It has been announced that M&S has won a case against BNP Paribas Securities Services, part of the French banking giant, for rent over-payment.
The leading retailer demanded repayment of £1.1m, including over-payment of rent, car-parking fees, service charges and insurance rent after it vacated rented space at The Point in Paddington after exercising a lease break.
The case was decided in M&S’s favour last week. This decision is described as changing ‘the legal landscape’, giving tenants hope of securing repayment in the absence of an express provision to that effect within property leases.
Ross Berridge, property dispute resolution partner at Thomas Eggar LLP, explains what this legal landmark means for retailers and landlords:
“The Court was effectively in agreement with tenants who have long found it difficult to understand why they should be paying rent for periods when they are no longer in occupation.
“The lesson to be learned from the case could be that the Court may be willing to imply terms into a lease that rent should be repaid following a break. However, the more important lesson is that it is not in the landlord’s or the tenant’s interest to leave the question open for debate. Well drafted modern leases deal expressly with the issue. It is never a happy position to be in to be relying upon implied terms.
“There may not be the anticipated deluge of cases following this decision as disputes often settle because the sums in issue do not warrant litigation. Clearly in the M&S case, they did. In any event BNP are appealing so the decision may not stand. It would be helpful if the Court of Appeal had the opportunity to review the entire area to make it clearer.
“The moral of this story is that tenants and landlords should agree at the outset whether rent is to be repayable where a break date falls during a rent payment period.”