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Compensation

This page deals with compensation payable to the tenant in two different sets of circumstances:
  • Where the tenant is unable to obtain a new tenancy because the landlord is objecting on grounds (e), (f) or (g);
  • Where the landlord gets the property back after he has made a misrepresentation or concealed material facts - s37A of the 1954 Act - the first case under this section.

Tenant unable to obtain a new tenancy

This section deals with compensation under Part II of the 1954 Act where the tenant is unable to obtain a new tenancy because of opposition by the landlord on certain grounds. There are two cases referred to; one deals with contracting out of the compensation provisions; the other with the conditions for double compensation. Each case is concerned with the occupation of the tenant immediately prior to the termination of the tenancy.

The right to compensation: s37

If:
  • The court is precluded from making an order for a new tenancy by reason of (e), (f) (g), or
  • L served a s25 notice or s26(6) counter-notice relying only on (e)(f)(g) and T did not apply or did but withdrew the application,
T is entitled to compensation on quitting the holding: s37(1).

The amount of compensation: s37(2)

Basic rate: Appropriate multiplier x rateable value.

Enhanced rate: Appropriate multiplier x twice rateable value.


Restriction on contracting out

Bacciocchi v Academic Agency Ltd
[1998] 3 EGLR 157, CA.

Introduction

Section 38(2) states:
    "Where .. during the whole of the five years immediately preceding the date on which the tenant under a tenancy to which this Part of this Act applies is to quit the holding, premises being or comprised in the holding have been occupied for the purposes of a business carried on by the occupier or for those and other purposes any agreement which purports to exclude or reduce compensation shall to that extent be void".
What is the position where there is a short gap between the tenant leaving the premises and the tenancy coming to an end?

Basic facts

  • 20 year lease - T ran a restaurant
  • Lease contained a clause excluding compensation on quitting
  • L served s25 notice specifying (f) and (g)
  • T issued claim for ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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