The Court of Appeal has released an important decision for landlords and tenants concerning applications for consent to assign a lease, overturning the High Court's earlier decision in No.1 West India Quay (Residential) Ltd v East Tower Apartments Ltd.

The Court of Appeal decided that one bad reason for a landlord refusing its consent will not render the entire decision to withhold consent unreasonable, so long as there are other reasons for the refusal which are good and free-standing.

The expression “dilapidations” refers to any breach of lease covenants which relate to the condition of a leased property. This can apply to, among other things, a tenant’s covenants to repair the premises, to decorate or to remove alterations.

The process for ensuring that dilapidations are remedied usually takes place at the end of a lease, and any such dilapidations are commonly labelled “terminal” or “lease end” dilapidations. The procedure for determining liability can be complex and can potentially end up in Court.

With residential leasehold law in the spotlight, landlords should be aware of a recent court case which focused upon the method of calculating the premium payable for a residential lease extension.

The Insolvency community in Scotland has watched with interest the case of Grampian MacLennan's Distribution Services Ltd v Carnbroe Estates Ltd and in particular Lord Woolman's eyebrow raising opinion at first instance that a distressed sale by a company of its major asset (an industrial unit comprising a warehouse, vehicle workshop and yard with gatehouse) had not constituted a gratuitous alienation where the sale has been off market at a price of £550,000 whereas the property had been valued at £1,200,000 on the open market or at £800,000 on a restricted 180 day marketing period

The Inner House of the Court of Session has found that, where a business had no realistic prospect of continuing in existence, it was not appropriate to assess whether a property was sold at an undervalue by reference to a forced sale valuation.

The Court’s judgment serves as a valuable reminder of some fundamental principles of insolvency law.

The facts

Question

My client is buying a property from a receiver appointed under an equitable charge granted by a company which has become insolvent. The charge gives a receiver a power of sale and contains a power of attorney. Will the receiver be able to sign all the necessary documents to allow the transaction to proceed to completion?

Answer

Senior associate Lucy Gould reviews the recent case of Davis v Jackson [2017] EWHC 698 (Ch), in which the court determined the beneficial interests a separated (but not divorced) married couple each held in a property. The property was owned in joint names but occupied only by the wife, who had solely financed its purchase and the mortgage.

Background

Gowling WLG's finance litigation experts bring you the latest on the cases and issues affecting the lending industry.

Single signature bank mandate binding on partnership

The High Court has recently considered whether a one signature bank mandate was sufficient to bind a partnership to various loan agreements.

Minding the Gap

JCAM Commercial Real Estate Property XV Limited -v- Davies Haulage Limited [2017] EWCA Civ 267

Summary

The Court of Appeal has closed an important loophole benefitting tenants that are considering options for insolvency.

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)