In Lie v Mohile, the Court of Appeal held that an application for a new business tenancy made by one of two business partners was not valid.
This upholds the established case law of Jacobs v Chaudhuri in that all joint tenants must join in an application under the Landlord and Tenant Act 1954 unless the tenants can take advantage of one of the statutory exceptions.
Section 41A provides an exception for partnerships where not all of the joint tenants continue to use the demised premises for the purposes of the partnership business, namely:
- The lease must be vested in at least two joint tenants;
- The demise must include property occupied for the purposes of the business;
- The business must, at some time during the tenancy, have been carried on in partnership by all of the joint tenants;
- at least one of the joint tenants must currently carry out the business, either alone or in partnership with others and occupy no part of the property, under the tenancy, for the purposes of the business carried on by the other joint tenants or tenants;
- It is very important, not only when a protected lease is ending but at the start of a business, that the legal structure is considered in view of any application. Doctors and dentists, in particular, often practice from shared premises, and there may be circumstances where vesting property interests in a special purpose vehicle (SPV), such as a limited company or limited liability partnership, may help avoid disputes in the future. It is sensible to take legal advice on a corporate and property level and to consider any tax implications.
Speak to property litigator Laura St-Gallay today about your business lease application.
Note: This article is not legal advice; it provides information of general interest about current legal issues.