JCT: Changes on the Way
For those of you who use the JCT suite of contracts, you should note there are proposed changes to the suite coming later in the year…
Published 1 August 2016
Landlords are all too aware of the strict requirements, and potential pitfalls, of notices served in order to exercise a break right in a lease. The conditions, wording and timings of any break notice are key, open to scrutiny and errors can be expensive and in some cases fatal to a business.
The recent case of Vanquish Properties (UK) Limited Partnership v Brook Street (UK) Limited has highlighted the absolute need to ensure that the serving and receiving parties are correctly identified. With more corporate structures available to businesses, the number of limited partnerships entering into tenancies is now increasing. Limited partnerships (unlike limited companies or limited liability partnerships) are not legal entities in their own right and therefore enter into legal arrangements through their trust, nominee or general partner companies, which are entities capable of holding an interest in land.
In the Vanquish case the Landlord served a break notice, but in error the notice was served in the name of the limited partnership rather than the general partner, making the notice invalid (because the limited partnership has no legal identity). The Landlord tried to argue that the error could be rectified on the basis that a reasonable recipient would not have been perplexed by this error. This was rejected by the Court, again taking a very strict approach to the interpretation of break notice requirements.
Ensure whether you are a limited partnership yourself, or serving notice on a limited partnership tenant, that the legal entity behind that partnership (which will be detailed in the lease particulars) is the server or recipient of the documentation.