NHS to cough up back rent in ‘landmark’ ruling

THE NHS has been ordered to pay rent on the remainder of a lease at Wirral offices it has not occupied since 2013 in what is being called a “landmark” ruling.

A High Court ruling by Leeds District Registry found that partitions installed by the tenant had prevented vacant possession.

A property is given vacant possession if it is empty of moveable objects and people, and there are no others that have the right of ability to occupy it.

In the NHS case, an open plan office was let on a 10-year lease in 2008. It had an option to exit the lease at the halfway point, providing six months’ notice was given and the building came under vacant possession regulations.

The NHS exercised the break clause option. However, items including partitions were left behind which the landlord argued were removeable possessions.

The landlord said they were nott fixtures because they were only “slightly attached” by screws to the ceiling.

The NHS argued that it had a right, but not an obligation to remove them as tenant fixtures. They said that if the landlord had wanted them to be taken down, they should asked for them to do so.

The court however ruled in the landlord’s favour, swayed by the argument that small offices were more difficult to market than an open plan office.

It said that the partitions prevented vacant possession and that the NHS was liable to pay rent for the remainder of the original lease, to September 2018.

Rent totals for the period at the Wirral site were undisclosed.

Specialists at law firm Gordons said the case would have “significant” consequences for commercial property tenants when looking to use the option to break a lease.


Samantha Bell, a commercial litigation solicitor in the Leeds office of Gordons law firm, said: “Tenants have always been held to strict compliance with options to break leases, however this case – although only a first instance decision – arguably takes the law on vacant possession much further and gives the landlord even more ammunition to frustrate the tenant’s attempts to break a lease.


“It is fair to say the decision was harsh on the NHS and it may be that the case will be overturned if the tenant appeals, or be considered only to apply on the specific facts of this case. In the meantime, it will be very worrying for tenants that have recently exercised or are planning to exercise a right to break a lease.”

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