Landlords - Beware of Allowing Tenants to Ignore Some Lease Terms
- AuthorSarah Davies
Living in an apartment block suits many people but it can bring its own challenges – not least the fact that you will be living very close to your neighbours. Friction can arise even among good neighbours and occasionally these issues can lead to legal action.
One recent Court of Appeal Case is a useful reminder to landlords of their obligations when they have a lease agreement in place.
Duval v 11-13 Randolph Crescent Limited raises important questions about tenants’ ability to prevent their landlord granting consent to other tenants to carry out work on their home, that they are prohibited from doing under the terms of their lease.
This case dealt with a landlord who was obliged under a lease to grant all leases within a particular block of flats on equivalent terms. Under what is called an enforceability covenant, a leaseholder can demand that a landlord enforces the obligations set out in the leases of other tenants. This has happened in this case, subject to the tenant who has raised the issue agreeing to pay the landlord’s costs in the associated legal claim.
Under the leases in question, the tenants were not allowed to carry out certain works to their properties. However, the landlord indicated it would give consent for one tenant to do just that. A neighbour in the block objected, arguing that any consent given by the landlord would amount to a breach of their enforceability covenant.
The landlord’s argument was that they were free to deal with their own building as they saw fit, and that if consent was provided, there was no breach. The Court found that the landlord is free to grant any consent, however in doing so they open themselves up to damage claims for breach of their own enforceability covenant.
This decision suggests that for all lease clauses which provide an absolute prohibition, a landlord overlooking or consenting to a breach could be in breach of their enforceability covenant. As a result of this, an objecting tenant may be entitled to pursue the landlord for compensation.
In light of this decision, landlords should take time to review their leases and the way in which they deal with granting consent to tenants. The possible implications of such clauses and exposure to damage claims should also be considered when entering in to any new leases.
Whilst many landlords may not have leases which include clauses worded in exactly the same way as in this case, it may be the case that for landlords to avoid any risk of liability they should:
- Refuse consent in all situations where their tenant’s lease contains an absolute prohibition
- Act on any known breaches to avoid ambiguity as to whether they have impliedly consented to that breach
For further information on this topic, call Sarah Davies on 01792 529617 or email firstname.lastname@example.org
Sarah Davies is a member of the Property Litigation Association, and has been recommended by the Legal 500 2016 edition. Sarah's reputation for excellence has secured her a portfolio of clients ranging from individuals to Commoners Associations and Farmers to Commercial and Residential Property Landlords and Professionals.