Long lease with 21-year rent reviews — Supermarket building erected at expense of tenant — Rent review assumptions silent as to existence of building — Whether rent at review assumes land without buildings
The plaintiff and defendant are the respective owners of the freeholds of two adjoining properties, 65/67 and 69/71 York Road, Acomb, York. In 1966 the plaintiff’s predecessor in title was granted a building lease of the site of 69/71 York Road for 99 years from December 31 1965 “in consideration of the expense to the tenant of erecting a supermarket”. The lease contained provisions for a review of the rent every 21 years, the first being at the end of 1986. The plaintiff as tenant sought a declaration that the rent at review must be determined on the assumption that the property demised was, as had occurred, land without buildings.
The plaintiff contended that his predecessor under the instant lease had facilitated the buildings as he had owned the adjoining site and the building stood partly on this; the rent under the lease was £1,100 and under the sublease of the whole building was only £5,250; the language of the parcels clause referred to land only; and the valuation of half a building held practical difficulties.
Held The plaintiff’s application failed. Where the lease is silent as to the appropriate assumptions at review, the arbitrator must take the premises as they stand. The reference to “land” in the parcels clause was normal conveyancing language: see Ipswich Town Football Club v Ipswich Borough Council and Gob Eng Wab v Yap Phooi Yin [1985] 1 Malaysian LJ 329 (both to be reported in “Estates Gazette” of August 13 1988). The practical difficulties of valuation presented a problem which was not likely to defeat a surveyor. The defendant was entitled to a declaration that the property demised included “the land and buildings standing thereon at each rent review date”.
Michael Barnes QC and Jonathan Karas (instructed by Forsyte Kerman) appeared for the plaintiff; and Derek Wood QC and Howard Elgot (instructed by Sykes Lee & Brydson, of York) appeared for the defendant.
