A break right conditional on giving up vacant possession has always been a cause for concern; what is vacant possession can be difficult to ascertain. Last week’s case of Riverside Park Limited v NHS Property Services Limited emphasised how important it is to identify what is a chattel and what is a fixture to ensure vacant possession is given.
NHS Property Services Limited was the tenant of office space. Riverside Park Limited was the landlord. The tenant sought to terminate its lease by service of a break notice. The break was conditional upon vacant possession being given. At the break date various items were left in the property; large amounts of partitioning, kitchen units, floor coverings, window blinds, a burglar alarm amongst others. The case focused on whether the partitioning was a tenant’s chattel and therefore needed to be removed to exercise the break. The court held that it was and the failure to remove it rendered the break ineffective meaning the lease continued.
The court found that the partitioning was standard demountable partitioning simply held in place by screw fixings to the raised floor and suspended ceiling. They were not fixed to the structure of the property and could be easily removed without damaging either the partitioning or the property. Further the court analysed the purpose of the partitioning. It concluded that the partitioning was for the benefit of the tenant “rather than affording a lasting improvement to the Premises”. All of these points meant the Court reached the conclusion that the partitioning was a chattel and therefore should have been removed for the purposes of giving vacant possession as at the break date.
This case is a harsh reminder of the difficulties in giving vacant possession. Tenants will need to carefully consider how works have been annexed to a property to ascertain whether removal will be required. When exercising a conditional break, tenants should carefully analyse what is to remain at the property and ensure no items left behind are chattels.