Picture the dismay of the landowners in Kent v Guest [2021] EWHC 51 (Ch); [2021] PLSCS 9, who purchased a piece of land and a set of racing stables in 2016 with a view to building a new house and running the stables themselves.
The sellers had employed a former Grand National winner, who lived in a large static caravan on site, to train their horses, and the buyers agreed that the arrangement could continue until they had constructed their new house and could move in.
The buyers granted the trainer a tenancy, which was excluded from the protection of the Landlord and Tenant Act 1954. When it expired, they renewed it without taking legal advice and without complying with the notice requirements in the 1954 Act.
As a result, the trainer acquired security of tenure and, when asked to vacate, refused to do so. Worse still, he claimed that, if he was entitled to a new business tenancy, he was also entitled to occupy the newly constructed house on the land because it was part of the land demised by the lease.
The buyers sought possession, relying on section 30(1)(a) (the tenant ought not to be granted a new tenancy due to the state of repair of the holding) and section 30(1)(c) (the tenant ought not to be granted a new tenancy in view of other substantial breaches of his obligations, or for any other reason connected with his use or management of the holding), and Leeds County Court rejected the trainer’s application for a new business tenancy.
The county court judge agreed that the property was in poor repair and had been structurally altered and added to without the landlords’ permission. To make matters worse, the trainer had been burning trade waste at the property despite warnings from the local authority, and his wife was carrying on an artificial turf business, which was not permitted by the lease. And, to cap it all, the trainer had failed to insure the property but, when challenged, rectified his omission in August 2018.
On appeal, the trainer suggested that the court should take a “compartmentalised” approach to grounds (a) and (c). However, the court was dubious. If this were the law, there could be breaches of covenants which, viewed separately, might not be sufficiently serious to prevent the renewal of a tenancy. But if taken collectively – as would reflect the situation of the parties in practice – the totality of such breaches could be so significant that it would be unfair to foist the tenant on the landlord for another term.
However, the court did not need to decide the point. The judge was satisfied that the breaches of the repairing covenants, which were adequately supported by the evidence, were sufficiently serious to justify the county court’s decision on ground (a), that the grounds for opposition to a new lease under ground (c) had also been made out, and that the refusal to renew the tenancy was correct.
Consequently, there was no need to consider whether the trainer would have been entitled to occupy the new house. However, in the absence of a claim for rectification of the lease, or some argument based on estoppel, or some discretion as to the extent of the property to be subjected to a new lease under the 1954 Act, the judge observed that he would have found it extremely difficult to reject the trainer’s claim.
Allyson Colby is a property law consultant
