Back to Basics Disrepair and Dilapidations
Transcript of Back to Basics Disrepair and Dilapidations
Back to Basics – Disrepair and Dilapidations
•When is a “repair” obligation breached?
•s.11 of the Landlord and Tenant Act 1985
•Damages: Part 1 – T’s liability at end of lease
•Damages: Part 2 – L’s liability for general damage
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
“Repair”
Not only relevant to question of whether workmust be carried out.
Other examples on when “repair” obligation arerelevant include:
•The level of service charges
•Rent review
•Whether access must be given for works
•Liability to occupiers or visitors
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
“Repair”
What is required by a covenant to “repair” willdepend on the ordinary rules by which courtsconstrue a contract.
“the essential question is what a reasonableperson, having all the background knowledgewhich would reasonably have been available tothe parties in the situation in which they were atthe time of the contract, would understand thewords to mean”
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
“Repair”
Many different ways covenants drafted.
Precise meaning will depend on particularcontract but the essence of the word “repair” isto restore the physical condition of somethingthat has deteriorated.
Excludes design defects and poor workmanship attime of construction.
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
Not “Repair”
Severe condensation caused by cold bridging –
Quick v Taff-Ely Borough Council
Basement flooded due to defective constructionof “kicker” joint - Post Office v AquariusProperties Ltd.
Remedying lack of sound insulation – SouthwarkLBC v Tanner
Removal of asbestos – SoS for the Environment vEuston Centre Investments Ltd (No. 2)
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
Could be “Repair”
Inherent defects causes damage to other parts
Part that is defective has itself become damaged
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
“Repair” vs “Keep in Good Condition”
A covenant to, “Keep in good and tenantablecondition” maybe wider than “repair”.
Credit Suisse v Beegas Nominees Ltd - waterleaked through the cladding panels. Not inrequired condition as not watertight
Welsh v Greenwich LBC - obligation to "maintainthe dwelling in good condition and repair"required L to install insulation to prevent damp
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
What standard of “repair” is required?
Generally a covenant to “repair” or “keep inrepair” requires premises to be put in repair.
Standard of repair depends on contract e.g.
•Schedule of condition
•Exclusion of “fair wear and tear”
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
What standard of “repair” is required?
General covenant requires not “perfect” but“substantial” repair.
Standard of repair under the general covenant issuch repair as, having regard to the age,character and locality of the premises, wouldmake them reasonably fit for the occupation of areasonably minded tenant of the class who wouldbe likely to take them.
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
When obligation to “repair” arises
Question more important where L responsible.
L generally requires notice of defect beforeobligation arise in parts demised on tenant
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
When obligation to “repair” arises
L is in breach only when:
•he has information about the existence of thedefect such as would put a reasonable landlordon inquiry as to whether works of repair areneeded; and
•he has failed to carry out the necessary workswith reasonable expedition thereafter”.
Time – Once obligation triggered party has areasonable time to execute repair.
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
When obligation to “repair” arises
Requirement for notice based on implied term
The reason for the rule is not only the landlord'sinability to know of disrepair, but also thetenant's advantageous position
Can be displaced by special circumstances
Edwards v Kumarasamy
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
When to “Repair” – Notice
Notice – L only requires notice to be liable forparts demised on tenant
The reason for the rule is not only the landlord'sinability to know of disrepair, but also thetenant's advantageous position - Edwards vKumarasamy
Time – Once obligation triggered party has areasonable time to execute repair.
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
Damages – Common Law
“At common law the measure of damages recoverable by a landlord at the end of the lease for breaches by the tenant of his repairing obligations is the cost of the repairs that the tenant should have carried out, plus loss of rent during the period needed to carry out those works.”
Tiger Aspect Holdings v Sunlife Europe Properties
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
Damages – Common Law
Other consequential losses possible:
•Service charge
•Insurance rent
•Liability for rates
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
Damages – s.18 Landlord and Tenant Act 1927
Require 2 valuations:
•Valuation if T complied with covenants
•Valuation of reversion in actual condition
First valuation exercise will require establishingwhat work T should have done
The difference between these values is the cap.
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
Damages – s.18 Landlord and Tenant Act 1927
Valuations will depend on identifying whathypothetical purchaser would plan to do withpremises and therefore what it would offer.
Where L has actually carried out the works this istreated as prima facie evidence of the damage tothe reversion
Similarly failure by L to carry out work may beevidence that work is not necessary
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
Damages – s.18 Landlord and Tenant Act 1927
For valuation methodology see, RICS -Dilapidations in England and Wales, 7th edition,Chapter 10
Valuation may be provided pre-action under Pre-Action Protocol (the 'Dilapidations Protocol’).
Onus is on T to raise as a defence – see para 9.5
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
Hammersmatch Properties (Welwyn) Ltd v v Saint-Gobain Ceramics & Plastics Ltd
1930s purpose-built factory/warehouse/offices
Cost of works T should have carried out £2.4m
Value in repair £3.0m
Value out of repair (site value for demolition andredevelopment) £2.1m
s.18 cap £900,000
3 September 2020Zachary Bredemear and Richard Cherry
Disrepair and Dilapidations
Disrepair Claims in Residential Property
the (very) basics
Richard Cherry
Richard Cherry
The elements
A lease/tenancy is just a specialised contract
– Terms of the contract
– Breach
– Damage
But consider the impact of tortious and statutory elements
Breach
What are the landlord’s obligations?
