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Landlord’s right to redevelop premises -when does it take precedent over a tenant’s right to quiet enjoyment?

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The recent case in the High Court of Timothy Taylor Limited v Mayfair House Corporation and another [2016] EWHC 1075 raised some interesting legal questions. Timothy Taylor Limited had a 20 year lease to occupy a ground floor and basement of premises in Mayfair as a high class art gallery. The landlord undertook redevelopment works to the upper floors of the building in order to increase the number of residential units available for let. After several complaints about noise and disruption to the landlord, the tenant applied for an injunction to control the ongoing works and also made a claim for damages. Notably, the tenant took issue with the scaffolding surrounding the building which obscured the gallery and affected the tenant’s ability to take deliveries and access the premises.

The tenant’s lease contained a standard covenant stating that the landlord granted the tenant quiet enjoyment of the premises. However, it also contained a right for the landlord to erect scaffolding to re-develop the building providing it did not significantly restrict access or the use and enjoyment of the premises. It also gave the landlord the right to re-develop the building, even if this considerably affected the tenant’s business or its use and enjoyment of the premises.

The Court ruled that the rights the landlord benefitted from in the lease did not give an “untrammelled” right to build and re-develop and, in fact, the landlord had to exercise its rights in a way which was considered reasonable and caused minimum disruption to the tenant.

So what where the key factors in reaching this decision?

In conclusion, the Court ruled that the landlord had acted unreasonably and consequently, it awarded damages despite the fact that the tenant’s revenues had actually increased during the period of works. They were also awarded in lieu of an injunction.   

This case sends a clear message to landlords - even if a lease contains a right allowing re-development to a building with a tenant, a landlord must liaise with the tenant to ensure that works cause minimum disruption to the tenant. Landlords planning re-development would be wise to review the guidance given by the Court, reducing the likelihood of delays and expenses incurred by tenants applying for injunctions and bringing claims for damages.

If you have any queries about this article please do not hesitate to contact Gina Rhodes on gina.rhodes@clarionsolicitors.com or 0113 222 3211.

 

 

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