#14790 - Example Conference Business Tenancies - BPC Property and Chancery

INTRODUCTION

Name and role

Purpose of conference

Agenda

AREAS OF QUESTIONING

Claim: Business Tenancies

How much rent?

Rent payable – Quarterly?

Workers? Offices?

Do they have alternative offices?

Location of Main Office

Contemplating recovering possession of the building from XX

Is property needed immediately?

For their own business use

Ground To be gutted and refurbished

What type?

How?

When?

Who?

Can ground floor be refurbished w/o disturbing the other floors

Using substantial part of property?

XX informed of intention to continue tenancy?

ADVICE

1. Law of Business Tenancies

Governed by Part II Landlord and Tenant Act 1954

Section 23 (1) provides that:

“this Act applies to any tenancy where the property compromised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purpose of a business carried on by him or for those and other purposes”

Requirements

• There must be a tenancy

• The premises must be occupied by the tenant

• Exclusive possession of property

• The premises must be occupied for the purposes of a business carried on by the tenant

• Business is widely defined in s23 to include a ‘trade, profession or employment’. It includes a trade profession or employment and includes any activity carried on by a body of persons, whether corporate or unincorporate: s.23(2).

2. Claimant’s Case

Procedure

• Serve a s25 Notice – Notice to terminate tenancy

Be served not less than six (6) but not more than twelve (12) months before termination date

The termination date is as specified in the notice and cannot be earlier than the contractual end date.

In prescribed form

State whether landlord will oppose new tenancy (see amendments in Art 4 SI 2003/3096)

Hostile notice: landlord will oppose and on what grounds

Be served by “competent” landlord (s44 and Sch 6)

The landlord must have more than fourteen (14) months to run on their own lease.

• After the landlord has given a s25 notice for termination, the tenant can apply under s.29 for a new tenancy or the landlord can apply for a new tenancy to be granted, or for termination of tenancy on s.30 ground.

The time limit for application is before the termination date as specified in the notice.

The parties can extend the time limits.

The landlord must within 2 months serve a counter notice, informing the tenant whether he will oppose the grant of a new tenancy, and, if so, on what grounds.

• Procedure – CPR part 56

The claim should be commenced at the County Court to the district where the land is situated, although, if it is a complex claim, it can be started in the High Court.

There are different procedures for opposed and unopposed claims.

Opposed: where the landlord is opposing to the new tenancy on one of the grounds under s30.

The tenant must use the Part 7 Procedure.

Unless ordered otherwise, any grounds of opposition should be dealt with as a preliminary issue. Failure of which, a further trial would be ha for the terms, rent and duration of the tenancy.

• s.30 grounds of opposition to new tenancy (Discretionary):

1. Breach of repairing obligations by the tenant

2. Persistent delay in paying rent

3. Other substantial breaches of covenant by the tenant

4. Landlord can provide suitable alternative accommodation

5. Landlord intends to re-let whole

Where the tenancy was a sub-letting of part and the landlord can show that s/he intends to re-let the whole of the premises at a higher rent.

6. Demolition or Reconstruction of premises

7. Landlord intends to occupy (can’t use this if he purchased reversion in previous 5 years)

Ground F

The landlord can’t just decide that they will demolish and use that ground without evidence. They must show a genuine intention and a reasonable prospect of carrying out the work. The work must constitute demolition or reconstruction of the premises or a substantial part thereof, or substantial work of construction, and the landlord must show they cannot reasonably do the work without obtaining possession.

The work must be large enough to fall within Ground F, it must be the demolition or reconstruction of the premises or substantial part thereof or substantial working construction.

Moreover, landlord must show that he cannot do the work without obtaining legal possession. In Heath v Drown [1973], the landlord could not get possession under Ground F because he could do the work by using the rights of access that he had under the lease, the possession of premises was not required.

How v Grethal [2015] EWCA Civ 23 – the relevant date for assessing intention is at the date of hearing.

NB: s.31 (2) – If the Court is not satisfied that the work is to be done yet or is not to be done at the termination of date but the work is intended to be done in the following year after the end of the tenancy, then instead of ordering a new tenancy, the Court may refuse a new tenancy but extend the old tenancy for up to a year.

Alternatively, Court may order a short new tenancy, or new tenancy with redevelopment break clause which allows the landlord to terminate the lease when he is ready to redevelop

s.31A - The court will not order possession if the landlord could do the work around the occupying tenant, by the tenant being given a new lease by the landlord being given rights of access to do the work. Or by the tenant being...