The Implications of a Landlord's Right to Carry Out Works

A recent case provides helpful guidance for both landlords and tenants of mixed use and other commercial buildings in relation to the relationship between a standard landlord’s right to enter the property for particular purposes during a lease (e.g. to develop other parts of it) and its obligation to allow the tenant quiet enjoyment of the premises.

The case involved was Timothy Taylor Limited vs Mayfair House Corporation Limited (2016). The landlord in this particular case owned a multi-floor building in London. At ground floor and first floor level was a commercial premises operated by a tenant as an art gallery.

In 2013 the landlord commenced works in relation to the upper floors within the building, converting them into residential apartments. The lease contained a provision allowing the landlord to enter the building in order to alter it in such manner as it saw fit even though by doing so, this could materially affect the tenant’s use and enjoyment of the art gallery. The lease also contained a standard landlord’s quiet enjoyment covenant in favour of the tenant.

The tenant brought a claim against the landlord seeking an injunction to regulate the ongoing works and a claim for damages arising out of the interference and disruption caused by the landlord’s works on the basis this breached the landlord’s quiet enjoyment covenant.

The court found in favour of the tenant. It accepted that while the tenant could not prevent the landlord undertaking the works in question, it could regulate the way in which they were carried out with a view to ensuring that the minimum of inconvenience or disturbance was caused.

The court recognised the inherent difficulty in balancing the natural competing interests of both the landlord and the tenant in this case but provided helpful guidance in terms of the extent of any steps which ought to be undertaken by a landlord when exercising rights of this nature. It specifically pointed to the following:-

• the nature of the tenant’s business. The extent of any steps required to mitigate the disturbance or inconvenience should be judged by reference to the relative sensitivity of the adjoining tenant’s operations or business activities
• the extent of any compensation offered by the landlord to the tenant (e.g. a discount on the rent it is required to pay during the carrying out of the works) in order to reflect any disruption caused
• where the works are required for the general benefit of a number of tenants in the same building then the mitigating steps the landlord will need to undertake will be less severe than where the works benefit the sole interest of the landlord
• to ensure proper steps are taken to communicate and consult with the tenant in terms of the timing of the works and the manner in which they are to be undertaken
• the taking of all practical steps to minimise disturbance (e.g. by carrying out particularly noisy operations at appropriate times of the day).

The case is an important reminder that however wide a landlord’s right of access may be in a lease, this does not override its duty to ensure that it takes all reasonable and proper steps to minimise any disruption or disturbance to a tenant of another part of the building even if the wording reserving that right seeks to exclude any liability for doing so.

To find out more about your obligations as a landlord, you can contact Justin Sturdy on 02380 717717 or email justinsturdy@warnergoodman.co.uk.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.