McDonalds Real Estate LLP v Arundel Corporation
Language: English Series: Estates Gazette ; (830) 2 August 2008, 84-88(5)Publication details: 2008Subject(s): Summary: Provides detailed case notes on McDonalds Real Estate v Arundel Corporation [2008] EWCH 377 (Ch), 16 January 2008. The case shows the potential problems involved in drafting rent review clauses based on hypothetical lettings. The court had to determine the assessment of rent on a rent review for a warehouse used as a drive-thru restaurant. In 1986, McDonalds took out a fifty year lease on an old factory with a view to converting it into a drive-through. The lease provided the building to be treated as a warehouse with 15% office space at rent review. The case turned on whether, where there were no suitable comparables, the open market rent of the restaurant should be determined on the basis of a retail warehouse. The landlord argued that warehouse could include retail warehouses, which generate a significantly higher rent than storage warehouses. The Court had to decide what sort of warehouse was intended. Held: claim allowed in part. A storage warehouse had been intended, but there was no restriction on the usage of the word. The landlord may seek to have the building's retail value reflected in the rent review.| Item type | Current library | Call number | Copy number | Status | Barcode | |
|---|---|---|---|---|---|---|
| Journal article | London Journal article | L144747 (Browse shelf(Opens below)) | 1 | Available | 144747-1001 |
Provides detailed case notes on McDonalds Real Estate v Arundel Corporation [2008] EWCH 377 (Ch), 16 January 2008. The case shows the potential problems involved in drafting rent review clauses based on hypothetical lettings. The court had to determine the assessment of rent on a rent review for a warehouse used as a drive-thru restaurant. In 1986, McDonalds took out a fifty year lease on an old factory with a view to converting it into a drive-through. The lease provided the building to be treated as a warehouse with 15% office space at rent review. The case turned on whether, where there were no suitable comparables, the open market rent of the restaurant should be determined on the basis of a retail warehouse. The landlord argued that warehouse could include retail warehouses, which generate a significantly higher rent than storage warehouses. The Court had to decide what sort of warehouse was intended. Held: claim allowed in part. A storage warehouse had been intended, but there was no restriction on the usage of the word. The landlord may seek to have the building's retail value reflected in the rent review.