Most commercial leases impose an obligation on the landlord to give the tenant the right to peacefully enjoy their premises. This provision was recently considered in Jafari v Tareem Limited where scaffolding was erected around a dental practice for almost 2 years because the landlord wanted to convert the block into a 134 bedroom hotel.
After completion of the works, the tenant issued proceedings against the landlord, seeking over £450,000 in damages for wrongful interference with his peaceful enjoyment of the premises. He claimed that even though the rent was suspended by the landlord for the period of the works, it had caused a huge downturn in the profitability of his dental practice.
At first instance, the judge noted that the tenant’s rent had been suspended when the works were being carried out. The landlord had also taken reasonable steps to minimise the disturbance to the tenant – the tenant’s claim for loss of profit was therefore rejected.
On appeal, the tenant tried to argue that the waiver of rent was irrelevant to the question of whether there had been a breach of the peaceful enjoyment covenant by the landlord. However, the court decided that the argument, even if successful, would not result in any increase in the damages awarded to the tenant. The conclusion was therefore that the waiver of rent was adequate compensation for the disturbance caused to the tenant.
Before carrying out any building works, we would advise our landlord clients to carefully consider the impact those works, including scaffolding, will have on their tenant’s business and encourage them to engage with the tenant to find ways to minimise any disruption. Similarly, we would advise our tenant clients to contact the landlord at the earliest opportunity to highlight any disturbance and financial difficulties their business may face as a result of such works.
We recommend the above as the lesson to be learnt from this case is that a landlord and tenant should remain pragmatic and keep a dialogue open as a means to avoid litigation if at all possible.