– s11 Landlord and Tenant Act 1985 as minimum –
express terms in tenancy may be more onerous
- Covenant for quiet enjoyment/non-derogation from grant
– Defective Premises Act 1972
s11 Landlord and Tenant Act – the base
duty
(1)In a lease to which this section applies … there is implied a covenant by the lessor—
(a)to keep in repair the structure and exterior of the dwelling-house (including drains, gutters and external pipes),
(b)to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for making use of the supply of water, gas or electricity), and
(c)to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.
(duty to keep in repair includes a duty to put into repair)
S 11 detail
‘Structure’ includes floors, windows and walls including plaster (Grand v Gill [2011] EWCA Civ 554)
s11 Landlord and Tenant Act – common
parts
(1A) If a lease to which this section applies is a lease of a dwelling-house which forms part only of a building, then, subject to subsection (1B), the covenant implied by subsection (1) shall have effect as if—
(a) the reference in paragraph (a) of that subsection to the dwelling-house included a reference to any part of the building in which the lessor has an estate or interest; and
(b) any reference in paragraphs (b) and (c) of that subsection to an installation in the dwelling-house included a reference to an installation which, directly or indirectly, serves the dwelling-house and which either—
(i) forms part of any part of a building in which the lessor has an estate or interest; or
(ii) is owned by the lessor or under his control.
(1B) Nothing in subsection (1A) shall be construed as requiring the lessor to carry out any works or repairs unless the disrepair (or failure to maintain in working order) is such as to affect the lessee’s enjoyment of the dwelling-house or of any common parts, as defined in section 60(1) of the Landlord and Tenant Act 1987, which the lessee, as such, is entitled to use.
s11 Landlord and Tenant Act -
limitations
(2)The covenant implied by subsection (1) (“the lessor’s repairing covenant”) shall not be construed as requiring the lessor—
(a)to carry out works or repairs for which the lessee is liable by virtue of his duty to use the premises in a tenant-like manner, or would be so liable but for an express covenant on his part
s11 Landlord and Tenant Act – standard
of repair
(3) In determining the standard of repair required by the lessor’s repairing covenant, regard shall be had to the age, character and prospective life of the dwelling-house and the locality in which it is situated.
s11 Landlord and Tenant Act – implied
covenant for entry
(6) In a lease in which the lessor’s repairing covenant is implied there is also implied a covenant by the lessee that the lessor, or any person authorised by him in writing, may at reasonable times of the day and on giving 24 hours’ notice in writing to the occupier, enter the premises comprised in the lease for the purpose of viewing their condition and state of repair.
Is there denial of entry alleged?
Homes (Fitness for Human Habitation)
Act 2018
Amends Landlord and Tenant Act 1985 to add
s9A Fitness for human habitation of dwellings in England
(1)In a lease to which this section applies of a dwelling in England (see section 9B), there is implied a covenant by the lessor that the dwelling—
(a)is fit for human habitation at the time the lease is granted or otherwise created or, if later, at the beginning of the term of the lease, and
(b)will remain fit for human habitation during the term of the lease
Homes (Fitness for Human Habitation)
Act 2018 - limitations
(2) The implied covenant is not to be taken as requiring the lessor—
(a) to carry out works or repairs for which the lessee is liable by virtue of—
(i) the duty of the lessee to use the premises in a tenant-like manner, or
(ii) an express covenant of the lessee of substantially the same effect as that duty;
(b) to rebuild or reinstate the dwelling in the case of destruction or damage by fire, storm, flood or other inevitable accident;
(c)to keep in repair or maintain anything which the lessee is entitled to remove from the dwelling;
(d)to carry out works or repairs which, if carried out, would put the lessor in breach of any obligation imposed by any enactment (whenever passed or made);
(e)to carry out works or repairs requiring the consent of a superior landlord or other third party in circumstances where consent has not been obtained following reasonable endeavours to obtain it.
(3)The implied covenant is also not to be taken as imposing on the lessor any liability in respect of the dwelling being unfit for human habitation if the unfitness is wholly or mainly attributable to—
(a)the lessee’s own breach of covenant, or
(b)disrepair which the lessor is not obliged to make good because of an exclusion or modification under section 12 (power of county court to authorise exclusions or modifications in leases in respect of repairing obligations under section 11).
Defective Premises Act 1972 (1) - duty
4 Landlord’s duty of care in virtue of obligation or right to repair premises demised.
(1) Where premises are let under a tenancy which puts on the landlord an obligation to the tenant for the maintenance or repair of the premises, the landlord owes to all persons who might reasonably be expected to be affected by defects in the state of the premises a duty to take such care as is reasonable in all the circumstances to see that they are reasonably safe from personal injury or from damage to their property caused by a relevant defect.
