Can a landlord be in breach for granting consent? – Duval v 11-13 Randolph Crescent Limited 2020
The Supreme Court has handed down its decision in the case of Duval v 11-13 Randolph Crescent Limited this month (May 2020), which will have far reaching practical implications for landlords when dealing with requests for consent by leaseholders.
By way of background, Dr Duval is a leaseholder in a block of residential flats of which 11-13 Randolph Crescent Limited is the landlord. Under the terms of Dr Duval’s lease, the leaseholder is prevented from:
- carrying out improvements to the flat without the landlord’s prior written consent; and
- cutting any internal walls within the flat or any of the walls enclosing the flat (this latter obligation being an absolute covenant, meaning that the landlord does not have to consider giving any consent).
The lease also contained a provision that all the flats in the building would contain the same covenants and that the landlord would enforce those other covenants, where there is a breach, at the request of the leaseholder, subject to payment of (or security for) its costs by that leaseholder. This is usually referred to as a mutual enforcement clause for the benefit of the leaseholders.
Another leaseholder in the building, Mrs Winfield, asked the landlord for permission to alter her flat which included the removal of a load bearing wall. Without the landlord’s consent, it was accepted that those works would be a breach of the absolute covenant contained in the flat leases. The landlord decided to give consent and Dr Duval sought a declaration that the landlord was prevented from doing so pursuant to the mutual enforcement clause.
The matter went to the Supreme Court, who took the view on interpretation of the leases that, although you can expect that the leaseholders would want to carry out works to modernise their flats, the absolute prohibition prevented the leaseholders from carrying out works which could affect the structure of the building and that it was the landlord’s responsibility to manage the block for the benefit of all leaseholders.
Many residential leases will contain varying provisions concerning what works or alterations a leaseholder can or cannot do to their property (in some cases by way of absolute prohibition). Many leases will also contain a mutual enforcement clause which requires a landlord to take action against a leaseholder where there is a breach, if asked to do so by another leaseholder.
The effect of this case is that landlords will be able to use less discretion when considering whether or not to grant any consent under a lease where there is an absolute prohibition in relation to works, although each case will still need to be decided on a case-by-case basis.