Where a lease is protected by the security of tenure provisions of the Landlord & Tenant Act 1954, the tenant is entitled to apply for a new tenancy at the end of the term of the existing lease. There are seven statutory grounds on which a landlord can rely to oppose the tenant's application, one of which – 'ground (f)' – involves the landlord's intention to demolish or reconstruct the property comprised (or partially comprised) in the tenancy. In order to succeed, a landlord must demonstrate that it has sufficient intention to carry out the demolition or reconstruction works.
In a recent case, S'Franses Ltd v The Cavendish Hotel (London) Ltd, this issue of intention has been considered, and in particular the extent to which works should be proposed for independent commercial reasons or whether they can be devised simply as a way of securing vacant possession of the property.
The Court held that, provided a landlord could establish an honest intention to carry out development, the underlying reason for the works did not matter, even if this was to avoid the tenant's renewal rights and obtain vacant possession of the property.
In relation to this ground to oppose, it is worth landlords and their advisors remembering that if a lease includes a particularly wide right of entry for the benefit of a landlord this can work against a landlord objecting to a tenant's statutory right to renew (for demolition or redevelopment) because the landlord might be able to carry out the works simply by exercising its rights under the lease rather than needing to secure vacant possession of the property. In order to rely successfully on ground (f), the landlord must always show that he will not be able to carry out the intended works of demolition/reconstruction without obtaining possession of the property concerned.