Baillie v Savage [2018] EWHC 3035 (Ch) concerned the lease of a house and garden in Kent. The tenancy agreement was for two years and there was no break clause. Mr Savage paid all of the rent (approximately £34,000) in advance and, after moving in, contacted the letting agent to draw attention to the fact that a retaining front wall at the property was bulging. No action was taken and, four months later, part of one of the garden walls collapsed onto the path in front of it, causing damage to the pipe supplying the heating system.
Mr Savage contacted the letting agents again. He explained that cracks had appeared in the walls of the property and were continuing to grow, that the kitchen floor was bulging and that the remainder of the surviving wall was bulging and leaning. He stressed the urgency of the situation and the potential risks to which he and his partner were being exposed.
Mr Savage had to chase the letting agents a couple of months later and, when no action was taken, he instructed his own structural engineer to report on the condition of the property. The engineer concluded that there was a serious problem and a high risk of a further landslip and wall failures. Consequently, he did not consider the property to be a safe, habitable dwelling.
The parties’ lease contained a clause that provided that “the rent or a fair proportion of the rent shall be suspended if the premises or any part thereof shall, at any time during the tenancy, be destroyed or damaged by any risk insured by the landlord so as to be unfit for occupation and use … until the premises shall again be rendered fit for habitation and use”. And the landlord had insured against the relevant risk in this case.
So there were just two questions to answer. First, had part of the premises been destroyed or damaged by an insured risk during the tenancy? Since part of the garden wall collapsed, and the landlord had insured against the relevant risk, this requirement was satisfied. Secondly, did the destruction or damage render the premises unfit for occupation and use? The judge ruled that this requirement had also been satisfied.
Summers v Salford Corp (1943) AC 283 was authority for the proposition that “if the state of repair of a house is such that by the ordinary user damage may naturally be caused to the occupier, either in respect of personal injury to life or limb or injury to health, then the house is not in all respects reasonably fit for human habitation”. In that case, the fact that one sash-cord had broken meant that there was a strong probability that its fellow cord would also break (especially as it was being subjected to extra strain). And that would expose anyone handling the window to danger, which prevented the room from being reasonably fit for occupation.
In this case, there was a real risk of further damage of a similar nature, which would be potentially dangerous to the occupants of the premises. An alternative interpretation of the clause, which would require the tenant to continue to pay rent whilst the property was at risk of landslip, was not commercially sensible.
Allyson Colby, property law consultant
