Comparable Rent Accusation

Assessing rent levels through comparisons with similar properties is a common practice on commercial premises. However, this approach faced scrutiny in the case of Clear Call Limited v. Central London Investments Limited, where a landlord defended against claims of entering into a sham lease with artificially inflated rent to boost returns on its other properties.

In this case, one of the landlord’s tenants applied for a new lease under the Landlord and Tenant Act 1954 but objected to the rent set by a judge at £125,700 per annum. The judge had considered the rent achieved by the same landlord for another property as part of the decision-making process.

The tenant argued that the transaction was a sham and that the comparison was artificial and unreal because the relevant premises had remained empty and dilapidated since the alleged agreement. Additionally, the tenant was described as a dormant, non-trading company.

The landlord refuted the accusation, asserting it had not engaged in any deceptive practices to inflate rents in the area where it owned substantial properties. Evidence demonstrated the transaction occurred after negotiations and rent payments were made.

The court dismissed the tenant’s appeal, emphasising that the judge had thoroughly considered and rejected their arguments. The fresh evidence presented by the tenant lacked substance and could have been brought before the judge or was already considered in a previous High Court appeal.