M&S loses legal battle against former landlord in the Supreme Court
The Supreme Court has dismissed Marks & Spencer’s (M&S) second appeal against its former landlord, BNP Paribas (BNP), to reclaim £1.1m of rent it claims it had overpaid.
M&S occupied four floors in the BNP-owned building, The Point in Paddington Basin, London.
In July 2011, the retail giant served a break notice and paid BNP three months of rent and service charges from 25th December 2011. The lease ended on 25th January 2012 and the landlord refused to repay the rent paid in advance of the break date.
M&S appealed to the High Court. Initially, it was allowed to reclaim up to £1.1m in rent for the period following the break date.
On 1st December 2015, BNP successfully appealed the High Court’s original decision.
M&S argued there should be an obligation implied in its lease requiring the landlord to return the rent paid for the period after the break date, despite the fact this was not specified in the contract.
The Supreme Court unanimously rejected the retailer’s argument.
You can find a summary of the case here.
What this means for you
In this case, the courts found in favour of the landlord. Where a break clause does not fall on a rent payment date, in order to comply with a break condition requiring payment of rent up to the break date, if rent is quarterly, this means the full quarter’s rent is due, even if this relates to a period after the break date.
The court will not imply a term into the lease that any monies paid in advance must be repaid by the landlord if the lease is silent on the point, as this lease was.
As a tenant, it’s important you include in the lease a clause requiring any monies paid in advance of the break date to be reimbursed.
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