Removing Commercial Tenants: Any Old Reason?

Removing Commercial Tenants: Any Old Reason?

Published: 26 March 2014

Can landlords get rid of commercial tenants for any old reason? Perhaps not, but there is a recent reminder that the reasons for doing so are theoretically wider than is usually appreciated.

Background - the 54 Act

It is well known that commercial leases are either inside or outside the Act – the Landlord and Tenant Act 1954 that is - or the "54 Act".

Tenants and tenancies outside the 54 Act have no real protection.  Those inside are governed by and protected (to an extent) by the provisions of the 54 Act.

The primary protection is the right to request a new lease – when the old one comes to an end. The landlord is obliged to grant a new lease (even if it does not particularly like the tenant) unless it can rely on a specified number of statutory grounds – 7 grounds there are. The most well-known of these are that the landlord wants to redevelop the premises or wants to occupy them itself.

Ground (c) – other substantial breaches OR any other reason connected with the tenancy.

Far less commonly encountered is the right to oppose on "any other reason" connected with the tenancy (which is in fact the second half of ground (c) – known as the "other substantial breaches" ground).  What might "any other reason" include?  In the 60 years since the introduction of the Act relatively little exploration has been given to that. That limited exploration has included a tenant illegally using premises for a concrete breaking business (in contravention of planning law) and a tenant’s parking habits just outside its demise which upset adjoining tenants. 

In Horne & Meredith Properties Ltd v Cox [2014], the Court of Appeal (upholding the decision at first instance) agreed that a landlord could get rid of its tenant because of disputes between the two of them over a right of way used in connection with the tenancy.  There was no suggestion that the tenant was in breach of the terms of the tenancy.

A satisfactory reason?  At first glance maybe not. However, these disputes had: been conducted over 16 years, had cost the parties huge legal fees, and involved ten sets of legal proceedings – all initiated by the tenant and had included baseless allegations of fraud against the landlord.  The cumulative effect of all this was such that the Court was satisfied that the relationship between the parties had irretrievably broken down (yes - much like a marriage) and it would not be right to impose a warring tenant upon the landlord.

"Any Old Reason?"

The case may result in more consideration being given to the "any other reason" ground.  Struggling for other statutory grounds to object to a tenancy? Maybe this ground can assist.  A note of caution though, any old reason is not going to cut it.  The court will need to be convinced that a new tenancy "ought not" to be granted to the tenant.  Prejudice to the landlord and fault on behalf of the tenant will normally need to be ingredients before a Court agree the tenant ought not be granted a new tenancy.

Food for thought? No doubt, but the opening of the floodgates for a variety of new reasons to oppose leases? Unlikely.

For more advice and information please contact Chris Hill, a solicitor in the Dispute Resolution Team.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.