Can a Landlord terminate a lease if steroid abuse is proven?
A typical clause in a lease will require the tenant to “comply with all laws relating to ….the Property and the occupation and use of the Property by the Tenant”
Another typical clause in a lease will require that “The Tenant shall not use the Property for any illegal purpose nor for any purpose or in a manner that would cause loss, damage, injury, nuisance or inconvenience to the Landlord, its other tenants or any other owner or occupier of neighbouring property”
A failure to comply with either such clause relating to the occupation and use of the Property by the tenant will provide a landlord with a ground for forfeiting the lease.
In the light of the above, the question now is can a landlord forfeit a lease granted to a gym if some of its members are covertly supplying anabolic steroids to others?
Anabolic steroids in England & Wales are controlled Class C substances under the Misuse of Drugs Act 1971. There is no possession offence but it is illegal to manufacture, supply or possess/import/export steroids with the intent to supply, without a licence to do so.
Under section 8(b) of the 1971 Act a tenant will commit an offence if it knowingly permits or suffers on its premises the supply, attempt to supply a controlled drug to another in contravention of section 4(1) of the Act, or offering to supply a controlled drug to another.
Thus under section 8(b) of the Misuse of Drugs Act 1971 an offence is committed if it is established that drugs are supplied on the property with the tenant’s knowledge. It may be enough to establish that a complaint had previously been made regarding such activity but the tenant did not take adequate steps to curb the illegal activity.
SCENARIO
A gym occupies a unit on an industrial estate under a 25 years lease. The other tenants on the estate include a children’s soft play area, DIY stores and a supermarket.
A user (hereafter referred to as ‘X’) of a gym suspects that some gym users are supplying other gym users with anabolic steroids. X makes a formal complaint to the gym’s manager. No obvious steps are taken by the gym to curb the activity. A gym user dies on the property following cardiac arrest. It is later established that the death was caused by a toxic homemade anabolic steroid. The death is reported in the local and national press with the gym receiving negative publicity and a subsequent police investigation is launched.
The landlord decides that it is not good estate management to allow the gym to continue to occupy the industrial estate as a result of the negative publicity.
The question is can the landlord forfeit the lease and recover possession of the property on the grounds that the tenant failed to comply with all laws relating to the occupation and use of the Property?
The landlord’s solicitor advises that the lease can be forfeited on the basis that the lease allows forfeiture of the lease due to a failure to comply with laws relating to the use of the Property. A court application for forfeiture is made by the landlord and it recovers possession of the property.
In practice it would be unlikely that a landlord would forfeit a lease in isolation of other facts. However gym tenants must be aware of the risk that these options may be available to a landlord.
From a gym tenant’s perspective it is good practice to demonstrate a zero tolerance of anabolic steroid use. This can be done by erecting warning signs on both the premises and its website. Furthermore it would be good practice to train gym staff on the risks associated with steroid abuse. This knowledge can then be passed on to vulnerable gym users. Such proactive measures will provide valuable mitigating factors in the event of any claim for forfeiture on the grounds that the gym allowed the supply of anabolic steroids on the property.
For guidance on how effectively to manage a gym’s lawful operations we can advise you on managing the risks identified in this article. We can also review your terms and conditions to ensure they are socially responsible and up to date with recent legal changes.
For further information please contact one of our commercial team members on 01905 721600.