Most leases include obligations designed to preserve the character and visual appearance of leasehold properties. Tenants may be prohibited from altering the structure and exterior of the premises, or from erecting signage without the landlord’s permission, and may be under general obligations to remove refuse and rubbish and to keep any open land or spaces clean and in good order.
However, tenants may be just as interested in the landscape, streetscapes and general appearance of the environment around them. The Court of Appeal’s decision in Innerspaces Self Storage Ltd v Harding [2014] EWCA Civ 46; [2014] PLSCS 36 provides us with useful guidance on the scope and effect of a landlord’s covenants in such circumstances.
The tenant had taken an assignment of the lease of industrial premises for its self-storage business. Its complaint concerned a pile of rubble near the main entrance to the estate, which had been sitting there for nearly four years following the demolition of an empty property that had fallen into disrepair. The landlord intended to use the rubble as hardcore for the base of a new building, but had been unable to secure planning permission for its proposals. It erected a hoarding around the rubble in an attempt to screen it from public view, but the tenant complained that the rubble remained an eyesore and was deterring potential customers.
In due course, the tenant issued proceedings for damages on the grounds that the landlord was in breach of its covenant for quiet enjoyment or had derogated from its grant. It also claimed that the landlord had failed to comply with its covenants to administer and manage the estate in general, and to keep the common parts tidy, planted, tended and landscaped, where appropriate.
The trial judge accepted that the pile of rubble might not impress the tenant’s customers, but decided that it had not materially interfered with the tenant’s business. He reminded the tenant that the rubble was not within the common parts of the estate and dismissed the claim. The tenant accepted most of the judge’s conclusions, but asked the Court of Appeal to consider whether the landlord was in breach of its covenant to administer and manage the estate in a proper and efficient and economic manner in accordance with the principles of good estate management.
The Court of Appeal accepted that the phrase “administering and managing the Estate” was not limited merely to the discharge of office functions and that it could, in appropriate circumstances, encompass obligations to carry out work or restrain unsuitable activities or prevent a nuisance on other parts of the estate. However, in the absence of a sufficiently certain standard, or set of criteria by which the appearance of the estate could be judged, it was impossible to interpret the phrase as encompassing a general obligation to maintain or improve its appearance. The fact that the landlord had entered into specific covenants to keep the common parts tidy, planted, tended and landscaped reinforced the court’s reluctance to add to the landlord’s burdens by interpreting the phrase more widely.
Allyson Colby is a property law consultant
