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Case Update: The competing rights of landlord and tenant

06-06-2016

There is a basic premise under the terms of a lease, whereby a landlord is impliedly obliged to ensure that its tenant is given ‘quiet enjoyment’ of the premises in question.

The courts have had to assist in cases whereby this right in favour of the tenant conflicts with an express term in a tenancy that allows a landlord to carry out works to the demised property.

In Lechouritis v Goldmile Properties [2003] EWCA Civ 49, the landlord had covenanted in the lease to carry out repairs. The tenant, who ran a restaurant business brought a claim due to the disruption caused by scaffolding erected outside of the property.

The Court of Appeal had the task of on one hand recognising the need to prevent the landlord from interfering with the tenant’s possession and enjoyment of the premises, whilst paying heed to an express repairing covenant agreed by the parties. The court was able to marry the two by providing that a landlord must use all reasonable precautions to minimise disturbance.

This reconciliation exercise by the court has attracted media attention recently as art dealer Timothy Taylor, the husband of the Queen’s cousin Lady Helen Taylor, whose 40th in line to the throne, brought a claim against ‘inconsiderate’ landlords in Timothy Taylor Ltd v Mayfair House Corporation and another [2016] EWHC 1075.

In this instance, the lease expressly provided a right to alter or rebuild the building even if the premises, a high-end art gallery in Mayfair, and the tenant’s use of it were materially affected. The lease did also contain a provision: ‘permit the Tenant peaceably and quietly to hold and enjoy the Premises without any interruption or disturbance from or by the Landlord’.

Works to the building from the first floor upwards were commenced by the landlord in 2013 to create new apartments to let. Daily disruption ensued, with significant noises causing staff absences, as well as scaffolding that effectively rendered the gallery invisible.

Investigating whether the landlord has taken the necessary steps to minimise disturbance requires a court to consider whether:

The court found that the landlord failed to pay sufficient regard to the tenant’s needs to keep the gallery running effectively, drawing attention to the significant £530,000 per year rental fees.

The tenant had only received a general indication that the works would be carried out in the future and the court found that the outright refusal to propose a discount increased the sense of unreasonableness.

The nature of the scaffolding also failed to protect the appearance of the property, with the court finding that the landlord should have considered a tower design whilst seeking to minimise the noise disruption during working hours. Failure to liaise with the tenant could also be counted amongst the landlord’s numerous failings.

The case serves to highlight the need for the landlord to protect the tenant’s right to enjoy the property, even if the lease expressly allows works to be carried out. Taking greater steps may be required if the work relates solely for the benefit of the landlord and it is important for landlords who have plans to build or repair in the future to not only think about the practical steps required to minimise disruption, but also to actively communicate with tenants both prior to the lease being entered in to and before the works are carried out.

 

 


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