We are often asked by landlords whether tenants need to
completely strip out premises including partitioning when they are
required to deliver up vacant possession. This is most common when
break clauses are conditional on delivering vacant possession.
What does vacant possession mean?
In the leading case (NYK Logistics Limited –v–
Ibrend Estates), it was decided that –
the property must be empty of people
the person needing vacant possession must be able to take
immediate and exclusive possession, occupation and control of the
The property must be empty of chattels and Ibrend made it clear
that this element of the test is only breached if the chattels
remaining are significant so that they substantially prevent or
interfere with the enjoyment of the right to possess a substantial
part of the property
How are partitions relevant to VP?
The recent case of Riverside Park Limited –v- NHS
Property Services Limited had to decide whether the
substantial amount of demountable partitioning left by the tenant
on the premises frustrated the break notice. This was another
case where the break notice was only effective if vacant possession
was delivered on the break date.
In the Riverside case, the partitions had been constructed by
the tenant on top of a raised floor and reached up to the underside
of the suspended ceiling and were only fixed by screw
fixings. They were not affixed to the structure. They
were clearly regarded by the expert witness as demountable.
The tenant had turned open plan space into a rabbit warren of small
The Judge held that these partitions were an impediment which
substantially prevented and interfered with the right of
possession. He also held that he was not concerned that the
landlord had no evidence that it could not let the property to
anyone else. The landlord's unchallenged evidence was
that it was clear that the rabbit warren configuration was not the
attractive proposition it needed to be for its future lessees.
Are partitions always chattels?
This is awkward and the answer will depend on the facts in each
case (and there are a lot of conflicting cases on chattels and
fixtures) In Riverside the lightly affixed and demountable,
partitions intended to benefit the tenant, rather than improve the
premises and were chattels.
It will be possible that some partitions will have been annexed
to the structure and become fixtures. Then the questions will be
complex and will depend on the lease and any licence to alter
before it becomes clear whether they would have to be removed at
the end of the term.
Whilst this looks like a hard decision for tenants, it is
consistent with the basic principle that there has to be strict
compliance with options and that as break clauses are a species of
option tenants must work to achieve strict compliance (or negotiate
clearer leases and licences to alter).
This case was based on its very specific facts and it is only a
High Court case but landlords may be able to use the argument about
demountable partitions being chattels to frustrate conditional
break clauses. At present we are resisting drawing too many firm
conclusions from this case and it will always be a question of fact
and degree in every case.
As ever, tenants really need to consider the work they need to
do to secure the effective break of their lease at a very early
stage and make sure that they have taken out everything necessary
(and anything they have any doubt about) before the break date.
Damage caused by removal can be dealt with in a dilapidations claim
but failing to remove may leave the tenant with a continuing lease
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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