Landlord and Tenant Act 1954 Demolish or Reconstruct ground [s.30(1)(f)] to be considered by the Supreme Court – Part 1

S Franses Ltd v The Cavendish Hotel (London) Ltd (Judgement [2017] EWHC 1670 QB appealed) was heard by the Supreme Court on 17 October 2018. The decision will have significant consequences  and landlords and tenants across the country are eagerly awaiting the decision.

Facts

The appellant tenant served notice to renew a tenancy protected by the Landlord and Tenant Act 1954 (‘the Act’). The respondent landlord sought possession of the premises on one of the permitted grounds under s 30(1), namely that it intended to demolish or reconstruct them on the termination of the current tenancy (ground (f)). The landlord gave an undertaking that the works would be carried out if possession was granted. Both the County Court and the High Court held that the landlord had established the requisite intention even if it only intended to carry out the works if they were necessary to satisfy ground (f) (‘the demolish or reconstruct ground’) and the works had no other commercial objective.

The case considers whether a landlord can deny the grant of a new tenancy to a protected business tenant on the demolish or reconstruct ground of the Act where the proposed works are designed solely to satisfy that ground.

In this case, the tenant sought to renew a tenancy protected by the Act. The landlord refused a new tenancy and cited the redevelopment ground in opposition.  The demolish or reconstruct ground allows a landlord to oppose a new tenancy where the landlord intends to carry out works which it could not do if the tenant were to be allowed to remain in occupation.

The courts placed no weight on the fact that works were contrived specifically in order to satisfy the demolish or reconstruct ground. Current case law has established that the landlord must have a “firm and settled intention” to carry out the works but that the motive for carrying out the works is irrelevant.

Issue(s) before the Supreme Court

The construction of the Landlord and Tenant Act 1954 (‘the Act’), namely:

(i) Whether a landlord which intends to carry out works if, and only if, those works are necessary to satisfy s 30(1)(f), and which offers an undertaking to carry out those works in the form of the undertaking given by the respondent in the present case, has the requisite intention for the purposes of ground (f); and

(ii) Whether a landlord whose sole or predominant commercial objective is to undertake works in order to fulfil ground (f) and thereby avoid the grant of a new lease to the tenant, and which offers an undertaking to carry out those works in the form of the undertaking given the present case, has the requisite intention for the purposes of ground (f)

The case is significant for both business tenants and landlords and the Supreme Court’s view is eagerly anticipated. We will produce a follow up Blog once it is known.

If you’re a landlord or tenant of business premises and would like to discuss your rights to possession or lease renewal, please contact Darryn Harris or Daniel Crate in our Dispute Resolution team on 01483 302 000 to discuss how we can help.