B&M was the tenant of a retail unit in North West London. The landlord, HSBC, wanted to terminate the B&M’s lease to allow it redevelop the unit which both parties agreed were tired and required modernisation.
B&M served a notice to renew its lease during the coronavirus pandemic but HSBC did not receive a copy and omitted to serve a counter-notice opposing the grant of a new lease on the grounds of redevelopment.
HSBC wanted the new lease to facilitate its proposed redevelopment of the unit whilst B&M contended that its preference to continue trading from the unit should take precedence over the landlord’s intention to redevelop. The parties could not agree the terms of a new lease which were decided by the court.
When deciding the terms of the new lease, the court did not accept B&M’s arguments that jobs would be lost if a new lease should not be granted on the same terms or that it might lose market share to a competitor. If the unit were to be redeveloped then more jobs would potentially be created and B&M’s application for a new lease under the Landlord and Tenant Act 1954 could not have the effect of reducing competition between retailers.
The Court decided that the new lease should include a break clause to be exercised immediately upon HSBC giving B&M 6-months’ notice and in doing so the Court noted that B&M had obtained a further 2 years in occupation of the unit during the course of the proceedings. B&M was granted a term of 5-years which would provide some measure of security in case HSBC could not obtain planning permission and did not want to take back possession of the unit.
The case above indicates that if the landlord has a tenable plan and demonstrable intention to redevelop then the Court will facilitate its proposals, even if the date for the implementation of the redevelopment is not immediate.
Alex Haddad deals with lease renewal proceedings. Please feel free to contact Alex (Tel No. 0203 892 6805; Email: ahaddad@nockolds.co.uk) if you should wish to discuss any property disputes.