UK: Are Landlords Being Made Responsible For Their Tenants' Business Activities?

Last Updated: 13 October 2017
Article by Anthony Judge

 Landlords are responsible for the buildings they own. But increasingly this responsibility is being extended to encompass the behaviour of their tenants. This is not just a question of activities that might upset or offend nearby occupiers; it seems that landlords are now required to take on some of the work of the police or of HMRC. Is this part of a Government move to reduce the burden on the state or is it merely a perception magnified by the media? In this piece we discuss this trend and advise landlords on the current extent of their liabilities.

The landlord/tenant relationship

Leases typically require the tenant to comply with the law as far as it relates to the premises and the tenant's use of the premises, and not to use the premises for an illegal act. However, they do not include a general obligation to comply with the law in the running of their business – and a tenant would surely object to such an obligation. It is also likely that a landlord would not want to include this sort of provision. If the landlord has power to stop the tenant doing something then this power may come with an enforcement responsibility – as with the concept of being a "knowing permitter" under environmental legislation. The knowing permitter becomes liable if it has the ability to stop something but doesn't do so.

Modern slavery

One of the most high profile cases of landlord exposure to blame for tenant's misdeeds came last year when Hermes came into the firing line over the behaviour of Sports Direct, one of its tenants. In a well-documented case, Sports Direct were accused of mistreating their employees. Although as a matter of law, and under the terms of Sports Direct's lease, Hermes had neither the right nor the responsibility to intervene in its tenant's treatment of its staff, Hermes was concerned about possible reputational damage it might suffer through the behaviour of its tenant. It complained to Sports Direct and (in its capacity as shareholder) voted against the re-election of the chairman and 3 directors.

It also considered introducing anti-slavery clauses into its leases, although it is generally agreed that the impact of the Modern Slavery Act ("MSA") 2015 on parties to leases is limited. All organisations which carry out business in the UK with an annual turnover of £36m are required to produce an annual slavery and human trafficking statement. This statement typically describes the measures that the organisation is implementing "to ensure that slavery and human trafficking is not taking place in any of its supply chains, and in any part of its own business". There is no formalised mechanism for evaluating the extent to which the organisation implements those measures in practice. Applying that requirement to the landlord and tenant relationship:

  • Qualifying landlords do not as a matter of law need to consider their tenants' businesses' compliance, as they are not part of their supply chain.
  • This position is reversed in the unusual situation where the tenant supplies additional services to the landlord.
  • However, all landlords may want to think about checking before granting a new lease that their qualifying prospective tenants have published their annual statements, in order to protect their public standing.
  • Qualifying landlords need to consider the businesses which supply services to them whether directly or indirectly through their property managers.
  • Qualifying tenants should consider their landlords' businesses' compliance, particularly if they receive services from their landlords, as they would form part of the tenant's supply chain. However, in practice it is very rare for leases to contain obligations on a landlord in relation to any services it provides or works it carries out.

Landlords' areas of responsibility for tenants' compliance with the law

There are some areas of law where landlords can be made directly responsible for their tenants' compliance. These include:

  • Contamination – Environment Protection Act 1990 is focussed on clearing up any contamination. This means that liability can fall on a landlord if the tenant fails to execute a clean-up during its term.
  • Tax and National Insurance – if a landlord who contributes to the cost of works that its tenant is carrying out falls within the definition of a" contractor" under the Construction Industry Scheme, it must register under that scheme and pay its contribution to the tenant net of income tax and NI.
  • Immigration status - landlords of residential property are responsible under the Immigration Act 2014 for checking that their tenants have sufficient immigration rights to give them the "right to rent".

Tobacco duty

Earlier this year, in a consultation paper on sanctions to tackle the evasion of tobacco duty, the Government said it was considering imposing a duty on landlords to take steps to ensure that their property is not being used to evade duty, including checking the premises and the business the tenant carries out there, taking steps to ensure they are aware of illicit activity, and reporting immediately any concerns to the authorities. This would cut across the tenant's entitlement to quiet enjoyment of the premises, standard in all leases for centuries, and make the landlord an enforcer for HMRC. The consultation ended in May 2017 and its conclusions are awaited.

Cannabis farming

In a similar vein, there seems to be a suggestion from the police and the media that a landlord should be held responsible if a tenant is running a cannabis farm from the premises. For example, in a recent report in the Crewe Guardian regarding a cannabis operation, the police urged landlords to make regular checks on their properties and to report to the police any information gleaned. Here there is likely to be a breach of the terms of the lease, but it will be up to the landlord (if it knows what is going on) to decide what enforcement action (if any) to take under the lease.


One of the key concepts underlying the leasehold relationship is that the tenant acquires a legal interest in the land and with it the entitlement to enjoy the premises without interference from the landlord. There seems to be a general drift by the Government and the media to move responsibility for ensuring the tenant upholds the law from the enforcement agencies to the landlord, a move that should perhaps be resisted.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Shepherd and Wedderburn LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Shepherd and Wedderburn LLP
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions