A landlord seeking to recover possession of a commercial property at the end of a business tenancy in order to redevelop it, must establish, under ground (f) of section 30(1) of the Landlord and Tenant Act 1954, according to B P Collins’ property disputes team, that on the termination of the current tenancy it intends to demolish or reconstruct the premises and that it could not reasonably do so without obtaining possession.
Pridewell Properties (London) Ltd v Spirit Pub Company (Managed) Ltd [2026] provides a detailed examination of what that ground actually requires. Mr Justice Fancourt held that intention is not just a state of mind. It has to be backed up by evidence of practical and financial deliverability, and the works must be capable of starting promptly after termination, not at the end of a lengthy process of preparation that has yet to begin. The decision is a difficult one for opportunistic landlords to now overcome.
The background
The Railway Bell is a public house on George Lane in South Woodford, East London. The tenant, Spirit Pub Company, had operated the pub since 2007. The landlord, Pridewell Properties (London) Limited, was an SPV formed specifically to redevelop the site – a scheme consisting of three mews houses in the beer garden, a smaller rebuilt pub on the ground floor, six self-contained flats on the upper floors, and a slightly enlarged third floor.
When Spirit served a section 26 request for a new tenancy, Pridewell opposed the grant on ground (f). At trial, HHJ Hellman found that Pridewell could not establish a real prospect of obtaining the funding needed for the scheme. The application for a new tenancy therefore succeeded. Pridewell appealed.
What the case decided
Mr Justice Fancourt dismissed the appeal. The narrow ground on which the case was determined was funding: Pridewell needed to show a real prospect of being able to fund the scheme, and the bank had made clear that it would require personal guarantees from the directors of the SPV. Pridewell had adduced no evidence at all about the personal finances of any director. In those circumstances the trial judge had been right to conclude that the funding hurdle had not been cleared. The fact that the premises offered adequate mortgage security was not enough where the lender required guarantees too.
The appeal could have stopped there. But Fancourt J went further and addressed, in detailed obiter remarks, the four grounds raised in the Spirit’s notice filed in respect of the appeal. Two of those grounds produced findings of considerable practical significance.
Planning permission: the right question
By the time of trial, Pridewell had not even applied for planning permission. Two London Plan policies were in play, and it was agreed both had to be satisfied: policy D13, which requires noise mitigation where new homes are built near existing pubs, and policy HC7, which protects pubs and resists development that would harm their operation or viability.
The trial judge found that D13 could be met through acoustic design. But, he made no clear finding on HC7. Instead, he weighed the policies against the local need for housing and concluded there was a real prospect of permission, though less than 50%. Fancourt J held that this was the wrong approach. Housing need could not outweigh a failure to comply with the development plan. The real question was simply whether HC7 could be satisfied – and that question had never been answered. Had the appeal turned on this point, he would have sent it back to the trial judge.
Timing: the question every landlord needs to understand
The most important part of the judgment, and the part that will reshape how ground (f) cases are argued going forward, concerns timing. The 1954 Act requires the landlord to intend to carry out the works “on the termination of the current tenancy”. The courts have long accepted that this does not mean the bulldozers must arrive on day one (a short modest delay is permitted), but Fancourt J’s judgment redraws the line decisively in favour of tenants.
The trial judge had accepted that there would be a delay of 10 to 14 months from the possession date before works could begin, principally because Pridewell needed to carry out acoustic surveys and intrusive investigations to support its planning application (and it could not do so until it had the property). He found that this was a reasonable time in all the circumstances and that the works could therefore be said to be intended “on the termination of the current tenancy”.
Fancourt J held that this was the wrong question. The correct test is not whether the length of the delay can be justified in the circumstances. The correct test is whether, given a delay of that length, the landlord can be said to intend to carry out the works on the termination of the tenancy at all. The latitude allowed by the case law – “within a reasonable time” – covers the short practical steps a landlord needs to take after taking possession: securing and clearing the property, mobilising contractors, taking other preliminary steps. It does not cover obtaining planning permission, conducting surveys that have not yet been done, or resolving uncertainties that prevent the landlord from being ready to start. A delay of 10 to 14 months for those reasons is not a short modest delay. It means the landlord intends to start the works when the obstacles are surmounted, not when the tenancy terminates.
The reason for the delay does not save the landlord. Even though Pridewell could not access the property to carry out intrusive investigations until it had possession, that was a consequence of the parties’ bargain. The tenant was under no obligation to give early access, and the landlord’s difficulty in working around that did not extend the statutory tolerance.
What this means in practice
The decision has immediate practical consequences for both landlords and tenants in business lease renewals:
- For landlords contemplating a ground (f) opposition: Intention is not enough. There must be evidence of practical and financial deliverability. The funding model must be plausible and supported by evidence, including evidence of guarantor strength where the borrowing entity is an SPV. The redevelopment plan must satisfy the relevant development plan policies in their own right, not as a balancing exercise against unrelated material considerations.
- For landlords on timing: Work backwards from the termination date. If the works cannot realistically start within a short period of obtaining possession (weeks rather than many months) the ground will fail. Planning applications and pre-application consultations need to be progressed before the trial, not afterwards. Surveys and intrusive investigations need to be planned for in advance, even if the tenant’s lease does not permit early access.
- A practical workaround for landlords: Fancourt J expressly noted that a landlord who loses at trial is not shut out of redevelopment. The landlord can argue for a short term (one year or less) on renewal, can argue for a redevelopment break option, and can argue for access provisions in the new tenancy permitting surveys and investigations during the renewal term. The cost may be a lower market rent, but it allows the landlord to take genuine steps to get its scheme ready while the tenant remains in occupation.
- For tenants resisting a ground (f) opposition: Examine deliverability closely – funding, guarantees, planning consents, and the realistic timeline for starting works. A landlord who cannot show real evidence on each point will struggle. A landlord who needs many months to prepare to start after possession is likely to fail on the timing point alone.
- For SPV structures: Where the landlord is a special purpose vehicle with no assets of its own, the bank will almost always require personal guarantees from the directors or parent shareholders. Evidence of the directors’ personal financial position is therefore essential. Without it, the funding test cannot be satisfied.
Get in touch
Our property disputes team advises commercial landlords and business tenants on all aspects of 1954 Act renewals, including opposed renewals on ground (f) and the other statutory grounds. We can advise on the strength of an opposition before notices are served, on the evidence needed to make or resist an opposition at trial, and on the practical workarounds available where a ground of opposition fails.
The property disputes team wants to get to the heart of the issue, understanding the objective and managing the process to analyse the risks and achieve a resolution as swiftly, efficiently and as cost effectively as possible. The team’s ethos is simple: solve the problem. For more information, get in touch with Elliott Brookes or email enquiries@bpcollins.co.uk or call 01753 889995.
