Vacant Possession: What does this Mean?

If you have ever been a party to a business lease you will be familiar with the phrase “vacant possession” which would likely have been a condition that needed to be satisfied following expiry of any break notice. Generally vacant possession means that the premises must be empty of possessions or free of people.

A recent case of Capitol Park Leeds plc v Global Radio Services Limited (2020) EWHC 2750 (Ch) however, has thrown doubt on this general definition. In this case the tenant had the right to break its lease if it gave vacant possession of the premises.

The premises included the original building and all landlord’s fixtures. After the break notice was served the tenant stripped out various items including ceiling lights, tiles, window sills and radiators to name a few.

It was intended these would be replaced prior to the tenant vacating but this was not done. The matter went to the High Court which held that the break condition of vacant possession had not been satisfied as the premises had been handed back in a state that was deemed “dysfunctional and unoccupiable”.

This may seem a surprising outcome for many and permission has been granted to appeal this decision but the point to note here is if you are in doubt as to any of the conditions attached to your break notice please seek legal advice before it is served!

-Reena Mistry 

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