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Landlord and tenant (general).

The editor of this section of the site is Sarah Thompson-Copsey

Licence to assign lease

‘Buy-back’ clause

TCG Pubs Ltd & Anor v The Art Or Mystery of the Girdlers of London
[2017] EWHC 772 (Ch)

Summary

On the strict interpretation of the lease a ‘buyback’ clause was in fact an option and required strict compliance with the Leasehold Property (Miscellaneous Provisions) Act 1989. Failure to comply meant the clause had not been operated and the tenant was not in a position to apply for licence to assign.

Facts

Premises were let by a landlord (L) in 1987, the current tenant was (T) which was in administration. The lease contained a clause requiring T, if it wanted to assign the lease, to
    “first grant an option to [L] (such option to be exercised within sixty days of the date of receipt of notice by [L] of application by [T] to assign…) to buy back the residue of the said term at the then current open market value of the demised premises such value to be agreed by [L] and [T] within two months of [L] exercising such option … If such option is not exercised by [L] as aforesaid [T] may with the consent of [L] such consent not to be unreasonably withheld or delayed assign … the whole of the demised premises."
After T went into administration, solicitors for T wrote to L offered to sell the residue of the lease to L for £1.7m. Shortly thereafter the solicitors for the proposed assignee wrote to L seeking consent to the assignment. L’s solicitors replied to the proposed assignee’s solicitors noting that the application should have come from T but stating that “subject to that formality being observed” L had “no objection in principle” to the assignment on the basis of various conditions. A dispute arose in relation to the proposed assignment, which proceeded to the High Court.

Issues

Whether T had granted a valid option by writing to L indicating that it was prepared to offer L the ability to purch ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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