By Kavita Bharti, Legal Adviser at LEASE
April 2019
A lease of a flat or a house can be granted to you perhaps when you are moving into a brand-new development. Alternatively, you may have bought a lease from a previous owner.
The lease will set out obligations that you must obey. But there should also be rights given to you by the lease and which are there for your benefit. For instance the right to use a side passage; to cross over land or a footpath to reach a main road; to use a car parking space; or to make use of a bin store for disposing of refuse.
Hopefully, you can continue to enjoy and use these rights without anyone stopping you.
But what if the landlord was to interfere with or take away such rights granted to you under the lease? Would the landlord be at fault in any way and, if they are what, remedies are available to you?
This is where the long-standing legal principles of quiet enjoyment and derogation from grant come in and may be of assistance to you.
A landlord’s obligation to give quiet enjoyment is a standard feature in most leases and indeed is implied anyway where not expressly set out in the lease. The landlord’s obligation not to derogate from grant will be implied into the lease and it is unlikely that the lease will state anything about it.
This article examines the meaning and effect of these two landlord obligations.
Derogation from grant
What is derogation from grant?
It is the general legal principle that if one party agrees to give a benefit to another party the giving party should not do anything that substantially takes away that benefit from the receiving party.
This principle reflects the idea of fair dealing between the parties and is typically relied upon by leaseholders to prevent landlords from doing something that makes the property materially less fit for the purposes for which the lease was granted so preventing the leaseholder from enjoying their property.
In other words, the benefit of what is given with one hand should not be taken away by the other hand. If the leaseholder is given a right, the landlord is not to do anything which would stop the leaseholder from carrying out or exercising that right. For instance, if the landlord has granted a lease for a particular purpose he may not then use the adjoining land retained in their ownership so as to prevent or frustrate the purpose for which the lease was granted.
What situations are examples of derogation from grant?
- Blocking or landscaping over a parking space
- Stopping a leaseholder using a right of way or placing an obstruction in their path
- Preventing access to a garden that the leaseholder is entitled to use.
If the landlord breaches a covenant not to derogate from grant you may be entitled to go to the county court to make a claim for damages and/or an injunction. However, it is important to seek advice from a litigation specialist before starting any legal action. It is always advisable to consider other methods first, such as mediation
Quiet Enjoyment
What is Quiet Enjoyment?
Contrary to popular belief, the landlord’s obligation to give quiet enjoyment has nothing to do with noise levels at the premises. It means the leaseholder has a right, not just to occupy the property, but to use it in a lawful way, without interference.
This obligation gives the leaseholder the right to enjoy possession of their property during the term of the lease and basically for the landlord not to interfere with the leaseholder’s exercise and use of the right of possession. In addition, it means that the leaseholder is entitled to enjoy the full benefit of the property free from interference.
The clause may be broken by the landlord carrying out work on other parts of the building that causes noise and nuisance to the tenants. It would be necessary to prove that the landlord, in carrying out the works, is carrying out an activity which makes it impossible for the leaseholder to live there.
If substantial interference is suffered, then as with derogation from grant, a leaseholder can either go to the county court for an injunction to limit the interference and/or seek damages for any losses caused by such interference.
What is “substantial interference”?
Whether an act amounts to “substantial” interference will depend upon the facts of the case. Historically, the interference had to have a physical aspect, but more recent findings have expanded the scope of interference to non-physical acts. Examples of activities that have been found to be “substantial interference” include:
- cutting off the gas and electricity supplies to the leaseholder’s property;
- flooding caused by water from the Landlord’s neighbouring property which damages the leaseholder’s property;
- continuous loud noise, dust and dirt which interferes with the leaseholder’s enjoyment of their property;
- putting the leaseholder in fear and intimidating them into leaving the premises;
- a significant obstruction of access to the leaseholder’s property, for example an obstruction caused by scaffolding
Is there any useful case law about quiet enjoyment and derogation from grant?
In the case of Timothy Taylor Ltd v Mayfair House Corporation & Another [2016] EWHC 1075 (Ch), [2016] All ER (D) 97 (May) involving a commercial property tenant namely an art gallery in Mayfair the tenant recognised that the landlord was entitled to carry out its works and accepted that some disruption to its use and enjoyment of its premises was inevitable. However, it complained that the manner in which the work had been carried out and was threatened to be continued to be carried out in the future, was unreasonable in that it paid little or no attention to its rights under the lease.
In 2013, the landlord began works to develop the upper floors of the building in which the gallery was located. Originally, the landlord had presented the tenant with a design for the scaffolding which was considered ‘not wholly intrusive’ as the gallery could still be seen from the street as open for business and readily accessible. However, once the scaffolding was put up, the gallery was ‘practically invisible’. This, together with the impact caused by the noise of the works, led the tenant to claim for damages for past breaches of its right to quiet enjoyment and an injunction requiring the landlord to dismantle the scaffolding and restricting noise limits.
The landlord was held not to have struck the balance correctly: it had not discussed its proposals adequately with the tenant nor offered any kind of compensation during the works.
The moral of this story is clear: if works are going to be carried out, then it is not enough to just rely on a right to do them under the lease. Instead, the landlord must be reasonable. The landlord should communicate the proposed plans to the tenant and realistically explain the likely duration of works and expected noise level. The landlord should instruct contractors to take account of the tenant’s use and enjoyment of premises.
Whilst this judgment involved a tenant under a commercial lease it could equally apply to owners of residential leasehold property such as of a flat in a building.
Remedies
As already mentioned, the remedy with both derogation from grant and a breach of quiet enjoyment would be to seek an injunction to limit the interference and/or seek damages in the County Court for losses caused by such interference. Obviously, this may be a costly, stressful and time-consuming option and it is always advisable to consider other methods first, such as mediation. If you are considering taking legal action, please take further advice from a solicitor specialising in litigation.
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