It is well established that time is not usually of the essence of a rent review clause, unless there are any contra-indications in the express words of the lease, or in the relationship between the rent review clause and other clauses, or in the surrounding circumstances.
Does a rent review provision that requires a landlord to have applied for the appointment of an independent surveyor by a specified date, failing which the rent will continue at the rate previously payable under the lease (until the next rent review date falls due in accordance with the lease), constitute a contra-indication that ousts the general presumption that time is not of the essence of a rent review?
In Secretary of State for Communities and Local Government v Standard Securities Ltd [2007] EWHC 1808 (Ch); [2007] PLSCS 134 the tenant sought a declaration that the landlord had lost the right to review the rent because it had failed to observe the strict timetable laid down in the lease.
The landlord constructed a series of arguments, turning on the interaction of various clauses in the lease, in support of the proposition that time was not of the essence of the rent review. It argued that the disputed provision was merely a mechanism to ensure that the landlord continued to receive rent, while the rent review was pending. The landlord claimed that this filled a gap in the clause in the lease that reserved the rent payable to the landlord, under which the rent initially reserved by the lease was expressed to be payable only for the period up until the first rent review date under the lease.
The judge accepted that there was a lacuna in the lease, which did not deal with the rent payable with effect from the rent review date that had passed, but thought that this was more apparent than real, and did not see why this should distort or affect the clear meaning of the rent review proviso.
The judge observed that the landlord was seeking to find a lack of clarity that was not there. He accepted the tenant’s arguments that, if a provision that is relied upon as a deeming provision is ambiguous (because it is sensibly and reasonably capable of being read in more ways than one), the presumption that time is not of the essence may be relevant in deciding whether the provision is a deeming provision or not. However, it was not the function of the courts, when construing documents, to search for ambiguities, nor should the rules that exist to resolve ambiguities be invoked to create ambiguities that are not there.
The judge ruled that the ordinary meaning of the words used in the lease should prevail, and was in no doubt that the proviso in the lease was a contra-indication that rebutted the presumption that time is not of the essence of a rent review.
Allyson Colby is a property law consultant
