News & Views

Spook Erection: Part Two

This is the second of several case studies that partner Mike Lewis & Associate Ben Walters covered in their recent talk at Heathrow Airport for 80 surveyors as part of their CPD training.

Security of Tenure: Can you oppose a lease renewal on the grounds of third-party redevelopment?

The Landlord and Tenant 1954 Act provides a business tenant with the right to remain in occupation once a lease has ended and the right to request the grant of a new lease on the existing terms. The Landlord can only refuse a new tenancy based on one of the grounds contained in section 30 (1) (a) – (g) of the Act.

In the case of Santander UK Plc v LPC Estates Ltd, Santander requested a new lease at the end of their tenancy. The Landlord LPC Estates opposed to this based on ground (f) in the Act.

The Landlord had entered into a new building lease with a third party to prove its intention to re-develop the property, by requiring the third party to carry out the works.

The Court in this case had to consider whether the landlord had an intention to develop the property, and it at first instance, it was found that it did – the tenant therefore appealed to the High Court.

The Court referred to the previous case of Spook Erection Ltd v British Railways Board. This case found that the landlord granting a building lease was sufficient to prove the landlord’s intention to develop.

This case is useful for landlord’s where they wish to refuse a tenancy on the ground of re-development. A landlord can prove its intention to re-develop the property by entering into a building lease with a third party and compelling them to carry out the works.

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