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Problems with Leasehold Covenants

14th February 2019 by Rob Kelly

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Is the landlord of a block of flats entitled to grant a licence to a tenant to carry out work which would breach an absolute covenant contained in a lease of the tenant’s flat, where the leases of other flats require the landlord to enforce the covenants at the request of a tenant of one of those other flats?

This important question was recently answered by the Court of Appeal.

11-13 Randolph Crescent in Maida Vale was originally two houses but they had been converted into nine flats each of which was held under a long lease.  The reversion was owned by 11-13 Randolph Crescent Ltd, a company owned by the flat owners themselves.

In 2015, Mrs Winfield approached the landlord asking for permission to carry out improvement works to her flat, Flat 13.  The landlord was willing to grant consent but the owner of two adjoining flats claimed that the terms of the lease prevented the company from doing so because it contained two clauses which prohibited (i) tenants from making alterations or improvements and (ii) the tenants from cutting, maiming or injuring any wall within or enclosing their flat.  The second covenant is what is usually called an “absolute” covenant.  An absolute covenant against alterations is one which prevents the tenant from making any changes to the property.

Mrs Winfield’s wishes included the removal of about seven metres of a load-bearing wall at basement level and extending her flat beyond its current limits which, it was accepted, would have amounted to a breach of the absolute covenant.

The judge at first instance held that the landlord was entitled to permit the breach.  However, in overturning that decision the Court of Appeal held that if the landlord could grant a licence to do something which would otherwise be a breach of the lease, he commits a breach.  The court granted a declaration to the effect that the waiver by the landlord of a breach of covenant by a lessee or the grant of a licence to commit what would otherwise be a breach of covenant would amount to a breach of the lease.  To hold otherwise would defeat the purpose of the covenant.

If you would like further information about this article please contact Rob Kelly.

Rob Kelly

Senior Associate — Dispute Resolution

Direct dial: 01202 755217

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Rob is an Associate Member of the Chartered Institute of Legal Executives (September 2009).  Rob also holds an LLB (Hons) degree in law.  He successfully completed training as a mediator under the ADR Chambers / Harvard Law Project Scheme and was one of the first mediators to have been appointed an IMI Certified Mediation Advocate in the UK with a commercial practice.

Rob specialises in dispute resolution through litigation, arbitration and mediation, with particular emphasis on contractual disputes, claims involving allegations of professional negligence (which he has prosecuted on behalf of commercial and private clients and defended on behalf of insurers, re-insurers and Lloyd’s syndicates). He is regularly instructed in connection with substantial disputes involving contractual, professional negligence, contentious probate issues.  Rob also deals with contentious property and landlord and tenant issues.

Rob’s style is a mix of listening, asking (tough) questions, diplomacy and reality testing. He’s interested, flexible, and pragmatic. He offers a common sense, realistic approach to assist his clients in searching for solutions to their disputes and brings straight talking and integrity to his work.

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