Brexit Frustration: Will it become a problem for landlords and an opportunity for tenants?

An impending court trial relating to the legal doctrine of “frustration” is sure to generate interest for landlords and tenants as Brexit approaches.

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Brexit Frustration: Will it become a problem for landlords and an opportunity for tenants?

An impending court trial relating to the legal doctrine of “frustration” is sure to generate interest for landlords and tenants as Brexit approaches.

In the case in question (Canary Wharf (BP4) T1 Limited and others v European Medicines), the Tenant is seeking to argue that their lease has been “frustrated” due to an unforeseen circumstance, in this instance Brexit.

In this context “frustration” basically means that the contract (in this case a lease) has become impossible to fulfil or that obligations contained within it have become substantively different. If the lease is found to be frustrated, it would – in theory – be possible to set it aside.

In this particular case the developer claimant is arguing that Brexit was a foreseeable consequence by virtue of the existence of Article 50 of the Treaty of European Union which expressly provides for withdrawal from the EU. Whether you agree with this argument or not I’m sure you will recognise that enabling the lease in question to be determined by frustration would create a dangerous precedent for the UK property market not to mention the wider economy if applied to other commercial agreements.

The trial date is set for March 2019 and could have huge consequences for landlords and tenants alike. Watch this space!

For advice on the validity of your leases please contact James Alger on 0114 276 5555 or james.alger@keebles.com

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