The High Court has rejected landlord Pridewell Properties’ appeal to redevelop part of east London pub The Railway Bell in South Woodford into flats, with occupier Spirit Pub Company winning the right to a new business tenancy.
Railway Bell, South Woodford
The appeal followed a county court’s previous rejection of a bid by Pridewell Properties, an SPV formed to develop the premises, to eject Spirit, which has operated the pub since 2007, to make way for the scheme.
Pridewell had planned to build three mews houses in the beer garden area and reconstruct the building with a smaller pub on the ground floor, with six flats on the upper floors and an additional third floor.
The appeal judge said the trial judge had been right to find insufficient evidence of the landlord’s funding for its plans.
But he disagreed with the trial judge that a 10-to-14-month delay in implementing the works would be “sufficient to meet the statutory test of intending to carry out works on the termination of the current tenancy”.
The issue at the trial was whether the landlord could prove it had a “reasonable prospect” of obtaining planning permission and funding for the scheme, and would carry out the works “on the termination of the current tenancy”. The landlord had not obtained or even applied for planning permission for the scheme before the trial.
Georgina Muskett, senior associate in the real estate disputes team at law firm Charles Russell Speechlys, said: “This is a significant judgment that provides vital lessons for commercial landlords and developers on the Landlord and Tenant Act [LTA] hurdles they may run into when looking to redevelop a property.
“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.”
Muskett added: “If there is one lesson landlords reading his judgment should take away, it is that redevelopment [under the LTA] is a high‑evidential hurdle that should not be underestimated. They 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.”
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