Pilot scheme for unopposed London business lease renewals
Under the Landlord and Tenant Act 1954 (1954 Act), a tenant occupying premises for business purposes has a statutory right to renew their lease, unless it is excluded from the provisions of the 1954 Act, or the landlord successfully opposes the grant of a new lease under section 30 grounds (e.g. tenant’s failure to comply with repairing obligations, persistent delay in paying rent and landlord’s redevelopment).
If the landlord does not oppose the renewal of a lease to a tenant, but terms cannot be agreed between the parties, Court determination is required. Many landlords and tenants in similar situations in the past will tell you that this process is slow, costly and there was no guarantee that the appointed judge would be an expert in property. As a new solution to this, a fast-track pilot scheme was launched in early 2018 to transfer unopposed lease renewal applications issued in the Central London County Court to the First Tier Tribunal (Property Chamber) in London.
The aim is to determine the case within 20 weeks with no provision to stay the proceedings other than a potential 3-month stay to allow for referral to the Professional Arbitration on Court Terms (PACT) scheme or another recognised dispute resolution service. Once the directions have been issued, a deferment will only be granted in exceptional circumstances.
The procedures are broadly similar to the usual Court process, but several have been adapted or removed to ensure a speedier and less costly process. The application will be listed to be heard in a two day period together with a number of other cases and determined by an experienced tribunal judge assisted by a tribunal valuer. Usually, the matter in dispute between the parties is the rent, but the Court can give further directions if other lease terms are also in dispute.
All will welcome the principle of speeding up the lease renewal process, but the procedures give the parties little flexibility. In some cases, lease renewal proceedings issued at the last minute are unavoidable and the parties representatives may not always have the full facts necessary to prepare a case or even a completed draft of the lease. Failure to comply with directions may result in the claim being struck out.
At present, the scheme only applies to properties in the jurisdiction of the Central London County Court, but if this is seen as a success by the Court and its users, this could be the way forward for determining all unopposed lease renewals throughout the country.
If you have any questions or would like more information, please contact a member of our Valuation & Advisory Services Team.