Commercial leases usually contain an express covenant by the
landlord to give the tenant quiet enjoyment of the demised premises
i.e. to ensure that there is no interference with the tenant's
possession and enjoyment of the demised premises and reserve
various rights to the landlord including rights to carry out works
to the demised premises or adjoining premises, even if such works
affect or interfere with the tenant's business. In the recent
case of Timothy Taylor Ltd v Mayfair House Corporation  EWHC
1075 the High Court considered the relationship between these two
Timothy Taylor Limited ("the Tenant")
held a 20 year lease of the ground floor and basement of a five
storey building in Mayfair ("the
Property") at a rent of over £500,000 per
annum, from which it operated a high-class art gallery. Mayfair
House Corporation ("the Landlord")
retained the remaining floors.
The Tenant's lease contained a covenant by the Landlord to
give the Tenant quiet enjoyment of the Property. The Tenant however
had been made aware that some work would be carried out to the
building during the term of the lease, therefore the lease reserved
to the Landlord:
the right to alter or rebuild the
building even if the Property or its use and enjoyment were
materially affected; and
the right to erect scaffolding
temporarily, provided that this did not materially restrict access
to or the use and enjoyment of the Property.
The lease was granted in 2007 and in 2013 the Landlord began
extensive works to develop the upper floors of the building as new
apartments. These works were very noisy and involved scaffolding
which wrapped around the building, largely obscuring the gallery
The Tenant claimed that its business was seriously affected by
these works and that the Landlord was in breach of the quiet
The Court ruled that although the Landlord had the right to
carry out works to the building it had not taken all reasonable
steps to minimise disruption to the Tenant. The Landlord was
therefore exercising its rights unreasonably and was in breach of
its quiet enjoyment covenant.
In considering whether a landlord has exercised its rights
reasonably the court may consider:
The nature of the tenant's
business – In this case the Property was used as a high-class
art gallery, so the Landlord had to exercise its rights with regard
to the Tenant's need to keep the gallery running with as little
disturbance as possible.
What knowledge or notice the tenant
has of the intended works at the start of the lease – in this
case the Tenant only had a very general idea of the Landlord's
intention to carry out works at some stage, rather than specific
Any offer of financial compensation
made to the tenant – In this case the Tenant requested
financial compensation but this was refused by the Landlord. The
Court found that the Landlord was entitled to refuse to financially
compensate the Tenant but that this increased the level of
Whether the works were being carried
out for the personal benefit of the landlord or for the benefit of
some or all of the tenants in the building – In this case the
works were entirely for the Landlord's benefit.
The Court awarded the Tenant a rebate of 20% discount on the
annual rent, backdated from the date of commencement of the
Points for landlords to consider when intending to carry out
Give tenants as much information as
possible regarding anticipated works, before the lease is
Schedule frequent meetings with
tenants so as to address any specific concerns and adjust any
method statement accordingly.
Instruct contractors to carry out the
works with due regard to the occupation and use of premises by
Consider scaffolding options which
avoid obscuring tenants' premises.
Consider offering compensation to
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 Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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).