EMA Decision: Brexit Does Not Frustrate Property Lease

The EMA’s appeal against the decision of the Order of Mr Justice Smith that Brexit would not frustrate the EMA lease which was due to be heard in January 2020 has been withdrawn by the EMA.

The EMA have reached an agreement with Canary Wharf to sublet their demise to WeWork. WeWork will take a lease of the demise from EMA which will expire on the expiry of EMA’s lease in June 2039.

In the circumstances the High Court decision of Judge Marcus Smith will stand. It is unlikely that other tenants will pursue such an argument given this first instance decision and given that there may be other options available to tenants in similar circumstances such as assigning the lease or subletting with the permission of their landlord. In cases, where the lease contains a break clause, tenants are likely to exercise this. It is likely that tenants will explore these other avenues rather than commit to expensive litigation where a first instance decision has already ruled against the frustration argument.

For now the landlords can breathe a sigh of relief although the commercial realities of Brexit may well be felt in other ways. Until the UK’s departure has been finalised we are unlikely to know what the impact will be on commercial landlords up and down the country.

If you would like to contact Shilpa Mathuradas or another member of the Housing & Social Care department, please call 020 7485 8811.