Whether you are a commercial landlord or tenant – beware of misrepresentation and claims for compensation under s.37A Landlord and Tenant Act 1954
First reported case on s.37A - Inclusive Technology v Williamson [2009] EWCA Civ 718
In this case a commercial landlord of a premises served a s.25 notice on the tenant terminating the tenancy on the grounds that "on the termination of the current tenancy the landlord intends to…. carry out substantial work of construction on the holding or part thereof and that he could not reasonably do so without obtaining possession of the holding".
The landlord had also sent a letter prior to the notice and a covering letter confirming that he was going to be refurbishing the property and that it would therefore be necessary for the tenant to vacate. The tenant offered more rent to remain in the premises but the Landlord refused confirming his intention to carry out works.
The tenant therefore signed a lease for an alternative premises and vacated. The tenant later discovered the landlord had decided to defer the works and the property was being marketed. The tenant issued a claim against the landlord for compensation under s.37A.
The court awarded the tenant compensation due to the landlord's continuing representation of his intention which became a misrepresentation when it later became false.
In the alternative the court held that the landlord had a duty to inform the tenant of his change of mind, a breach of which amounted to concealment. This decision is consistent with the purpose of the statutory provision, which was to encourage fair dealing between the parties and is a warning to all commercial landlords.
