Marks & Spencer v BNP Paribas (2013) has been ricocheting around for some time. The case raised the issue of whether business efficacy was grounds for reading an implied term into leases for apportioning final rent, where a break clause allowed a tenant to terminate a lease in the middle of a quarter. Marks & Spencer was the tenant, BNP Paribas the landlord – and The Supreme Court said no, ruling in favour of the landlord.
Marks & Spencer who, having paid their full quarter's rent in December and a lump sum equal to a full year's rent, exercised a break clause in their lease in January - the following month - and the lease ended.
Exercising this right was conditional upon there being no arrears and Marks & Spencer paying the lump sum, making the break clause legitimate.
Marks & Spencer proposed that having paid the final quarter's full rent on the due date -thereby satisfying the conditions of the break - and termination of the lease, it was eligible for repayment of excess rent paid because of an implied term in the lease. They felt this was in full accordance with the law.
They brought a claim in The High Court for the return of the apportioned rent for the period from January – March. The repayment would have amounted to a substantial sum. The High Court found in favour of Marks & Spencer. The Court of Appeal overturned this decision, in favour of BNP Paribas.
Marks & Spencer appealed the decision to The Supreme Court which ruled that no such term should be implied into a lease. The law of apportionment of rent was examined as it is established that neither in common law nor statute, is apportioned rent payable in advance on a time basis. As there was no evidence to the contrary, the court concluded that rent payable in advance should not be allocated on a time basis.
The Court considered that it would be wrong for them to read an implied term into the lease, particularly as both parties had entered in to a professionally drafted lease.
This case confirms that when a landlord and tenant enter into a lease knowledgeably and prudently, the courts are generally reluctant to intervene into contractual disagreements unless (but not exclusively) the mechanisms of the lease are unworkable or commercially absurd.
This case could have been avoided entirely if both parties had agreed at the outset that the break date should fall on the rent payment date, thus avoiding a dispute on rent apportionment entirely. When negotiating terms for a lease and as a result of this judgement, it should now be considered best practice for break dates and rent payment dates to be in unison, whenever possible.
Chartered surveyors Caxtons is delighted that they have again beaten the clock and let a flat within 24-hours of it going onto the market.
Amelia Singer Caxtons' Residential Lettings Manager took on a two-bedroom apartment in Rotherhithe with excellent transport links and good views over the River Thames to Canary Wharf.
Amelia viewed the property then went back to her office and prepared the property details, ensuring they were uploaded to the Caxtons' website and property portal Rightmove. As soon as the details went 'live' she received an enquiry about the property and responded immediately. She arranged a viewing, convenient to the current tenant, for later that day.
She met the professional couple who had sent the email enquiry and showed them around the property. They loved the flat and agreed on the spot that, subject to successful referencing, they wanted to rent the property. With the paperwork done, a date has now been set for them to move in in the New Year.
The rent achieved on this ideally positioned property was £1675 per calendar month. However, the speed of let was
due in no small measure to Amelia's willingness to go that extra mile and to make herself available at a time that was convenient to both the landlord and applicants.
While this Lawrence Wharf, Rotherhithe apartment had everything going for it - including ideal location, excellent transport links, stunning views, modern and clean with a high specification throughout - it was never going to be on the market for a protracted period. However, it was still a delight for the landlord to discover how quickly it had been let and that there would be no expensive void period to worry about.
Caxtons has introduced a 'delayed payment' scheme for their student tenants in relation to accommodation deposits on tenancies commencing on 1st July 2016.
Duncan Reeves, Associate Director and Head of Residential & Student Lettings, Canterbury said "As demands on students' finances grow, we realise that when making advance payments for their coming year's accommodation with administration fees and deposits is a real stretch for many.
"With that in mind we decided to introduce a delayed deposit payment scheme for students whose tenancies commence on 1st July 2016.
Terms and conditions do apply and are shown on the pdf below.
For further information contact Caxtons Student Lettings on 01227 788088 and speak to one of the team.