The recent case of Timothy Taylor Ltd v Mayfair House Corporation attracted widespread press coverage, in part due to the claimant's wife being the Queen's cousin. It involved the owner of a high class gallery in Mayfair bringing a claim against his landlord for disruption caused by works.
The case doesn't introduce any new law, but provides landlords with a useful reminder of how - and how not - to carry out works.
Say, for example, you're the landlord of an office block with a retail unit below. Your office tenant vacates and you'd like to carry out a substantial redevelopment of the office floors, while the retail tenant remains in occupation. You check the retail lease and there is an unqualified right for the landlord to carry out works. Does this mean you're free to do the works as you please? Unfortunately for landlords, the answer is no.
In Timothy Taylor, the lease reserved a similarly wide right for the landlord, who started substantial works to rebuild the interior of the upper floors to create new apartments. The tenant accepted that the landlord had the right to carry out the works, but argued that the way in which the works were carried out was unreasonable. This was due to (i) high levels of noise; and (ii) the fact that the whole building was encased in scaffolding, so from the street it looked as though the gallery was closed.
The High Court decided that the landlord had breached the covenant for quiet enjoyment (i.e. the tenant's right to undisturbed use of the property). The court awarded the tenant damages amounting to 20% of the rent for the duration of the works, both past and future.
So, regardless of what the lease says, a landlord must act reasonably when carrying out works and should bear in mind the following:
- The threshold for reasonableness is higher where the works are being done solely for the landlord's benefit – rather than, say, to comply with the landlord's repairing covenants – or if the landlord refuses to offer the tenant compensation.
- Communication is key. The landlord should have an open dialogue with the tenant before the works start, to give full details of the works programme and discuss how disturbance can be minimised.
- If possible, scaffolding should be designed to protect the appearance of the tenant's premises and allow access to be maintained.