You might think, quite reasonably, that if a tenant has obtained landlord consent to carry out works to their property then this should be final. The tenant can proceed in the comfort that it has the authority to carry out the proposed works and, equally, the landlord (theoretically) can rest easy in knowing that the works will be carried out without dispute.

Unfortunately, following a recent decision of the Supreme Court in Duval v 11-13 Randolph Crescent Ltd [2020] (the “Duval Case”) it is not as simple as this for landlords who own blocks of flats or estates whereby each tenant is subject to the same lease provisions.

In these types of developments, landlords will typically sell long leases to tenants of each flat, on the same lease provisions, which will also include an obligation on the landlord to enforce the terms of lease upon one tenant and the request of another. In other words, where one tenant is breaking the terms of their lease, another tenant can inform the landlord who should stop them from doing so. This creates a problem for landlords where there is a term within the leases which absolutely prohibit the tenant to do something.

An absolute prohibition within a lease provides that a tenant is never permitted to do something in any circumstances. This means there is no qualification to the prohibition such as obtaining the consent of the landlord. For example, a lease that provides that a tenant must not make any alterations to the structure of the property. If the tenant wants to make alterations to the property which would involve a structural element (e.g. removing part of a wall) they are prohibited from doing so under the lease.

However, in practice there are instances where a tenant has approached the landlord for consent and the landlord has granted them a licence to carry out the works regardless of the lease provisions. This is normally acceptable in a standalone lease for a self-contained property that does not form part of a wider estate or block.

In the Duval Case, a landlord who owned a block of flats, provided a licence for a tenant to make a structural alteration contrary to an absolute prohibition in the lease. Another tenant objected to this claiming that the landlord did not have the authority to permit the tenant to breach the absolute prohibition.

The Supreme Court ruled that because the lease contained an obligation on the landlord to enforce the lease terms against a tenant at the request of another, the landlord did not have any authority to permit the tenant to act in breach of the lease terms. The landlord would be in breach of this obligation if it did so. If the landlord wanted to give its consent to the works, it needed to obtain the consent of all the other tenants in the block.

What are the consequences of this ruling for landlords?

Landlords should be wary of the fact that their consent is not always final. In situations where there are leases to tenants on the same provisions comprising a block of flats or an estate, they are not free to ignore absolute prohibitions within the lease and give their consent to works. If they do so, they will be in breach of their enforceability obligation owed to other tenants within the block or estate. Consequently, affected tenants could be entitled to damages (where the works have already commenced) or an injunction withdrawing such a licence or consent (if the works have not yet started).

Landlords could also consider framing prohibition provisions to allow for a qualification of their consent when drafting their leases as a possible solution going forward. However, this may cause landlords greater issues on occasions where they do not want to give their consent to a tenant’s proposal (as they will no longer benefit from the protection of an absolute prohibition) which is, arguably, a more common occurrence in practice than wishing to consent to a tenant’s proposal for works.

If you would like to discuss any of the content of the blog further please email me or another member of the Commercial Property team.

This blog was co-authored by Fred Chandler, Trainee Solicitor and Joanne Spittles, Partner