Landlords who want to take the ‘easy route’ of negotiation, rather than litigation, when a tenant’s lease comes up for renewal should take advice to ensure that this is the best course of action, as a recent case proves.
The circumstances were that the tenant had breached its obligations to repair the property, so the landlord served a legal notice on the tenant to which the tenant replied. This procedure had the effect that the lease could not then be forfeit and the landlord could only recover damages by obtaining the leave of the court.
All went to plan, however, and the tenant eventually carried out the necessary repairs after lengthy negotiations. The landlord then sought to recover its costs incurred in the negotiations.
The court refused the landlord’s claim, because while the lease stated that the landlord could recover its costs when these were incurred in ‘contemplation of or in relation to …proceedings…’, there were no proceedings contemplated, because the landlord had not served the tenant with a notice that it intended to make a claim.
Trying to negotiate, rather than taking legal action, has proved to be expensive for the landlord in this instance.
Landlords who find themselves in a similar position, or who want to have their leases vetted to ensure they do not end up in a similar position, should contact us on 0844 967 2020.