Tom Weekes QC and Laura Bushaway assess the practical implications of a Court of Appeal decision about the grant of consent to a tenant to carry out works where a lease contains an absolute prohibition.
I am the freeholder of a block containing five flats. The lessee of the second-floor flat has requested my consent to keep his pet poodle at the flat and to remove the (non-structural) partition wall between the kitchen and living room. The flat is let on a 99-year lease containing a covenant prohibiting any animals being kept at the flat. Structural alterations are prohibited in the lease but non-structural alterations may be carried out with the landlord's prior written consent. The leases of the other flats within the building are in a similar form. Each contains a provision enabling a leaseholder to require the landlord to enforce any tenant covenants in the leases of the other flats (subject to the leaseholder who made the request paying the costs of any enforcement action). Am I able to grant a licence to the lessee to keep a dog at the flat and to carry out the non-structural alterations?
Yes. But if you grant consent for the lessee to keep a dog at the flat, you will breach the mutual enforceability covenant in the leases of the other flats. You might face a claim for damages by another leaseholder.
Your lease contains a provision which requires all of the leases in the building to contain similar terms and conditions to each other and enables a leaseholder to require a landlord to enforce any tenant covenants in the leases of other flats, on its behalf, against another tenant, subject to the leaseholder, who made the request, paying the landlord's costs of any enforcement action. This is known as a mutual enforceability clause.
In Duval v 11-13 Randolph Crescent Ltd  EWCA Civ 2298;  PLSCS 177, Mrs Winfield, the leaseholder of a block of flats in Maida Vale, London, wanted to carry out works to her flat including the removal of a section of a structural wall. That would have breached a covenant containing an absolute prohibition against making structural alterations. The landlord was willing to grant Mrs Winfield a licence permitting her to do those works. However, Dr Duval, who owned a neighbouring flat, objected. She argued that, by granting consent, the landlord breached the mutual enforceability clause in the lease.
The Court of Appeal agreed. A long line of cases had held that where a covenantee undertakes a contingent obligation, he is under an obligation not to prevent the contingency occurring. For example, in Short v Stone  8 QB 358, Mr Stone promised to marry Miss Short within a reasonable time after a request by her. Before she made any such request, Mr Stone married someone else. It was held that Mr Stone had breached his contract with Miss Short by putting it out of his power to comply with his contingent obligation to marry her.
It is possible that if the leaseholder keeps a dog at the premises, it will result in disturbance or nuisance to another leaseholder, with the risk that you may be required to pay that leaseholder damages for having breached the mutual enforceability covenant.
If you decided to grant consent for the lessee to keep the dog at the flat, you might do so on terms designed to minimise the likelihood of the dog disturbing the neighbours or, indeed, provide that the consent will be revoked in the event that the dog does disturb the neighbours.
Duval does not apply where the covenant is qualified. A qualified covenant is one which prohibits a lessee from doing something unless they have obtained the landlord's prior consent. The lease with which you are concerned contains a qualified covenant against non-structural alterations. Therefore, if you decide to grant consent for the removal of the non-structural partition between the kitchen and living room, you will not be in breach of the mutual enforceability clause in relation to those works. However, you will nonetheless wish to ensure that a comprehensive licence is entered into with the lessee regulating those works.
This is how the law currently stands. However, in March 2019, the landlord in Duval was granted permission to appeal to the Supreme Court. The appeal was heard on 10 October 2019, although it is likely that the judgment will not be handed down for some months. Landlords – and their advisers – await with interest the Supreme Court's decision on this issue.