How Easily Can I Recover Possession from my Tenant for the Redevelopment of a Commercial Property?
Unless the lease has been specifically excluded from the protections of the Landlord and Tenant Act 1954 (“the Act”), your tenant’s right to occupy will not automatically come to an end on the expiry date under the lease. For a landlord who wishes to redevelop its property, recovering possession of the same from its tenant can prove a major first hurdle. At PDT, we are experienced in assisting landlords in opposing a tenant’s claim for a lease renewal.
A tenant will have the right to claim a renewal of its lease at the end of the fixed term where it can satisfy the following qualifying criteria:
As a landlord, you can oppose a lease renewal on certain statutory grounds, one of which is that you have an intention to demolish or reconstruct the property. This is commonly referred to as Ground (f).
To successfully rely on Ground (f), you must be able to demonstrate the following:
Whilst your intention only needs to be demonstrated at the date of any Court Hearing, your chances of success can be vastly improved by taking some or all of the following practical steps at an early a stage as possible:
In addition, a tenant, upon receipt from its landlord of either a statutory notice or counter-notice confirming that a lease renewal will be opposed on Ground (f), will often seek details and evidence at a preliminary stage as to the proposed works and your intention and ability to carry them out. If a convincing position can be established at this early stage, a tenant will often accept the position, take its statutory compensation and vacate without making a court application.
Finally, and just as a reminder, whilst there is much a landlord which wishes to redevelop its property can do to boost its chances of successfully recovering possession, once that tenant eventually goes, the tenant will be entitled to statutory compensation based on the rateable value of its premises.
However, where a tenant fault-based ground (such as a failure to pay rent or to keep the property in repair) is also relied on, you may be able to avoid the payment of compensation.
This is a complicated area of law with traps for the unwary. Taking advice at an early stage can put you in a stronger position and may save time and cost, particularly if court proceedings can then be avoided.
*For a further update on an additional hurdle for landlords please read Gail's recent article True intentions? S Franses Limited v The Cavendish Hotel (London) Limited
If you would like further advice, please contact Gail Morris
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