S Franses Limited v The Cavendish Hotel Limited judgment - LEGAL COMMENT
The Supreme Court has this morning handed down the much anticipated judgment in the case of S Franses Limited v The Cavendish Hotel (London) Limited, concerning opposed lease renewal proceedings under the Landlord and Tenant Act 1954. This case had leapfrogged the Court of Appeal after the High Court found in favour of the landlord.
Commenting on this, Mishcon de Reya Real Estate Partner Chhavie Kapoor said:
"This judgment is a game-changer. In a departure from long-settled practice, a landlord seeking to oppose the grant of a new tenancy on the basis of redevelopment must now demonstrate that its intention to undertake works is independent of the tenant's right to a new tenancy. The key question landlords will therefore now have to address is: would you intend to do the same works as those proposed, even if the tenant left of its own accord? The days of landlords fabricating extensive schemes of works, solely to recover possession of their properties, now appear to be over.
"The facts of this case, which involved £775,000 worth of work with no commercial benefit, were – undoubtedly – extreme. It's clear that the entire value of the works proposed by the landlord consisted of removing the tenant.
"The Court acknowledged that matters will be less straightforward in circumstances where a landlord proposes to undertake certain works irrespective of whether the tenant would vacate voluntarily or not, and others only for the purpose of satisfying Ground (f). In those instances, the Court indicated that regard should only normally be had to those works that the landlord unconditionally intended to undertake and the spurious top-up works should be disregarded."
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