Something Changed – Landlord recovers possession of iconic music venue

The landlord of the Leadmill nightclub in Sheffield, where Pulp performed its first ever gig, has successfully recovered possession on grounds that it intends to operate a music venue from the premises.

Under the Landlord and Tenant Act 1954 (the 1954 Act), unless parties have not contracted out of its protections, tenants of commercial leases enjoy ‘security of tenure’.  This means that a landlord must serve notice either offering terms for a new tenancy or specifying a ground for possession (of which there are seven) at or after the end of the contractual term in order to recover possession, unless the tenant is willing to vacate voluntarily.  

In MVL Properties (2017) Ltd v The Leadmill Ltd [2025] EWHC 349 (Ch) (19 February 2025), the landlord sought to establish ground (g), meaning that it intended to occupy the premises for the purpose of its own business.  

Running in the background to this decision is the Government’s ongoing consultation as to the future of the 1954 Act, which you can read more about here.  For now, this decision will interest commercial landlords and tenants alike, as it outlined the Court’s approach to ground (g) cases and how the intention of the landlord is scrutinised. 

There are several aspects to ground (g), but of most importance in this case concerned the landlord’s intention.  It needed to show that it had a firm and settled intention to occupy the premises for the purpose of its own business (the subjective element), and that it had a reasonable prospect of being able to bring about the fulfilment of that intention (i.e. it is capable of achievement) within a reasonable time (the objective element).  

The tenant had a 20-year lease which expired on 25 March 2023.  The landlord served a notice to terminate (under section 25 of the 1954 Act) on the basis of ground (g).  The landlord intended to operate its own music venue from the premises.  It provided an undertaking to the Court to do so, which the Court held was sufficient to establish the subjective element alone. 

The landlord sought to establish the subjective and objective element in various ways – including (but not limited to) proving a track record of operating similar venues, spending significant sums on planning consents for the works it would need to carry out, applying for a shadow premises licence for the venue, and registering the trademark “Electric Sheffield” (which was going to be the new name for the music venue).  

The tenant raised a number of defences, including that the cost of implementing the landlord’s proposals if the premises were returned to “shell” form would mean the landlord’s proposals were not viable (i.e. to operate as a music venue).   Further, the time it would take for the landlord to carry out those works would mean that it could not occupy the premises for business purposes within a short enough timeframe.

The Court favoured the landlord’s arguments – saying that the landlord cannot be prevented from relying on ground (g) just because the tenant intended to “reduce the premises to a state of dereliction” to such an extent that “it will be impossible for [the landlord] objectively to intend to occupy for the purposes of a business within a reasonable time”.  In any event, the suggested 35-week programme was not unreasonable.  

Further, the landlord was only required to prove that it had a realistic chance of completing the works needed to establish its occupation for business purposes, not that the costs of doing so would be a wise investment.

The tenant also raised an argument pursuant to Article 1 Protocol 1 of the European Convention on Human Rights, in that the landlord would acquire the tenant’s “goodwill” without adequate compensation.  The Court rejected those arguments too, concluding (among other things) that the landlord’s intentions serve the public interest, that ground (g) strikes a fair balance between the tenant’s right of renewal with the landlord’s right of possession, and that the landlord will be conducting its own business and will not be conducting effectively the same the business of Leadmill. 

The Court ordered possession and the order contained the undertaking provided by the landlord.  

Please do not hesitate to contact Samuel Lear or your usual Charles Russell Speechlys contact if you have any queries.