Avoiding claims for disruption when carrying out work on tenanted properties
In a recent case before the High Court, Timothy Taylor Limited v Mayfair House Corporation, it was decided that a landlord which had carried out substantial building works above its tenant's property had not taken reasonable steps to minimise disturbance to the tenant and had therefore breached the covenant for quiet enjoyment in the lease.
The property in this case was a high-class art gallery in Mayfair but nevertheless the case has implications for landlords and their tenants whatever the nature of the property.
The tenant, who occupied basement and ground-floor premises in Mayfair, brought a claim against its landlord in relation to building works that the landlord had been carrying out above the gallery since 2013. The works were substantial as the landlord was virtually rebuilding the interior of the
premises from the first floor upwards so as to create a number of residential apartments. It was the
tenant’s case that the landlord had undertaken these works in breach of the terms of the lease
and, in particular, that it had behaved unreasonably in relation to the erection of scaffolding
enveloping the whole of the building and with regard to undertaking noisy works.
The Judge in the case confirmed that the lease entitled the landlord to do the work provided that it has taken all reasonable steps to minimise the disturbance caused to the tenant. The Judge took particular note of the quality of the premises and their location and the high rent payable and of the fact that the landlord was undertaking the works for its own benefit rather than simply carrying out necessary repairs.
The Judge concluded that the works did substantially interfere with the use and enjoyment of the
premises as an art gallery. Before the scaffolding was erected, the tenant was shown a sketch plan indicating how the scaffolding might be erected in a sympathetic way, preserving the open aspect of the gallery; as it was, the scaffolding caused the whole building to be "enwrapped" giving the impression to outsiders that the gallery had entirely disappeared and was now part of a building site. In addition the main hoist used to bring up materials to the site from ground level was placed virtually right outside the door of the gallery so that the front of the gallery was often blocked by lorries delivering building materials. Moreover, the tenant experienced periods of high levels of noise on almost a daily basis. There was no real liaison with the tenant as to the likely duration of the works, the noise levels likely to be experienced and ways of mitigating the impact of the noise. It was also relevant that the landlord had not offered any discount in the rent.
The tenant was successful in its claim and damages were assessed at 20% of the rent, payable from August 2014 until the date when the work was completed.
There are many lessons for landlords and their agents to learn from this case. A right to build does not entitle a landlord to trammel over the tenant's rights and a landlord who does not consult sensibly or offer any form of compensation will have to demonstrate that it has met a very high bar of reasonableness if it is not going to have any liability to a tenant.Contact Johanne Spittle for further information.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.