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Most, if not all, modern day commercial leases will include an express right for the tenant to have quiet enjoyment of the property being leased to them, but what effect does this clause have on a lease and how does this impact the landlord’s ability to deal with adjoining land as they wish?
Some may think very little, but the decision in the recent case of Timothy Taylor Ltd v Mayfair House Corporation and another  has cast doubt on this opinion.
The commercial tenant in the case leased the ground and basement floor of a building in Mayfair for an annual rent of £530,000. The lease contained the usual ‘quiet enjoyment’ provision but also granted the landlord the right to carry out substantial building works to adjoining property regardless of its impact on the tenant’s use of their premises.
The landlord, Mayfair House Corporation, began substantial construction works to the upper floors of the building to create apartments. Considerable disruption was experienced by the tenant as a result of high noise levels and related staff illness. It also appeared as though the tenant’s art gallery had closed due to the landlord’s scaffolding encasing the whole building. The Tenant made a claim for a breach of the quiet enjoyment provision in failing to take reasonable steps to minimise the disturbance to the tenant’s property.
The Court held that irrespective of an express provision in the lease granting the Landlord the right to undertake substantial works regardless of the impact on the Tenant’s Property, the Landlord had still failed in its duty to minimise the disturbance to the Tenant’s business.
The Court outlined a number of things they could consider when assessing whether the landlord had acted reasonably:
The Court held that:
What should commercial landlords do when considering undertaking works on adjoining or neighbouring tenanted properties?
To discuss any of the issues raised in this article further, please contact Danielle Leeming.
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