A business tenant paying an annual rent of £100,000 receives a notice from the landlord proposing a rent of £250,000 for the next rent review period. In the heat of the interchange that follows, the tenant neglects to serve a counternotice within the time limit prescribed by the lease, which goes on to state that, in such event, the tenant will be “deemed to have agreed” the rent so proposed.
Is there any way out for the tenant who is now anxious to see the appointment of an expert or an arbitrator?
The underlying question, whether time was intended to be of the essence, came before the court – one might almost say for the umpteenth time – in Starmark Enterprises Ltd v CPL Distribution Ltd [2000] EGCS 81, where Neuberger J, after considering a library of authorities, felt constrained to rule in favour of the tenant.
But the story did not end there. The landlord emerged victorious from the Court of Appeal (see [2001] EWCA Civ 1252; [2001] 32 EG 89 (CS)), which took the bold step of departing from its earlier decision in favour of the tenant in Mecca Leisure Ltd v Renown Investment (Holdings) Ltd [1984] 2 EGLR 137.
The judgments contain an intriguing observation by Arden LJ, suggesting that, in certain circumstances, such a deeming provision could fall foul of the Unfair Terms in Consumer Contracts Regulations (SI 1999 No 2083).
A business tenant paying an annual rent of £100,000 receives a notice from the landlord proposing a rent of £250,000 for the next rent review period. In the heat of the interchange that follows, the tenant neglects to serve a counternotice within the time limit prescribed by the lease, which goes on to state that, in such event, the tenant will be “deemed to have agreed” the rent so proposed.
Is there any way out for the tenant who is now anxious to see the appointment of an expert or an arbitrator?
The underlying question, whether time was intended to be of the essence, came before the court – one might almost say for the umpteenth time – in Starmark Enterprises Ltd v CPL Distribution Ltd [2000] EGCS 81, where Neuberger J, after considering a library of authorities, felt constrained to rule in favour of the tenant.
But the story did not end there. The landlord emerged victorious from the Court of Appeal (see [2001] EWCA Civ 1252; [2001] 32 EG 89 (CS)), which took the bold step of departing from its earlier decision in favour of the tenant in Mecca Leisure Ltd v Renown Investment (Holdings) Ltd [1984] 2 EGLR 137.
The judgments contain an intriguing observation by Arden LJ, suggesting that, in certain circumstances, such a deeming provision could fall foul of the Unfair Terms in Consumer Contracts Regulations (SI 1999 No 2083).
