Tenant's don't always win but nor do landlords

Tenant's don't always win but nor do landlords

The recent High Court Case of Hammersmatch Properties v Saint-Gobain Ceramics (2013) concerned a claim on a 1930s industrial building in Welwyn Garden City.  The tenant had been in occupation for 25 years commencing in 1984 and the cost of the works which was agreed between the parties was £2.2m.

However the tenant argued under s18 (1) of the 1927 Landlord and Tenant Act that the difference in value of the building in repair and out of repair was merely £0.1m due to the age and re-development potential of the premises.  The Landlord’s argument was that the building should be valued by reference to the potential for refurbishment and sub-division into units.

The court dismissed the tenant’s assessment of diminution as a “finger in the air” figure but equally did not fully agree with the Landlord’s assessment, putting the value of the premises in repair at £3.0m and out of repair at £2.1m.  Thus the Landlord’s claim was capped at £0.9m.  

The settlement of the claim was therefore significantly higher than the tenant’s assessment of £0.1m but also far reduced from the Landlord’s claim of £2.2m.