Associate solicitor Gemma Smith, in our Commercial Property team, examines a recent case involving vacant possession.
We have become accustomed to seeing the failure of a tenant’s break in a lease where the tenant is required to give vacant possession as a pre-requisite to the successful operation of a break clause. To date, this has generally been due to the tenant failing to remove something from the premises, whether this is partitioning, its possessions or even rubbish.
In the recent High Court case of Capitol Park Leeds plc v Global Radio Services Limited [2020] EWHC 2750 (Ch) (23 October 2020) it was decided that the tenant’s removal of certain items was also sufficient to frustrate the vacant possession requirement of the tenant’s break.
The items removed formed part of the “Premises” as demised under the lease and included items such as tiles, lighting and heating equipment. The basis of the decision seems to rest on the fact that the removal of the items left the premises in a state unsuitable for occupation on the break date, meaning that the landlord was unable to simply re-let the premises on that date.
The ability for the landlord to re-let the premises on the break date has been a key requirement in the context of cases where failure to provide vacant possession – and therefore failure to terminate a lease – has been as a result of a tenant not removing enough items to satisfy the vacant possession requirement. It is interesting in this case that the removal of more items than the tenant should have was also deemed to frustrate vacant possession (rather than, for example, being dealt with as a dilapidations issue).
Permission has been granted for the tenant to appeal the decision and it will be very interesting to see how this develops. The decision is however yet another warning that tenants should not accept a break clause where vacant possession is a pre-condition to a break and should otherwise comply with the requirements of a break clause to the letter if seeking to successfully terminate a lease.
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This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
