Only one lessee in the market
When it comes to disregards, there is a striking difference between: (a) the fixing of a rent at rent review; and (b) its determination by the court when ordering a new a new tenancy under the Landlord and Tenant Act 1954. Under the former process, which derives from a contract, there may be scope for implying a disregard on the (business efficiency) basis that the clause in question is otherwise unworkable.
However, as affirmed by the Court of Appeal in J Murphy & Sons Ltd v Railtrack plc [2002] 2 EGLR 48, such a route cannot be taken on statutory renewal, as the only permissible disregards are those recited in section 34 of the 1954 Act.
On the question of rent review – discussed for purposes of comparison – there is a suggestion that, on similar facts (demised land inaccessible but for lessee’s ownership of adjoining land), the answer should not rest upon an implied disregard but rather upon the assumption that the market consists of a single “special purchaser” who would be prepared to pay more than a nominal amount.
The adoption of that view (fully discussed by Sandi Murdoch in
PP 2002/109
Only one lessee in the market
When it comes to disregards, there is a striking difference between: (a) the fixing of a rent at rent review; and (b) its determination by the court when ordering a new a new tenancy under the Landlord and Tenant Act 1954. Under the former process, which derives from a contract, there may be scope for implying a disregard on the (business efficiency) basis that the clause in question is otherwise unworkable.
However, as affirmed by the Court of Appeal in J Murphy & Sons Ltd v Railtrack plc [2002] 2 EGLR 48, such a route cannot be taken on statutory renewal, as the only permissible disregards are those recited in section 34 of the 1954 Act.
On the question of rent review – discussed for purposes of comparison – there is a suggestion that, on similar facts (demised land inaccessible but for lessee’s ownership of adjoining land), the answer should not rest upon an implied disregard but rather upon the assumption that the market consists of a single “special purchaser” who would be prepared to pay more than a nominal amount.
The adoption of that view (fully discussed by Sandi Murdoch in No way out for landlords, Estates Gazette 31 August 2002, p95), would clearly be bad news for landlords who have let landlocked premises without inserting an appropriate (express) disregard in the rent review provisions.
