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Landlord and tenant (general).

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

Side letter to lease

Termination right a penalty

Vivienne Westwood Ltd v Conduit Street Development Ltd
[2017] EWHC 350 (Ch)


The termination provisions in a rent concession side letter to a lease were penal in nature. The purported termination provisions were therefore unenforceable and the rent remained payable at the reduced rate.


A tenant (T) took a lease of premises for a term of 15 years, at an initial rent of £110,000 reviewable in 2014 and 2019. At the time the lease was executed, a side letter was entered into (personal to T) which provided that if the open market rent review in 2014 produced a rent of more than £125,000 pa, the rent would be capped for the next five years at £125,000 pa. The side letter also contained a termination right which provided that the agreement contained in the side letter for the reduced rent would end “immediately” if any of a number of events occurred and also provided that:
    “If [T] breach any of the terms and conditions contained in this agreement or any term of the Lease….[L] may terminate this agreement with immediate effect and the rents will be immediately payable in the manner set out in the Lease as if this agreement had never existed”
The landlord’s interest was transferred a number of times, and in due course the landlord granted a concurrent lease to L making L the immediate landlord of T.

The open market rent in 2014 was established at £232,500. L argued that T had breached the terms of the lease, because it had paid some of the rent due under the lease late, and therefore L had been entitled to, and had in fact term ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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