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Landlord extra time to oppose lease renewal confirmed

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In August 2010 the High Court contemplated in Somerfield Stores Ltd v Spring (Sutton Coldfield) Ltd1 whether a business tenant can bring forward the hearing date to prevent a landlord from opposing a lease renewal. The general principle is that a tenant occupying a business premises has the right to try and renew the lease when it expires (the Landlord and Tenants Act 1954, s.26). The same Act provides that a landlord may oppose such a renewal on several grounds, and in this case the landlord sought to recover possession for redevelopment purposes (s.30(1)(f)). It is necessary for a landlord to prove two things if he is to oppose a renewal on this ground: (1) a firm and settled intention to redevelop when the lease expires; and (2) the ability to carry out the proposed redevelopment. Somerfield (the tenant), the business tenant of a supermarket premises owned by Spring (the landlord), served notice on Spring under s.26 LTA 1954 that they intended to renew their tenancy. This was served with a counter notice by Spring that they would oppose the renewal of the tenancy on the grounds that they intended to redevelop the property upon the termination of the lease (s.30(1)(f)). Somerfield applied to the court for the grant of the new tenancy, and a trial date was set to hear the ground of opposition, as stipulated above. In February 2009 Spring went into administration and this delayed the progress of any plans for redevelopment. In an attempt to take advantage of this Somerfield decided not to wait for the trial date in the distant future, they applied for a summary judgment to dismiss the ground of opposition on the basis that Spring would not be able to prove either the intention or the ability to redevelop the property. The application for summary judgment was dismissed, it was held that the date of the hearing at which the necessary intention had to be shown to exist was always the date of the substantive trial of the landlords ground of objection. It was held that it made no sense to consider the matter at a summary hearing rather than a final hearing, as the parties would have to wait until the final hearing to take any action resulting anyway. The court accepted that this was more favourable to the landlord, but submitted that this was clearly the intention of the 1954 Act and should not be changed. For additional information or comment please contact: Justin Emerson of Gepp & Sons. The above is not legal advice; it is intended to provide information of general interest about current legal issues.