Catherine Taskis QC & Anthony Tanney examine some conflicting decisions on rent-free periods in business lease renewals
- The issue: should a discount be applied when determining rent on business tenancy renewals to reflect the lack of a rent-free period for fitting out?
- The answer, at the moment, is the subject of conflicting county court decisions.
On the renewal of a business tenancy under Part II of the Landlord and Tenant Act 1954 (LTA 1954), the rent payable under the new tenancy is the last matter to be dealt with. Under LTA 1954, s 34(1), the rent to be determined by the court is ‘that at which, having regard to the terms of the tenancy (other than those relating to rent), the holding might reasonably be expected to be let in the open market by a willing lessor…’. The court is directed to disregard four matters, including any effect on rent of the fact that the tenant has, or its predecessors in title have, been in occupation of the building (LTA 1954, s 34(1)(a)).
The
