Round-up of recent 1954 Act case law

Three recent judgments give rise to important points for both owners and occupiers of commercial property.

On 19 November 2024, the Law Commission began consulting on its proposals for reform of the security of tenure provisions in the Landlord and Tenant Act 1954 (the 1954 Act).

The consultation period has now closed; and the market awaits the outcome with interest. Will the Law Commission recommend that security of tenure be abolished? Will they propose an "opt-in" system, rather than the current "opt-out-if-you-like"? Or will they endorse what we currently have, but suggest "reasonable modernisation"?

In the meantime, the Courts continue to hear 1954 Act cases, and a number of new decisions have been handed down in recent months. The termination of protected leases seems to be an emerging theme this year, and the following cases set out key points for both landlords and tenants to consider.

Spirit Pub Company (Managed) Limited v Pridewell Properties (London) Limited [2025] Claim No: K02ED953

The tenant of this public house had been in situ since 2007. The landlord sought to terminate their tenancy on the basis that they planned to redevelop the property.

However, whilst the landlord was able to prove that they had a genuine intention to redevelop, they could not demonstrate that they had the funding necessary to carry out the proposed works. Accordingly, the landlord's claim failed, and the Court held that the tenant was entitled to a renewal lease.

This case is a sharp reminder that, to terminate a tenant's 1954 Act rights, landlords need clear evidence of both their intention to carry out any proposed redevelopment and ability to see their plans through to completion. Typically, this means demonstrating that there is a real prospect of obtaining planning permission, together with any other consents needed, and that suitable funding is available.

MVL Properties (2017) Ltd v The Leadmill Ltd [2025] EWHC 349

This case concerned a popular live music venue in Sheffield. The tenant applied to the Court for a renewal lease. The landlord opposed the tenant's claim on the basis that it intended to occupy the property and operate its own business from it.

The tenant ran a novel argument at trial which was that Article 1 (the right to private property) of the European Convention on Human Rights would be breached, if the tenancy was terminated, as the landlord would indirectly acquire the goodwill of the tenant’s business without paying adequate compensation.

However, the tenant was unsuccessful, and the Court held that, even if the tenant could evidence a quantifiable loss of goodwill, any deprivation that did occur was in accordance with statute and in the public interest.

Each case will turn on its own facts. However, in light of the judgment in this case, it is difficult to foresee a scenario where breach of Article 1 could be used successfully to defeat a landlord's opposition to granting a renewal.

SBP 2 S.À.R.L v 2 Southbank Tenant Limited [2025] EWHC 16 (Ch)

The mechanisms in the 1954 Act are not the only way security of tenure can be terminated, and this case related to a landlord's attempt to bring a protected lease to an end via forfeiture.

The lease contained a clause which, amongst other things, allowed the landlord to terminate if the tenant was "unable to or deemed unable to pay its debts within the meaning of sections 122 or 123 of the Insolvency Act 1986".

The tenant contended that the clause in question only gave rise to a right to terminate once a court had determined that it was insolvent. The landlord disputed this and argued that such an interpretation was impractical and did not reflect the commercial position between the parties.

Following a two-day summary judgment hearing, the Court ruled in favour of the tenant. In particular, it found that the clause in question provided a "certain, clear and workable" forfeiture mechanism, and that the landlord's argument that it would be too "cumbersome and expensive" to follow the process set out in the lease was not persuasive.

Comment

These cases all demonstrate the importance of taking legal advice at an early stage, if the termination of a lease is contemplated by either landlord or tenant. There are usually multiple factors that determine the success, or failure, of an attempt to terminate, and it is vital that a clear and viable strategy is adopted from the outset.

Whether you are a landlord who is thinking about terminating a tenancy, or a tenant who would like to preserve their right to occupy, do get in touch and we would be glad to assist.