EMI Group Ltd -v- O&H Q1 Ltd [2016 EWHC 529 (Ch)is the latest case in the saga following the 2011 decision in K/S Victoria St. v House of Fraser, relating to lease assignments and guarantors of “new tenancies” (generally meaning leases entered in to on or after 1 January 1996).

Landlords have no reason to fear Frankenstein’s monster, following the decision of the High Court in EMI Group Limited v O&H Q1 Limited. The court was considering, once again, the anti-avoidance provisions in the Landlord and Tenant (Covenants) Act 1995. Many will be familiar with the effect of the 1995 Act, which ensures that both tenants and their guarantors are released on assignment.

In 2016 the High Court considered the validity of an assignment of a lease by a tenant to its guarantor. The antiavoidance provisions in section 25 of the Landlord and Tenant (Covenants) Act 1995 ("1995 Act") strictly limit the freedom of contract of parties to leases governed by that Act, broadly, those granted after 1995. Agreements which frustrate those provisions are void even if they are commercially justifiable.

BRIEF FACTS AND DECISION

EMI Group Limited v O&H Q1 Limited [2016] EWHC 529 (Ch)

In 2016 the High Court considered the validity of an assignment of a lease by a tenant to its guarantor. The antiavoidance provisions in section 25 of the Landlord and Tenant (Covenants) Act 1995 ("1995 Act") strictly limit the freedom of contract of parties to leases governed by that Act, broadly, those granted after 1995. Agreements which frustrate those provisions are void even if they are commercially justifiable.

BRIEF FACTS AND DECISION

EMI Group Limited v O&H Q1 Limited [2016] EWHC 529 (Ch)