Landlords should remember the importance of quiet enjoyment28 Jul 2016
Redeveloping a building with a tenant in situ may seem like an attractive prospect for a landlord, who can utilise the rental income to pay for the redevelopment work. However, a recent case involving a high-class modern art gallery in Mayfair provides important clarification, as well as a reminder to landlords of the importance of a sitting tenant’s right to quiet enjoyment and the possible pitfalls of redeveloping a tenanted building.
In the case of Timothy Taylor v Mayfair House Corporation and another (2016), the tenant (Timothy Taylor Ltd) had a lease of a ground floor and basement unit for use as an art gallery. Since 2013, the landlord had been carrying out redevelopment work to virtually rebuild the interior of the building from the first floor upwards. In carrying out the work, the landlord erected scaffolding around the entire exterior of the building, which obstructed the façade of the gallery, and placed a hoist above the gallery’s front door for the purpose of unloading construction materials from delivery vehicles. The work that was carried out was incredibly noisy.
The tenant complained that the works were being carried out in a manner that breached its right to quiet enjoyment and requested historical damages, alongside an injunction against future works. However, as well as the lease granting the tenant’s rights, it also reserved the right for the landlord to carry out redevelopment work.
The court’s task was to balance the respective rights of the tenant and the landlord. Ultimately though, the court was in favour of the tenant, finding the design of the scaffolding and the landlord’s failure to communicate effectively regarding the noise levels, was a breach of the landlord’s covenants. The tenant was awarded damages in respect of the works but the court stopped short of awarding an injunction, as this was deemed impractical and the works were due to finish shortly after.
Points to note
There are a number of things that landlords should consider when carrying out the redevelopment of a tenanted property:
• Take into account the nature of the tenant’s business, as some may be more sensitive to disruption than others.
• Communicate to tenants as early as possible about proposed works, in order to fulfil their obligations to the tenant.
• Make sure any construction contracts contain appropriate controls to limit any disturbance to the tenant.
• Update the tenant regularly on the progress of any works and warn of any delays.
• In certain cases it may be worth considering offering a rental discount in order to maintain a good landlord/tenant relationship.
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