Under commercial leases, it will often be the landlord’s responsibility to carry out maintenance and repair works to the property. However with tenants in place, it can sometimes be difficult to carry out such works without causing disruption.
Here, commercial property expert Daniel Long explores what landlords need to consider in terms of interference with the tenant’s use of the property when they have a right or obligation to carry out work to the premises.
When determining who is responsible for maintaining the property, the starting point will always be the terms of the lease.
Many commercial leases will contain a quiet enjoyment covenant, which enables the tenant to freely enjoy occupation without substantial interference. Conflict can arise when a landlord is entitled to carry out maintenance but the work makes it difficult for the tenant to quietly use and enjoy the premises.
This balancing exercise was most recently highlighted in the case of Timothy Taylor Ltd v Mayfair House Corporation.
The case relates to works to the upper floors of a building in Mayfair which generated noise, unsightly scaffolding and loss of prominence for several months to a tenant’s art gallery operating from the ground and basement floors.
The court ultimately awarded the tenant a 20 per cent rent reduction for loss of use and enjoyment during the period of the works, after taking into account the communication between the parties, the nature of the tenant’s business, whether the tenant stood to benefit from the works, the absence of an offer by the landlord to compensate the tenant, the level of detriment to the tenant and the lack of consideration by the landlord to minimise disruption.
Exercising your rights as a landlord
The case is useful in identifying various issues landlords should consider before exercising their right to carry out works to commercial premises that are occupied.
Landlords should give thought to alternative means of carrying out the works that would reduce the level of interference and minimise any infringement of the tenant’s right to quiet enjoyment.
A programme of works and clear details of the timings should also be provided to the tenant, with ample notice given.
It is vital for landlords to act reasonably when exercising their right to carry out works, as courts may award the tenant damages if a dispute arises and such reasonableness cannot be evidenced.
If there is a lack of engagement by the landlord – such as no attempt to implement a scheme of works that reduces interference or no compromise solution offered – there will be a greater risk of a dispute escalating.
Landlords are advised to work with the tenant from the outset and show that the tenant’s needs have been considered. By acting reasonably, landlords have a stronger chance of avoiding costly litigation.
Daniel Long is a Partner and head of commercial property dispute resolution at WHN. To find out more about the rights and remedies available to landlords and tenants in these circumstances, or any other commercial property matter, call Daniel Long on 0161 761 4611 or email firstname.lastname@example.org