British Land (BL) and Portman Estate have asked the High Court to resolve a mistake in the lease agreement on
In March 2001, Portman Estate, as freeholder of the site, agreed to grant BL a lease until 25 December 2106, but that, on completion of BL’s redevelopment of the site, the term would be extended to 25 December 2154.
The parties agreed that the extension of the lease term would be achieved by a reversionary lease, which gives the tenant a right of possession in the future rather than immediately.
However, following practical completion on 29 January 2007, the parties discovered that they had “mistakenly believed” that such a lease could be lawfully granted in their case; in law, a reversionary lease must start within 21 years of the date on which it is granted.
Accordingly, BL has filed a claim with the High Court for an order to rectify the agreement so that the current lease to 2106 is regranted to last until 2154.
Gareth Clutton, chief executive of Portman Estate, said: “This is a purely procedural matter undertaken entirely with the agreement of both parties in order to sort out an unintended leasing issue.”
