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Issues with Landlord consenting to tenant’s proposed alterations

It is common to find in Lease Agreements, restrictions on what a tenant can and cannot do with regards to altering the property. Generally, landlords will at the very least include a clause requiring the tenant to notify the Landlord and seek written consent prior to starting any works.

In some instances, a Lease may include an absolute prohibition. This was the case in Duval v 11-13 Randolph Crescent Ltd [2018] whereby the Lease contained an absolute prohibition on any alterations to the property. Not only was this absolute prohibition intended to protect the interests of the Landlord but also those of neighbouring tenants. However, despite the lease containing absolute prohibition, a landlord had granted permission to a tenant to carry out works, which arguably breached the landlord’s covenants contained in a different lease granted to a neighbouring tenant.

The issue came to a head when the neighbouring tenant sought to enforce the absolute prohibition via the rights (enforcement covenants) conferred under the lease agreement granted to them. In exercising this right, the neighbouring tenant endeavoured to compel the landlord to enforce the tenant’s covenants of absolute prohibition so that the restriction on carrying out any works to the property would continue and prevent from the consented works from being carried out. This now caused a dilemma for the landlord, as it meant the landlord will either be in breach of the consent to the works already provided by refusing the works to proceed, or if the landlord allowed works to proceed, then the landlord will be in breach of  the enforcement covenant contained in the neighbouring tenant’s lease.

In conclusion of this case, the courts held in favour of the neighbouring tenant highlighting the fact that the landlord was under an obligation to comply with the lease covenants (enforcements covenants), and by providing consent to carry out works, the landlord through the default of their own,  had placed themselves in a difficult position to enforce the covenants.  In light of this, the landlord was not able to ignore the absolute prohibition, and therefore had made an error in providing their consent to works. In that respect, landlords should be weary of breaching covenants in the lease especially where the lease allows third parties (e.g. other tenants) to remedy the breach.

It is important to note that buildings with multiple flats will almost always have a uniformed version of a lease for all the flats, as this provides certainty and consistency in the way the building functions as a whole. In addition, as the rights and reservations will be the same throughout the flats, it will enable tenants to enforce breaches by other tenants within the building. Therefore, it is important for Landlord’s to carefully review the lease agreements before consenting to works or any other requests made by  tenants.

Written by Maqadas Ali

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