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Tenant Tactics: What can we learn from Sainsbury’s victory against their landlord?

Ground (f) of the Landlord and Tenant Act 1954 (the Act) is a frequently used legal mechanism by landlords to oppose a tenant's lease renewal.
February 4, 2025
Ground (f) of the Landlord and Tenant Act 1954 (the Act) is a frequently used legal mechanism by landlords to oppose a tenant’s lease renewal.

This provision allows a landlord to refuse a new lease if they intend to demolish or reconstruct the property, or carry out substantial work on it. However, as recent case law has demonstrated, relying on Ground (f) is not without its challenges.

In this article, Surrey-based Lease Advisory expert Frank Perri explores Ground (f), its implications, and what landlords and tenants can learn from two high-profile legal battles.

Understanding Ground (f) of the 1954 Act

The Act provides commercial tenants with security, ensuring they can request a lease renewal when their current lease expires unless a landlord successfully opposes it under Section 30(1).

Ground (f), found in Section 30(1)(f) of the Act, allows landlords to oppose renewal on the basis that they intend to demolish or reconstruct the premises. However, for this argument to succeed, the landlord must demonstrate a clear, financially viable development plan that requires vacant possession of the property.

Key Lessons from Recent Case Law

Case 1: S Franses Ltd vs The Cavendish Hotel (London)

In this landmark case, the Supreme Court ruled against the landlord, finding that the proposed development was not genuine.

The Cavendish Hotel, which owned the building, attempted to rely on Ground (f) to refuse a new lease to its tenant, S Franses Ltd, a textile dealer operating on the ground floor and basement.

The court concluded that the landlord’s development scheme was designed solely to defeat the tenant’s right to renew the lease, rather than being a legitimate project requiring vacant possession.

Case 2: Sainsbury’s Supermarkets Ltd vs Medley Assets Ltd

Sainsbury’s operated a supermarket on the ground floor of a building in Kentish Town, London.

Although parts of the premises, such as the basement and upper floors, were unused or vacant, the lease covered the entire building.

Medley Assets sought vacant possession under Ground (f) to facilitate development. However, just before the trial, Sainsbury’s strategically retreated to a portion of the premises unaffected by the proposed works.

This move undermined the landlord’s claim, as the court required the works to be impossible without full vacant possession of the tenant’s actively used space.

Michael Duncan, a solicitor at Burges Salmon law firm, commented:

“This case highlights how tenants can strategically vacate part of their premises before trial to weaken a landlord’s Ground (f) argument and maintain their lease renewal rights.

“Moreover, the Judge confirmed that, once the landlord’s possession claim had been defeated, the tenant was free to move back into the entire premises and then seek renewal of the whole.

“We therefore expect to see more tenants deploying similar tactics, especially where they are not fully utilising their space and have scope to be flexible.”

Practical Advice for Landlords and Tenants

For Landlords

If you plan to rely on Ground (f), ensure your proposed development is legitimate, well-documented, and financially sound.

Ensuring that plans are fully formed before engaging with tenants, or serving any notices to quit, usually results in cost savings later down the line.

Attempting to use Ground (f) as a tactic without a genuine intention to proceed with the works can backfire, as seen in these cases. Seek professional advice to bolster your case and avoid costly legal disputes.

For Tenants

These cases should reassure tenants that landlords cannot rely on Ground (f) without solid evidence. If you suspect your landlord’s proposed works are unnecessary or unfeasible, you may have grounds to challenge them.

It may also be possible to deploy tactics such as the ones seen in the Sainsbury’s v Medley Assets case above. Ultimately, it is wise to seek legal advice to understand your rights and options.

Act Early, Seek Advice

For landlords and tenants alike, professional advice is crucial when dealing with Ground (f) disputes.

Whether you are looking to secure vacant possession or protect your right to lease renewal, understanding the legal landscape can make all the difference.

If you receive a Section 30(1)(f) notice, don’t delay – consult a lease advisory expert to explore your options. For help and support, contact Vail Williams lease advisory team.