12 Days of Christmas – Day 7

On day 7, we look at two recent cases on service charges: the High Court's decision in Triplark Ltd v Whale and the Upper Tribunal's decision in London Borough of Tower Hamlets v Lessees of Brewster House and Malting House.

Triplark Ltd v Whale

Triplark, the landlord, wished to renew the communal heating and hot water system (which it was obliged to repair) by installing additional apparatus in the tenants’ flats. Given the leases obliged the tenants to repair all central heating apparatus solely serving the flat, the tenants were worried that the heat exchangers which the landlord intended to install, would form part of their demised premises and add to their repairing obligations.

The High Court determined that the landlord was not permitted to make the proposed alterations to the tenants' flats. Whilst the tenants’ repairing obligation contemplated “additions thereto”, this related to additions that the tenant may have made. The landlord had no right itself under the lease to enter a tenant’s flat to make additions. The judge was not prepared to interpret the tenant’s repair covenant as permitting the landlord to make additions as it considered appropriate, and then expect the tenant to carry out repairs to the additions as if part of the demise.

Following this judgment, landlords should consider whether any proposed improvements they intend to make could be challenged by tenants as increasing the tenants' maintenance burden beyond what was within the contemplation of the parties at the commencement of the lease.

London Borough of Tower Hamlets v Lessees of Brewster House and Malting House

A building in Tower Hamlets had safety defects which required reinforcement works to be carried out, estimated to exceed GBP8 million in cost. The landlord sought recovery of part of such costs from tenants under the long leases of the flats within the blocks as being covered under either i) the recoverable cost of work to "maintain" the blocks in good and substantial repair and condition; or ii) via the services "sweeper" provisions in the leases.

The Upper Tribunal held that, whilst a covenant to “maintain” is something different from “repair” and can denote something preventive rather than remedial, neither a covenant to repair nor a covenant to maintain is a covenant to remedy structural defects nor make a building safe.

As for the sweeper clause, the Upper Tribunal held that this was designed to provide for items not yet thought of at the grant of the leases but, if the landlord had intended recovery of the costs of items vastly different in kind and scale from those expressly specified, clear express words would have been used.

This judgment has potentially wide significance for landlords of buildings with structural defects which are only just being discovered or are yet to be discovered.

If you have managed to read this far, here is your reward of a festive joke to get you in the Christmas spirit: What is green, covered in Christmas lights and Christmas bulbs, and goes ribbit? A mistle-toad!