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



“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”



https://www.youtube.com/watch?v=6aw5OTyP-1Q

“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.



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)



Could be “Repair”

Inherent defects causes damage to other parts

Part that is defective has itself become damaged



“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



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”



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.



When obligation to “repair” arises

Question more important where L responsible.

L generally requires notice of defect beforeobligation arise in parts demised on tenant




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.




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



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.



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



Damages – Common Law

Other consequential losses possible:

•Service charge

•Insurance rent

•Liability for rates



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.




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




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



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



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%


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%


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

[email protected]

Zach Bredemear

[email protected]

mailto:[email protected]

mailto:[email protected]

Documents

Back to Basics Disrepair and Dilapidations