Fencing Disrepair Blocks Lease Termination
Commercial tenants are required to comply with the covenants in their leases and breaches of lease covenants can have serious implications, as a recent case shows. It involved a tenant (a car sales and repair business) that wished to end its lease, which ran for ten years from February 2005.
The terms of the lease allowed the tenant to terminate it on three months' notice if there was a failure to obtain planning permission to load and unload cars on the premises, for which the tenant was obliged to apply and duly did. In 2010, when the local authority lodged a notice on the tenant alleging a breach of the conditions of use of the land with regard to the movement of vehicles, the tenant decided to terminate the lease and issued a notice to the landlord to that effect. The landlord rejected the notice on the ground that the tenant had breached various conditions, including the rather frivolous one (which the court rejected) that the keeping of a pet dog on site was a breach of a covenant prohibiting the keeping of 'livestock'. The court also accepted that occasional lateness in the payment of rent was not sufficient reason to regard the covenants as materially breached. The more important argument, that the tenant had obtained the required planning permission but had then proceeded to breach its terms, also failed.
However, the tenant's attempt to break the lease was rejected on the ground that it had not complied with its obligations to keep the premises in 'good and substantial repair', because it had failed to make adequate repairs to the fencing. The lease required that repairs were made to keep the property in the same condition as it had been in at the beginning of the lease. The tenant had failed to do so in this one regard and was left to face continuing rent payments as a result.