Business tenancy renewal refused in light of tenant breaches

Often landlord clients wrongly believe that they do not have a ‘real’ opportunity to oppose an application for a new business tenancy – they hold the view that a Court will allow the tenant to remedy the breach and grant them a new term

This is not always the case

Landlords will often oppose on the discretionary grounds of: failure to repair the premises; persistent delay in paying rent; and other substantial breaches of the lease (such as breach of user, or unlawful sub letting); in which case the Court has to consider whether firstly, there has been a breach and secondly, in light of the breach, (if any) whether the tenant “ought not” to be granted a new tenancy

In a recent case, the Court of Appeal found that when considering whether a new tenancy “ought not” to be granted, this question has to be asked in respect of each ground separately, (in other words, a positive answer in respect of one of the grounds was enough to refuse to grant a new tenancy). For example, in light of the extent of the disrepair, ought the tenant be granted a new tenancy, ignoring other breaches (if any)

The Court of Appeal also held that landlords did not have to show a loss of rental income or reduction in the value of the landlord’s interest

This clarification from the Court of Appeal should be a reminder to business tenants to remedy their breaches, especially if they intend to apply for a new term

Prince Evans Solicitors LLP is holding its next free commercial property seminar with Barclays Bank PLC at 5:30pm on 16th September 2014 at the DoubleTree Hilton Hotel, 2-8 Hanger Lane, Ealing Common, W5 3HN; booking is essential – please contact Louise Heasman by emailing or calling 07950 248038