The decision provides helpful guidance on how the courts will balance a landlord’s obligation or right to carry out repairs with the tenant’s right to quiet enjoyment.
Key takeaways
· Tenants have an express or otherwise implied right to quiet enjoyment, to use their premises without interference from the landlord or its agents.
· Repairs carried out by landlords under repairing obligations (or improvements under express rights) can interfere with the tenant’s right to quiet enjoyment.
· The courts have consistently held that the landlord’s obligations and rights to carry out works, and the tenant’s entitlement to quiet enjoyment, must be made to fit together. Neither trumps the other.
· Landlords can therefore carry out works, but only if they act reasonably when exercising their rights.
· What is reasonable will depend on the facts of the particular case.
· In MSA Properties v The Drapery, the court considered that the landlord would act reasonably by replacing floor joists between two floors, despite significant disruption to the tenant who was ordered to give up possession of its flats for six weeks to enable the landlord to carry out the works from above.
Repairing obligations
Although the wording of the particular lease must always be checked, it is very common for leases of multi-let buildings to provide that the landlord retains responsibility for repairing the structural elements of the property (the foundations, roof, external walls, floor joists etc), leaving the tenants responsible for keeping the inside of their particular premises in repair.
What is quiet enjoyment?
Leases typically contain a clause confirming that the tenant has the right to occupy and use the premises they have let without interference or interruption from the landlord or anyone claiming under them (such as employees, agents or other third parties). This is commonly called the “right to quiet enjoyment”.
In fact, the right to quiet enjoyment would be implied into the agreement between the landlord and tenant even if there was no express clause in the lease.
Repairing obligations v quiet enjoyment
It will be immediately apparent that there may be occasions where a landlord may want or need to carry out works to parts of the building that it is responsible for, which might interfere with the tenant’s
entitlement to quiet enjoyment.
Where the landlord and tenant cannot reach agreement, one of them might ask for the court’s assistance.
The landlord might, for example, seek an order for specific performance and an injunction compelling the tenant to give access so that the repair works can be carried out.
The tenant, on the other hand, might seek an order preventing the landlord from carrying out its proposed works. Where those works have already been completed, the tenant might claim compensation for trespass, nuisance, derogation from the rights granted by the lease and/or breach of its right to quiet enjoyment.
Whilst on the face of it the two covenants might seem to be in conflict, the courts have repeatedly stated that they are not inconsistent and must be read alongside each other.
There is a long line of cases in which the courts have sought to reconcile the landlord’s covenant to repair and the tenant’s covenant for quiet enjoyment. The conclusion these cases have reached is that the landlord is entitled to carry out the work, but must act reasonably in the exercise of its contractual rights. The key test is therefore one of
reasonableness.
For example, in one case, the landlord had to carry out repairs to the external walls which required scaffolding and sheeting to be fixed to the outside of the building. As a consequence, the tenant’s restaurant business was seriously disrupted. The Court of Appeal found that the landlord was not required to take “all possible” precautions to prevent disturbance; it was only required to take “all reasonable” steps, which it had done, including having postponed the start date for the works until after the restaurant’s busiest Christmas period and agreeing to spread the service charge over a year.
However, in another case, the landlord had reserved the right to construct new apartments in the upper floors of a building in Mayfair, but the court found that it had not taken reasonable steps to minimise disturbance to the tenant of the art gallery underneath, in breach of the quiet enjoyment covenant. An earlier plan suggested that scaffolding would be erected so that the gallery would be seen to remain open, but the whole building was eventually encased which gave the impression that it had closed. A hoist was placed right outside the door of the gallery, and there had been no real liaison with the tenant about the duration of the works, noise levels, mitigation or rent reduction.
What was the situation in MSA Properties v The Drapery?
MSA (Landlord) owned the freehold of a property in Northampton.
There were two commercial units on the ground floor, as well as a loading bay and bin store.
The first to fourth floors contained 25 residential flats, held by The Drapery (Tenant) on a 999-year lease.
In 2022, part of the ceiling of the loading bay underneath two of the first-floor flats, collapsed. Evidence of historic water leaks were discovered and investigations revealed that a number of the structural joists that supported the first floor were rotten.
The Landlord sought an order enabling it to replace the joists to comply with its repairing obligations under the lease. It said that the works could only be undertaken from above, which would require removing the bathrooms and floor finishes of the two flats, and partition walls. It estimated that the works would take 10 weeks, during which time the flats would need to be vacated.
