The Landlord and Tenant Act 1954 sets out various grounds of opposition to the renewal of a business lease. Should the landlord fail to establish any of these grounds, the tenant will be entitled to a new tenancy. Certain grounds of opposition relate to the tenant’s behaviour. As a result, the court can refuse to order the renewal of a lease where the tenant has failed to keep the premises in repair or has persistently delayed in paying rent.
In addition, section 30(1)(c) of the 1954 Act enables the court to refuse to order the renewal of a lease in view of other substantial breaches of the tenant’s obligations or for any other reason connected with the tenant’s use or management of the holding. The wording used in section 30(1)(c) suggests that a tenant need not necessarily be in breach of covenant for the provisions relating to the tenant’s use or management of the holding to apply. This would appear to allow the courts considerable latitude. However, cases based upon this particular ground for possession do not feature often in the law reports.
The decision in Fowles v Heathrow Airport Ltd [2008] EWCA Civ 1270; [2008] PLSCS 272 provides landlords with a useful reminder that section 30(1)(c) may prevent tenants that use premises for an illegal purpose from obtaining an order for the renewal of their tenancies (unless they are prepared to mend their ways).
The local authority served enforcement proceedings on the tenant, alleging breaches of planning control. The tenant subsequently fought a lengthy battle over the use of the site, which lasted for almost 20 years. In the meantime, the landlord served a notice under the 1954 Act, terminating the tenancy and stating that the landlord would oppose the grant of a new lease on the grounds set out in section 30(1)(c).
The High Court and the Court of Appeal agreed that the majority of the tenant’s activities on the land were illegal under planning law. Neither court was convinced by the tenant’s promise that he would mend his ways, because they felt unable to attach any weight to his assurances as to his future behaviour. Consequently, the landlord succeeded in its ground of opposition to the grant of a new lease.
The section is expressed in broad language and, when dealing with applications for renewal that are contested under section 30(1)(c), the court will be entitled to look at all relevant in connection with the tenant’s use or management of the holding so that it can exercise its discretion fairly. It is also worth noting that a landlord that successfully opposes an application for renewal on this ground will not be required to compensate the tenant on the termination of the lease. However, the landlord must be able to satisfy the court that the tenant “ought” not to be granted another tenancy.
Allyson Colby is a property law consultant
