Skip to main content

News story

October 24, 2019

Scheme of works: true intentions

The Supreme Court rules on the Landlord & Tenant Act 1954

A landlord intending to redevelop, demolish or carry out a substantial scheme of works can no longer rely on the Landlord & Tenant Act 1954 (the LTA) to defeat a tenant’s application for a new lease.

In the case of S Frances Limited v The Cavendish Hotel (London) Ltd, the Supreme Court held that under the LTA, a landlord’s intention behind a scheme of works must be independent of the tenant’s claim for a new lease.

This decision marks a significant departure from previous case law. The court can now investigate any scheme of works proposed by a landlord and consider their nature and intention, before coming to a decision on the grant of a new lease to an existing tenant.

Except where the LTA has been specifically excluded from a lease, a business tenant who occupies premises for business purposes is entitled to a new lease at the end of the term under the LTA. Unless a landlord can prove that one or more of the LTA’s specific grounds for opposing the grant of a new lease applies.

Section 30(1)(f) of the LTA is known as the “redevelopment ground” and requires that a landlord intends to demolish, reconstruct or carry out a substantial construction scheme of works on the premises, which they could not reasonably do without obtaining possession.

Previously a landlord’s motive was irrelevant. However, in the Frances case, it was shown that the landlord had devised a scheme of works, which met the statutory criteria under the LTA, but that it intended to recover possession of the premises without a commercial benefit and that it may not carry out those works.

The Supreme Court held that to satisfy the criteria, a landlord’s intention must exist independently of the tenant’s claim for a new lease and must not be conditional upon whether the tenant wishes to remain at the premises. It applied the test of whether the landlord would still do the same scheme of works if the tenant left voluntarily.

Tenants will be pleased with this decision, as it has gone some way to ensuring that the spirit of the LTA has been maintained. Consequently, tenants can analyse their landlord’s intentions and schemes of work in greater depth and attempt to challenge the scheme of works’ necessity rather than just vacating the premises.

Each side’s negotiating position is more important than ever. The decision is likely to result in more landlord’s considering the proposed terms of a new lease with a potential redevelopment break, rather than having to devise a scheme of works to obtain possession, where they risk having to prove their intentions, or in cases where only part of the premises is required, to complete the scheme of works.

Our experienced property litigation team can advise landlords and tenants on the provisions and consequences of the LTA. Call property litigation lawyer Laura St- Gallay today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Stay in touch

Subscribe to our newsletter

Stay in touch

By completing your details and submitting this form you confirm you are happy for us to send you marketing communications and that you agree to our Website Privacy Policy and Legal Notice and to us using Mailchimp to process your data.


Sending

News/Insight

  • What is the Employment Rights Bill 2024?
    The Employment Rights Bill 2024 marks a pivotal moment in UK employment law, promising the most significant reforms in over three decades


    Read more
  • Autumn Budget Statement 2024
    Key implications for employment law, property law, and estate planning


    Read more
  • Disclosure against warranties in UK corporate transactions
    In UK corporate transactions, disclosure of information is a vital strategy for sellers to shield themselves from warranty claims when selling their shares or business.


    Read more
  • How the Employment Rights Bill 2024 impacts employers and businesses
    The government’s new Employment Rights Bill outlines significant changes to employment laws, focusing on workers' rights and flexibility.


    Read more
  • Business First Magazine
    Autumn/Winter 2024 Edition


    Read more

What they say...

  • Stephen, November 2024
    “Outstanding family lawyer who came through for me in a difficult case. In the world new to me of divorce and the aftermath, [Pippa Marshall] provided excellent advice from the first call and right through to conclusion. She made a difficult ex

  • M. M. Homes, November 2024
    “Charlotte explained everything very clearly and made the whole process nice and easy. Have already started recommending her to my friends.” Wills and LPAs

  • Nim, November 2024
    “I highly recommend James McMullan and his team. They all did a fantastic job with helping me through a particularly difficult family situation. They are extremely professional, caring, and experts in their field.” Probate and contentious

  • Man Kiu Wan, November 2024
    “Thank you Charlotte for your excellent and professional services.” Probate

  • Ms K, November 2024
    “I was recently made redundant, and my company had handled some of the process quite poorly. Patrick came recommended by a friend who had used him during her own redundancy, and I can now wholeheartedly recommend him myself. His initial consult

Read more
Send this to a friend