Advice for Landlords looking to carry out works in a building where there are already tenants occupying parts of the premises.August 15, 2016
A Landlord looking to undertake works, whether of repair or redevelopment, to a building which is let should first check the terms of any relevant occupational leases to ensure that they reserve all rights required by the landlord to do the works being proposed. If sufficient rights are not reserved the landlord will not be entitled to undertake the works and there will be no need to consider the implications of the Tenant’s benefit of the Landlord’s covenant for quiet enjoyment.
If sufficient rights have been reserved, then the landlord needs to be aware that no matter how widely worded those reservations may be they will still be qualified by the covenant for quiet enjoyment (whether express or implied) enjoyed by the tenant. The landlord when seeking to exercise these rights must therefore ensure that he takes all reasonable steps to mitigate the impact of the works on his tenants. While what is reasonable will depend on the facts of each individual case there are certain points which the landlord must bear in mind.
Sharing of Details of the Works
A relevant factor in any dispute will be how much the tenant knew of the proposed works when he originally took the Lease. As a landlord if you are letting premises that you know are going to be subject to works you should ensure that new tenants are made fully aware of same and that this is properly documented.
A landlord should not wait until he receives complaints from his tenant before entering into dialogue with the tenant about the works. The landlord should begin liaising with his tenant as soon as possible (and certainly in any event before the works commence) and should continue liaising with him until the works have been completed. A tenant at the very least should be informed as to what is proposed by the landlord i.e. when the works will start and how long the works will last. The tenant should also be consulted on how best to minimise the impact of the works on him and his business and if possible, a method statement should be agreed by the parties. Certainly efforts should be made in that regard.
Consider Financial Compensation
Any rent reduction or other financial compensation offered by a landlord is a factor to be taken into account when judging the overall reasonableness of steps the landlord has taken. A landlord is advised to be open minded and at least to give tenants a chance to make representations.
Be Mindful of the Context
The use, location and rental level for the premises concerned may also be relevant.
Consider Who Benefits from the Works
If the works are for the benefit of the landlord and confer no benefit on the tenant then this is likely to be a factor taken into account in judging the reasonableness of the works. As such the steps required of a landlord undertaking essential repairs to a building may be different from those required of a landlord undertaking a redevelopment exercise to increase the value of its reversion.
As with most things problems can be avoided, or at least, reduced by an early appreciation of the effect of what is proposed on other occupants and by taking steps to involve those others in the process, thus ensuring as little disturbance or inconvenience as possible.
The essential point for a landlord to bear in mind is to ensure that it has taken steps to show that it acted reasonably both in the decisions it made and the actions it took.
This article is for information purposes only and any specific queries should be addressed to a member of our Property Department for further and specific legal advice.