The High Court has reasserted that the motive of a landlord is irrelevant when looking at their intent to redevelop in a hostile lease renewal. There is no new law as a result of this case but the decision has led some to question whether the protection afforded to a business tenant under the Landlord and Tenant Act 1954 has seen its day.
In S Franses Limited v The Cavendish Hotel (London) Limited [2017] EWHC 1670 (QB) the landlord wanted to recover the premises back from a tenant with rights to renewal under the Landlord and Tenant Act 1954. Any tenant with these statutory rights has the right to renew their lease unless one of the grounds of opposition can be proven by the landlord. One of the most frequently used grounds is ground (f) which is where the landlord requires possession of the property to redevelop. In the case the landlord prepared a number of schemes of building works and the landlord’s witness in cross examination admitted:
• Some of the works would not be undertaken if the tenant left voluntarily
• If the court did not rule in the landlord’s favour then the works would not be undertaken
• If the court did rule in the landlord’s favour the entirety of the works would be carried out.
The tenant argued that this conditional intention of the landlord to carry out the works was insufficient: the landlord was only going to do them if it meant the tenant was not given a new tenancy. The landlord’s clear purpose for devising the scheme was to obtain vacant possession of the property.
The High Court held that the motive was irrelevant in these cases. The landlord had provided an undertaking to the court that they would carry out the works and that combined with the factual evidence to the court was sufficient to meet the required intention under the 1954 Act.
Practical points
• A well-advised landlord can defeat a tenant’s right of renewal providing they have sufficient funds and inclination to carry out a development scheme that might not necessarily be commercially viable.
• It is not for the court to look at the business case for any development. Commercially viable schemes may be the norm but are not necessary to prove intent. A landlord does have to prove there are no legal or practical obstacles to the development but crucially not the business sense behind it.

by Jen Morris
Consultant (Litigation)