A recent decision in the Court of Appeal (CoA) concerning obligations which can be implied under a lease should ring alarm bells with landlords who do not take compliance matters such as electrical safety seriously.
The facts of the case in question are relatively straight forward, in that a tenant operating a café business had to close, after experiencing significant problems with the electrics in the building. In closing the business, the tenant alleged that she was entitled to rescind the lease since she claimed the landlord had, prior to the lease being entered into, argued that the building had been rewired and had passed all relevant safety inspections.
Additionally, and more interestingly, the tenant stated that an obligation should be implied upon the landlord the effect of which was that the landlord should be held responsible for maintaining and repairing all electrical installations in the building, which the landlord was in repudiatory breach of which she was entitled to accept (and therefore bring the lease to an end).
Upon examining the lease itself, it transpired that there were far more extensive obligations on the tenant than the landlord (which in itself is perhaps not entirely usual!) but more particularly, there was no express reference to any responsibility for the repair and maintenance of the exterior of the building, or to the plumbing or electrical installations. Where the tenant only occupies a part of a building, it is common practice that the lease will at least impose some obligation on the landlord (even if the landlord can then recover a proportion of those cost from the tenant by way of a service charge or similar contribution).
The court quite rightly declared that the lease was “an oddly balanced document” and held that the landlord had indeed committed a repudiatory breach of an implied obligation to keep the electrical installations at the building safe.
The landlord appealed to the CoA, but his application was dismissed. The finding was reached on the basis that the parties true intentions at the time the lease was entered into must surely have included an understanding that the landlord would remain responsible for the structure and exterior of the building, and the plumbing and electrical apparatus within it. As such, the CoA concluded that the lease could only ever be considered as incomplete, given the lack of an express provision to cover such matters, and therefore determined that such obligations could be implied into the lease.
In this instance, there was an obvious and clear gap in the drafting of the lease relating to the maintenance obligations and responsibility for the repair and upkeep of the exterior of the premises and the service media running through it, and a ‘common sense’ approach would clearly suggest that such matters must be dealt with in the lease. The fact that they were not covered expressly shouldn’t mean that a landlord can circumvent their obligations by simply removing or deleting relatively standard clauses. It does however go without saying that if the tenant had obtained the correct and full advice prior to entering into the lease, which would also have included an examination as to whether safety certificates were indeed available for the electrics, a lot of trouble and expense could have been avoided.