Real Estate Tip of the Week: Come on feel the noise!
Published 23 May 2016
It is common for commercial leases to contain an express right for a landlord to redevelop the remainder of the building, even though the works might adversely affect a tenant's use and enjoyment of its premises. However a recent decision provides a useful reminder that, even where such rights are very widely drafted, landlords cannot simply ride roughshod over their tenants' rights to quiet enjoyment.
In Timothy Taylor Ltd v Mayfair House Corporation  EWHC 1075 (Ch) a tenant's lease of part of a building was subject to a landlord's right to alter and rebuild the building, even if the use and enjoyment of the premises were materially affected.
The landlord's substantial works to the remaining floors in the building resulted in very high noise levels, tenant staff illness, occasional closure of the tenant's business and almost entire obscuring of the premises by scaffolding. The tenant successfully argued that the landlord was in breach of its covenant for quiet enjoyment and was awarded damages equal to 20% of the rent for the duration of the disturbance.
This decision makes it clear that a landlord must take all reasonable steps to minimise disturbance whilst carrying out works, if it is to comply with its covenant for quiet enjoyment. It also provides some practical guidance as to what those steps should be, including:
- Liaising fully with the tenant at all stages of the process;
- Designing scaffolding to protect the appearance of the premises and access to them;
- Agreeing with the tenant steps to minimise disturbance;
- Considering an offer of financial compensation to the tenant.