BUILT ENVIRONMENT JOURNAL

Dilapidations claims

The court concluded that the temporary fix had not discharged the landlord's repairing obligations under the lease

Author: Emma Humphreys

01 February 2020

In 2018, we saw the first dilapidations case for almost two decades to consider the circumstances in which the court is prepared to order specific performance of a tenant's repairing obligations.

In Zinc Cobham 1 Ltd & Ors v Adda Hotels & Ors [2018] EWHC 1025 (Ch), the landlord was unsuccessful; the High Court struck out its claim for an injunction to force the tenants to undertake the works required and decided that the landlord's remedy should be restricted to damages.

More recently, in Blue Manchester Ltd v North West Ground Rents Ltd [2019] EWHC 142 (TCC), the courts have shown that specific performance of repairing obligations is available in appropriate circumstances, although this case concerned a landlord rather than tenant being required to undertake remedial works to a building.

In this case, there was a serious issue with the sealant holding together the glass panels of the building occupied by the tenant and Carillion, the contractor that built the tower, had installed temporary stitch-plates to keep the glass in place but had failed to find a permanent solution by the time it went into a state of liquidation four years later.

The tenant, hotel operator Hilton, was concerned about the stitch-plates safety and their impact on the appearance of the building. Its 999-year lease of the hotel obliged the freeholder to keep the facade 'in good and substantial repair and when necessary .... reinstate replace and renew' it.

There was also a reverse Jervis v Harris clause, which allowed the tenant to undertake works at the freeholder's cost if the freeholder failed to comply with its repairing obligations.

The parties disagreed as to whether the freeholder was obliged to find a permanent solution to address the sealant issue and the Technology and Construction Court (TCC) was therefore subsequently invited to consider the position.

Having heard expert evidence about the problems caused by the stitch-plates and the fact that they were designed to last for no longer than three years, the court concluded that the temporary fix had not discharged the landlord's repairing obligations under the lease.

Interestingly, the judge felt that aesthetic standards could be relevant and that there would need to have been a compelling reason to require the tenant to accept the ugly stitch-plates as a permanent solution.

Although there was no specification for the remedial work, the judge was prepared to order specific performance of the landlord's repairing obligations.

In his view, damages would not be an adequate remedy for the tenant; neither would it be satisfactory to leave the tenant to undertake the repairs and then seek to recover the costs from the landlord.

The TCC decided that the freeholder should be allowed 18 months to repair the building and restore it to substantially the same external appearance as at the date of the lease. However, if it transpires that the costs involved with the works are going to be disproportionate, the landlord is permitted to apply to court for approval to undertake a different remedial scheme.

Another recent decision relevant to repair works is Lessees and Management Company of Herons Court v Heronslea Ltd [2019] EWCA Civ 1423, which concerned whether approved inspectors owe a duty under section 1 of the Defective Premises Act 1972 when performing their statutory functions in certifying compliance with Building Regulations. The potential for such claims has, of course, been highlighted as parties explore liability for the installation of defective cladding.

The Court of Appeal has decided that an approved inspector performing statutory functions does not fall under the requirements of section 1(1) of the 1972 Act. In its view, this section 1(1) is aimed at someone who positively contributes to 'the provision or creation' of a dwelling by doing the work. This decision appears to leave little scope for claims against an approved inspector under the 1972 Act.

 

Emma Humphreys is a partner at Charles Russell Speechlys emma.humphreys@crsblaw.com

Related competencies include: Landlord and tenant

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