If, as a matter of construction of a lease, a landlord is obliged to repair an addition to a building, does it make any difference that the addition may have been erected in breach of covenant?
In Christopher Moran Holdings Ltd v Carrara-Cagni [2016] UKUT 152 (LC); [2016] PLSCS 102 the First Tier Tribunal decided that a flat owner was not liable to contribute to the cost of repairing conservatories that formed part of the penthouse flat at the top of a building. The tribunal took the view that the conservatories had been added in breach of covenant. It could not have been the intention of the parties to the underleases of the individual flats that flat owners would have to contribute to the cost of repairing and maintaining unlawful additions to the building. Therefore, the landlord was not entitled to recover more than would have been required to repair the original structure, had the conservatories not been built.
The Upper Tribunal has overturned the decision. Neither party was able to produce any documentation proving the lawfulness or unlawfulness of the extensions, which were built before the parties appeared on the scene, and the judge was not convinced that the conservatories had been constructed in breach of covenant simply because there was no evidence of consent having been granted. It was not possible to say with any confidence that the conservatories were created in breach of the covenants in the head lease, or by a previous owner of the penthouse in breach of the covenants in his own lease.
Furthermore, the head lease required the landlord to repair all the structures erected on the demised premises at any time and the leases of the flats included a covenant that the landlord would comply with all its obligations in the head lease in so far as they affected the building (unless they were to be performed by individual flat owners themselves). Repairing covenants apply to subsequent alterations and additions to a building, unless the language used in a lease contradicts this general proposition: Rose v Spicer [1911] 234. Therefore, the landlord was obliged to repair and replace the conservatories, unless the circumstances in which they had been erected made a difference.
The words used by the parties made no distinction between lawful and unlawful additions to the building. If the First Tier Tribunal were correct, the head landlord would be liable to repair part of the main structure at no cost to its undertenants. Alternatively, liability would fall on the penthouse owner. In either case the identities of those responsible for carrying out and paying for the work would not be apparent from the lease, but would depend instead on circumstances that might not be known to those acquiring interests in the building in the future.
This would be contrary to common sense. There was no reason for the historic lawfulness of the addition to the building to make any difference to the analysis of the continuing rights and obligations of the parties and it would be wrong to rewrite the clear and practical language of the flat owners’ leases.
Allyson Colby is a property law consultant
