Repairs and alterations

The scope of a repairing obligation can vary unexpectedly according to the specific wording of the clause and in the circumstances of the letting. The tenant's repairing covenant relates to other provisions (including those dealing with insurance, rent review and service charge) and if it is not satisfactory it could affect the parties' liability or remedies in the event of a dispute.

The meaning of 'repair' is found in case law. The key principles are:

• repair is not improvement - liability cannot arise in the absence of disrepair

• repair is distinct from renewal - renewal is required only where the property (or the relevant part of it) is beyond economic repair

• inherent defects can fall within the scope of a repairing obligation - if they cause damage to the property that is covered by the obligation and cannot be repaired without dealing with the inherent defect

The standard of repair

The standard formula is 'such repair as having regard to the age, character and locality would make it reasonably fit for the occupation of a reasonably minded tenant of the class likely to take it'.

The standard is fixed when the lease is granted. A covenant to 'keep in repair' will include the obligation to put the property into the appropriate standard of repair.

Repair and condition

In a case concerning social housing, condensation had given rise to mould on furniture and decoration inside the property but caused no damage to the structure. Perhaps because of the type of tenancy, the Court of Appeal held that 'condition' went beyond and added to the obligation to 'repair' and that the landlord was liable to deal with the cause of the condensation.

Schedules of condition

The purpose of a schedule of condition is to limit, modify or clarify a repairing obligation. The schedule must provide accurate evidence of the required condition, as it will be used to determine the reinstatement and other works that the tenant must carry out and also the level of any damages recoverable during or at the end of the term.

The schedule of condition must be kept with the lease and must be in a form that provides meaningful evidence. A photographic schedule may be more useful than one giving only a verbal description.

Practical difficulties can arise where a schedule of condition is used to limit the obligations of an undertenant. If the head tenant remains liable for the full repairing covenant then it will be necessary to reserve a right of entry to carry out works that go beyond those required by the schedule of condition. It is not certain that an injunction would be granted to compel the undertenant to allow access, and so the head tenant might be faced with a claim for damages. In those circumstances the head tenant would have to rely on the statutory cap on damages imposed by Landlord and Tenant Act 1927, s 18 and/or on the protection conferred by the Leasehold Property (Repairs) Act 1938.

Alterations

Leases usually prohibit or restrict the tenant's right to alter the property. The purpose of the covenant is to protect the landlord from the tenant effecting alterations and additions which damage the property interests of the landlord.

Alteration will usually be construed as something that alters the form or construction of the building. Where the proposed alteration is an 'improvement', consent cannot be unreasonably withheld (Landlord and Tenant Act 1927, s 19(2)). An improvement is an alteration which enhances the premises from the tenant's point of view by, for instance, increasing their value or utility. Consequently, where the lease specifies that an alteration requires the landlord's consent, he will almost certainly not be able to withhold that consent unreasonably.

It is for the tenant to show that the landlord has 'unreasonably' withheld consent to the proposals which the tenant has put forward. The tenant must make sufficiently clear what his proposals are, so that the landlord knows whether he should refuse or give consent to the alterations or additions.

'Reasonableness' is a spectrum, not a single point. It is not necessary for the landlord to prove that the conclusions which led him to refuse consent were justified, only that they were conclusions which might be reached by a 'reasonable landlord' in the particular circumstances. However, consent cannot be refused on grounds of pecuniary loss alone. The proper course for the landlord to adopt in such circumstances is to ask for a compensatory payment. Further, the landlord is not entitled to refuse consent on grounds which have nothing to do with his property interests.

Improvements

Regardless of any prohibitions in the lease Landlord and Tenant Act 1927 allows the tenant to carry out improvements and, on quitting, to get compensation for them. The tenant must comply with the correct procedures and strict time limits:

• the tenant must give written notice of its intention with a:

  detailing the improvement and the Property to which it relates

• • specification, and

  • plan

• the landlord may (within three months) give notice:

• • consenting to the works

  • objecting to them, or

  • indicating that it intends to carry out the improvements itself in return for a reasonable increase in rent (which may have to be determined by the court)

The tenant may carry out the improvement if no notice of objection is received from the landlord or the court certifies the improvement as 'proper' - that is, among other things, it adds to the letting value of the premises. The works must be carried out by the tenant in accordance with the specification and plan provided, and in compliance with conditions imposed by the Court, as otherwise the right to compensation will be lost.

Once the works are completed, the tenant should request a certificate that the improvement has been properly completed, in order to show compliance with the Act on any future compensation claim. The landlord must (at the tenant's expense) give the certificate of due execution within one month of that request, failing which the tenant may apply to the Court for one.

When a tenant serves a notice of its intention to make an improvement, and the landlord serves a notice of objection on the ground that it wishes to carry out the improvement itself in consideration of a reasonable increase in rent (or such as the court may determine) the tenant is permitted to change its mind and decide not to proceed with the improvement. The landlord is not then entitled to proceed with carrying out the improvement. The provision is designed to allow the tenant to carry out improvements not to compel it to accept works that the landlord wants to carry out.