Landlord Liable For Unreasonably Executed Works

A landlord has had to compensate a tenant for unreasonably carrying out works to a building.

The tenant paid £530,000 a year rent for the ground and basement floors of a building in Mayfair which it operated as a 'high end' art gallery. The lease contained a quiet enjoyment covenant to "...permit the Tenant peaceably and quietly to hold and enjoy the Premises without any interruption or disturbance from or by the Landlord."

In 2013 the Landlord started the conversion of the upper floors of the building into residential apartments. The tenant complained of unreasonable noise levels which caused the gallery to close on some occasions. The scaffolding also enveloped the building making it appear that the business was not trading.

The High Court held that the Landlord had the right to carry out the conversion works but could not do so in breach of the covenant of quiet enjoyment. The Court took into account:-

1. The tenant was not fully informed about the works or their extent;

2. The landlord had refused to discuss compensation with the tenant;

3. The works gave no benefit to the tenant;

4. The landlord had a duty to carry out the works with as little disturbance to the tenant as was possible;

5. The scaffold design paid no regard to the tenant's business and was wholly unreasonable; and

6. The landlord had not made any attempt to liaise with the tenant as to how the works could be carried out.

The Court held that an injunction to restrain the landlord's activities was inappropriate in the circumstances and restricting the noise to particular times or to particular noise levels was problematic in the circumstances. It therefore ordered the landlord to refund 20% of the rent from the date of judgement to the date of completion of the works.

"Whilst this case related to premises in Mayfair with a substantial rent, the principles are equally applicable to all leased premises" says partner and head of the commercial department, Gillian Jones. "Parties entering into such leasehold arrangements must consider such circumstances and make sure provision is made in the lease in advance."

For more information on leasing, or acquiring a lease, of commercial premises contact Gillian Jones.


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