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If a commercial contract is terminated immediately for material breach (which the contract expressly permits), and the innocent party is required to make redundancies as a result, can the innocent party claim the cost of the redundancies as part of its damages claim against the party in breach?
Q&As
The aim of contractual damages is to put the innocent party in the same position as they would have been had the contract been performed, in so far as money is able to do so (See: Robinson v Harman). The loss suffered by the innocent party therefore has to be identified and quantified. For more information, see Practice Notes: • Contractual damages—general principles • Contractual damages—pecuniary losses In deciding whether to award damages, the court will consider the principles of causation and remoteness and whether an innocent party has mitigated its loss. In considering remoteness, the court will have regard to the
If a commercial lease contains a provision allowing the landlord to break the lease at any time during the term with a three-month written notice, is this a term of years certain for the purposes of contracting out of sections 24–28 of the Landlord and Tenant Act 1954?
Q&As
By section 38A of the Landlord and Tenant Act 1954 (LTA 1954), parties to a lease may agree to exclude the security of tenure that would otherwise apply to a business lease. This right to ‘contract out’ applies to a tenancy ‘to be granted for a term of years
If a commercial lease contains a provision to pay service charge but service charge has never been demanded, is there a limit as to what period a landlord can request backdated service charge for?
Q&As
In the case of commercial premises, the protection afforded to residential tenants by the Landlord and Tenant Act 1985 (LTA 1985) will not apply. As such, in a commercial lease, if the service charges are reserved as rent, the time limit for recovery of the same through the courts (once they become due and the tenant fails to pay on time) is six years pursuant to the Limitation Act 1980 (LA 1980). If the service charges are not reserved as rent, then the time limit for recovery of the same will be
If a commercial lease contains provision for rent reviews in 2011, 2014 and 2017, but none of these have ever been implemented, can the landlord now implement the rent reviews back to 2011 and charge interest on the increased rent from 2011?
Q&As
Many (particularly older) forms of rent review clause require the landlord or tenant to take certain steps in connection with the rent review procedure set out in the lease (eg service of notices or counter-notices, or references to a third party). Often, the time for taking such a step will be defined or ascertainable and, if a deadline is missed, the question arises as to the consequences for that party in the context of the rent review. The answer, broadly, will turn on the well-known contractual issue: is time of the essence? If it is of the essence, the consequences may be severe; but if it is not, then the rent review machinery allows that party to take the necessary step out of time without those adverse consequences. See Practice Note: A guide to rent
If a commercial lease does not specify the responsibility for an asbestos survey, is this the responsibility (including the cost) for the landlord or the tenant-is there an authority that states whose responsibility this is?
Q&As
The Regulation of asbestos in commercial buildings is contained with the Control of Asbestos Regulations 2012, SI 2012/632 (CAR 2012) which came into effect in April 2012. It is best practice to read the CAR 2012 in conjunction with the Approved Code of Practice (ACoP) published by the Health and Safety Executive. To manage the risks from asbestos in non-domestic premises, a duty holder is required to carry out a ‘suitable and sufficient’ assessment to determine whether asbestos or asbestos-containing material is, or is liable to be present in the premises (CAR 2012, SI 2012/632,
If a commercial lease excluded sections 24–28 of the Landlord and Tenant Act 1954 (LTA 1954) and a subsequent renewal lease did not contain any such exclusion, does this mean that the renewal lease was not contracted out? Can a landlord claim rent for a period after a lease has expired?
Q&As
The Landlord and Tenant Act 1954 (LTA 1954) provides security of tenure to business tenants in occupation of leasehold property if certain conditions are met. It is possible to exclude the effects of LTA 1954 only if the procedure set out in LTA 1954, s 38A is followed. A lease for a term certain may be excluded from LTA 1954 if (paraphrasing)
If a commercial lease includes a clause whereby a landlord has the right to forfeit the lease if rent goes unpaid for more than 14 days and rent is paid on a quarterly basis but tenant has failed to pay rent for in excess of a year and a letting agent has continued to send the tenant an invoice at the point each quarter rent fell due, will the landlord be deemed to have waived the right to forfeiture?
Q&As
The right to forfeit a lease will be waived if the landlord has knowledge of the breach and demands or accepts rent that fell due after the date on which the right to forfeit arose. That is, after the breach, and any grace period set out in the forfeiture clause—such as a period of
If a commercial lease is being assigned from an individual tenant to a company of which the individual tenant is a director and an existing rent deposit provides that the deposit should be returned on lawful assignment, does a new rent deposit agreement need to be entered into between the landlord and the assignee company, or will the previous agreement with the individual tenant stand?
Q&As
A rent deposit is a sum of money that is deposited by a tenant when it takes a lease of premises. The deposit acts as security for the landlord against the non-payment of rent or other breaches of the lease terms by the tenant. The money is held on the terms of the rent deposit deed and the landlord has immediate access to funds in the event that the tenant is in breach of the lease. The terms of the rent deposit deed may provide for the deposit to be held in an interest earning
If a commercial lease is let to two tenants jointly and severally would both tenants need to join in a relief from forfeiture application or could one tenant progress an application without the co-operation of the other?
Q&As
This question is addressed in Practice Note: Relief from forfeiture for breach of covenant, which explains that if there are joint tenants, both (or all)
If a commercial property has been sold and the seller has left livestock on the land, does the purchaser need to follow the procedures under the Torts (Interference with Goods) Act 1977 to have the livestock removed?
Q&As
In the course of a purchase of commercial property, it is important for the parties to be clear, if possible, as to what chattels left on the premises form part of the sale. In circumstances where livestock has been left on the land, the first step will be to determine, by reference to the terms of sale and/or by seeking to discuss with the vendor, whether the livestock formed part of the purchase. In the event that ownership of the livestock, which will fall within the scope of chattels, has passed to the purchaser, the purchaser is free to deal with the livestock as they choose within the bounds of the law, and, in particular, the Animal Welfare
If a commercial property is granted change of use, does that replace the previous use consent or add to it? For instance, if an A1 shop is granted consent to change use to A2, would consent be required if a later occupier wished to revert back to A1?
Q&As
It is possible, and in fact common, for a number of different planning permissions to be granted for development on either the whole or parts of a site. The grant of a planning permission for a change of use of premises does
If a commercial tenant becomes insolvent what effect does this have on the lease and payment of business rates?
Q&As
A well-drafted lease will contain provisions that deal with the eventuality of a commercial tenant becoming insolvent, and the first recourse should be to the terms of the lease. Many leases will provide for insolvency to be a trigger for forfeiture of the lease and may also provide for remedies such as a guarantor being required to take a lease on the same terms in the event that the tenant is insolvent. However the nature of the tenant and the steps that are taken as a result of the insolvency may also have an impact on what remedies the landlord has. Where the commercial tenant is a