Pridewell Properties v Spirit Pub Company: landlord fails to establish redevelopment ground under 1954 Act

The High Court has dismissed a landlord's appeal in Pridewell Properties (London) Limited v Spirit Pub Company (Managed) Limited [2026] EWHC 953 (Ch), upholding the decision of His Honour Judge Hellman that the landlord failed to establish ground (f) of section 30(1) of the Landlord and Tenant Act 1954. The case concerned The Railway Bell, a public house in South Woodford, and a proposed scheme to build three mews houses and six self-contained flats whilst retaining a reduced pub on the ground floor.

Ground (f) permits a landlord to oppose the grant of a new business tenancy where it intends to demolish or reconstruct the premises, or carry out substantial construction works, and could not reasonably do so without obtaining possession. The landlord must demonstrate a real prospect — more than fanciful or speculative — of being able to carry out those works on the termination of the current tenancy.

Funding and the personal guarantees issue

The central ground of appeal concerned the judge's treatment of funding evidence. The landlord argued that once the judge had found, at paragraph 116 of his judgement, a real prospect that a lender would be satisfied with mortgage security and restrictive covenant insurance, the question of personal guarantees from the directors was superfluous.

Mr Justice Fancourt rejected that reading. The judgement on funding had to be read as a whole: the indicative term sheets from the proposed lender expressly required personal guarantees, and the judge found that any lender would require the same when lending to a special purpose vehicle of this kind. No evidence was adduced as to the personal finances of the directors, leaving the court unable to assess whether such guarantees would be of sufficient value. The absence of that evidence was fatal. The appeal on this point was dismissed.

Timing: a significant clarification

The more significant aspect of the decision arises from the court's analysis of the Respondent's Notice ground concerning timing. The judge at first instance had accepted that works would not start for 10 to 14 months after possession, largely because the landlord could not carry out intrusive surveys or pre-application planning consultations while the tenant remained in occupation. He concluded that this delay was reasonable and therefore satisfied the "on the termination of the current tenancy" requirement.

Fancourt J disagreed. The statutory test is not whether the period of delay is reasonable or justified in the circumstances; it is whether the landlord intends to carry out the works at the termination of the tenancy, with only modest tolerance for a short mobilisation period. The expressions used in earlier Court of Appeal authority — "not at any long delayed time" (Reohorn v Barry Corporation) and "at once and not after a time" (Fisher v Taylor's Furnishing Stores) — remain authoritative. The "reasonable time" formulation is a paraphrase indicating that literal day-one compliance is unnecessary, not a freestanding test of justifiability.

Where a landlord must first obtain planning permission based on surveys that cannot be conducted until after possession, and where the planning application itself will not be submitted until six or seven months after the possession date, it cannot be said to intend to begin works on termination. The tenant's unwillingness to permit pre-possession access, whilst it explained the delay, did not alter the legal position: those were the consequences of the parties' bargain.

The judge was also critical of the first-instance approach to planning policy, noting that policies D13 and HC7 of the London Plan — which protect public house viability and existing noise-generating uses — were agreed by experts to require satisfaction before permission could be granted. The conclusion that a real prospect of permission existed, reached partly by reference to housing delivery targets rather than by addressing HC7 directly, was found to have involved a misdirection, though the court declined to resolve that issue finally given that the appeal had already failed on other grounds.

The case is a useful reminder that the Act's structure already accommodates landlords in the position Pridewell found itself in: a short new tenancy, access provisions, or a redevelopment break clause can preserve the ability to redevelop without distorting the timing test under ground (f).