Hewitt & Gilpin successfully represented Central Craigavon Limited in the case of JD Sports Fashion plc -v- Central Craigavon Limited [BT/16/2019) which was heard by the Lands Tribunal.
The case involved the determination as to the correct commencement date for a new tenancy and consequently the valuation date for rent assessment purposes.
Under normal market considerations, the choice of term commencement date would have minimal impact on the rent payable under a new tenancy, which was, in the words of the Court "probably why the issue had not previously troubled the Tribunal".
In this case, the landlord served a notice on 31 January 2018 determining the existing lease and proposing the grant of a new lease for a term of 10 years from 18 August 2018 at a rent of £144,000.00.
On 20 February 2019 the tenant made a tenancy application to the Tribunal, agreeing the 10-year term but proposing a rent of £110,000 per annum, and with no term commencement date specified.
Both parties then appointed experts who took the date of 18 August 2018 to assess the terms of the tenancy, including the rent.
Prior to finalisation of negotiations, the Covid crisis emerged which the tenant contended had seriously depreciated the retail property market such that any new tenancy must reflect the property market at the time the tenancy was being granted. In short, the tenant argued that it was not reasonable to expect it to pay a 2018 pre-Covid rent for the grant of a new lease in 2020.
The landlord argued that the term commencement date should be 18 August 2018, that being the date specified in its notice, and agreed between the experts during their negotiations.
The Tribunal found the following facts to be relevant to the exercise of its discretion under Article 11 (1) of the Business Tenancies (Northern Ireland) Order 1996 (“the Order”):
