Have you heard the one about 4 Ferraris + a Lamborghini?

When we first started our journey in commercial property, leases that were contracted outside of the Landlord + Tenant Act 1954 were practically unheard of.

Leases were typically 25 years long, with 5 yearly rent reviews, even for the smallest of property………...and a tenant break clause was just a mythical beast that was talked about but rarely seen.

Move forward to 2024, almost every lease is contracted outside of The Landlord + Tenant Act, leases for a typical property are 3-5 years duration with at least 1 tenant break clause and no rent reviews.

So, dealing with a lease renewal of a property with a long term lease that has the protection of The Landlord + Tenant Act, 5 yearly open market rent reviews and no break clauses can been seen as either a bit of burden or a joyful throwback to the good old days of property chess with your counterpart.

The joy can easily turn sour however if you can’t agree the new lease and you end up in court to resolve your differences.

Ashurst Real Estate was recently engaged very late in the day by a landlord to act as an expert witness in a 1954 Act lease renewal that had been negotiated by the landlord directly with the tenant’s adviser for several years before court proceedings were introduced.

How difficult can it be to act as an expert witness in a long established lease renewal dispute? Be objective. Present the facts. Primary duty to the court. Easy…..in theory!

But not so easy when your opposite number is not being objective, hiding from the facts and being particularly belligerent……..add in unlicensed alterations and a sub letting of a part that technically breaches the permitted use rights but adds significantly to the property’s value.

Just some of the reasons why our landlord client decided to push the court proceedings button.

They say that you never stop learning.

Acting as the landlord’s expert witness in this lease renewal was an education, both in terms of revisiting old school landlord and tenant law and lease renewal tactics whilst learning complex legal points about valuing unlicenced alterations, with the precedents coming from a lease renewal dispute of an oil refinery!

A week before final submissions were to be swapped and presented to the court, landlord and tenant reached a compromise with a near 30% increase in rent and slightly in excess of the level that was proposed to the tenant almost 3 years earlier.

Ashurst Real Estate provided an overwhelming body of evidence which was hard to ignore and would have tested the tenant’s surveyor’s objectivity in court.

Whilst the landlord achieved its rental increase with Ashurst Real Estate’s input directly helping to unlock the settlement, we felt that an even greater percentage increase could have been achieved had the case reached a legal conclusion.

You are probably now asking yourself what the Landlord + Tenant Act 1954 and acting as an expert witness has to do with 4 Ferraris and a Lamborghini?

Absolutely nothing, other than we expertly witnessed these beauties lined up in Green Park this morning………each with its own parking ticket!

If you wish to discuss a lease renewal, rent review, acquisition, disposal or any other commercial property matter, call Ashurst Real Estate on 020 7419 5117.