Timothy Taylor Ltd v Mayfair House Corporation [2016] EWHC 1075 (Ch); [2016] PLSCS 136 raised, in acute form, the conflict between a tenant’s rights to use and enjoy premises that form part of a building and a landlord’s right to make alterations to areas that are not let to its tenant.
The tenant’s premises, situated on the ground floor and basement of a building in London, were used as a high class, modern art gallery. The landlord was refurbishing the upper floors, causing the tenant to complain about the noise of the work, which had, on occasions, forced the gallery to close, and about the use of scaffolding, which was wrapped around the building, suggesting that the gallery formed part of the building site. To make matters worse, entrances to the premises and the tenant’s signage on the hoarding around the scaffolding were often blocked by contractors, or construction vehicles delivering materials to the site.
The tenant accepted that the landlord had excepted and reserved rights to alter the building when it granted the lease, and that it was entitled to undertake the work. But it complained that the landlord had not done enough to minimise the disturbance caused.
The judge ruled that landlords’ rights to carry out work must coexist with their tenants’ rights to use and occupy their premises without being disturbed by their landlord. Consequently, landlords must take all reasonable steps to avoid interfering with their tenants’ use and enjoyment of their premises. Neither obligation takes priority over the other; they must be made to fit together.
Was the landlord exercising its right to build unreasonably? The judge decided that it was, even though the landlord’s rights had been expressed in wide and untrammelled terms. One of the factors that the court is entitled to take into account when considering the reasonableness of a landlord’s actions is whether it is undertaking the work because its building is in need of repair. In this case, the landlord was redeveloping the building to make a profit from new lettings. Furthermore, although it had warned the tenant before granting the lease that it might carry out work, it had not explained that the alterations would be so extensive that the tenant would suffer such considerable disturbance, or liaised properly with the tenant, both before and during the work. Indeed, it had not even told the tenant when the work would finish.
The premises had been let for use as a high class art gallery, for a very substantial rent. The landlord had not liaised sufficiently with the tenant about how to mitigate the effect of the noise and had not offered to compensate the tenant for the disturbance caused. Furthermore, its contractors had designed and erected the scaffolding with little or no regard for the tenant, even though this could have been done much more sympathetically.
Consequently, the landlord was in breach of its covenant for quiet enjoyment and had also derogated from its grant. The court ordered the landlord to reduce the tenant’s rent by 20% for the period while the work was being carried out and invited the tenant to apply for an injunction, should the disturbance get worse.
Allyson Colby is a property law consultant
