop at both the date of service of the notice and the date of any court hearing.
This case doesn’t create any new law but is an interesting summary of the existing application of Ground “f”. Many landlords hoping to redevelop properties subject to leases falling within Part 2 of the Landlord & Tenant Act 1954 (and who need to obtain vacant possession in order to carry out the development) will no doubt breathe a sigh of relief following this judgment.
If you wish to discuss any of the issues raised in this blog please contact David Eminton.