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Should the quiet enjoyment of Covenants take a backseat to a Landlord’s obligation of repair?

A covenant of quiet enjoyment insures a Tenant against a disturbance of their right to use the property. However, to what extent can this be implemented when the Landlord is under an obligation to repair?
In Century Projects Limited v Almacantar (Centre Point) Limited [2014] EWHC 394 (Ch) it was ruled that the Tenant, Century Projects Limited, was not entitled to claim an interim injunction against its Landlord, Almacantar (Centre Point) Limited, for carrying out works that would damage the tenant’s business and breach their covenant of quiet enjoyment.
The case concerns a dispute between the Landlord and Tenant regarding their rights in relation to the premises of the top three floors of Centre Point Tower at Tottenham Court Road which the Tenant runs as an elite restaurant and private members’ club.  The landlord needed to carry out external works to the tower, which involved putting scaffolding at the top floors. The Tenant argued that this would obstruct the view from the restaurant and would severely damage business and it was in breach of the Landlord’s express covenant for quiet enjoyment.  However, the Landlord argued that it had rights under the lease to carry out work without obtaining consent and is under an obligation to carry out repairs to the external parts. The Tenant applied for an interim injunction to prevent the Landlord from putting up the scaffolding.
It was decided that the Landlord was required to take all reasonable and proper steps to avoid disturbing the Tenant’s business. The Landlord must find a balance with its duty to carry out repairs and its obligation not to interfere with the Tenant’s enjoyment of the property. Under the circumstances the court held that the Tenant would struggle to persuade a court at trial that the Landlord had acted unreasonably as the Landlord had chosen a method of works which was consistent with professional expert advice.
Therefore, the Tenant was not entitled to an Interim Injunction.
The courts did not rule out the possibility of a court ruling that the Tenant’s right to quiet enjoyment had priority over the Landlord’s obligation and that, in these circumstances, it would be necessary for the Landlord to take all possible steps, not merely reasonable steps, to limit disruption.
This case highlights the need for Landlords and Tenants to consider possible conflicting obligations when agreeing a lease and where possible balance must be found to enable both parties to respect the covenant for quiet enjoyment and the obligation for repair.
For further information please contact Tom Warrender.