In this case, the landlord wanted to oppose a new lease on various grounds, including a persistent delay in payment of rent and the tenant’s failure to comply with their repairing obligations. The tenant had covenanted to keep the premises in good and substantial repair, which they had failed to do during their tenancy. On that basis, the landlord served counter notices opposing the new tenancy.
The Court of Appeal agreed with the trial judge on the decision made that the balance was in favour of the tenant and a new lease should be granted. But there were some important points (in relation to the obligation to repair) that should be considered.
- What is the relevant date when considering the grounds of opposition to renewal? The Court of Appeal found that, whilst the state of repair at the date of the hearing is most relevant, the historic behaviour and compliance with covenants should also be considered. In this case, the tenant had remedied the disrepair in advance of the trial date and the Court of Appeal felt it unlikely that they would allow it to happen again.
- Importantly, the Court of Appeal made it clear that if a tenant had a poor record of compliance and only resolved issues at the last opportunity, the court could consider this when deciding whether to grant a new tenancy.
- There are circumstances where a tenant’s conduct is such that a judge may consider that it ought not to be granted a new lease. Whilst that benchmark had not been reached on this occasion, tenants should bear this in mind when considering (amongst other matters) their conduct in relation to compliance with dilapidations covenants, not just at lease end but also through the term of the lease.
What can tenants take away from this?
Notably, that if there is any possibility you will look to renew a lease in the future, ensure you consider the repairing covenants throughout the term, address any disrepair, and keep a record of all ongoing maintenance and service records. Depending on the nature of the building, it may be worth considering implementing a planned maintenance programme to address any issues on a cyclical basis.
