30 April, 2021
The recent case of Procter v Procter dealt with the situation where a property owner wishes to grant a lease to both themselves and a third party jointly.
In Procter, a family farm was owned by trustees and was farmed by a partnership consisting of the trustees and other family members, without any form of written tenancy agreement. When the family members fell out, the partnership argued that there was an oral tenancy. The crux of the case was whether this was possible given that the trustees who owned the farm were also members of the partnership (essentially being the landlord and also the tenant (albeit jointly with others).
At the first trial, the partnership's claim was dismissed on the basis that the tenancy agreement would need to be in writing. However, the Court of Appeal overturned this ruling, and held and a landlord leasing property to itself and another party jointly will hold the property in distinct capacities. Therefore, it was possible for a landlord to lease property to two or more tenants, where the landlord was one of those tenants (whether orally or in writing).
Within the context of Pension Scheme trustees holding property, the decision confirms that the trustees can lease property to one or more of the trustees jointly with other parties as tenant.
For more information contact Mohassan Mehmood in our Commercial Property department via email or phone on 0333 207 1161. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
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