Take care when entering tenancy agreements

2nd February 2016

The recent case of Arnold v Britton (2015) UKSC has again highlighted the importance of making sure that the wording of any tenancy agreement reflects the understanding of the parties.

The case involved a number of tenants who had entered leases between 1978 though to 1991 that provided for a 10% increase in service charges per year. Whilst at the outset service charges were £90 + VAT, the provisions of the lease meant that some of the tenants would be required to pay £50,000 per annum by 2072! The tenants argued that they should only be required to pay the fair proportion of the Lessor’s costs, with the 10% per annum being treated as an annual cap on the amounts.

The court dismissed the tenants’ argument as the contract stated clearly what the position was, and that commercial common sense and prevailing circumstances didn’t diminish the importance of what was stated in the agreement.

This comes as a reminder as to the importance of drafting and reading any tenancy agreements thoroughly to ensure that the terms fit in with the intentions of the parties.

Should you need any assistance with preparing or negotiating lease terms, or if you simply would welcome a second opinion upon lease terms, then please do contact your local Bagshaws office:

Ashbourne 01335 342201 - email: ashbourne@bagshaws.com
Bakewell     01629 812777 - email:    bakewell@bagshaws.com
Uttoxeter    01889 562811 - email:   uttoxeter@bagshaws.com