I am looking at a property occupied by a tenant who has recently renewed their lease for another 10 years. In 1997 they carried out a significant extension to the property with Landlord consent. The new lease states that these works are to be disregarded for the duration of the term when considering any rent reviews and specifically mentions the extension, which is clear to me so far.
On lease expiry, should the tenant wish to renew once again the previous improvements will be over 21 years old and from a previous tenancy and I assume can now be rentalised. However do the principles established in the case of O’May v City of London Real Property Company (which are that the tenant is entitled to a new lease no more onerous than the existing lease) hold any weight here? I believe not, as this goes directly against S34 of the 1954 L&T Act, and cases such as Brett v Brett Essex Golf Club and Panther Shop Investments v Keith Pople show decisions being referred directly to the Act.
(O'May -v- City of London Real Real Estate Company Limited. Here the landlord was in effect trying to transfer the responsibility for the repair and maintenance of office premises to the tenant. The value of the reversion would have been increased by over £1m as a consequence of this change and the court held that the landlord was not entitled to insist upon such a requirement).
if anyone has any advice it would be much appreciated