American bank Citibank is facing an £11m damages claim after giving up the lease of its offices at Kensington High Street in west London.
Landlord Fairgate International claims in a writ issued at London’s High Court that Citibank has breached its lease by failing to equip the property as required, failing to equip seventh floor flats as required, and by handing back the property without decorating, repairing or cleaning it.
Fairgate claims that work costing more than £6.6m will be needed to remove fixtures and fittings to make the property comply with the specifications set out in a lease, while loss of rent will amount to £2.2m, according to the writ.
Other costs, including more than £1.3m in VAT, will bring the landlords’ total losses to £11.27m it is alleged.
Citibank took a lease of the offices in 1989, with an initial rent of £1.625m pa. The lease was due to run to December 2013.
The writ says the bank was responsible for keeping the office block decorated with high quality fitted carpets or carpet tiles and high quality wallpaper, while the reception area was to have a built in reception desk, mirrors, planter troughs, and window blinds.
However, on 28 September 2001, the lease was surrendered back to Fairgate, and replaced by a new lease agreement, the writ says.
Under this agreement, Citibank paid just one pound and the landlord let the property to Citibank for a term expiring on 28 September 2002, while Citibank surrendered the lease.
In August last year, Fairgate’s solicitors wrote requiring Citibank to reinstate the property as required by the lease, but they say the bank has breached its obligations and failed to do so.
References: EGi News 13/08/03
