In Levett-Dunn and others v NHS Property Services Ltd, the High Court in Birmingham found that a tenant’s notice to exercise a break clause had been validly served on a their landlord at the address set out in the lease, even though the landlords no longer used those addresses.
The tenant served notice under a break clause in a 10 year lease. The notices were sent by recorded delivery on each of the individual landlords named in the lease at the business addresses provided in the document. However, the landlords no longer used those addresses. In fact, only one of the four named landlords had retained any connection with the address given for him in the lease but he had transferred his interest in the property in 2011. The tenant followed up the notices by email to the Landlords’ property manager.
Prior to the expiry of the notice the tenant contacted the property manager to arrange for the return of the keys. The manager sent a careful reply accepting the keys without prejudice to the landlords’ contention that the notices were invalid. So the landlords were aware of the tenant’s intention to leave even though they were taking the view that the break clause notices were ineffective because they had not been served on them properly. On 13 October 2014 the landlords leased the property to another tenant while disputing the validity of the notices and claiming that the original leases continued.
The court held that where a contractual relationship existed they would take note of the agreed details for service. The leases specifically provided that the landlords were to be served at their last known place of abode or business, and also set out that address. The tenant had complied with the contractual provisions.
The landlords could have taken steps to inform the tenant of a change of address and, having failed to do so, they bore the risk of any notices not reaching them. Thus the tenant was entitled to a declaration that the leases had been terminated.
In the event that the above decision was wrong, the court also held that the landlords had accepted the tenant’s surrender of the lease when they had retaken possession and re-let the property.
Comment
This case demonstrates the crucial importance of keeping contact details updated, especially where the tenancy agreement makes clear that those details should be used for service. Landlords and tenants who fail to do this may find themselves being held to have received notices or being served with legal proceedings of which they were entirely unaware.
