Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LONDON-Retailer Homebase has applied for leave to appeal to the House of Lords over a court ruling that restricts the ability of a tenant to sublet at less than the market rent.

The dispute centres on a 25-year lease, with five yearly upward only rent reviews signed by Homebase in 1985. The lease terms also required the tenant to pay for all repairs, to maintain the property to a specified standard and to sublet it to another tenant only with the landlord’s permission.

But in 1998, Homebase decided it no longer wished to occupy the premises, for which it was paying annual rent of £322,500, and moved out despite having 12 years remaining on the lease. A year later the retailer signed a sub-tenancy deal with Lairdale who was willing to pay only two-thirds of the rent being asked.

The sub-lease appears to expose Allied Dunbar to risks it had not counted on when it agreed to let the unit to Homebase and the fund sought an injunction preventing the sublet.

The Court of Appeal upheld the view of Allied Dunbar and ruled that Homebase could not sublet at less than the market rent. Now the retailer is appealing to the highest court in the country, the House of Lords. The outcome will dictate the degree of flexibility in lease terms.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.