The case of NYK Logistics UK Ltd v Ibrend Estates BV has highlighted the need for both solicitors and tenants to beware of the legal requirements surrounding 'vacant possession' says Neil Pota, associate, Bircham Dyson Bell LLP.
"During recessionary times, landlords will be extra vigilant to maintain their income streams and so tenants wishing to exercise a break clause, yield up at the end of the term or surrender a lease must be careful to do so in the correct and lawful manner," explains Neil Pota.
"The requirement to provide vacant possession must be followed to the letter of the law; the property must be empty of people and possessions so that a buyer or landlord can enjoy immediate and exclusive occupation of the property.
"This failed to happen in the case of NYK Logistics UK Ltd v Ibrend Estates BV; vacant possession wasn't deemed to be given as the tenant had re-entered the property to carry out dilapidation repairs, leaving them liable for the rent for a further quarter.
"It's important that tenants satisfy the conditions of a break in clause, give vacant possession, and carry it out to the letter of the law. Solicitors should advise clients of the relevant and necessary steps - and in some are guilty of assuming that the tenant knows what is required in providing vacant possession .
"The case is a warning to all; clear advice must be given on what is required or your client may be liable for further rent if you don't follow the law correctly."
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