Cases - Ashworth Frazer Ltd v Gloucester City Council

Record details

Name

Ashworth Frazer Ltd v Gloucester City Council

Date

[1997]

Citation

1 EGLR 104, CA

Legislation

Landlord and Tenant Act 1985

Keywords

Commercial property – landlord and tenant – rent review – meaning of “such sum as shall be equivalent to 8 percent of the rack rents receivable by the lessee” – whether 'rack rents receivable' was based on rents actually received or the rents that would have been received if all the lettable parts had been let at market rent at the review date

Summary

The ground rent payable under a long building lease of a multi-let property was to be reviewed to 'such sum as shall be equivalent to eight per cent of the rack rents receivable by the lessee in respect of the demised premises on the relevant review date'. Elsewhere in the lease, this was referred to as 'the fair market rent'. The lease did not impose any obligation on the lessee to use best endeavours to sublet the various parts of the premises or to maximise the rental income or to impose any rent reviews in subleases. The tenant claimed that the eight per cent was to be calculated on the rents actually payable by subtenants at the review date, but the landlords successfully argued that 'rents receivable' covered rents that would have been receivable if all the lettable parts had been let at market rent at the review date.