General practice surveyor Philip Dickins explains the importance of seeking professional advice for landlords planning to oppose a lease renewal.
A recent case has brought into focus the issues which must successfully be addressed by landlords wanting to oppose the renewal of a business tenancy on the basis it proposes to redevelop the property.
Aside from the often overlooked point that a business tenant will be liable to receive statutory compensation of once or twice the rateable value of the holding, for a non fault ground of opposition to a lease renewal, the landlord will have needed to serve an opposed Section 25 notice specifying the ground on which it relies.
Section 30(1) (f) of the 1954 Act states that a landlord can oppose a lease renewal if, on 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, to carry out substantial work on construction of the holding or part thereof and could not reasonably do so without obtaining possession of the holding.
Aside from ensuring that the works come within the definition of ground (f), the works must be carried out to the individual holding which is the part the tenant occupies for the purpose of its business. Further, the landlord must also show it couldn’t do the works without obtaining possession and how the works will result in the premises becoming entirely different to those currently occupied by the tenant.
Additionally, the landlord will need to demonstrate it has a realistic prospect of implementing its intention and will need to secure plans, planning consents, third party consents, and finance by the date of any court hearing, further, if it also requires vacant possession of other property to carry out a development, the landlord will need to show that this can be delivered and that its intention to redevelop is settled.
Strategically pre-planning will be required to ensure that as many of the practical elements are in place at an early stage to convince the tenant as to the validity of the landlord’s case and accordingly preparing the ground and liaising with its professional team at an early stage are essential to the prospects of success.
Phil Dickins Bsc (Hons) MRICS