How does the quiet enjoyment covenant affect a landlord’s right to build?
If you need to undertake work to your property, you may want to ensure you seek legal advice beforehand. As a landlord, you may want to carry out works to parts of the building, however you might find that Tenants complains that the disturbance is a breach of Tenant’s entitlement to ‘quiet enjoyment’.
To what extent can Landlords simply avoid this problem by wording the lease accordingly (so that works carried out by a Landlord are not deemed to be a breach of quiet enjoyment)? A recent case shows it is not as easy as that. The tenant had a high-end art gallery in the basement and ground floor of a Mayfair building. The Landlords started substantial works to the rest of the building, which resulted in high levels of noise and a scaffolding design that engulfed the whole building (meaning the gallery was virtually invisible). However, the Landlord had inserted a clause in the lease giving him the right to alter or rebuild the building even if the gallery (and its use or enjoyment) was materially affected. Despite that, the Tenant argued that the building works were substantial interference with the use and enjoyment.
The court agreed and awarded damages of 20% of the rent payable – despite the fact that the Tenant had not suffered a loss of profit (and, indeed, had actually increased sales during that time!).
The court agreed and awarded damages of 20% of the rent payable – despite the fact that the Tenant had not suffered a loss of profit (and, indeed, had actually increased sales during that time!). Having said that, it does seem that this Landlord was relatively inconsiderate and could have taken more care to accommodate the Tenant’s concerns. The court therefore highlighted practical points which Landlords should consider to avoid such claims:
- The Tenant should be informed of works beforehand, the Landlord should engage with the Tenant early, preferably prior to the tender stage, and discuss arrangements to minimise disturbance (including the design of scaffolding and plans for noisy works).
- Scaffolding should not obstruct access to Tenant’s premises, and should maintain the appearance of the Tenant’s façade as far as possible. In particular, Landlords should consider the use of pillars or towers to avoid obstructions.
- Care should be taken to ensure that deliveries of building materials do not obstruct access.
- Consider limiting the hours for noisy works (and give the Tenant notice).
- Keep the Tenant regularly informed about likely timescales, and have regular meetings. Landlords cannot simply delegate responsibility to a reputable builder.Consider a rent concession (especially if problems arise).
Sean Callaghan – [email protected]