The Fragrance Shop entered into a number of leases which purported to be outside of the security of tenure provisions of the Landlord and Tenant Act 1954 ("the 1954 Act"). At the expiry of those leases the various landlords sought to recover possession of the premises in order to let them to a competitor. The Fragrance Shop claimed that the contracting out procedure required by the 1954 Act had not been correctly followed and accordingly they were entitled to security of tenure.
The statutory contracting out procedure requires that, before completion of a lease, a landlord must serve a warning notice on a tenant explaining the rights they are giving up and for a tenant to acknowledge (usually by way of swearing a statutory declaration) that notice and state that they are aware of the consequences of contracting out. The tenant's declaration also requires the term commencement date of the lease to be inserted.
The tenant claimed that the warning notices and declarations were invalid as the landlord had served the warning notices on the tenant's solicitors (not the tenant themselves), as the statutory declarations had been made by a senior employee (not a company director) and finally as the statutory declarations did not state a fixed date for commencement of the lease.
The Court took a robust approach to all of the tenant's arguments and held that all the leases were validly contracted out. The case will be a relief to many landlords who have for many years routinely adopted similar procedures when contracting out leases.
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