Archive for September, 2009

Fair dealing requires nothing less

Generally, a tenant occupying premises for its business purposes, is entited to apply to the courts for a new tenancy (unless its lease states otherwise) pursuant to the Landlord and Tenant Act, 1954.

The landlord can oppose the grant of a new tenancy on one or more grounds specified in s30(1) of the Act.  The landlord must state its ground(s) of opposition either in its own notice terminating the tenant’s tenancy (a s25 notice) or in answer to a tenant’s request for a new tenancy (a s26 request).  Once the landlord has stated any ground(s) of opposition, the tenant may choose to either vacate the property (without making an application for a new tenancy) or continue to make its court application.  If the landlord’s ground(s) of opposition has or have nothing to do with the tenant’s default (e.g. the landlord requires the premises for its own purposes), the tenant is entitled to compensation pursuant to the Act (based on the rateable value of the premises).  Payment is made if the tenant simply vacates the premises or the court refuses to grant a new tenancy.

There is a further little used potential head of compensation payable to the tenant under the Act.  If the tenant accepts a landlord’s ground of opposition and quits the premises, or makes a court application for a new tenancy but then withdraws it, and it later appears that he did so by reason of the landlord’s misrepresentation or concealment of material facts, the tenant can seek compensation for damage or loss sustained as a result of quitting the premises (s37A of the Act).  In Inclusive Technology v Williamson [2009] the landlord stated orally to the tenant and in its written s25 notice that it opposed the grant of a new tenancy because it intended to demolish, reconstruct or carry out substantial works of construction on the premises and could not do so without obtaining possession of the property.  At the time the landlord genuinely intended to refurbish the premises and the tenant, relying on this representation, vacated the property.  The landlord later decided to “hold fire” and leave the proposed works until some time in the future.  The landlord failed to inform the tenant of the changed circumstances and the tenant successfully applied to the courts for compensation.  Hughes LJ made it clear that a landlord, having made a statement of intention, can still change his mind and “he has not promised to redevelop or refurbish the premises – but if he has made the representation which this landlord did, then he must correct it when it becomes, to his knowledge, false.  Fair dealing, and for that matter s37A, require nothing less.”

If you wish to hear more about the Landlord and Tenant Act, 1954, speak to Hatherleigh Training.