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25th April 2012

Beware of waiving lease obligations

In a recent case, Faidi and another v Elliot Corporation, the Court of Appeal considered whether a landlord had waived a tenant's obligation to lay carpets when it granted a licence to alter.

The Defendant was the tenant of a flat in an apartment block and the Claimants were the tenants of the flat below. The Defendant’s lease required it to keep some of the flat’s floors carpeted. However, the landlord had granted the Defendant a licence to carry out alterations, including to lay an oak floor and underfloor heating. The Claimants complained about the noise and sought an injunction requiring the Defendant to comply with its obligation to keep the floor carpeted.

The Court of Appeal held that the landlord had waived the obligation to keep the floors carpeted. It found that the carpeting requirement was incompatible with the permitted works. Although the licence provided that the existing lease obligations would continue to apply, this general provision could not prevail over the specific effect of the licence.

When a landlord grants a licence to its tenant it should consider whether, by doing so, it is releasing the tenant from any obligations under the lease. Some leases may require the landlord not to waive or modify another tenant’s obligations. A landlord who alters one tenant’s obligations could therefore inadvertently be in breach of another lease.

The Court also emphasised the "very great desirability" of attempting to resolve neighbour disputes without resorting to the Courts. Negotiations or mediation to explore a compromise in the form of a practical solution, for example, in this case, partial carpeting, could help to resolve the matter without Court proceedings.

For more information or advice on these issues, please contact Eleanor Rutherford on 01604 233233 or on eleanorrutherford@hewitsons.com

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