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Landlords should seek advice if they want to avoid being cast as the Arch villain
Article date: 01/10/2015
Recent controversy in The Archers has centred on the possible conversion of the village shop to residential apartments. The storyline highlights the potential pitfalls faced by landlords seeking to redevelop properties, with Hazel Woolley being Ambridge's landlord 'villain of the piece'.
In 1972, Hazel's father Jack opened the fictional shop, which in 2009 his wife Peggy agreed to lease to the village at a peppercorn rent. Following Jack's death, the shop passed to Hazel, whose plans to redevelop the shop following flooding has brought her into conflict, not only with Peggy, but other village residents who want to see the shop reopen for the benefit of the local community.
Although, for now at least, Hazel has agreed to allow the shop to re-open and 'honour the spirit of the lease', it remains to be seen whether she will have a change of heart and exercise the break option to end the lease as she had threatened. If she does, what could the residents of Ambridge do to thwart her plans? And what steps could they be taking now to make life difficult for Hazel down the line?
"Unless the parties agree at the outset that it will not apply, the Landlord and Tenant Act 1954 gives business tenants a right to a new lease when the existing one comes to an end or a landlord's break option has been exercised," explains Paul Barker an expert in property disputes at Midlands law firm, Higgs & Sons.
"Where the Act applies, a landlord can only object to granting a new lease on very limited grounds, including where they intend to redevelop or reconstruct the premises. If the Act does not apply to the shop lease and a landlord exercises the break option, the lease would end and the shop would have to close.
"But if the Act does apply, exercising the break would not be the end of the story, a landlord would then have to serve an additional notice under the Act (known as a Section 25 Notice) and demonstrate to the Court that they intend to redevelop. That would involve proving they had a firm and settled intention to redevelop and a reasonable prospect of achieving that intention."
In a scenario such as that being played out in Ambridge, one factor which might affect the landlord's ability to get planning permission is if the shop were registered as an asset of community value (AVC). Local residents could ask the local authority to list it as an AVC. To be considered to have community value, land or buildings must (amongst other things) have previously been used to further the social wellbeing or interests of the community in the recent past. The Ambridge village shop could well satisfy that test.
If a building is registered as an AVC and a landlord wishes to sell, the community would be given the opportunity to develop a bid and raise capital to buy it. Registration as an AVC is also a factor which the local planning authority could take into account as a material consideration when deciding on whether or not to grant a landlord planning permission for their redevelopment plans. In The Archers case, it would be worth the residents of Ambridge exploring the AVC route further, to try and keep one step ahead of Hazel and secure the future of the shop.
"It's really important for a landlord to get their ducks in a row if they plan to redevelop premises where the Act applies," concludes Paul Barker a partner in Higgs' Dispute Resolution team.
"The landlord, in this case Hazel Woolley, would need to show to the Court that she had drawn up detailed plans and specifications for the work, adequate funding was in place and she either had planning permission or a reasonable prospect of getting it.
"Her fictional case highlights the fact that landlords should seek specialist advice on their intentions before acting if they wish to avoid a real life drama."
For further information on Higgs & Sons' Property Disputes team please contact Paul Barker on 01384 327 365 or firstname.lastname@example.org