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by kenn on 8/14/2005 11:22:00 PM

Expensive lesson from a tenant who wouldn't go

Damon Dash Story



How do you shift a business or house tenant when he overstays?

It can cause major problems, none more so than when the tenant in question is Roc-a-Fella record-label boss Damon Dash, who stayed on without paying rent at a £19,000-a-month house in London, long after his year-long tenancy agreement had expired.

The landlord assumed his tenant would renew the agreement. Damon Dash's advisers told him he would not, but that he might be interested in buying the property. Meanwhile, no rent was paid.

The tenant and his advisers had also taken all nine front-door keys and the landlord had none left. He could do nothing but watch the arrears mount up.

The landlord said: "It was illegal for me to cross the doorstep. His property was in there. They had not handed the key back or surrendered the tenancy.

"I was therefore entitled to mesne profits, which is a legal term meaning whatever I lost as a result of my tenant's behaviour, I would be paid in compensation."

The case eventually went to court, the judge found in favour of the landlord and awarded him £53,644, which was effectively legal costs, loss of rent and interest.

Eventually, all the Damon Dash gear was taken away in vans. The debt is still unpaid.

The Damon Dash case illustrates the problems that can occur with residential tenancies. Similar scenarios are possible with business tenancies, although the changes to the Landlord and Tenant Act 1954 which came into force last year should mean that cases comparable to the one above become less frequent.

With business leases the landlord's termination notice states the date on which the landlord wants the lease to end and indicates whether the landlord would oppose an application by the tenant for a new lease.

If the landlord does oppose, he needs to specify one or more of the seven statutory grounds for doing so.

Where the landlord and tenant agree that a tenancy will be contracted out - that is, the tenant will not have the security of tenure protection of the 1954 Act - then it is not necessary to make an application to the court.

Instead, the landlord will have to serve the tenant with a 14-day "health warning" advising the tenant what rights he or she is giving up and urging them to take independent advice.

Where the landlord has obtained an order refusing the grant of a new tenancy by misrepresentation the tenant will be able to apply for compensation.

The same right applies where the tenant has decided not to seek a new tenancy because of a ground of opposition raised by the landlord.

Compensation acquired in these circumstances is in addition to statutory compensation for disturbance.

Consequently, tenants may well be advised to keep an eye on their former business premises to see whether the landlord has put into effect the plans outlined when resisting lease renewal.

Leasehold renewals have been a particularly difficult area of law for many years. Failure to meet notice deadlines has often had severe effects. The changes and simplification of procedures are welcome.

The alterations to the Act were meant to add flexibility and streamline the system.

However, as Damon Dash the King of Bling shows, there are still pitfalls for the unwary - so check facts carefully and take advice before taking action.

Richard Freeman-Wallace is head of property at Watson Burton LLP

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