Landlord's Intention To Redevelop A Business Tenancy

The landlord served a s25 notice opposing the grant of a new tenancy, relying on s30(1)(f) of the Landlord and Tenant Act 1954 (LTA 54), the redevelopment ground.

The tenant argued a point based on a novel interpretation of the LTA 54 to the extent that the landlord must show the necessary intention to redevelop, not at the date of the hearing to determine the matter, but instead on the date that the landlord served the s25 notice. This was some 11 months before the hearing.

The Court found that the landlord did not have the requisite intention at the time that it served the s25 notice, but held that this was immaterial as the relevant date to ascertain its intention was the date of the hearing. On the facts, the landlord did have the requisite intention at this time. Accordingly, the Court dismissed the tenant's application for a new business tenancy and ordered the tenant to provide vacant possession.

The tenant appealed this decision, arguing that the Court had erred in finding that the requisite time for the landlord's intention to redevelop was the date of the hearing. The tenant's argument was based on the changes to s25 LTA 54 that were introduced by the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 (RRO 2003).

The Court of Appeal unanimously dismissed the appeal, finding that the changes to s25 LTA 54 related to the abolition of the counter-notice procedure and that there was no evidence of an intention to alter the settled law on when a landlord must show its intent for the purpose of relying on s30(1)(f) LTA 54.

The position, therefore, remains the same. The key time for ascertaining the landlord's intention to redevelop is the date of the hearing. The change brought by the RRO 2003 made only a small statutory change. However, if the Court of Appeal had accepted the tenant's argument then it would have had severe consequences for current lease renewals and would have controversially changed settled law.

The case is also consistent with a relatively recent case where the...