Presence of tenant’s chattels frustrates vacant possession on break
Burges Salmon LLP reports that, in the case of Riverside Park Ltd v NHS Property Services Ltd, the break clause in an NHS lease provided that the break would only be effective if vacant possession given but partitioning, kitchen units, window blinds and other such items were left in the premises.Therefore the landlord argued that the NHS had not given vacant possession of the premises and that therefore the break was invalid. The key issue was whether the items were fixtures or tenant’s chattels. If the items were chattels then vacant possession had not been given and the test for distinguishing chattels and fixtures centres on the degree of annexation and the object/purpose of annexation. The court determined that the items were chattels and not fixtures, because they were only “slightly attached” to the premises and did not provide a lasting improvement to the premises. The court also noted that, even if the items had been fixtures, the NHS had still not complied with the break clause, because the definition of “premises” specifically excluded partitioning and tenant’s fixtures.