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Noisy Works and Quiet Enjoyment: a salutary tale

Published February 2017

Reasonableness is a terrific strategy for a number of reasons. First, it is nice to be nice. Secondly, it is hard to expose it as merely a tactic. If you are really being reasonable, there is nothing to uncover. No litigation was ever won with the submission that the Judge should ignore what the other side are saying because they are only being reasonable.  Thirdly, it plays well. Very well. Fourth, you never regret it. It is historic stubbornness that is always regretted, not historic reasonableness. And fifth, it contrasts very picaresquely with greed. ‘You greedy, me reasonable’ is one hell of a starting point in Court.

Timothy Taylor Ltd v Mayfair House Corporation [2016] EWHC 1075 (Ch) was a classic example of rampant reasonableness on one side (mine) and a somewhat contrasting approach on the other. It concerned the vexed question of how the tenant’s right to quiet enjoyment and the landlord’s duty not to derogate from grant is squared with the landlord’s right to carry out works.

Surprisingly, because it is common in modern leases for there to be reserved to the landlord a right to do works and indeed, create a disturbance, in certain circumstances, there is little case law on the point.

The leading case is Lechouritis v Goldmile Properties [2003] EWCA Civ 49 where a landlord’s duty to repair but in the course of it affect the tenant’s business detrimentally ran up against the tenant’s right to quiet enjoyment. It was held that covenants pulling in different directions must nevertheless be read together and they must be assessed together against a criterion of reasonableness. The landlord must carry out its works taking all reasonable steps to accommodate the tenant’s occupation and minimise disturbance to the tenant.

Timothy Taylor Ltd builds on that. The landlord was held not to have struck the balance correctly: it had not discussed its proposals adequately with the tenant nor offered any rental discount during the currency of the works. Indeed, the landlord had rejected a proposal from the tenant for a rent reduction, the evidence being that he took the tenant for the meeting to discuss it to a club where instead of discussing the rent reduction he instead was alleged to have called over a third party, which rather inhibited negotiation about rental levels and works.

The moral of the story for landlords is clear: if you are going to do works, it is not going to be enough to just rely on a right to do them under the lease. Instead you have to be reasonable. You have to take the tenant out for a serious discussion. And not be distracted. With plans. And diagrams. And a timeline of works. And you have to listen to concerns. And act on them. Throughout the works. And reduce the rent. 20% for painful levels of interruption is good. For the currency of the works. And you have to keep listening. And acting on what you hear. Nicely.

Then you do your works, make vast amount of noise, create swathes of dust, hugely increase the value of your building and sit back and rely on your right to build.

It should work.  If you are nice about it.

 

Jonathan Seitler QC acted for the successful tenant in Timothy Taylor

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