Whether a lease of business premises says so or not, a landlord is under an implied obligation to given its tenant ‘quiet enjoyment’ of the demised premises. Essentially this means that the landlord must ensure there is no interference with the tenant’s possession and enjoyment of the property. Usually, quiet enjoyment is expressly set out in the lease.
Covenanted repair work
There is established case law to cover the position where a Landlord has covenanted to carry out repairs to a building and therefore has an implied right to undertake buildings works. In this scenario, a landlord must use all reasonable precautions to minimise disturbance while carrying out the repairs and, if he does so, there will be no breach of the quiet enjoyment covenant.
New building work
Taking this a stage further, if the landlord wishes to alter or rebuild a building or – as is becoming increasingly common in metropolitan centres – wishes to add value by building apartments on top of existing commercial premises, then how does this fit with the tenant’s right to quiet enjoyment?
In Timothy Taylor Ltd v Mayfair House Corporation the lease reserved an express right for the landlord to alter or rebuild the building and gave the landlord the right to erect scaffolding as long as this did not restrict access to or the use and enjoyment of the premises.
It is always preferable for leases to contain these express reservations in favour of a landlord who might want to develop at some point in the future.
What are all reasonable steps according to the Court?
Nevertheless, when the works were carried out, they were so disruptive that the tenant claimed that the landlord had not taken all reasonable steps to minimise disturbance and sought damages and an injunction.
The Court gave some interesting pointers as to what a landlord should do to demonstrate that all reasonable steps to minimise disturbance to the tenant had been taken:
- What knowledge or notice did the tenant have of the intended works at the outset of the lease?
- Has any offer of financial compensation been made by the landlord to the tenant for the disturbance caused by the works?
- Are the works being carried out for the personal benefit of the landlord or for the benefit of all the tenants in the building?
In the case, the landlord was held to be acting unreasonably because the way the scaffolding was designed and erected paid little regard to the interests of the tenant. The man hoist for bringing materials up from ground floor level was placed virtually outside the premises’ front door. Delivery lorries blocked the external view of the premises. There was no real liaison with the tenant as to the likely duration of the works and the noise levels.
Incumbent on landlord to liaise with tenant
It would have been incumbent on the landlord via its project manager and other professionals to sit down with the tenant to explain what was proposed and to agree the method by which the work could be carried out with the minimum of disturbance.
The tenant succeeded in damages but not in its request for an injunction.
This case points out the importance of early discussion with tenants when redevelopment is to take place, including landlords making an effort to take into account the interests of occupiers of a building when those works are planned.
Disclaimer: While we do all that is possible in terms of ensuring its accuracy, this blog contains general information only. Nothing in these pages constitutes legal advice. You need to consult a suitably qualified lawyer from the firm on any specific legal problem or matter.
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Barr Ellison acted in a successful application to modify a restrictive covenant for a developer which otherwise prevented their redevelopment of a site in Cambridge.
Restrictive covenants can be a headache for developers who have otherwise found the perfect piece of land on which to carry out their dream development.
It is always preferable for leases to contain express reservations to alter, build and erect scaffolding in favour of a landlord who might want to develop at some point in the future.
A Court of Appeal decision serves as a warning to developers of the dangers of proceeding with developments in breach of a restrictive covenant.
It is a strict requirement that a party needs to be in compliance with all conditions precedent before serving a notice to complete a property transaction.
Appellants would be well advised to take care when introducing new evidence to a planning appeal, ensuring that it is available in good time for public inspection, usually via the local authority’s website.