Here the tenant operated a high class modern art gallery from ground and basement premises opposite the Connaught Hotel in Mayfair. The Defendant was the freeholder and head lessee through an associated company. The landlord wanted to redevelop the top four floors of residential flats and carried out substantial works from 2013 onwards.
The tenant complained about the way the landlord was carrying out these works. In particular, the tenant was annoyed by the noise of the works and that the scaffolding encompassed the whole building. The tenant maintained that the works substantially interfered with their use and enjoyment of the property as an art gallery.
The landlord was allowed to erect scaffolding under the terms of the lease provided it did not materially adversely restrict the use and enjoyment of the premises. The tenant had the benefit of a covenant as to quiet enjoyment in the lease.
Other issues for the court to consider included that the works were not repair works but works solely for the landlord’s benefit. The landlord had also not made clear to the tenant the extent of the works and had refused to grant the tenant a rent reduction.
Bearing all this in mind, the court held that the landlord had acted unreasonably. The landlord should have exercised their right to build with more consideration of the tenant’s need to keep the art gallery running and with regard to the tenant’s right to quiet enjoyment of their premises. As the tenant was not able to demonstrate any loss of profit on account of the works, the damages were assessed on the basis of loss of use and enjoyment at 20% of the rent. This case could prove useful where any landlord (commercial or residential) carries out redevelopment works in a problematic manner.