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Absolute restrictions in leases: How the decision in Duval v 11-13 Randolph Crescent Ltd affects landlords

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Can a landlord of a block of flats give permission for a tenant to carry out alterations prohibited under that tenant’s lease, when it owes an obligation to the other tenants in the block to enforce that prohibition?

Facts

11-13 Randolph Crescent Limited, was the landlord of a block of flats in Maida Vale. Each of the flat leases were granted on the same or similar terms and had a restriction preventing a tenant from cutting into any roofs, walls, ceilings or service media (e.g. pipes, drains, cables). The restriction was absolute, meaning the act was prohibited under the lease.

Mrs Winfield (‘W’) wanted to carry out works to her flat that involved removing a substantial part of a load bearing wall at basement level. The works fell within the absolute restriction in her lease. The landlord gave permission for W to carry out the works, subject to obtaining insurance.

Dr Duval (‘D’), another flat owner, objected and relied on another provision present in each of the leases, requiring the landlord to enforce the obligation mentioned above, at the request and cost of any other tenant in the block.

The judgment

The landlord was found to be in breach of their enforcement obligation. It held that a landlord that gave a promise to all the tenants in a block to enforce certain provisions in their lease at the request of another tenant, will be in breach of that promise if it permits one tenant to carry out alterations that are absolutely prohibited.

The court disagreed with the landlord’s argument that the obligation to enforce the restriction only arose once the objecting tenant made a request. This was a valuable right that should not be defeated by who acts first. It therefore followed that it would be an implied term in the lease that the obligation to enforce cannot be cancelled by any prior actions of the landlord that prevented it from being fulfilled.

The court described the works the absolute restriction sought to prevent against as ‘fundamental works which go beyond routine alterations and improvements’.  It was held that it would therefore be reasonable for such works not be carried out without the consent of all of the other tenants, who have an interest to see that the works did not affect the wider structure or fabric of the building.

What this means for landlords?

The Supreme Court’s decision concerns an absolute restriction rather than a qualified one. A qualified restriction requires a tenant not to do something, unless they have the consent of the landlord. The law implies an obligation that such consent should not be unreasonably withheld. Had W’s works fallen within a qualified restriction, provided the landlord could justify that it was reasonable to grant such consent despite the enforcement request, they may not have found themselves in breach.

It therefore follows that landlords of multi tenanted buildings need to be careful when asked to grant permission for works that are prohibited under the lease, as this may breach an enforcement obligation in the leases of other flats. Whilst time consuming, to avoid a later request for enforcement, the landlord may consider gathering the agreement of all tenants in the building prior to granting permission. It may also be prudent to include in a licence granting consent, a term that the tenant seeking permission will indemnify the landlord against any costs arising from an enforcement claim.

If you are a tenant unsure of whether you can rely on an enforcement provision in your lease or a landlord on the receiving end of an enforcement request and would like advice, please contact a member of our residential conveyancing team.

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