Complete Exclusion Necessary to Justify Claim of Possession
28th March, 2013
When a tenant takes a lease, one of the things that they are almost invariably required to agree not to do is part with possession of the let premises without the written agreement of the landlord.
However, the commercial reality is that there are many circumstances in which the tenant of commercial premises might allow another person or business to share or use part of the let premises for their own purposes.
When another person is permitted to use the tenant’s premises, the question arises as to at what point that can be described as parting with possession in contravention of the lease covenant.
A recent High Court case dealt with this issue. It involved a company that leased land which it allowed Ford to use for the storage of vehicles prior to their despatch to dealers. Ford wished to take the storage of the vehicles ‘in house’, so it relied on an agreement made with the tenant some years ago that it could occupy the site under licence or call for an underlease.
Regrettably for Ford, the landlord refused to agree to an underlease and sought possession of the property on the ground that the tenant had parted with possession of it in violation of the covenant in the lease.
The Court found that whilst Ford did exercise day-to-day control over the business activities on the site, the tenant had not parted with possession of it. To have done so, Ford would have needed to have completely excluded the tenant from the property.
Occupation and possession is not the same thing in law and whilst Ford clearly occupied the premises, it could not be said to have taken possession of them in the sense that its control was total and exclusive.
For advice on all aspects of commercial property law, contact Simon Ellis on 01244 405516 or at [email protected]
You might also be interested in...
9th August, 2018
We have been approached by a number of clients who have received a statutory demand, either personally or to their company, and they have asked us what to do about it. One business was contacted by a company demanding payment of a debt owed under a contract for TV advertising in a shopping mall. We presume – but... Read More »
3rd August, 2018
Agriculture and Estates specialist Ben Brassington has strengthened the services offered by Top 200 legal firm Aaron & Partners LLP A dairy farmer with more than 18 years’ experience as a Partner in his family’s farming business has been appointed by a top legal firm in Shrewsbury. Ben Brassington, who has also been working for several years as... Read More »