Covenants for quiet enjoyment in a lease will not prevent a landlord from carrying out its public duties in the public interest
Some freehold properties, which were formerly leasehold, but have been enfranchised, are subject to schemes created under the Leasehold Reform Act 1967 or the Leasehold Reform, Housing and Urban Development Act 1993, which enable the estate owner to retain some management control over the enfranchised properties, the amenities and common areas. This usually means that the proprietors of enfranchised properties within the scheme will have to obtain both planning permission and estate management consent before altering their properties.
Shebelle Enterprises Ltd v Hampstead Garden Suburb Trust Ltd [2013] EWHC 948 (Ch) concerned a proposal to build a substantial basement extension containing a swimming pool in the garden of a property situated at the top of a hill in Hampstead. The tenants of a leasehold house at the foot of the hill were concerned that this would affect the structural integrity of their property and could cause flooding.
The parties debated the issue inconclusively until the tenants sought an injunction to prevent the Trust from permitting the alterations, in reliance on the covenants for quiet enjoyment in their lease. The Trust reminded the tenants that they had a cause of action against their neighbours for any nuisance caused by the works. It claimed that its ability to withhold consent for the work was restricted under the scheme to reasons associated with visual amenity. Alternatively, the tenants were not entitled to prevent it from carrying out its duties in accordance with the public interest.
The judge understood the tenants’ concerns, but refused an injunction. He was not convinced that the scope of the scheme was as narrow as was claimed. The Trust need not, on principle, confine its attention to issues relating solely to the use, appearance and maintenance of the property that had been enfranchised. It could also consider the effect of the proposed work on neighbouring properties and on the character and amenities of other parts of the scheme (but could also legitimately decide to let the planning authority deal with some or all of these issues, where appropriate).
However, the Trust was acting as a custodian of the public interest in preserving the amenities of the estate. The judge drew a parallel with cases where the courts have refused to allow the rule that a grantor must not derogate from his grant to prevent public bodies from exercising their statutory powers in the public interest (even though the decisions were not on all fours with this case and the public interest here was of a local nature).
Alternatively, the Trust was acting under statutory authority, since the estate management scheme was made under the Leasehold Reform Act 1967 and approved by the court.
The tenants protested that the lease was granted before the statute was enacted, when the only forms of control that the parties would have envisaged were those imposed as a matter of private law. The judge was unimpressed. Parties to leases must be taken to intend that covenants for quiet enjoyment will not prevent an original landlord, or any future landlord in whom the reversion might subsequently become vested, from carrying out their public duties in the public interest.
Allyson Colby is a property law consultant
