Margaret is planning to open a pet shop and has agreed to lease commercial premises on the High Street from Paddington Properties for five years. According to section 52(1) of the Law of Property Act 1925, a lease for more than three years must be made by deed. Paddington Properties assures Margaret that the deed will be drawn up by the end of the month, once their legal advisor has returned from vacation. In the meantime, Paddington Properties allow Margaret access to the premises in order to commence renovation works to the shop. Two months later, Margaret has invested over £10,000 in renovations to the premises, but Paddington Properties has still not drawn up the deed. Instead, they were in constant negotiations with another interested lessee who has now offered them a higher price for the premises. Paddington inform Margaret that she must vacate the premises by the end of the month. Can Margaret prevent her eviction?

Question

Quizplus · Accepted Answer

Margaret can argue that Paddington Properties is estopped from evicting her because she relied on their assurance to her detriment by investing in renovations. Estoppel can prevent Paddington from going back on their word, even if the formal deed was not completed.

Margaret Is Planning to Open a Pet Shop and Has