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Commercial tenants & the right to quiet enjoyment

18 October 2016 • Danielle Leeming

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 [2016] 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:

  • Whether the Tenant had been informed of the works and the extent of the works
  • Had any offer of compensation been made to the Tenant for any disturbance
  • Were the works being undertaken to benefit the tenants of the building or solely for the landlord’s gain.

The Court held that:

  • The landlord should have undertaken the works having regard to the tenant’s need to keep his business running with as little disruption as possible
  • The way in which the scaffolding was constructed showed no consideration for the impact the scaffolding could have on the tenant’s business
  • There was also evidence to suggest that the contractors working on the building regularly obstructed the entrance to the tenant’s property
  • There were no real discussions with the tenant in relation to any impact the works may have and any discussion as to the increase in noise the construction works would have
  • Although the landlord was not obliged to offer any compensation as a result of the disruption, the refusal to pay any compensation provided further evidence of the landlord acting unreasonably.

What should commercial landlords do when considering undertaking works on adjoining or neighbouring tenanted properties?

  • Notify the tenants of the intended works giving the tenants as much detail as possible as to the likely impact and the anticipated time scales
  • Discuss ways to minimise the disruption to the tenants where possible
  • Ensure that contractors and employees of the landlord minimise the disruption to the tenants wherever possible
  • Consider ways of erecting the scaffolding in a way which will limit the disruption to any tenants business to avoid claims for breach of the quiet enjoyment provision
  • Ensure that any provisions within the lease which restrict the landlord’s right to undertake works on adjoining or neighbouring property are complied with
  • Make extra efforts to reduce disruption particularly where the intended works are for the landlord’s benefit rather than the tenant’s benefit.

To discuss any of the issues raised in this article further, please contact Danielle Leeming


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