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Renewal of Commercial Leases – Intention is More than Mere Contemplation

The legal right that many commercial tenants enjoy to have their leases renewed can be overcome if their landlords ‘intend’ to occupy the premises for their own business or residential purposes. However, as a High Court ruling made clear, the concept of intention involves more than mere tentative contemplation.

The case concerned the tenant of a restaurant whose lease was protected under the Landlord and Tenant Act 1954. The landlord served notice terminating the lease and opposed the grant of a new tenancy on the basis that he intended to open his own hospitality venue on the premises. Following a preliminary hearing, however, a judge found that he had failed to establish such an intention.

In rejecting the landlord’s appeal against that ruling, the Court noted that the case hinged on Section 30(1)(g) of the Act, which excuses landlords from the usual obligation to renew protected commercial leases if they intend to occupy relevant premises, or part of them, as their residence or for the purpose of themselves carrying on a business.

The Court noted that, for a project to be ‘intended’, it must move out of the realm of tentative, provisional or exploratory contemplation into the valley of decision. The judge made no error of law and, in considering the landlord’s state of mind, was entitled to find on the evidence that he lacked the firm and settled intention required by Section 30(1)(g).

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Published
10 November 2021
Last Updated
3 December 2021