When it comes to renewing a commercial property lease, the landlord and tenant can have very different outcomes in mind. Many will understand their rights under the Landlord and Tenant 1954 (“the Act”), which allow a tenant, if it has the protection of the Act, the right to seek a new lease at the end of its current tenancy.
The landlord, may however, object to the lease renewal on a number of grounds, such as an intention to redevelop or the intention to carry on its own business at the premises.
In the recent case of MVL Properties (2017) Ltd v The Leadmill Ltd [2025], the landlord did intend to occupy the premises for its own business and so objected to the claim for a new tenancy by the tenant.
Background
In 2003, the tenant took a 20-year lease of a premises in Leadmill Road, Sheffield, which was protected within the Act. In March 2022, the landlord served a Section 25 Notice pursuant to the Act upon the tenant opposing the grant of a new tenancy on the ground 30 (1)(g). This ground is used when the landlord intends to occupy the premises for the purpose of carrying on a business.
The tenant defended a claim for possession on the basis that the business the landlord intended to carry on at the premises was essentially the same business as the tenant ran. The business in question was principally that of running a music venue and nightclub.
The landlord was required to establish that it had a real intention to occupy the premises for its own business at the date of the hearing, and there was a reasonable prospect of doing so within a reasonable time after the tenancy ended.
What was unusual about this case was that the tenant was also relying on the use of Article 1 of the First Protocol to the European Convention on Human Rights (“ECHR”) in addition to the Act.
Under Article 1 of the First Protocol, the tenant argued that if it was not granted a new lease of the premises, it would be deprived of associated goodwill, which it argued was a “possession”, without receiving compensation for that element.
What was the outcome?
The court found in favour of the landlord and was satisfied that the landlord had the necessary firm and settled intention to occupy the premises for its own business. The landlord was able to prove to the satisfaction of the court, that it would commence the fitout process for running the music venue upon termination of the tenancy or within a reasonable time after termination. This established the grounds of Section 30 (1)(g) of the Act to the satisfaction of the court. The court also ruled that the tenant had not established that the landlord would be carrying out effectively the same business as the tenant.
The court considered the tenant’s argument that goodwill could be a possession, and whilst the court acknowledged that it could be a possession within the meaning of Article 1 of the First Protocol of the ECHR, it was necessary to prove the existence of goodwill, which the tenant failed to do.
The court’s ruling was a blow to the tenant and highlights the difficulties that tenants can face when it comes to renewals of leases pursuant to the Act, even with the use of the ECHR.
It may not be a surprise that the tenant sought compensation for the goodwill that it had built up over the years, and if you are a tenant facing a challenge to a lease renewal or landlord seeking to oppose one, it is a helpful case to understand the approach a court may take in determining these challenges.
The courts seek the balance between the tenant’s rights of renewal and the landlord’s right to possession in certain circumstances pursuant to the Act.
If you have any questions regarding this case or related matters, please contact us on 0345 646 0406 and a member of our Team will be in touch.