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Archive for March, 2008

Time, gentlemen, please.

Time limits cause one to stop and think.  Will they be strictly applied?  The first port of call must be the agreement.  Did the parties intend that time be of the essence of the contract?

The House of Lords found in United Scientific Holdings v Burnley Borough Council [1977] 2 EGLR 61 that generally speaking, time is not of the essence in rent review provisions.  However, if a lease contains a contra-indication, the general presumption will be over-ridden.  In Secretary of State for Communities and Local Government v Standard Securities Ltd [2007] EWHC 1808 (Ch), rent was to be reviewed every seven years.  Agreement on the rent was to be reached not less than two months before the review date or it was to be determined by an independent surveyor appointed at the landlord’s request.  If no request was made before the review date, the rent was to remain at the same level for the next seven years.  The judge found that the provisions clearly indicated time to be of the essence.

In Legal & General Assurance Society Ltd v Expeditors International (UK) Ltd [2007] EWCA Civ 7, tme was stated in a lease to be of the essence with regard to operating a break clause.  The tenant’s option to break was conditional upon it paying the yearly rent, complying with the relevant covenants up to the date of expiry of the notice and delivering up the premises on that date with vacant possession.  Notice was given and the landlord agreed a settlement sum to be paid by the tenant in exchange for which it was released from its liabilities pursuant to its covenants.  However, the tenant failed to vacate on the expiry date.  The Court of Appeal held that to give business efficacy to the settlement, the lease would come to an end whether or not the tenant succeeded in yielding up vacant possession by the end of the expiry period.

Would you like to hear more about timing?  If so, why not ask Hatherleigh Training to conduct a training session with you?