One of the grounds on which L can object to the grant of a renewal lease to a business T is when L intends to occupy the premises in order to carry out his own business (s3(1)(g) LTA 1954). But, what happens if L claims that he intends to occupy the premises, but is in fact likely to sell the premises within a short period?

It all boils down to whether or not L can show that he has the requisite intention to occupy. This is well illustrated by a recent case involving a newsagents where L claimed that he intended to carry on a similar business from the premises. He even offered an undertaking to the court not to use the premises for any other purpose for two years. However, L was 61 and he acknowledged he would want to sell when he was aged 65 (plus there was evidence that he had already retired from two other businesses operated from the same building). The CA agreed with the county court judge that there was doubt as to whether L had a substantial and genuine intention of running a business at the premises for the foreseeable future; the burden of proof was on L. Whilst the 1954 Act did not require L to occupy for a particular length of time, there had to be some substance to the intention to occupy, and the occupation had to be more than short term. In the court’s view, L was highly likely to sell at the end of the two-year period and accordingly T was granted the renewal lease.

The case does not provide a clear answer as to how long L must intend to occupy. But, it does indicate that a two-year undertaking will not always be regarded as sufficient. ?Patel v Keles [2009]EWCA Civ 1187 (access free at www.practicalconveyancing.co.uk). Source: TLT Solicitors.