June 2012 Archive

Unreasonable refusal to mediate

In the recent dilapidations claim arising between PGF II SA v OMFS Company/Bank of Scotland PLC the court highlighted the risk of unreasonably ignoring mediation. In the months before the trial the landlord proposed mediation but the tenant failed to respond. The case eventually settled the day before trial but the landlord claimed that it should have a substantial cost payment due to the fact that the tenant had unreasonably refused to enter into mediation when it was initially proposed.

Covenants against sub-letting

In the recent case of Re Courtenay Gate [2012] UKUT 125 (LC) the Upper Tribunal (Lands Chamber) refused an application by a tenant to discharge or modify a leasehold covenant prohibiting sub-letting a flat. In the block of flats in question there were 31 flats and 5 of the other flats leases allowed sub-letting or had been varied to permit sub-letting.

Enterprise and regulatory reform bill 2012 - 2013

The Enterprise and Regulatory Reform Bill 2012-2013 was published on 23 May 2012. The aim of the bill is to reduce regulation by merging the planning system with listed building and conservation area regimes. The bill was debated at its second reading in the House of Commons on 11 June 2012 and has now gone into the committee stage. Committee reports are expected by 17 July 2012.

Validity of notice to terminate a licence

The recent Court of Appeal decision in Fitzhugh v Fitzhugh [2012] EWCA Civ 694 overturned the High Court’s decision and held that a notice purporting to terminate a licence was invalid if it was served by only one of the joint licence owers. This decision has implications for those drafting licences where an individual or party is both a licence ower and licensee.

Another cautionary break tale

In the recent case of Avocet Industrial Estates LLP v Merol Limited and Another [2011] we find a further cautionary tale for tenants wishing to break to their leases. In this case the tenant found itself on the hook for over £300,000 of rent as a result of the failure to pay interest on late payments amounting to only £130. Even the judge conceded that the outcome was “harsh” but the court was bound by legal principle.
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