In the recent case of Ministry of Sound Ltd v the British and Foreign Wharf Company Ltd [2025], the County Court was asked to determine the terms of a new lease following the Ministry of Sound’s application for a new tenancy of its premises at Gaunt Street, London, under the Landlord and Tenant Act 1954.
The main issue related to whether the new lease should include a landlord’s rolling redevelopment break option. The Ministry of Sound, which occupies the premises as one of the most well-known nightclubs in the UK, opposed this on the basis that the uncertain nature of a redevelopment break would cause them serious financial, reputational and potentially legal consequences, e.g. by being forced to cancel long-term bookings and other contracts.
Nevertheless, the Court confirmed the position that where there is a real possibility of redevelopment during the term of the new tenancy, then the break clause ought to be granted unless there is some ‘major factor’ leading the Court to decide otherwise.
After hearing expert evidence from both parties, the Court found that in this case there was in fact a real possibility of redevelopment and that the concerns raised by the tenant were not enough to justify refusing the break. The judge made the point that any protected commercial tenant would inevitably face difficult commercial and operational decisions as a lease nears the end of its term and these risks would no doubt have to be accounted for when entering into contracts with suppliers, performers etc. He also referred to previous cases to emphasise the fact that it was never the intention of the 1954 Act to stand in the way of redevelopment.
This serves as a reminder of the importance the Court places on balancing the commercial interests of both landlords and tenants and that a landlord’s redevelopment break will likely be granted in situations where there is a ‘real possibility’ of redevelopment, despite the adverse consequences this may have on the tenant’s business.