Landlords must be considerate
Commercial landlords who want to carry out building works on a property must consider the impact they’ll have on their tenant’s business.
Property specialist Jagdeep Kandola, from Martin-Kaye Solicitors, in Telford, said in most commercial leases, landlords had reserved the right to carry out remedial or redevelopment work during the tenancy.
“But if they want to implement the works, as long as your lease says you are entitled to a right of ‘quiet enjoyment’ of the premises, which most commercial leases do, they must take into account how your business will be affected.
“And if they fail to put your business first, without offering an adequate rate rebate, your business may well have a solid claim for damages.”
Jagdeep said the issue had been at the centre of a case heard by the High Court where a company had signed a 20-year lease to occupy two floors of a building in London.
“Before the company signed, the landlord made it clear that they may develop the building’s upper floors at some point in the future.
“The tenant was unconcerned until work began several years into the lease, and was unhappy about the impact the refurbishment was having on the business.
“They claimed the scaffolding that encased the building was not the image they wanted to portray, and that noise during the day from the building works was unreasonable and interfered with their day-to-day operation.”
The judge said the landlord had not explained the scale of the works to the tenant, had not given adequate notice of when they would begin, or kept the tenant informed on progress.
“There was no predetermined right to a reduction in the tenant’s rent during the works, but the judge awarded a 20% rebate and another 20% as damages – in all over £200,000,” said Jagdeep.
“So if you’re a landlord with big plans for your commercial property, it’s clear that there could be serious consequences if you fail to consider your tenants throughout the building works.
“Consult them before, during and after the project, ensuring their business is always at the forefront of your plans, otherwise your renovation could lead to not only a financial penalty, but the loss of a loyal tenant too.”
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