Landlords – Caution there is a tripping hazard!

Property ownership today is increasingly complex with multiple layers. It is quite common for there to at least be a ; freeholder, long leaseholder and a tenant (usually letting on an assured shorthold tenancy basis or periodic tenancy). Quite often there is a shroud of uncertainty over who has responsibility for repairing a defect on

akrantz-sbProperty ownership today is increasingly complex with multiple layers. It is quite common for there to at least be a ; freeholder, long leaseholder and a tenant (usually letting on an assured shorthold tenancy basis or periodic tenancy).

Quite often there is a shroud of uncertainty over who has responsibility for repairing a defect on the exterior of the building when a flat is tenanted. This issue often comes to the fore where tenancies are concerned when an event directly affecting the tenant (usually on an AST basis) takes place, such as if the tenant has gotten injured at somepoint in or around the property.

This is exactly what happened in the recently decided case of Edwards v Kumarasamy [2016] UKSC 40.

The Case Background

Kumarasamy or K held a long lease for a flat in a building owned and managed by Freeholder (F). The terms for this specific lease granted K right to use the front hall and entrance path (which was paved) to access the communal refuse and bin storage unit. F, as landlord in the headlease, had a covenant to keep that path and all other communal areas in good condition subject to K giving notice of defect and F then having a reasonable opportunity to remedy the defect.

K also then sublet the flat to E under assured shorthold tenancy. E subsequently tripped on a loose paving stone taking rubbish to the refuse collection and injured their hand and knee. E claimed that K was liable for this by virtue of section 11 Landlord and Tenant Act 1985 (“LTA 1985”).

Section 11 LTA 1985

This is a section outlining that there is an implied covenant on the lessor who has an “estate or interest” in the property (i.e. K in our circumstances) to maintain/repair the structure and exterior of the dwelling house where the lease is for less than seven years.

E was arguing that his AST fit this description as a tenancy for less than seven years and therefore K should have been liable for this defect.

The point of debate is whether K had such a responsibility under section 11 LTA 1985.

The Supreme Court Decides

The Court of Appeal, rather worryingly for most buy to let landlords, found in E’s favour and held that K had been granted sufficient rights over the pathway and hall area to be responsible to E for its upkeep and therefore the section 11 LTA 1985 obligations did apply.

The Supreme Court looked at section 11A LTA 1985 to see that K only had a lease of part of the building. In addition they stated that one cannot construe the statute to place a more onerous obligation than that which had been agreed in terms of demise within the contract, i.e. the lease. It would be difficult to see that the pathway leading to the building would be construed as K’s responsibility to repair himself when the lease had not done so and merely granted K a right of access. However, the Supreme Court still found that he had an “interest” in the hallway and path under the Law of Property Act 1925 definition, since he had an easement or legal right to pass over this area.

However the Supreme Court had regard to the defence for K that if he could show he had used all reasonable endeavours to obtain rights to carry out repairs but had failed to do so at that point, then he would not be liable.

The Supreme Court held that in granting the underlease, it was acceptable in these circumstances to expect the undertenant (E), to give notice of this disrepair or damage to K as his intermediate Landlord since K was not present on the site. In granting the underlease to E, K had “given up or lost” his right to the access in the hallway and front path. A right of repair (and indeed a responsibility) was not obvious or necessary for K to exercise his right of way over the hallway at the front of the building and in order for him to undertake any repair or notify F of this, he would need to have been made aware.

Ultimately the lack of notice about the damaged pathway from E saved K from liability in that he could not reasonably have acted in a situation where he could not attempt to undertake repairs, though the position on whether he was liable had he been notified remains somewhat unclear.

There was also fierce debate as to what constitutes a repairing obligation on the intermediate landlord. The Supreme Court found in this specific case that a path leading from the building to a garage/bin store cannot possibly be within the “exterior” of the dwelling house mentioned in section 11 LTA 1985. However, the Supreme Court left somewhat unanswered which items and building sections can be within the intermediate landlord’s repair obligation for the “exterior” of the dwelling house.

Likewise future clarity will be needed on the different instances where a landlord is entitled to expect notice of repair for liability purposes and circumstances where they are under an obligation whether provided notice or not.

So what next for the buy to let landlord?

Buy to let landlords can, for now at least, breathe a sigh of relief, since the onerous Court of Appeal decision was overturned at the Supreme Court.

Intermediate or buy to let landlords still need to be aware that their ability to dodge section 11 LTA 1985 repair obligations may not be so straightforward in the future. Enforcing an obligation on a tenant to provide notice to you for disrepair of common areas is not possible since it is prohibited under section 12 LTA 1985 to impose a covenant which restricts a Landlord’s liability to repair in section 11 LTA 1985. This means that making a requirement for a tenant to report problems is at best going to be an informal expectation or understanding rather than a necessarily legally enforceable obligation. Although this case shows that an intermediate Landlord could rely on this defence of not being notified, it is highly specific to the facts and may not form a reliable precedent for all scenarios a buy to let landlord may face when it comes to repairs to “external” and “structure”.

In a bid to minimise exposure, buy to let landlords may think it prudent to ensure either they or an appointed agent make occasional site visits to spot these issues going forward, since as this case shows, the law can more than easily trip you up.

*This article is not legal advice and is not intended to be relied on as such. If you have any queries please get in contact and a solicitor from our team will be able to assist.

Property law • Uncategorized

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