Georgina Muskett comments in Estates Gazette and Property Week on a major redevelopment case involving Spirit Pub Company and Pridewell Properties

The High Court has dismissed an appeal by landlord Pridewell Properties over plans to redevelop part of the Railway Bell pub in South Woodford, east London, meaning occupier Spirit Pub Company is entitled to a new business tenancy. The appeal followed an earlier county court decision rejecting Pridewell’s attempt to oppose lease renewal on redevelopment grounds.

Pridewell, a special purpose vehicle established to develop the site, had sought to remove Spirit, which has operated the pub since 2007, to make way for a residential scheme. The proposals included three mews houses on the pub’s beer garden and a reconfigured building comprising a smaller pub at ground level with six flats above and an additional third storey.

The appeal judge agreed that there was insufficient evidence of funding for the scheme and rejected the view that a 10‑ to 14‑month delay before works began would meet the statutory requirement to carry out redevelopment on termination of the tenancy. 

A key issue in the trial was whether the landlord could show a reasonable prospect of securing planning permission and funding, and a genuine intention to proceed, despite having neither obtained nor applied for planning permission. This judgement provides significant lessons for commercial landlords and developers on the Landlord and Tenant Act, and potential challenges they may encounter if looking to redevelop a property.

Georgina Muskett, Senior Associate in our Real Estate Disputes team, comments in Property Week and Estates Gazette:

One of the main lessons of the case – and where it fell apart for the landlord – is that redevelopment plans have to be absolutely watertight and well-evidenced when opposing renewal on redevelopment grounds.

Redevelopment [under the LTA] is a high‑evidential hurdle that should not be underestimated. [Landlords] must be prepared to prove they have the practical and financial means to deliver [a redevelopment] within a reasonable time of termination of the tenancy.

Read the full articles in Estates Gazette and Property Week.