Caution required when granting consent
The Court of Appeal has heard a case which involved a multi-let building with leases to each tenant containing the following provisions:
- an absolute covenant by each tenant against cutting into any walls or ceilings;
- a covenant on the part of the landlord that any lease granted of a unit in the building would contain similar covenants; and
- a covenant on the part of the landlord that, at the request of a tenant, the landlord would enforce the covenants given by another tenant.
One of the tenants, asked the landlord for consent to carry out alterations to their property involving cutting into several walls.
The landlord was willing to give its consent.
However, a neighbouring tenant objected and argued that the landlord had covenanted to enforce the absolute prohibition against certain works if requested to do so by another tenant.
The court initially held that the landlord would be in breach of its covenant to enforce the tenant covenants in the lease by granting consent to allow one of the tenants to do an act that would otherwise be in breach of its lease.
The landlord appealed this decision and, upon subsequent appeal by the landlord, the Court of Appeal upheld the decision.
The Court of Appeal noted that the landlord’s covenant to enforce did not expressly state that a breach would be committed by the landlord if it granted consent to one tenant to do something that would otherwise be a breach of an absolute prohibition. However, it went on, if the same was not implied into that provision, it would defeat the whole purpose of the covenant to enforce.
A landlord must give careful consideration when faced with any application by a tenant in a multi-let building for consent in respect of something that would otherwise be absolutely prohibited, to ensure that it does not result in the landlord inadvertently breaching a covenant to enforce at the request of another tenant in the building.
This case related specifically to a residential building however such provisions are also common in a commercial setting.
Care must be taken when drafting such provisions in future and it is clear that if a landlord wishes to have such freedom, the wording of the provisions in each lease should be expressly drafted in that way.