A recent case has highlighted the importance of having a (good!) lawyer look at your lease before you enter into it - otherwise you might be at risk of certain damage to the demise not being covered by its terms. We’ve summarised the recent case (Stonecrest Marble Ltd v Shepherds Bush Housing Association Ltd [2021] EWHC 2621 (Ch)) below.
The Case
The issue centred on the Landlord’s repair and insurance obligations under a lease of part. The Tenant’s property was damaged by water ingress from another part of the building, rendering it unusable. The ingress was caused by a blockage in a drainpipe which occurred over time.
The Landlord was required to:
- allow the Tenant quiet enjoyment of the property;
- clean, maintain and repair the common parts; and
- insure against the “insured risks” which included “flood… and overflowing of water… apparatus”.
The Landlord was not required to:
- generally keep the retained parts in repair; or
- repair where the Landlord had no obligation to insure.
Gradual deterioration for wear and tear was not included in the Landlord’s insurance policy. In addition, rent would only be suspended if the property was damaged or destroyed by an “insured risk” so that it could not be occupied or used.
The Decision
The Tenant accepted that the build-up of debris in the gutter was not an “insured risk”, but maintained that it was the Landlord’s responsibility to maintain the guttering.
The Court interpreted the lease on its ordinary meaning (that is to say, as the parties intended). On this basis:
- it was the Tenant’s responsibility to keep the property in good repair; and
- as the Landlord was not required to either:
insure against the risk of damage caused by gradual deterioration; or
repair where damage was caused by a “non-insured” risk; or
generally to keep the retained property in repair
there was no liability imposed on them.
Our Advice?
It is very important that you have a lawyer check over your lease to ensure issues like the above don’t arise. Had they reviewed the lease properly, the Tenant could have been protected through ensuring that there was a clause obligating the Landlord to maintain the building in repair. If there was such an obligation then this case would have been decided differently and, most likely, in favour of the Tenant.
Howes Percival’s commercial property solicitors provide a full range of services for landlords and tenants including commercial leases, property portfolio management and dispute resolution.
For more information, please contact Marcus Carter on 01908 247587 or at [javascript protected email address].
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