TENANT’S REPAIRING OBLIGATION

The first question must be, is the tenant obliged to correct the defect? It was established as long ago as 1847, in Payne v Haine, that a tenant’s obligation to keep a property in repair includes an obligation to put it into repair. So, if the defect is within the tenant’s demise and the lease contains a tenant’s full repairing obligation, then (subject to two important qualifications) the answer is yes.

1) IS THERE ANY DISREPAIR?

The first of the qualifications relates to the case of Post Office v Aquarius Properties. Most of us would sympathise with the observation made in that case by Ralph Gibson LJ:

‘I found it at first to be a startling proposition that, when an almost new office building lets ground water into the basement so that the water is ankle-deep for some years, that state of affairs is consistent with there being no condition of disrepair’.

That, however, was the conclusion to which the Court of Appeal ultimately came. The water ingress resulted from defective construction of the foundations, and of course that defect had existed when the tenant took the lease. What relieved the tenant of liability to correct the defect in this case was the fact that the building was in the same physical condition as when constructed: there had been no deterioration.

For a repairing obligation to apply, there must be some disrepair, and that means deterioration from a previous physical condition. Note that this does not mean deterioration since the date when the tenant took the lease; if that were so, Payne could not stand. No doubt, when a building is ankle-deep in water for a sufficiently long period, there will be some consequent deterioration, and then the tenant’s repairing obligation will bite. Whether that will oblige the tenant to correct the defect takes us on to the next qualification.

2) IS THE REQUIRED WORK ‘WORK OF REPAIR’?

There is a stubborn misapprehension that the law has something called an ‘inherent defects doctrine’, according to which a tenant can never be liable to put right a defect which was inherent in the premises when it took the lease. That would have been a quick answer to the landlord’s claim in Aquarius Properties, and the fact that it was not argued there demonstrates effectively enough that there is no such doctrine. In fact, it was conclusively laid to rest by Ravenseft Properties Ltd v Davstone (Holdings) Ltd, some years previously.

There is a twin notion which draws a distinction between ‘repair’ and ‘improvement’, and holds that a tenant can never be required to improve the property.

The true test, according to Ravenseft, is actually rather more uncertain and less helpful than either of those: does the work go beyond what can properly be called ‘work of repair’? To be slightly more precise, would carrying out the work mean that at the end of the lease the landlord would get back a building substantially different from that which they let?

This is largely a matter of impression, though the Court suggested that a useful indication might be to compare the cost of the proposed works with the value of the property. A better understanding of the thinking behind the decision may be gained from a brief consideration of the facts of the case itself.

The building in question was faced with stone cladding panels. These had begun to deteriorate, flaking and cracking, and many of them required replacement. The tenant did not dispute that replacement of the panels fell within its repairing obligation.

However, the cause of the problem was the expansion and contraction of the cladding panels, as a result of changes in temperature, and the absence of expansion joints between them to accommodate this movement.

The landlord contended that the tenant’s repairing obligation required it to re-clad the entire building, fitting expansion joints to ensure the problem did not recur.

The tenant resisted this on the basis that:

a) it would be work of improvement, not repair; and

b) it would require it to remedy any inherent defect.

The Court, after an exhaustive review of the case law, concluded that like-for-like replacement of the affected panels would be futile and absurd, as the problem would recur – refitting the cladding with the addition of expansion joints was the only sensible method of repair. The work was not so substantial and extensive that at the end of the lease the landlord would get a different building back. So, the tenant was held to be liable.

LANDLORD’S REPAIRING OBLIGATION

The cases discussed so far relate to lettings of standalone properties. Where a landlord lets part of a larger property, such as a unit in a shopping centre, or a suite of offices within a block, then there may be issues as to the extent of the landlord’s repairing obligations. The landlord will invariably have a repairing obligation as regards common parts and structural elements, though defining the extent of the landlord’s responsibility may not be straightforward in practice. Also, there is in theory at least the possibility of an Aquarius Properties-type dispute over whether there is any actual disrepair, as opposed to a defect of construction, although the reported cases show no example of this having occurred.

Those factors aside, the matter is straightforward legally: if the work falls within the landlord’s express repairing obligation, then it is its responsibility.

CORRELATIVE REPAIRING OBLIGATION

There may be situations, though, where the work is outside the scope of any express repairing obligation relating to the premises. Imagine a situation where a top-floor tenant has an internal repairing obligation, and the landlord retains control of the roof, but has no express repairing obligation in relation to it. If the roof is leaky, can the landlord repeatedly claim against the tenant for resulting damage within the top-floor premises, but do nothing in relation to the roof?

The case of Barrett v Lounova (1982) Ltd provides some support for the courts to imply a ‘correlative repairing obligation’ on the landlord, to prevent this absurdity. However, subsequent attempts to rely on this authority have so far been unsuccessful, and while it has not been overruled, it is apparent that the courts are reluctant to go further down that route.

LIABILITY IN NUISANCE

A recent County Court case, Jackson v J H Watson Property Investment Ltd, demonstrates another possibility, although the tenant was unsuccessful in that case.

The case concerned a long lease of a residential property. The tenant, Mr Jackson, was a barrister, who represented himself in court.

Repeated episodes of damp ingress to Mr Jackson’s flat were the result of defective concreting work to the adjoining light wells within the building. The light wells remained within the landlord’s control, but it was common ground that there was no breach of the landlord’s repairing covenant, on the basis of Aquarius Properties.

Mr Jackson therefore brought a claim for nuisance, to recover the cost of the repairs he had carried out within his flat, and a sum for inconvenience and diminution in value of the flat.

While this was certainly a potentially good basis for a claim, what defeated it was the principle of ‘caveat lessee’: the defect in the property was already existing when Mr Jackson took the lease, and a lessee takes the premises as they are.

HEADS YOU LOSE, TAILS THEY WIN

For a tenant, this all boils down to two unattractive propositions:

a) if the inherent defect falls within your demise, you face an uphill struggle to avoid liability, unless you are fortunate enough to be able to establish the state of the property has not deteriorated; and

b) if the inherent defect falls within the landlord’s part of the property, but not within its repairing obligation, you face an uphill struggle in fixing the landlord with liability.

This underlines the importance of a full pre-lease survey, which in the case of a letting of part of a property should extend to those parts of the building which might affect the premises to be demised. Tenants should also pay close attention to the scope of the landlord’s repairing obligation.

By Mark Shelton, associate, Cobbetts LLP.

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