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07 November 2013

Clear intention overrides non-compliance

When a tenant wished to break its 25-year lease at an appropriate break point, it served a notice on the landlord and probably considered that to be the end of the matter.

The landlord thought otherwise. The lease stipulated that the notice had to be stated to have been given ‘under Section 24(2) of the Landlord and Tenant Act 1954’. The break notice did not contain that statement. Accordingly, the landlord argued that the notice was invalid and that the tenant was therefore bound to the lease until the next break point.

The dispute ended up in court (Siemens Hearing Instruments Ltd. v Friends Life Ltd). The judge rejected the tenant’s argument that case law had established that the reference to the Act was unnecessary. The notice therefore did not strictly comply.

However, the section of the lease which dealt with giving notice to break it did not specify what the consequences of giving a notice that was non-compliant would be. The judge found that, in such cases, the intent of the respective parties needed to be considered. In this case, it was clear that the tenant wished to break the lease. As it was not clear what the effect of a non-compliant notice to break the lease would be, the notice was sufficient to break it.

Sarah McLoughlin, senior associate in the property litigation practice group comments: “The decision in this case was based on the specific facts. However, the message for landlords and tenants is to be careful with your paperwork and to ensure that your lease does account for all eventualities.”

For legal advice on leases please contact Sarah on disputes@bpcollins.co.uk or telephone 01753 279035

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