Problems with Leasehold Covenants
14th February 2019 by Rob Kelly
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.