Thinking of Signing a Lease Without Legal Advice? Just Don't Do It

Entering into a lease, whether commercial or residential, without taking legal advice is, to say the least, highly unwise. A landowner who fell into that trap put himself at serious risk of an unwanted tenant moving into his newly built home.

The man bought 40 acres of land on which stood a racing stable. A keen equestrian, his plan was to build a home for himself and his wife, a certified trainer of horses. He was at first on amicable terms with a racehorse trainer who had for years lived in a static caravan on the land and agreed that he could remain in situ until the house was completed and the couple were able to move in.

He granted the trainer a one-year tenancy which was contracted out of the security of tenure provisions under the Landlord and Tenant Act 1954. After that lease expired, he signed a copy of the original lease which he intended to be for another year on the same terms as before. He did not, however, take legal advice and failed to comply with the notice provisions of the Act.

The result was that he inadvertently granted the trainer a lease which was subject to the security of tenure provisions in Section 23 of the Act. The trainer refused to leave on expiry of the lease and demanded that he be granted a fresh tenancy. For good measure, he claimed that he was entitled to occupy the couple's new home because it stood on land granted to him by the lease.

After the landowner launched proceedings, however, a judge found that the trainer had breached a number of covenants in the lease. The property had fallen into a state of disrepair and unauthorised structural additions and alterations had been made to it. The trainer was conducting an artificial turf business on the premises without permission and had continued to burn trade waste on the property in defiance of warnings from the local authority.

On that basis, the judge ruled that the landowner was within his rights to terminate the business tenancy and that the trainer was not entitled to a new one. In rejecting the trainer's appeal against that outcome, the High Court could find no fault in the judge's exercise of discretion. The breaches of covenant were substantial and extensive and the judge was entitled to find that the condition of the property would only get worse if the trainer were granted a fresh lease.