The lease required T to pay a depreciation allowance toward the cost of maintaining and replacing fixtures and fittings, including the air conditioning. An unspent balance had accumulated when the lease came to an end. The reversion was sold and T signed a new lease. The first L transferred the depreciation fund to the new L but T said it should be returned.
Held: Once the sums were paid into the depreciation fund, they became the landlord’s absolute property. There was no provision in the lease for the return to the tenant of unspent funds at the end of the lease. This pointed to an intention that the landlord should keep them. The sums had been paid into a separate fund earmarked for the replacement of the air conditioning plant. The air conditioning plant had a finite life expectancy which was not necessarily co-terminous with the lease. The contributions to the depreciation fund were intended under the lease to go towards the cost of replacing the unit whenever that was necessary, regardless of whether the lease had already ended.
Judges:
Rimer J
Citations:
[1997] 2 EGLR 56
Jurisdiction:
England and Wales
Cited by:
Distinguished – Brown’s Operating System Services Ltd v Southwark Roman Catholic Diocesan Corporation CA 1-Mar-2007
T appealed against a decision upholding the claim of the respondent landlord S for unpaid service charges.
Held: The real issue was whether the money held by the landlord (whether held in reserve or retained as excess) was held to its own . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 02 June 2022; Ref: scu.259927