Landlord’s Remedies : Breach of Tenant’s covenant to repair
Landlords and tenants will often think about dilapidations close to the end of a lease and typically shortly before a lease is due to expire. A landlord will serve onto its tenant a detailed schedule of dilapidations specifying the repairs that the tenant must carry out prior to expiry. Invariably, the tenant will dispute the extent of a tenant’s liability which often continues after a lease has ended.
However, a typical commercial lease will impose an obligation on the tenant to keep the property in a particular standard of repair throughout the period of a lease and not just at the end. It often becomes necessary for a landlord to take steps during the period of a lease to ensure that its property is kept in the required condition.
The main remedies available to the landlord are:
a) To carry out the necessary repair works at the tenant’s expense
b) Damages for breach of contract
c) Obtain a court order
d) Threaten to terminate the lease
We take a look at these four options in more detail.
a) To carry out the necessary repair works at the tenant’s expense
Most commercial leases will contain an express right allowing a landlord to serve notice requiring the tenant to carry out the repair works failing which the landlord can enter the property and to carry out works at the tenant’s expense. It should be noted that in practice, it is rare for a landlord to carry out works because it must do so without any guarantee that it will be able to recover the cost from the tenant.
b) Damages for breach of contract
If a tenant fails to keep property in the standard of repair required by its lease, it will in breach of contract and liable to a landlord in damages.
c) Obtain a court order
It is possible for a landlord to obtain a court order requiring a tenant to carry out the repair works. This remedy can be expensive and time consuming for a landlord but it is a useful tool in its armoury.
d) Threaten to terminate the lease
If a tenant’s breach of its obligation to repair is sufficiently serious, a landlord can threaten to terminate a lease if the repair works are not carried out within a specified period. However, this remedy is only available to the landlord if it is reasonable in the circumstances, so it is likely only to be available where there is very significant disrepair and the tenant is first given a reasonable opportunity to remedy its breach of contract.
If you are tenant under a commercial lease and wish to understand your obligations in respect of repairs or if you are landlord and wish to discuss your remedies in respect of ongoing disrepair, please contact the property team.
