The English High Court has today rejected the argument that Brexit allows a tenant to get out of its lease, in a decision which is good news for landlords and arguably for the property industry generally.
The High Court has made its decision in the case of Canary Wharf v European Medicines Agency. The EMA had its headquarters at Canary Wharf in London. As an EU agency, the EMA is required to have its headquarters in an EU member state. Since the UK will stop being a member state after Brexit, the EMA argued that it would be impossible for its lease to continue (and hence was, in legal terminology, “frustrated”). The court rejected this argument. The lease will either continue, or the EMA will need to pay to end it.
While this decision gives anyone involved in property the comfort that Brexit will not (at least on this question) cause the massive upheaval that it could have done, it does not mean Brexit can now be ignored from a leasing perspective. Landlords and tenants alike still need to deal with Brexit and consider carefully how it will affect their businesses. There are several new clauses which should be added or tweaked to protect the position. We can help navigate the processes, outcomes and contingencies. Most of all, we can help you ensure that your business is Brexit-ready (even if the politicians can’t).
As a final comment: given the amount of money at issue, the judgement may well be appealed.
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