The recent judgment in MVL Properties (2017) Limited v The Leadmill Limited ([2025] EWHC 349 (Ch)) provides important insights into how the Court balances landlords’ rights against tenants’ long-held interests. This case centred largely around the balancing act made between (1) the landlord's desire to occupy and use the premises itself; and (2) the goodwill which the tenant had established over the decades during which it had operated from the premises.
Background
The dispute arose in respect of the renewal of a long-standing tenancy of a famous Sheffield music venue, The Leadmill. The tenant had not only carried out physical improvements (such as refurbishment works, specialized fixtures, and structural enhancements) but also built up a significant level of “goodwill” at the premises over time. At the end of the term of the lease, the landlord sought to terminate the tenancy, relying on the conditions contained within section 30(1)(g) of the Landlord and Tenant Act 1954 ("the Act"); it wanted to regain possession of the premises and intended occupying them for the purposes of its own business. The tenant objected and applied to the court for a new lease, pursuant to its rights under the Act.
Key issues
Intention to ccupy
In order to rely on section 30(1)(g) of the Act, the landlord had to demonstrate both a firm and settled (subjective) and realistic (objective) intention to occupy the premises for its own business once the tenancy ended. It supported its claim with detailed evidence, including substantial financial commitments, detailed refurbishment plans, and a clear unequivocal undertaking by its director to begin works promptly upon regaining possession.
Tenant’s claims to goodwill
The tenant further argued that the landlord’s actions would amount to an appropriation of the tenant's goodwill in contravention of Human Rights legislation. However, the court ruled that, while goodwill is a "possession" to which the Human Rights legislation applied, the tenant’s right to it wasn’t absolute, since the Act only provides a contingent right to renewal.
As such, although the tenant had built up a great deal of goodwill at the premises the Act didn’t guarantee them an endless right to that goodwill if the landlord could show that it genuinely intended to use the premises for the purposes of its own business following termination of the lease. The Tenant would be 'compensated' via the statutory compensation scheme set out in the Act: this recompense is calculated correctly by reference to the rateable value of the premises, not any loss arising from the tenant's loss of goodwill.
Legal and policy considerations
The judgment reaffirmed long-established principles from both the Act and supporting case law. It clarified that a landlord’s right to recover possession of their premises for their own business use does not mean an automatic forfeiture of the tenant’s interests—it simply means the tenant’s renewal rights are subject to the landlord’s genuine plans. Therefore the decision serves as a reminder that, while tenants’ rights are protected, the law also allows landlords to reclaim their premises when they have solid, realistic plans.
We can, therefore, take the following key learning points from Leadmill:
- Solid Planning Pays Off: Landlords must be prepared to clearly demonstrate not just an idea, but a realistic, funded, and actionable plan for reoccupying or repurposing their premises.
- Balancing Interests: The case reinforces that while tenant rights (such as security of tenure and goodwill) are important, the law protects a landlord’s right to recover and redevelop their premises for genuine business reasons.
- Lease Drafting and Negotiation: Both landlords and tenants should pay close attention to the precise wording of lease provisions. Clearly defined terms around fixtures, improvements, and the rights of renewal can help the parties to avoid future disputes.
- Cost and Time Considerations: Disputes over refurbishment costs and timelines can be complex. Engaging reliable experts and having detailed, realistic refurbishment plans is essential.
In summary, the judgment in Leadmill underscores that, when a landlord demonstrates a clear, settled and viable intention to reoccupy and transform a property, the courts are likely to support their contention that the tenant should not be granted a new lease — even if the tenant has built up considerable goodwill from the premises. Ultimately, thorough planning, robust financial backing, and strong advice are key to navigating these issues successfully.
