Return to sender no bar to break
Published 11 July 2016
In a recent case, Levett-Dunn v NHS Property Services Ltd, a tenant sent to its landlord by recorded delivery break notices to terminate three leases. The notices were sent to the landlord's address contained in each lease.
The landlord tried to argue that service was ineffective because although the notices were served on the address given for the landlord in each lease this was not the landlord's "place of abode or business" as required pursuant to the terms of the leases. The court disagreed.
The court held that a reasonable person considering the lease terms would conclude, in the absence of any other information, that the landlord's "place of abode or business" was the address specified in the lease. The court commented that if a landlord's circumstances changed then it was within its power to inform its tenant of its new address. If this was not done then it was not unreasonable that the landlord bore the risk of documents not reaching the correct address.
Landlords can mitigate this risk by keeping tenants informed of the correct address for service. This, for example, could be set out in rent demands.
Interestingly, the tenant also successfully argued that the landlord had, in any event, accepted a surrender of the lease by operation of law as the landlord had re-let to a third party. This demonstrates the importance for landlords faced with a disputed break option of setting out its position clearly in correspondence and ensuring that any action it takes in relation to its property could not be construed as accepting a surrender of the lease from its tenant.