A month doesn’t go by without somebody writing about extended permitted development rights. These measure were bought in by the Government primarily to provide impetus to an ailing Town Centre commercial property market slain by contemporary trends towards out of town retailing and modern purpose built office parks. With a buoyant local residential market and a ready supply of attractive period town centre buildings we have seen numerous conversions successfully and sympathetically undertaken to provide good quality residential accommodation, often unlocking significant value from an otherwise underperforming asset.
Completing such works is very straightforward with an empty property, but what if you have a tenant in occupation?
The first port of call in respect of all Lease Renewal negotiations should be the Landlord & Tenant Act 1954 which enshrines the process for all such leases falling within its remit. The Act provides tenants with security of tenure, automatically entitling them to a new lease on broadly similar terms unless the landlord can prove grounds for a refusal of a new tenancy under s.30. Assuming that your tenant has paid rent in a timely manner and otherwise fulfilled their obligations under the lease one option available is to refuse a tenancy under Ground (f) which states:
‘That the landlord intends to demolish or reconstruct the premises comprised in the holding or a substantial part of those premises or to carry out substantial work of construction on the holding or part thereof and that he could not reasonably do so without obtaining possession of the holding’
A conversion of the property from office to residential use is likely to qualify as substantial works of construction and may therefore provide one such avenue to obtaining vacant possession in order to facilitate such works. That said in order to rely upon Ground (f), the landlord must do more than merely state that it will demolish or reconstruct the premises. The intention must have moved “out of the zone of contemplation” and into “the valley of decision” (Cunliffe v Goodman  2 KB 237). In order to enter said valley of decision there must be a firm and settled intention and a reasonable prospect of achieving the same by the end date of the tenancy.
Underwoods Lease Advisory department have extensive knowledge and experience in advising both Landlords and Tenants through the lease renewal process.
Posted By: Robert Keeves
A month doesn’t go by without somebody writing about extended permitted development rights. These measure were bought in by the Government primarily to provide impetus to an ailing Town Centre commercial property market slain by contemporary trends towards out of town retailing and modern purpose built office parks. With a buoyant local residential market and…