Landlords upgrading buildings to keep up with technological changes must give tenants their ‘quiet enjoyment’ writes Navneet Jhawar, associate at Charles Russell Speechlys.
Our recent report The New Real: unlocking new gains through smart buildings demonstrates the need to upgrade existing buildings to future-proof investment.
70% of landlords and building owners interviewed believe that changing technology needs will have a greater impact on building obsolescence than energy efficiency requirements. A further 68% of the stakeholders interviewed think that due to the costs involved, the majority of commercial buildings will need to be upgraded, rather than replaced to meet new technology demands.
Particular care will need to be taken where works are proposed to buildings with existing or adjoining tenants. This is the case even where a broad right to redevelop is expressly reserved under the lease.
A tenant has an implied right to quiet enjoyment and this is often expressly set out in the lease. The landlord must consider the impact that any renovations or technological upgrades will have on a tenant and take all reasonable steps to minimise disturbance.
The recent case of Timothy Taylor v Mayfair House Corporation demonstrates the danger of failing to take into account the impact of works on a tenant’s right to quiet enjoyment. In this particular case, the tenant operated a high-end art gallery from the ground floor and basement of a five-storey building in Mayfair. The landlord started substantial works to rebuild the interior of the building from the first floor upwards to create new apartments. The landlord had expressly reserved the right to alter or rebuild the building under the lease, even if the gallery (or its use or enjoyment) was materially affected. The tenant claimed that the works substantially interfered with its use and enjoyment.
The court was not impressed with the manner in which the works were carried out, which included high levels of noise on a daily basis and a scaffolding design which engulfed the whole building, meaning the gallery was almost invisible. The landlord was obliged to pay damages at a rate of 20% of the rent payable from the erection of scaffolding to completion of works (the rent being £530,000 per annum) which represented the tenant’s loss of use and enjoyment of the premises. These were awarded despite the fact that the tenant had not suffered a loss of profit and had in fact had an increase in sales.
The court helpfully highlighted some practical steps which landlords can take to avoid a claim:
Landlords considering works should seek advice early to avoid substantial claims for compensation.
Navneet Jhawar
Buckinghamshire tech company Halma has acquired transport safety firm MK Test Systems Limited. Headquartered in…
BRiCS Development has secured an £11.55 million finance facility with Paragon Bank’s Development Finance team…
IT services and solutions company Mintivo has appointed Alex Jukes as its new Managing Director…
Bartlett Tree Experts have announced its intention to build a new arboretum and research facility…
The creation of a first-of-its-kind imaging system at the University of Surrey could help the…
Open Sight, which provides support across Hampshire to those living with or at risk of…