Anybody who is involved in property matters (be it landlord,
tenant, agent or legal adviser) needs to know how to draft and
serve a notice in accordance with the underlying contract or
statute, otherwise there could be serious (and unwanted)
The recent High Court case of Vanquish Properties (UK)
Limited Partnership v Brook Street (UK) Limited is a blunt
reminder of the strict requirements for serving a valid break
Serving a notice is often a vital step in creating, exercising,
maintaining or terminating legal rights in a lease, sale contract,
development agreement or option or pre-emption agreement. A notice
should be drafted and served strictly in accordance with the
relevant contractual or statutory provisions. Failure to do so can
lead to the loss of legal rights or unwanted continuing legal and
In the Vanquish Properties (UK) Limited Partnershipcase, a
landlord lost its right to terminate its lease early because the
break notice was incorrect.
The case centred around a 10 year lease of a property on
Fenchurch Street (expiring in 2021), which was earmarked for
The property was originally leased by
The City Corporation as landlord to Brook Street as tenant.
The lease contained a landlord's
break right to terminate the lease on 27 September 2016 on six
The City Corporation subsequently
granted an overriding lease to a developer, "Vanquish
Properties (UK) Limited Partnership acting by its general partner
Vanquish Properties GP Limited", who became Brook Street's
Shortly after the grant of the
overriding lease, Vanquish's lawyers served a break notice on
Brook Street to terminate the lease. The break notice stated that
it was served on behalf of "Vanquish Properties (UK) Limited
Partnership, the landlord of the property".
The problem with both the overriding lease and the break notice
was that it is legally impossible forVanquish Properties (UK)
Limited Partnership, as a limited partnership, to hold a lease. A
limited partnership (unlike a limited company or a limited
liability partnership) is not a legal entity in its own right and
cannot own any property. A limited partnership must have a trustee,
usually a general partner, who manages the limited
partnership's business and holds any property on behalf of the
Brook Street challenged the validity of the break notice on this
basis. It argued that as a limited partnership has no legal
existence, Vanquish Properties (UK) Limited Partnership could not
be its landlord and therefore could not serve a break notice.
The Court agreed that the overriding lease could not be granted
to the limited partnership. As such, the overriding lease had never
been properly granted and Vanquish Properties (UK) Limited
Partnership could not have given a valid break notice.
In fact the Court implied that Vanquish Properties GP Limited,
as the general partner of the limited partnership, was the tenant
under the overriding lease and Brook Street's landlord. It
should have been this entity that served the break notice.
What does this mean for you?
Limited partnership structures have become increasingly common
as investment vehicles in the last few years, due to their tax
treatment and transparency.
It is important to fully understand the structure of an
investment vehicle and the legal implications of that vehicle
before entering into a contract and serving any notices. Courts
construe notices strictly and are unlikely to excuse mistakes.
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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