Duck family floating in a raw

No news is good news – or so we’re told. A recent Court of Appeal decision [1] confirming no change in the law in relation to redevelopment is certainly good news for landlords and developers.

Opposing lease renewal due to redevelopment

Since 1959 if a landlord wanted to oppose a business tenant’s statutory lease renewal on the ‘redevelopment ground’ [1] the landlord’s intention to carry through the proposed redevelopment is judged to be at the time of the trial of the contested action, not when the landlord serves its statutory notice, or its statutory counter-notice. This matters.

A bit of an oddity or sheer good sense?

It may seem odd that a landlord can serve a notice or a counter-notice at a point in time when it does not have the necessary evidence in place to satisfy the intention and ability tests. Be that as it may, however, it is a matter of some relief to landlords and developers that the Court of Appeal has recently confirmed that they can and that there are good practical reasons for this.

The position had been challenged by a business tenant [2] who argued that the procedural changes which have been in place since 1 June 2004 and which abolished the need for a landlord to serve a counter-notice to a tenant’s Section 25 Notice meant that the ‘new’ language used by the appropriate regulations indicated that the commercial landlord had to have the requisite evidence in place to satisfy the intention and ability to tests when the Section 25 Notice was served.

So what?

This timely reminder that intention is judged at the time of trial gives rise to a number of very significant advantages to landlords or developers who want to commence work at the earliest opportunity.

The process gives the landlord or developer six months or so within which to get its ducks in a row. It also allows developers to ask the seller of a development site to serve the notice before the developer acquires the site. This could be important where the timescale for starting the development work is tight.

Remember that the tests for satisfying the redevelopment ground are judged on a balance of probabilities. They do not have to be satisfied as a matter of absolute certainty. A settled planning permission would be ideal but, chances are, is probably not essential: a planning application might well be good enough.

This renewed certainty will enable landlords and developers to attack the timescale for getting on site well in advance of their having to satisfy the evidential tests. As market conditions improve, this could be an important tool for speeding up opportunities for getting spades into the ground.

This post was edited by Iain Davies. For more information, email blogs@gateleyuk.com.

[1] Section 30(1)(f) of the Landlord and Tenant Act 1954

[2] Hough v Greathall Ltd [2015] EWCA Civ 23


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.