WARNING: No apportionment of rent
Court of Appeal overturns controversial High Court decision and provides clarity for landlords and tenants
The Supreme Court ruled earlier this month in Marks and Spencer plc v BNP Paribas Securities Trust Company (Jersey) Limited and another that there was no implied term that the landlord must recompense a proportionate amount of rent paid in advance if the lease expired mid-quarter following the service of a tenant’s break clause.
This was a reversal of the earlier High Court decision to imply such a term that enabled the tenant to recover sums after exercising a break clause, resulting in ambiguity for tenants and landlords as to whether a term could be implied into all leases or only applied to a lease with the same facts and wording. In a summary of her judgement, Lady Justice Arden concluded that “When all the circumstances are considered, the correct inference to draw is that the parties proceeded on the basis that the loss from the payment of rent for the broken period should lie where it fell. Thus no term for repayment is implied.”
Whilst this decision brings with it welcomed clarification to the law, it also emphasises the need for tenants to comply with break conditions. If you are a landlord or tenant and would like further information, please contact info@charlesfrenchlaw.co.uk.
