Published 20 October 2014
Following our tip of 6 May 2014 further guidance has been provided in relation to opposing a lease renewal on the grounds of the tenant's material breach of covenant.
A renewal can be opposed if the tenant is in breach of its repair obligations or has persistently delayed in paying the rent. A renewal can also be opposed on the broader basis that the tenant ought not to be granted a new tenancy because of "other substantial breaches" or "for any other reason connected with the tenant's use or management of the holding".
In Youssefi v Mussellwhite 2014 the tenant had a protected lease of a house and shop. She served a request for a new lease which the landlord opposed on the grounds that the tenant:
had allowed a creeper to grow on an external wall (in breach of the repair obligation);
was persistently late in paying rent;
repeatedly refused to allow the landlord access to inspect; and
had failed to use the premises as a shop, in breach of the lease.
The breach of the repair clause was not sufficiently serious to refuse a new lease (the creeper could be cheaply and easily removed). However refusing to allow access repeatedly, was on its own enough to prevent the grant of a new lease.
In addition, the positive obligation to use the premises as a shop was also seen as substantial enough to prevent the grant of a new lease. Although the landlord had suffered no loss as a result, it was sufficient that the breach was substantial in that the tenant had not attempted to start business and had no intention of doing so.
This is welcome news for landlords, who can use their tenants' behaviour and material breaches of various lease covenants to object to the grant of a new lease.