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26th May 2020

Landlords be careful when granting consents!

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The Supreme Court recently decided in Duval v 11-13 Randolph Crescent Ltd that a tenant in a residential building intending to carry out works in breach of a covenant in its lease required the approval of the other tenants in order to carry out the works. The landlord was not entitled to provide approval to the works as the landlord owed an obligation to the other tenants of the building to enforce the restriction on carrying out works.

In the case, the tenant’s lease contained an absolute prohibition covenant which prevented the tenant from carrying out structural works. In addition, the lease required the tenant to obtain written consent of the landlord, being the freehold owner and management company of the building, in order to otherwise alter or improve the property it rented.

The tenant wanted to carry out works that would remove part of a wall in the basement, which would contravene the absolute prohibition in the lease not to carry out structural works. The tenant therefore asked the landlord for consent to carry out the works. The tenant’s initial request for consent was refused after a neighbouring tenant objected. The tenant made a further application for consent and the landlord then agreed to give consent.

Following the landlord’s grant of consent, the neighbouring tenant issued a claim against the landlord on the basis that the landlord was not entitled to permit the tenant to make such alterations in contravention of the terms of the lease and that the landlord was obliged by the landlord’s covenants in the other leases of the building to enforce the absolute prohibition on the carrying out of structural works.

The Court examined the tenant’s lease which was on similar terms to that of the other tenants in the building. The lease did not explicitly prevent a landlord from being able to grant consent for a tenant to carry out works affecting the structure, but the Court found that this term was implied into the lease. Therefore, the Court confirmed that the landlord did not have power to waive a tenant’s obligations in the lease without the prior consent of all of the tenants of the building.

The Court was clear that the proposed works were not routine repairs or renovations but were works which could have damaged the building and which fell outside of the scope of the tenant’s demise. This judgment was given as the landlord was required by the other leases in the building to enforce the absolute prohibition on structural works. The landlord could not simultaneously enforce this prohibition and give consent to such works.

This case serves as a reminder that care must be taken when deciding whether to grant consent to carry out works which are prohibited by a tenant’s lease. The landlord must consider its obligations to the other tenants and whether such works could have a detrimental impact on any part of the building falling outside of the requesting tenant’s demise.

For more information on the items raised in this article please contact Ceri Riddell on 01223 532753 or click here to email Ceri.