Following a recent decision in the Court of Appeal, landlords of blocks of flats should take extra care when considering an application for alterations. The case shows that landlords can be in breach of the lease if they give consent for alterations which would otherwise be in breach of the tenant’s obligation not to make structural alterations.
The Facts
The case in question was Duval v 11-13 Randolph Crescent Ltd and it was concerned with a block of flats in Maida Vale, each held on long leases. In 2015, one of the tenants applied for an application to carry out works. The lease contained a prohibition on certain types of alterations in the following form:
“Not to commit or permit or suffer any waste spoil or destruction in or upon the Demised Premises nor cut maim or injure or suffer to be cut maimed or injured any roof wall or ceiling within or enclosing the Demised Premises or any sewers drains pipes radiators ventilators wires and cables therein…”
There was no reference in the covenant to “without landlord’s consent”. This is known as an “absolute covenant”, which means that it does not contemplate that consent will being given and the landlord cannot be compelled to give consent. In other words, consents can be withheld and the question of reasonableness does not come into it.
The type of works proposed by the tenant in this case would have undoubtedly breached the absolute prohibition. Nevertheless, the landlord was prepared to overlook this and give consent. This prompted an objection from one of the other tenants, Dr Duval.
The basis of Dr Duval’s objection was that the works amounted to a breach of the lease and the landlord was obligated to take enforcement action, if called upon to do so by the other tenants. This obligation to enforce appeared in all leases on the following terms:
“That every lease of a residential unit in the Building hereafter granted by the Landlord shall contain … covenants of a similar nature to those contained in Clauses 2 and 3 of this Lease AND at the request of the Tenant and subject to payment by the Tenant of (and provision beforehand of security for) the costs of the Landlord on a complete indemnity basis to enforce any covenants entered into with the Landlord by a tenant of any residential unit in the Building of a similar nature to those contained in clause 2 of this Lease”
Clauses of this nature are common in block management schemes. They provide a way for tenants to take action against their neighbours in circumstances where the landlord has neglected to do so. This would not otherwise be possible because usually only the landlord can enforce the tenant’s covenants in a lease.
The landlord said that it was free to do as it pleased with its own property.
Therefore, the question before the Court was whether the landlord was able to consent to works which were absolutely prohibited by the lease.
The Decision
The Court found in favour of Dr Duval. It said that sanctioning the breach would put the landlord out of its power to enforce compliance, if requested by another tenant. As the Court put it “it would not give practical or commercial content to the obligation [i.e. to enforce] if the landlord had carte blanche to vary or modify the covenants; or to authorise what would otherwise be a breach of them”.
Comment
This case will be of particular interest to leaseholders in circumstances where they feel that the works proposed by another resident are in breach of the lease. It also provides a degree of certainty on their ability to compel the landlord to prevent the works from going ahead – depending on the wording of the lease of course.
Equally, landlords of block management properties will need to be aware of this case when faced with applications for consent for alterations. Although many landlords will be familiar with the objections when consent is refused, it now seems that they could face similar strength of opposition when consent is granted. If nothing else, it underlines the importance of treating all such applications seriously and obtaining advice from a specialist.
If you have any questions about the issues mentioned above, please do not hesitate to contact the property litigation team in our Redhill office.