New Act will sort out surrender problem
A business tenant wishes to assign, but cannot do so without first offering to surrender the lease to the landlord, this requirement having been imposed by a so-called Bocardo clause in the lease: see Bocardo SA v S&M Hotels Ltd [1979] 2 EGLR 48.
A point canvassed, but not conclusively decided, in Allnatt London Properties Ltd v Newton [1983] 1 EGLR 73 was that any agreement resulting from the acceptance of the offer would be struck down, where applicable, by the anti-avoidance provisions of the Landlord and Tenant Act 1954. That notwithstanding, it has now been held by Lindsay J that such a possibility does not free the tenant from the obligation to make the offer to the landlord, who would acquire an equitable interest in the remainder of the term should the tenant proceed with the assignment without complying with the clause: see Tiffany Investments Ltd v Bircham & Co Nominees (No 2) Ltd [2003] 12 EG 127 (CS).
This area is bound to remain controversial (see, for example,
For the future, the practical importance of the problem will be greatly diminished by statutory changes: see
PP 2003/34
New Act will sort out surrender problem
A business tenant wishes to assign, but cannot do so without first offering to surrender the lease to the landlord, this requirement having been imposed by a so-called Bocardo clause in the lease: see Bocardo SA v S&M Hotels Ltd [1979] 2 EGLR 48.
A point canvassed, but not conclusively decided, in Allnatt London Properties Ltd v Newton [1983] 1 EGLR 73 was that any agreement resulting from the acceptance of the offer would be struck down, where applicable, by the anti-avoidance provisions of the Landlord and Tenant Act 1954. That notwithstanding, it has now been held by Lindsay J that such a possibility does not free the tenant from the obligation to make the offer to the landlord, who would acquire an equitable interest in the remainder of the term should the tenant proceed with the assignment without complying with the clause: see Tiffany Investments Ltd v Bircham & Co Nominees (No 2) Ltd [2003] 12 EG 127 (CS).
This area is bound to remain controversial (see, for example, Terms of surrender Estates Gazette 28 August 1999, p69) if only because it is difficult to see how anyone can make an “offer”, as understood by the law of contract, where the proposal cannot be the subject of a binding “acceptance” (the two expressions being definable only in terms of each other).
For the future, the practical importance of the problem will be greatly diminished by statutory changes: see An old chestnut is cracked Estates Gazette 12 October 2002, p169, where Mark Shelton, of DLA, describes how the forthcoming 1954 Act reforms will operate, subject to certain conditions, to validate an agreement made on acceptance of a Bocardo offer.
