Landlords - Beware of Allowing Tenants to Ignore Some Lease Terms

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.

Under the leases in question, the tenants were not allowed to carry out certain works to their properties, namely the cutting into any walls or ceilings. 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 Supreme Court unanimously held that the landlord in this case was not free to waive compliance with, or permit works that breached the absolute covenant, without the agreement of all the other flat owners.

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.

The finding in this case shows a willingness by the courts to adopt a practical approach to interpreting the provisions contained in leases. 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 sarah.davies@jcpsolicitors.co.uk.

Property Litigation expert, Sarah Davies, has developed into one of the most effective specialists in her field of work. Her expertise in property advice and property dispute resolution is seen as an important role in the evolution of the JCP. Sarah advises on a broad spectrum of property matters