Eleven years after the changes introduced by the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003/3096 to s.25 of the Landlord and Tenant Act 1954, the Court of Appeal has clarified the meaning of the “new” wording.
Mr Hough was served with a s.25 notice by Greathall, who relied on s.30(1)(f) to oppose a renewal of his business tenancy. The ground requires the landlord to show an intention to demolish or reconstruct, or to carry out substantial work of construction to, all or part of the premises, and that it cannot reasonably do so without obtaining possession. Pre-2004, the Act required the landlord’s notice to state whether it “would oppose” a lease renewal; the wording now requires the landlord to state whether he “is opposed” to the same.
In an argument that was as creative as it was alarming in the industry, Mr Hough argued that this change overrode the established precedent that the relevant date of intention was the date of trial. Instead, he suggested that the landlord had to prove the intention to develop as at the date of the notice given under s.25. He argued that the leading authority on the date of intention - Betty’s Cafes Limited v Phillips Furniture Stores Limited  AC 20 - was distinguishable as it concerned a notice under s.26 of the Act, not s.25.
The proposed new interpretation of the Act had the potential to cause evidential difficulties for landlords who, at the date of the notice, would not necessarily have taken many preparatory steps for their proposed redevelopment. If the date of the notice was the correct time to assess intention, landlords would be forced to collate all their evidence of redevelopment, with all the attendant expense, at a much earlier date than was necessarily practical.
Fortunately, the Court of Appeal was unconvinced, finding no Parliamentary intention to effect such a radical change, and seeing no other reason to change the status quo. The material time under sections 25(6) and 26(6) remain the same, and challenges to s.25 notices are likely to remain relatively rare.
Helen Turnbull / 1st Feb 2015
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