STEPHEN SCOTT reports on the RICS Dilapidations Forum Conference.
Some UK cases, which were discussed at the recent RICS Dilapidations Forum Conference, may provide practical guidance for those involved in the drafting of leases, private landlords, and those involved in dealing with dilapidations claims at lease expiry in Ireland as well.
The first case deals with the issue of floor finishes, and more precisely carpet tiles. In South Essex Partnership University NHS Foundation Trust v Laindon Holdings Limited (2016), the issue as to whether carpet or a carpet tile was a fixture or fitting, and subsequently, whether changing from a carpet tile to a carpet was permitted under the lease, was the matter at hand. The sums involved may seem small, at approximately £45,000, but there was principle at stake and in the case of floor finishes, forgive the pun, the tenant was not about to be walked on.
The initial trial found in favour of the landlord who was awarded circa £140,000 in damages in breach of the repair covenant and a two-month rent void period. The first trial found that the carpet tiles were a landlord fixture and so it was held that the tenant was not allowed to change them as a permitted tenant alteration. In another twist, the landlord also claimed that the loss of rent should be quantified from the trial date and not the lease end. The tenant quite rightly appealed and the Court of Appeal decided that the floor finish was a landlord fixture, as found at the first trial, but the tenant did have the right to replace it as it could not be considered to be a structural alteration as envisaged by the parties and was therefore a permitted alteration. The Court also overturned the award for additional costs imposed on foot of the delay in settling this matter on the basis that as the tenant paid over a sum at lease end, the decision of the landlord to delay carrying out the works meant they could not claim twice. As replacement carpets and floor finishes are often the subject of contentious negotiations at lease expiry, this case does at least provide some clarity in respect of the status of such items.
State of disrepair
The case of Moorjani v Durban Estates (2015) involved the unusual scenario of a tenant suing a landlord for breach of repair, and in particular damages on foot of the tenant’s inability to remain in occupation of a property due to the state of disrepair that existed at the property. This was another case that ended up in the Court of Appeal, but prior to that, the tenant had claimed damages for breach of repairing covenant for disrepair to his flat. Mr Moorjani had a long leasehold (150 years) interest in the flat, and in 2005 refurbishment works were carried out. On foot of this, Mr Moorjani moved in with a relative and returned to the flat in late 2005 but was not happy with the quality of work carried out. To complicate matters, before the works were completed, there was a serious flood, which resulted in additional works and, regrettably, a longer stay with the poor put-upon relative. More bad luck struck the property, and the unfortunate Mr Moorjani’s flat was flooded again in 2006. Not a lot was done at this stage due to disputes between the landlord and the insurance company, so in 2008, Mr Moorjani called in his own contractors and finished the work himself. Finally, in 2008, he returned to live in his flat, no doubt to the delight of his relative. He then sued for damages, and at the first trial the judge only awarded damages for loss of amenity from 2008 to 2011. The claim prior to 2008 was dismissed, as Mr Moorjani was not in occupation so, according to the first trial, he did not suffer any inconvenience. The Court of Appeal did not agree and overturned this decision. They found that non-occupation could not be used as a reason to reduce the damages and that even though Mr Moorjani was living with a relative, he was still entitled to claim for loss of amenity and inconvenience attaching to his inability to use the affected property.
The case involved the unusual scenario of a tenant suing a landlord for breach of repair, and in particular damages on foot of the tenant’s inability to remain in occupation of a property due to the state of disrepair that existed at the property.
Tripping through the courts
Finally, another case that, remarkably, also ended up in the Court of Appeal, over little more than an award of damages of £3,750. This concerned an injury caused by a trip on a pathway and who was responsible for the upkeep and repair of the pathway in question. In Edwards v Kumasary (2016), Mr Kumasary was a buy-to-let landlord and Mr Edwards his tenant. When taking the rubbish out one day, Mr Edwards tripped on some damaged paving between the front door of his apartment complex and the bin store serving the properties, which caused him personal injury. Mr Edwards then sued his landlord for damages for failure to keep the paved area in repair under provisions of the sub-tenancy in respect of Section 11 of the UK Landlord and Tenant Act 1985. This particular piece of legislation places a responsibility on the part of landlords to keep premises in a certain state of repair.
In what now seems like a bizarre series of events over what was a relatively small sum of money, the case started off at the lower District Court, where it was found in favour of Mr Edwards and Mr Kumasary was ordered to pay damages to his tenant. Mr Kumasary subsequently appealed and remarkably the Court of Appeal upheld the District judge’s decision. The matter then progressed to the Supreme Court, which eventually found in favour of the landlord.
The case essentially boiled down to whether the location of the paving formed part of the exterior of the front hall of the property or an extension of same, and whether the landlord had an interest in that
particular part of the estate and, as such, could the landlord then be held liable for the disrepair to that particular part of the estate, when in fact he had received no notice of same?
In summary, the Supreme Court found that a landlord’s repairing covenant to an area of a property to which he/she is not in possession can only be triggered when he/she is provided with notice of any disrepair. All of which sounds perfectly sensible, and one wonders why it had to pass through three sets of proceedings before common sense prevailed. It does however raise issues for parties to commercial and
residential leases, ensuring that tenancy agreements include strict provisions for tenants having to serve notice and to formally advise landlords if they have a concern in connection with matters of disrepair,
and ensuring that there are clear lines identifying where responsibility for repairing obligations begin and end.
This article is intended to provide a flavour of the main topics covered by the various cases discussed at the Conference and the details are all available on the UK courts website: www.bailii.org. I would recommend a review of the specific judgments for clarity on the outcomes.
Director, Scott Murphy Chartered Building Surveyors