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Court upholds £1 market value rent due to inadequate evidence presented at trial

A recent high court decision upheld an annual rent of only £1 under a lease within the Landlord and Tenant Act 1954 (LTA) because of inadequate comparable evidence at trial. The case involved a lease of a youth centre. Because the centre was in a state of disrepair, it was originally let for a token rent of only £1 per annum. In addition, the lease required that the tenant monitor membership of the centre, allowing the landlord to take possession in the event that this dropped below a certain threshold.

When the lease was to be renewed, the landlord argued that the market value of the lease under the renewal provisions of the LTA was £16,000 a year, the tenant arguing that the original £1 a year sum was sufficient. At trial, the landlord backed its claim by producing figures demonstrating the value of supposedly equivalent leases. However the landlord had failed to provide the terms of these supposedly comparable leases so it was held that the evidence presented was not sufficient to prove the market value of the rent, especially given the onerousness of the clauses concerned in the lease in question. The landlord appealed the decision, but the High Court judge held that, while she was entitled to conduct her own analysis of the facts, she was not obliged to do so, ruling in favour of the tenant.

The key lesson from this case is the importance of providing clear and thorough comparable evidence at trial, especially when dealing with onerous clauses such as those involved in this lease. Failing to do so may lead to a costly and undesirable outcome, which may not be overturned at appeal.

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