In the recent case of Levett-Dunn v NHS Property Services Ltd, the High Court held that a tenant had validly served break notice on its landlords, despite the landlords no longer having any connection with the address at which the notices were served.
What was the dispute about?
Four trustees of a retirement scheme, which owned the freehold of a building in Wolverhampton, were named as the landlords in a lease of three floors of the building. The lease was granted for a ten year term but after three years the tenant sought to exercise the break clause.
The lease provided that the four landlords, three individuals and one corporate entity, were “all of 75 Tyburn Rd Erdington, Birmingham, B24 8NB“. This was also the address of the company for which the retirement scheme had been set up.
The lease provided that “service on any one of the parties comprising the Landlord shall be deemed to be service on all…“. The lease also incorporated Section 196 of the Law of Property Act 1925 which provides that any notice “shall be sufficiently served if it is left at the last-known place of abode or business“.
Four separate notices, one addressed to each of the landlords, were sent by recorded delivery to the 75 Tyburn Road address.
The tenant claimed that these were notices were ineffective as 75 Tyburn Road was not the “place of abode or business” of any of the landlords.
What did the court decide?
The court noted that the purpose of service provisions is to provide a practical method for serving notices. The serving party can be reasonably sure of the process for serving a notice and the party being served can be confident that any notice will be received. In essence, the party being served has made a decision as to how likely it is that any documents being sent to that address will come to their attention. It was therefore for the party whose address had changed to inform the other contracting party of such a change.
The court held that it is not a valid objection for a landlord to claim that they carry on little or no business at an address that has been specified in the lease. In the present case, the landlord had nominated 75 Tyburn Road as its address, regardless of whether it carried out any business there. The break was therefore valid.
In coming to this decision, the court considered the potential for injustice and the frustration of tenants’ rights. Tenants could serve whom they believed to be their landlord in good faith only to discover that their landlord had transferred its interest and that it was too late to rectify the error. Consequently, it is the party that changes its address that should bear the risk that any documents may not be received.
What does this mean for landlords and tenants?
Landlords should carefully consider what address for service is being provided in a lease, as well as the relevant notice provisions. Should the lease stipulate a particular address for notices to be sent to, rather than the landlord’s up-to-date registered address, the landlord must inform the tenant of any change in address. In such situations, landlords, or their agents, will need to proactively manage their property portfolio to ensure that all addresses for service remain up-to-date.
Tenants should remember that the party serving a notice at a particular address has the burden of proving that the address meets the contractual or statutory provisions relied upon. Regardless of this case, tenants should also continue to take reasonable steps to ascertain their landlord’s current address before sending any notice. If this is different to the address for service given in the lease, it would be sensible to serve notice on both addresses. Tenants should also request confirmation from the landlord that notice has been served correctly, which may avoid a protracted dispute arising subsequently.