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21st March 2016

Hewitsons successfully oppose the grant of a new business tenancy

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Hewitsons’ Property Litigation Team has helped to secure a County Court victory for joint landlords wishing to oppose the grant of a new business tenancy to a tenant of commercial premises.

In September 2009, the landlords let a number of outbuildings and an area of open land on their family farm to a tenant for the purposes of his business as a wholesaler of aquatic and reptile products. In May 2014, the landlords served notice on the tenant under section 25 of the Landlord and Tenant Act 1954 terminating his tenancy and opposing the grant of a new tenancy on ground (g) of Section 30(1) of the 1954 Act. The landlords’ opposition to the grant of a new tenancy was based on their intention to use the holding occupied by the tenant for the purposes of their own existing business which offers secure storage for caravans. The landlords secured retrospective planning permission for their existing storage business and were granted permission for their future plans for expansion.

At the final hearing in March 2016, the Judge dismissed the tenant’s assertions relating to the landlords’ motives for serving the Section 25 notice and his claims that the landlords’ business plans were unrealistic and unprofitable and rejected the tenant’s claim for a new tenancy of the holding. In his judgment, the Judge emphasised the single issue to be decided by the Court, namely the existence of the landlords’ intention to occupy the holding for the purposes of their own business, and confirmed that, in this case, he was entirely satisfied that the landlords’ were able to establish an intention which was genuine, realistic and accurately reflected their future plans. The landlords were also awarded their costs of the proceedings.

This decision demonstrates the importance for landlords to be able to show a real intention to use premises for their own purposes when bringing a business tenancy to an end. This will include obtaining any planning permissions which are required and having a coherent plan and the financial means in place for putting this into action. This case is also a warning to tenants that a landlord’s motives for bringing a business tenancy to an end will generally be of no interest to the Court when considering the Section 30(1) grounds.

If you are a tenant or a landlord and you would like any advice in relation to the termination of a business tenancy please contact Kate Harris on 01223 532762 or email Kate by clicking here.