Rent review — Landlords’ trigger notice — Two months for tenants’ counternotice — Reviewed rent “conclusively fixed” in absence of counternotice — Whether time of the essence — Application by tenants dismissed
The plaintiffs are the tenants of 89 East Street, Southampton; the defendants are the landlords. The plaintiffs hold a 26-year term by way of an underlease dated November 1983. By clause 1(a) of the underlease the landlords are entitled to serve a notice stating the rack-rental value for the purposes of the rent review. By clause 1(b), “if on the expiration of two months from the date of service of the Lessor’s notice the Lessee shall not have served on the Lessor a counter-notice … the rack rental value of the demised premises shall be conclusively fixed at the amount stated in the Lessor’s notice”.
By a letter of June 21 1988 written on behalf of the landlords, it was stated that formal notice was being given that the landlords “will be seeking a revised rent of £38,500”. The tenants failed to take any action within the ensuing two months. They eventually served a formal counternotice on December 12 1988. The plaintiff tenants sought a declaration that time was not of the essence of the rent review clause and that they could rely on the counternotice of December 12 1988.
Held The application was dismissed.
The words in the underlease, that the rack-rental value for rent review purposes was “conclusively fixed” at the expiration of two months from the lessor’s notice, made time of the essence of the clause. The parties had set out a timetable and what should happen if it was not complied with. They had used clear language and it meant what it said.
Henry Smith’s Charity Trustees v AWADA Trading & Promotion Services Ltd
(1983) 47 P&CR 607; 269 EG 729, CA considered.
Kirk Reynolds (instructed by White Brooks & Gilman, of Winchester) appeared for the plaintiffs; and Kim Lewison (instructed by Kanter Jules Grangewoods) appeared for the defendants.
