10 November 2014 #Commercial Real Estate
In Century Projects Limited v Almacantar (Centre Point) Limited & others , the claimant tenant held a 36 year lease of the top floors of Centre Point Tower at Tottenham Court Road, London which it used as a high class restaurant and private members’ club. It sought an injunction to restrain the landlord from carrying out external works to the cladding of the tower which involved the erection of scaffolding around the building, including scaffolding at the level of the top floors.
Its argument was that the erection of scaffolding would constitute a breach of the landlord’s express covenant for quiet enjoyment and/or would amount to a derogation from grant. The scaffolding would obstruct the view from the restaurant and would therefore severely damage the tenant’s business. It was not doubted that the work needed to be done, and the landlord was under an obligation to keep the external parts in good and tenantable repair, but the tenant preferred a less disruptive method of working.
The court held that the landlord was required, in a reasonable way, to balance its duty to carry out repairs with its obligation not to interfere with the tenant’s enjoyment of the demised property. The court felt that the tenant would face an uphill task in persuading a court at trial that the landlord had acted unreasonably, and therefore in breach of covenant, in choosing to follow a method of works that was consistent with clear professional expert advice. Hence, on balance, the judge declined to award an injunction, but left the tenant free to pursue a claim for damages for breach of covenant should it wish to do so.
Landlords need to always consider the effects scaffolding could have on a tenant’s business.