Can a Landlord end a Commercial Tenancy to use the premises for their own purpose?

A landlord can terminate a Commercial Tenancy to use the premises for their own activity.

There are, however, several steps which must be taken before this can happen.

Sophie Kerry, solicitor in the property litigation team at Wake Smith looks at the issue.

• The law
• A recent case
• Importance of the recent case

The law

At the end of a contractual term, a business tenancy which is protected by the Landlord and Tenant Act 1954 (‘’the Act’’) will not terminate automatically.

However, there are various ways a tenancy, which has the protection of the Act, can be terminated.

Under the Act, a Landlord can serve a Section 25 Notice which opposes a new Tenancy and relies on any number of the grounds in Section 30 of the Act.

If a Landlord wishes to terminate a commercial tenancy to use the premises for their own purposes, they would need to rely on ground (g) of the act.

This states: ‘’that on the termination of the current tenancy the landlord intends to occupy the holding for the purposes, or partly for the purposes, of a business to be carried on by him therein, or as his residence’’.

It is not the case however of merely relying on the ground.

The Landlord must show that their intention is real and certain, this could include providing Planning Applications, quotes from suppliers and business proposals.

They must also show they will be able to occupy the premises for the purposes of operating the business that they intend to carry out there. This could include providing permissions that they have obtained to operate the intended business from the premises.

A recent case

A recent case of Macey v Pizza Express (Restaurants) Ltd [2021] EWHC 2847 (Ch) shows what is required to be satisfied by a landlord so they can terminate a commercial tenancy to use the premises for their own purposes.

Mr Macey was the Landlord and Appellant, and Pizza Express was the Tenant and Respondent.

Pizza Express occupied the Exeter premises and Mr Macey opposed the grant of a new tenancy, as he wanted to use the premises himself to operate his own bistro.

The court considered whether Mr Macey satisfied ground (g) and essentially whether the plans submitted by Mr Macey for the bistro were actually viable and capable of being achieved.

The County Court found Mr Macey had failed to show a firm and settled intention, this was also upheld on appeal. The court commented that Mr Macey had ‘’mischaracterised his state of mind’’.

They found no evidence Mr Macey had committed financially to the project or incurred any substantial costs.

The court also noted Mr Macey’s children and the accountants, who were involved with plans for the business, were not asked to give oral evidence in support of his application.

Importance of the recent case

This case highlights the importance of the level of intention a landlord must show to satisfy ground (g).

Evidence must be provided which is definitive and plans must emphasize they are able to carry out the business intended.

Financial commitment by the landlord is key and the court will expect an element of preliminary steps to show a real intention to occupy, and use, the premises.

For further information on tenancy issues and disagreements contact Sophie Kerry at Wake Smith Solicitors on 0114 224 2036.

Published 22/05/22