201603.04

Tenants! Have You Read and Really Understood Your Lease?

Flat96Leases are not just pieces of paper and wise tenants always seek legal advice so that they really understand what they are signing up to. In one case which strikingly made that point, a long leaseholder ended up in danger of losing his property after his installation of a new boiler involved cutting through an exterior wall.

The flat tenant’s 99-year lease included a covenant which, amongst other things, forbade him from cutting, maiming, altering or injuring any of the property’s principal walls without his landlord’s consent. When his boiler broke down, he employed a plumber to install a new condensing unit. The job involved cutting at least one new hole into a flank wall to make way for an exhaust vent and waste pipe.

With a view to forfeiting the lease, the landlord, whose consent to the work had not been obtained, complained that the tenant had breached the covenant. His claim was rejected by the First-tier Tribunal (FTT) on the basis that the tenant had been told by the plumber that the boiler would be a like-for-like replacement and was unaware that any alteration to the wall would be necessary. The FTT also noted that, if asked in advance, the landlord would have granted consent.

In allowing the landlord’s appeal against that decision, however, the Upper Tribunal (UT) found that the tenant had to be assumed to have consented to the creation of the new hole, or holes, in the wall. He had not made reasonable efforts to obtain the landlord’s permission and the breach of covenant was therefore proved.

However, in describing the breach as modest, the UT observed that it was extremely unlikely that forfeiture of the lease would be granted or that the landlord would obtain anything more than nominal damages. The parties were urged to reach a sensible compromise of the dispute rather than continuing with the proceedings.

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