The Tenant, on the other hand, said that the defective joists could be repaired and did not require replacement, but that the works could in any case be undertaken from below without needing access to its flats and without interfering with its right to quiet enjoyment. It went further, arguing that it could only be required to vacate its flats if the Landlord’s chosen method for carrying out the repairs was the only possible method available, which it said was not the case here.
What did the court decide?
The court rejected the argument that a landlord could never reasonably select a method of repair which involves the tenant vacating unless this was the sole possible method of repair. That was an inflexible rule, particularly in the context of very long leases. It would unduly restrict the landlord’s ability to carry out effective repairs. The landlord would, in effect, be confined to carrying out piecemeal patch-repairs, rather than effecting more comprehensive solutions.
This argument was also inconsistent with the case law, which established that the reconciliation of the covenant to repair and the covenant for quiet enjoyment is a fact-sensitive exercise, in which neither trumps the other. The terms of the lease are important, and other relevant considerations include the extent of the disrepair; the effect, risks and advantages associated with the various methods of repair; and their impact on the tenant’s interest.
However, the Judge acknowledged that a method of repair that requires the tenant to give up possession for a period of time, does constitute a significant interference with the tenant’s interest and requires weighty justification.
In this case, the Judge was satisfied that the terms of the lease contemplated the undertaking of substantial works. The original parties to the lease must have envisaged that works affecting the tenant’s occupation might need to be carried out. The landlord’s contractual right to enter to carry out repairs was, however, expressly qualified by the requirement to cause as little damage and disturbance as was reasonably practicable in the circumstances.
In light of the expert evidence, the Judge considered that, on the balance of probabilities, localised repairs would not be sufficient and that it was necessary to replace six of the seven rotten joists.
The Judge also preferred the Landlord’s expert’s evidence that the replacement of the joists had to be undertaken from the flats above in order that the works could be carried out safely and in accordance with the principles of risk-avoidance in the Construction Design & Management Regulations 2015. Undertaking the works from below would give rise to materially greater risks, not only to the occupants of the flats but also to workers and other users of the building.
The Landlord had acted on the basis of considered professional advice, where there were a number of factors to weigh-up as to its choice of method such as the safety of the occupiers, builders and impact on the Tenant.
All in all, and having regard to the extensive rights in the lease, the Landlord’s decision to replace the joists and to undertake the works from above was found to not only be a reasonable means of discharging its repairing obligations, notwithstanding the significant disruption to the Tenant, but also reasonably necessary.
The Judge considered that, even if the decision on whether to do the works from above or below had been more finely balance, given the potentially significant risks to occupiers, workers and others using
the building, it would have been open to the Landlord, acting on appropriate professional advice, to adopt the method it reasonably considered best managed those risks even though the intrusion on the Tenant’s right to quiet enjoyment may have been more significant.
The Judge did not, however, consider that the 10-week period of exclusive possession sought by the Landlord satisfied its contractual obligation to cause as little damage and disturbance as was reasonably practicable.
A period of six-weeks was allowed instead, which would allow the Landlord sufficient time to carry out the necessary repair works whilst minimising disruption to the Tenant.
Our comments
It is not particularly common for landlords to secure orders requiring tenants to vacate to enable works to be carried out. It is arguably rarer still where residential occupiers are forced to decant.
However, this case shows that, whilst the threshold for ordering the temporary handing over of possession is high, the courts will make appropriate orders where circumstances justify the interference with
the tenant’s right to quiet enjoyment.
The key is that the landlord must not only act, but must demonstrate to the court’s satisfaction that it has and will continue to act, reasonably in the exercise of its rights.
The assessment of reasonableness will always be fact sensitive.
There are, however, various measures the landlord might consider taking to improve its prospects, such as: acting on appropriate professional advice; communicating early and clearly with the tenant; taking account of any particular timing or other concerns the tenant may have; putting measures in place to minimise disturbance to the tenant (for example, in terms of scaffolding design, positioning of cranes and skips, hours of work, start date, mitigating noise and vibration, scheduling and duration of the works); and possibly offering a rent or service charge reduction or other compensation.
The standard of reasonableness required may be higher when landlords carry out works of improvement for their sole benefit, than when carrying out necessary repairs.
We are likely to see an increasing number of these types of cases in the coming years as older buildings require more intrusive structural repairs, as more issues with mid-20th century construction methods are discovered, and as problems with more modern blocks of flats are identified given the sharper focus that the Grenfell Tower tragedy has brought.
Whether you are a landlord or developer looking to carry out structural works, or a tenant faced with the potential disturbance that such works might bring, obtaining early advice is essential.
