419-1587-Clerksroom-RRD-Stephen-Pritchett

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one would suppose that (subject to any express disposition by him) his rights in respect of them would not alter so long as he continued to occupy as tenant whether under his original lease or a new lease taking effect upon the determination of the original lease. I do not believe that a person holding over as a tenant from year to year taking a renewal of his lease under a provision in the original agreement would imagine that any rights that he had to remove fixtures would be affected by the determination of the original lease. The Landlord and Tenant Act 1954 is designed to ensure security of tenure for business tenants. The Act in effect enables such tenants to obtain extensions of their leases from time to time to enable them to carry on their businesses. One would be reluctant to reach the conclusion that while tenants are secure in their tenancies they may lose their rights in respect of valuable business fixtures.” Accordingly the position appears to be that any tenant’s fixtures or fittings which are installed by the tenant under one of a succession of leases in favour of the same tenant will not lose their status notwithstanding the fact that each successive grant of a new lease takes effect as a surrender of the old lease. In the blink of an eye between the surrender of the old term and the grant of the new term, the fixtures and fittings do not lose their status and accrue to the landlord as part of the freehold reversion but remain items which the tenant is entitled [possibly obliged] to remove subject to express provision to the contrary. This means, therefore, that when one is considering the position of tenants’ fixtures and fittings at the end of a second or third successive lease one must do so bearing in mind the fact that the tenants fixtures and fittings installed under an earlier lease are not only capable of being removed by the tenant but, perhaps more importantly, may well be the subject matter of an express obligation in the lease to remove them. A relatively standard obligation on the part of a tenant to remove tenants fixtures and fittings from the demised premises at the end of the term will, therefore, ostensibly apply to fixtures and fittings applied to the premises both during the final lease but also such fixtures and fittings as retained that status having been placed upon the demised premises by the tenant under an earlier lease. Assuming the absence of a positive obligation to remove tenant’s fixtures, if the tenant elects not to remove them then there is a further possibility that the repairing obligations under the lease will apply to the fixtures which have thus become part of the freehold reversion. The non-removal means that the items accrue to the landlord and the landlord can therefore expect that they should be delivered up in repair. In Simmons v Dresden [2004] EWHC 933 HH Judge Seymour QC held that where a tenant had left partitions, fixtures and fittings in breach of an obligation to remove them, a landlord was limited to his remedy in damages for non-removal and could not [on the wording of the covenant in question] leave them in situ and argue for their repair costs. The covenant was unusually worded and care needs to be taken to look at the lease obligations as a whole with regard to yielding up and repair (as well as the extent of the demise and whether this is expressed to include or exclude tenant’s fixtures) in order to determine what the positive leasehold obligations are with regard to removal and [assuming there is no obligation to remove them] whether the outgoing tenant is better off in any event removing the fixtures or leaving them in situ and merely ensuring that they are delivered up in repair. <strong>Clerksroom</strong> is a trading name of European Administration Limited Registered Office: Equity House, Blackbrook Park Avenue, Taunton TA1 2PX. Registered in England: 04207276
It is suggested that in the usual case where there is no express obligation to remove the fixtures and the tenant does not do so, the fixtures will accrue to the landlord, there will be no breach of any obligation with regard to yielding up because there was no positive obligation to remove which has been breached, but that the fixtures, having become part of the reversionary corpus, will nevertheless be subject to the obligation to repair upon yielding up. Thus the tenant may well have to factor in to his calculations the costs of removing or possibly even repairing defunct machinery and equipment. At the end of the second or third successive lease the landlord would appear to have a strong case for charging to the tenant the costs of removal. The Code of Practice for Commercial Leases states that the landlord’s control over alterations should not be more restrictive than necessary to protect the value of the property and any neighbouring property of the landlord. At the end of the lease, tenants should not be required to reinstate unless reasonably required. The BPF and BCO model clauses incorporate an obligation in relation to reinstatement : “(save to the extent reasonably required in writing by the Landlord) remove and make good any alterations or additions made to the Premises during the Term, or any prior period of occupation by the Tenant or its predecessors, and reinstate the Premises in a good and workmanlike manner to the Landlord’s reasonable satisfaction” AlTErATionS So what is the position with regard to alterations? In this context the relevant distinction is probably between those alterations which are lawful and those which are unlawful. The landlord’s cause of action for breach of a covenant against alterations will be broken at the time the alterations are undertaken whereas the cause of action for a failure to reinstate [whether lawful or unlawful] alterations will accrue at the time of the failure to reinstate – which will almost always be the end of the term. In the context of alterations the lease covenants will be the most important factor to consider. Unlawful alterations may however be caught by two distinct covenants; the covenant against alterations per se and the covenant to reinstate. Thus the landlord may well find himself with 2 separate causes of action, one of which accrues much later than the other. A reinstatement obligation maybe conditional upon the landlord requiring reinstatement or may be absolute. The obligation may be limited to alterations carried out during the term or it may incorporate an extended obligation to reinstate alterations made during any prior term or period of the tenant’s occupation. If the obligation is extended in this way then the schedule of dilapidations following expiry of a second or third lease will properly be able to specify reinstatement obligations notwithstanding that the alterations were made under a prior lease. But in more usual circumstances where the reinstatement obligation is limited to alterations carried out “during the term”, the landlord will, at the end of the second or third lease not be able to enforce the reinstatement obligation under that lease in respect of historic alterations. <strong>Clerksroom</strong> is a trading name of European Administration Limited Registered Office: Equity House, Blackbrook Park Avenue, Taunton TA1 2PX. Registered in England: 04207276
Page 1 and 2: Reinstatement, Repairs and Damages
Page 3 and 4: ANALYSIS The Chancellor accepted th
Page 5 and 6: In more usual circumstances where t
Page 7: He said that this had been the law
Page 11 and 12: www.clerksroom.com Administration:
Page 13 and 14: Thus as a matter of valuation it is
Page 15: the service the people the quality

419-1587-Clerksroom-RRD-Stephen-Pritchett

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