(2) The said duty is owed if the landlord knows (whether as the result of being notified by the tenant or otherwise) or if he ought in all the circumstances to have known of the relevant defect.
Defective Premises Act 1972 (2)
s4(4)
(4)Where premises are let under a tenancy which expressly or impliedly gives the landlord the right to enter the premises to carry out any description of maintenance or repair of the premises, then, as from the time when he first is, or by notice or otherwise can put himself, in a position to exercise the right and so long as he is or can put himself in that position, he shall be treated for the purposes of subsections (1) to (3) above (but for no other purpose) as if he were under an obligation to the tenant for that description of maintenance or repair of the premises; but the landlord shall not owe the tenant any duty by virtue of this subsection in respect of any defect in the state of the premises arising from, or continuing because of, a failure to carry out an obligation expressly imposed on the tenant by the tenancy.
Damage
1. What is in disrepair?
2. How long has it persisted?
3. When did the Landlord have notice (actual or implied)?
4. What has been the impact on the Tenant?
What is in disrepair?
Key areas:
Damp – penetrating? Condensation?
a matter for expert evidence
Heating and hot water – seriousness depends on weather and tenant
Dangerous/unfit installations
Infestations
Evidencing disrepair
Tenant’s evidence – anecdotal, photos, contact with third parties
Other tenants in block?
Expert Report
Housing File in public sector tenancies
How long has it persisted?
Has tenant: complained?
contacted builders, doctors etc?
replaced items? (receipts)
taken photos on phone?
What has the tenant noticed and for how long?
Limitation may be a factor
Housing File – when did housing officers visit/receive calls?
have contractors been instructed?
Expert evidence may assist on history – stains from repaired leak?
Other evidence
Expert evidence – instructed at earliest stage
Contents of expert report:
Results of inspection
%wme in damp cases
Comments from tenant
Scott schedule
For landlord – exercise right to inspect (s11(6))
Once tenant and Expert evidence (and Housing File) available, is it time to start making offers?
Notice
Actual Notice – contact from tenant
visits from Landlord’s servant or agents
builders
housing officers
Constructive Notice –
Exterior/structure
Parts of building under landlord control/common parts
Duty/right to inspect
Effect of DPA 1972 s4(4)
Tortious heads – reasonable foreseeability
Impact on the Tenant
General Damages
enjoyment of the home
stress and suffering caused by the condition of the property
injury to tenant or family
The nature of the tenant and their personal factors will affect damages
Special Damages
damage to belongings – schedule evidencing purchase/value as far as possible
extra costs – extra heating bills/equipment
medicines etc
Quantifying General Damages … not a
science
Wallace v Manchester [1998] EWCA Civ 1166‘the sum … required to compensate the tenant for the distress and inconvenience
experienced because of the landlord’s failure to perform his obligation to repair’
The [un]official tariff
English Churches v Shine [2004] EWCA Civ 434 approves‘a notional reduction in rent’ ‘a global award for discomfort and inconvenience’ or
‘a mixture of the two’
(Earle v Charalambous [2006] EWCA Civ 1090 market value proportion)
10% Simmons v Castle uplift for PSLA
Quantifying General Damages (2i)
A possible worked example… (without ANY liability!)
Monthly Rent: £1000 for 2 bed flat
Disrepair: Total loss of heating/hot water Dec-May
Patchy heating 6 months thereafter
Damp affecting 1 bedroom (severe – loss of room)
second bedroom (moderate –usable)
living room (minor)
Uncertain duration of damp but c1year
Draughts from defective front door for 2 years
Quantifying General Damages (2ii)
Disrepair:
1. Total loss of heating/hot water Dec-May -75-100% of rent?
2. Patchy heating 6 months thereafter – 25-30%
3. Damp affecting 1 bedroom (severe – loss of room) – 40%
second bedroom (moderate – usable) 20%
living room (minor) 10%
Uncertain duration of damp but c1year
4. Draughts from defective front door for 2 years – 10%
Quantifying General Damages (2iii)
1. Total loss of heating/hot water Dec-May -75-100% of rent? - £750 x 6 = £4500
2. Patchy heating 6 months thereafter – 25-30% - £250 x 6 = £1500
3. Damp affecting 1 bedroom (severe – loss of room) – 40%
second bedroom (moderate – usable) 20%
living room (minor) 10%
Uncertain duration of damp but c1year
In theory total of £700 x 12 = £8,400
4. Draughts from defective front door for 2 years 10%? – probably combine with damp
£14,400 for disrepair of 12 months when annual rent is only £12,000 - Judge will perform a cross-check and almost certainly reduce figures
Award can be > 100% of rent – Landlord’s behaviour / impact on tenant
(Chiodi v De Marney (1988) 21 HLR 6).
Then 10% per Simmons v Castle
Coming attractions in this cinema
Thursday 10 September
11.00am
Sarah Prager
and
Jatinder Paul of Irwin Mitchell
‘Claims for Gastric Illness in the Light of the Recent Decision in Griffiths v TUI UK
Limited’
Richard Cherry
Zach Bredemear