Most leases impose repairing obligations on tenants and require them to remove any alterations and reinstate their premises before their leases end. Obligations to reinstate do not always apply automatically. Some may be triggered by notice from the landlord and, if the parties have not specified the form that such notice must take, no particular form of notice will be required. In such cases, the landlord need only inform the tenant of its requirements in terms that a reasonable tenant would understand: Westminster City Council v HSBC Bank plc [2003] EWHC 393 (TCC); [2003] 1 EGLR 62.
In the Scottish case of L Batley Pet Products Ltd v North Lanarkshire Council [2014] UKSC 27; [2014] PLSCS 140, the Supreme Court considered two important questions that might also be asked in England and Wales. The council had taken a lease of premises, which had come to an end. The lease contained a comprehensive repairing covenant, which required the council to repair, maintain, and where necessary renew, rebuild and reinstate the premises, and to keep them in a good and tenantable condition. The lease also required the council to comply with any written notices identifying any failure to comply with its repairing obligations, and a boilerplate provision, which stated that any notices, requests, demands and consents must be in writing.
Shortly after the grant of the lease, the landlord gave the council permission to alter the premises, on condition that, “if so required” by the landlord, the council would reinstate the premises before the end of the term. The parties agreed that the obligations assumed by the tenant in relation to the alterations should be treated as if they were imposed by the lease so that the landlord could forfeit the lease if the tenant failed to comply.
The landlord claimed that it had had to spend over £253,000 on repairs and reinstatement after the end of the term, even though its surveyor had spoken to the council and informed it that the landlord wanted the council to restore the premises to their original condition before the lease ended. The council rejected the claim on the ground that, in the absence of any written notice from the landlord, it had not been obliged to do anything at all.
The Supreme Court ruled that the tenant was trying to impose a hurdle that was not there. An obligation to keep premises in repair encompasses an obligation to put them into repair and, unless the lease states otherwise, is a continuing obligation that does not need to be activated by a notice from the landlord: Credit Suisse v Beegas Nominees Ltd [1994] 1 EGLR 76.
The question of whether the landlord should have served a written notice requiring the council to reinstate the premises before the lease ended was less easy to answer. The agreement that licensed the alterations was a separate contract. It did not vary or amend the lease and the court must interpret the words that it contained. The parties had expressly stated when written communications were required and, in relation to reinstatement, it appeared that more informal communications were allowed. A requirement for writing would have provided more certainty. However, the parties had opted for less formality and no written notice was required.
