Reed Smith Client Alerts

Key takeaways

  • Re: Ground (f) - Multiple changes in plans leading up to trial, and delays in carrying out works, particularly where works can be partially commenced around tenants in occupation will be looked upon negatively by the court in deciding whether to grant possession to the landlord.
  • Note that savvy tenants may try and avoid an order under ground (f) by attempt to occupy part of the premises, if works won’t affect their whole demise. Offers by tenants to take a new lease of part on this basis should be taken seriously by landlords in order to avoid costly litigation.
  • The landlord should always (as far as possible) follow through with its redevelopment/own occupation plans once possession has been obtained under ground (f) or ground (g), otherwise there is a risk of compensation payable to the tenant on the basis of misrepresentation.

Autores: Brad Trerise

After a slight lull since the courts discussed the reasonableness of rent suspension clauses in lease renewals during the COVID pandemic, this year has seen a flurry of Landlord and Tenant Act 1954 (the “Act”) cases. Of particular note are: Sainsbury’s Supermarkets Limited v Medley Assets Limited [2024] and McDonald’s Restaurants Ltd v Shirayama Shokusan Company [2024].

Sainsbury’s Supermarkets Limited v Medley Assets Limited [2024] - An easy way for tenants to defeat ground (f)?

Sainsbury’s, trading as Sainsbury’s Local, occupied premises at 329-331 Kentish Town Road, London, consisting of a basement, ground floor and two upper floors. The landlord sought to redevelop the property and opposed the grant of a new lease to Sainsbury’s under ground (f).  The landlord’s original plans were for residential development. It then revised its proposals, planning to refurbish the office space on the upper floors and carry out works to the staircase and the basement (including lowering the basement floor). Crucially, no works were planned to the main part of the ground floor, from which Sainsbury’s traded. As part of the landlord’s argument, they put forward that lowering the floor of the basement would create a ‘floating demise’ that is effectively unusable (on the basis of the decision in Pumperninks of Piccadilly Limited v Land Securities PLC [2002]).