Replacement of carpets owned by landlord not a breach of repairing or alteration covenants – South Essex Partnership University NHS Foundation Trust v Laindon Holdings Limited [2016] EWCA Civ 377.

The tenant installed a tiled carpet at the landlord’s expense in line with its agreement for lease. Shortly before the end of the term of the lease, the tenant informed the landlord that it would be replacing the tiled carpet. The landlord did not object but then subsequently claimed that the new strip of carpet was installed in breach of the repairing covenant.

As the alterations clause within the lease permitted the tenant to make internal non-structural alterations to the building without the consent of the landlord, the court had to decide between two potentially competing clauses:-

1. the tenant’s unqualified right to make internal non-structural alterations without landlord’s consent; and

2. the tenant’s obligation to repair landlord fixtures.

The court held that the carpets were landlord fixtures, and as the carpets were not in disrepair there was no breach of the repair covenant. Further, as the alterations clause allowed the tenant to make internal non-structural alterations without the landlord’s consent, the tenant was entitled to replace the carpet.

What this means for you:

  • Parties should look at the terms of the lease as a whole during negotiation and on termination and consider the interactions between the tenant’s duty to repair and its right to make alterations.