Wapping Blues

If your memory serves you well,
You’ll remember you’re the one
That called on me to call on them
To get your favours done.
And after every plan had failed
And there was nothing more to tell,
You knew that we would meet again,
If your memory serves you well. *

The wheel has come full circle. Regular readers will recall the subject of this column (AM No. 17) in 1978 which discussed the plight of the artists living and working at Butler’s Wharf on the south side of the River Thames near Tower Bridge, who were being forced to leave by the owners who wanted to redevelop the Wharf. Well, it’s happening again. This time on the north side of the river almost directly opposite Butler’s Wharf which, incidentally, always seemed during the past four years to be a constant and sad reminder that a forcing of such an exodus should never be allowed by artists to happen again. But it has.

The 1978 article cited the similar precedents which had forced the arts community of SoHo in New York and downtown Chicago to leave under similar circumstances in the sixties. Now we can add Butler’s Wharf; and soon Wapping.

The real concern is not necessarily that artists are in fact leaving, but that they appear to be under a serious misapprehension which is causing them to feel they must go or believe that they have no rights to stay; some, even, that they simply do not want the aggravation again. The latter is understandable, but whatever the reason for leaving let everyone concerned make the decision after considering the real possibilities for staying. (This will not turn into a dissertation on Part II of the Landlord and Tenant Act 1954, which regulates the position of business tenants.) Please read on.

Rights to negotiate renewal of existing leases
Most people know that tenants of domestic premises cannot easily be kicked out, unless they do not pay their rent regularly or not at all; and that when the tenancy ends the tenant usually has a very strong legal right to have another tenancy on similar terms, automatically. Those principles are similarly applied to business tenants or leaseholders. Applied to the situation at Wapping (but not including the studio spaces taken by the SPACE organisation on terms specifically geared to their known policy of moving on when asked to do so), the law basically gives to tenants or leaseholders of business premises there (i.e. studio space) for more than a year, a right to negotiate another tenancy or lease on similar terms i.e. no less than the same obligations to repair and maintain and no less than the same length of term, if not longer. This right to negotiate is to be exercised during the final year of the agreement. The only variation possible is as to rent, and that is a matter for negotiation between the parties. Obviously, the lessor will want to get as much as possible and the lessee to pay as little as possible. The lessor normally uses the current market rents of surrounding comparable leases as a yardstick, and the lessee can check these out with neighbouring lessees.

If, during the last year, they cannot agree on the new terms (usually the rent is the sticking point) the lessee has to be served with a written notice to quit by the lessor specifically informing the lessee of their right to ask the local County Court to settle the matter. The court hearing would normally be held within a few months after the end of the leas6 (meanwhile the lessee continues occupying and offering the old rent in the customary manner). The lessee would undoubtedly get a court order giving a new lease for at least the same length again and on the same conditions, but the rent would be fixed by the court at the level of the current market rent in similar surrounding premises. This new lease granted by the court would also be renewable on the same terms in the same way, when it came to an end.

Everyone’s main concern is rent. The lessor is unlikely to succeed if he argues that the rents will go up in the near future (because, say, he plans to redevelop the property with others and create a more expensive property market); only current rents would be able to be used by the court as an analogue.

This raises an important issue, particularly in complexes such as Wapping (ripe for redevelopment but with artists and others paying reasonably low rents): if all the lessees stuck to their low rent figure during negotiations and, later, in the court, it would be highly probable that no higher analogue could be found in the immediate vicinity.

Exception to the right to renew
There is one exception to the lessee’s normal legal right to renew: if, before the first lease is agreed and signed, both parties have agreed in writing which has been approved by the local County court that the lessee will not have the normal renewal rights, then when the lease is granted the lessee does not have the normal right to renew. Some lessees at Wapping do hold such leases, and their position is discussed below (see: the Weak Leaseholders); the rest are the strong leaseholders, and they should first consider the effect on them of the lessor’s potential right to terminate their ‘strong lease’ on redevelopment grounds.

Termination of lease for redevelopment
The only strong ground a lessor has for ending any business lease, whether during or at the end of its normal course, is to prove to the lessee (or the court in the event of a dispute) that he has a ‘firm and settled intention to redevelop’ the premises. This would normally require him, in practice, to show that he had obtained two things: outline or full planning permission from the local authority’s planning committee; and reasonably detailed plans or drawings for the development of the premises or complex/site including the premises. Without these, a hand on heart declaration of intention would almost certainly fail to persuade a court to terminate the lease (or the rights to renew if the lease had ended). In this light, it is important to consider what appears to be happening to the ‘strong leaseholders’ at Wapping.

The Strong Leaseholders
To recap, they will not have forgone their renewal rights because they will not have consented to lose them at the County court before they signed their lease. It appears that the lessors have indeed stated their intention to redevelop Wapping. They also appear to be offering renewed leases, but only for a year or so and only on the basis of going before the county court and the lessees foregoing further rights of renewal. The effect of this appears to be that the leaseholders, assuming that termination can be achieved by the lessors at any stage on redevelopment grounds, are grabbing the offered weaker and shorter leases – or leaving. But from what has been said so far, it can be seen that this assumption may well be ill-founded; moreover, nobody appears to have been granted even outline planning permission for any redevelopment at Wapping by the Tower
Hamlets Planning Committee.

In these circumstances, the leaseholders making that assumption who have not yet agreed or about to agree to renew on any basis might wish to reconsider their position.

The Weak Leaseholders
Having already given up their rights to renew on any terms, any offer of renewal might be most welcome. Perhaps these lessees might bear in mind that the current market rents are those paid by surrounding leaseholders and are not likely to be higher than those currently being paid, and certainly not as high as the likely rents chargeable after redevelopment has occurred – if that ever happens.

The Non-Leaseholders
There are probably many more artists actually working from Wapping who are neither leaseholders, tenants, nor even licensees. They are in a virtually powerless position to prevent eviction. For those who have an oral or, even better, a written licence agreement, they must rely on the terms of their agreement for a solution to the problem of quitting when and if the leaseholder agrees or is forced to leave; or if the leaseholder stays at a higher rent. They might, however, wish to consider drawing their leaseholder’s attention to the possibility of their being in a stronger position to negotiate than they otherwise currently assume.

It’s all a bit messy and a very sad witness to yet another example of artists losing valuable property because they have tackled the problem on an individual basis, when they might otherwise have succeeded in maintaining if not improving their position had they responded as a group by sharing information and taking legal advice and assistance jointly. To date, nothing has emerged about the now customary and excellent Wapping Open Studios summer exposition. Let us hope there is another year – and that it’s not the last.

© Henry Lydiate 1983
© 1967 Dwarf Music

 

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.