Tenant ceasing to occupy for business having applied for new tenancy – Whether liable for rent under section 64 continuation provisions
A widely acknowledged weakness of the business lease regime operating under the 1954 Act is its failure to provide comprehensively for what is to happen when the tenant ceases to occupy the premises for the purpose of his business. Save for the limited instances where the Act deals expressly with the situation, the thrust of leading decisions, notably the now famous case of Esselte AB v Pearl Assurance plc [1997] 1 EGLR 73, is to disapply the Act from the moment that the tenant shuts shop, thus throwing the parties back to their common law rights.
The Esselte reasoning has now been extended to a case where the shop closed down at a time when the machinery of the Act was just about to move into top gear, the tenant having gone so far as to apply to the court for a new lease: see the Court of Appeal decision in Single Horse Properties Ltd v Surrey County Council [2002] EWCA Civ 367; [2002] 2 EGLR 43.
At the end of the day, the disapplying of the interim continuation provisions of section 64 deprived the landlord of the £68,000 rent that it would have received if the government office in question had remained open at all material times. More fuel for the law reform debate? See
Related item:
PP 2002/91
Tenant ceasing to occupy for business having applied for new tenancy – Whether liable for rent under section 64 continuation provisions
A widely acknowledged weakness of the business lease regime operating under the 1954 Act is its failure to provide comprehensively for what is to happen when the tenant ceases to occupy the premises for the purpose of his business. Save for the limited instances where the Act deals expressly with the situation, the thrust of leading decisions, notably the now famous case of Esselte AB v Pearl Assurance plc [1997] 1 EGLR 73, is to disapply the Act from the moment that the tenant shuts shop, thus throwing the parties back to their common law rights.
The Esselte reasoning has now been extended to a case where the shop closed down at a time when the machinery of the Act was just about to move into top gear, the tenant having gone so far as to apply to the court for a new lease: see the Court of Appeal decision in Single Horse Properties Ltd v Surrey County Council [2002] EWCA Civ 367; [2002] 2 EGLR 43.
At the end of the day, the disapplying of the interim continuation provisions of section 64 deprived the landlord of the £68,000 rent that it would have received if the government office in question had remained open at all material times. More fuel for the law reform debate? See PP 2002/105.
Related item:
A case of warts and all Estates Gazette 27 April 2002, p153.
