Real Estate Tip of the Week: Heavyweight Lifting – Round 2
Published 3 March 2014
In July last year we reported on a case where the High Court had ruled that a tenant was entitled to remove certain fixtures from its premises, even though the tenant had been obliged under the lease to build and fit out a working steel plant and mill. The fixtures that the court allowed to be removed were substantial (including two 100 tonne transformers and a 500 tonne casting machine).
That decision has now been overturned by the Court of Appeal. The Court held that an obligation in a lease that restricts a tenant's legal right to remove tenant's fixtures has to be clearly stated, and found that while the lease in this case did not expressly prohibit the removal of tenant's fixtures, the wording of the alterations clause and definition of the demised premises were sufficiently clear to override the right to remove tenant's fixtures.
While the landlord won, it would be best to avoid potential disputes and uncertainty. In leases where it is intended that tenant's fixtures are to be left in place at the end of the term there should therefore be a clear and unambiguous requirement to do so.