Trust me, I'm a Doctor. The Supreme Court has agreed with Dr Duval in unanimously rejecting the landlord's appeal following the October 2018 Court of Appeal hearing. This means that landlords of blocks of flats and flat owners now have to think very carefully, not only about carrying out works to flats, but potentially other absolute covenants (those which expressly prohibit the tenant from doing something). The issue arises for residential leases in blocks which are drafted on similar terms and contain a landlord enforcement covenant whereby any tenant in the building can require the landlord (subject to providing security for costs) to enforce covenants against another tenant, such as a covenant not to cut, maim or injure any wall.
The Supreme Court, in agreeing with the Court of Appeal's earlier decision, confirmed that, in consenting to what would otherwise be a prohibited act of "cutting or maiming… any roof wall or ceiling within or enclosing the demised premises", the landlord would be putting it out of its power to comply with its own obligations to other tenants in their own leases, including Dr Duval.
Whilst the injured tenant still had to make the request and provide the costs cover to the landlord - Dr Duval had complied with the former, but not the latter - the Court held that, despite this, the landlord still had an implied obligation not to do something which would prevent it from being able to enforce that covenant. The fact that Dr Duval had not actually given security for costs did not prevent the claim from proceeding and, ultimately, succeeding. The rationale is that, were a landlord to give consent to a tenant to carry out a prohibited act, it would render the covenant to enforce against other tenants ineffective, thus depriving injured tenants from recourse.
Going forwards, each individual lease will need to be carefully reviewed, by landlords and tenants alike. This judgment could have a profound effect on residential tenancies of this kind - of which there are many - as, tenants will feel that, having paid a significant premium to buy their dream flat, they should be allowed to carry out certain remodelling works, so being told they cannot do so will seem inequitable. It does not stop there though; other prohibitions in leases could be caught. If the lease prohibits any floor covering other than carpet, does not permit keeping pets, does not allow lodgers, the landlord would be in breach of its other leases if it did consent to these.
So, what does this mean and what is the way through? Broadly, there are three alternatives:
1. turn a blind eye and risk it (which is not going to be ideal for obvious reasons);
2. the landlord just says "no" (which we can imagine will become more common, particularly if option 3 is not going to be practical); or
3. obtain consent of ALL other tenants in the building.
Whilst option 3 may seem straightforward, if we are talking about a large, multi-tenanted, building, it may be very protracted and difficult to get a response from everyone - particularly if tenants do not live at the flat (for example, they are non-resident owners who have bought the property as an investment). Also, do not rule out vindictive neighbours… Neighbour disputes can be some of the most vitriolic and deeply entrenched - our home is our castle and all that.
We would expect landlords to start saying that, until its own costs are covered (by way of an indemnity ideally) and the tenant has obtained provided evidence of clear compliance with option 3, it will not give any consent. Given that the consent will then need to be documented by a licence for alterations, against at the tenant's cost, this could be a slow and expensive process for them. It is certainly going to be interesting to see how the residential sector reacts.
Is a landlord of a block of flats entitled, without breach of covenant, to grant a licence to a lessee to carry out work which would breach an absolute covenant contained in a lease of her flat, where the leases of other flats on similar terms require the landlord to enforce covenants at the request of a lessee of one of those other flats?