Absolute covenants and discrimination

LEGAL NOTES Elizabeth Dwomoh considers a recent disability discrimination case that underscores the applicability of the Equality Act 2010 in relation to absolute covenants against alterations. Key points Paragraph 2(8) of schedule 4 to the Equality Act 2010 should not be construed as meaning that it is now never reasonable for a landlord to have to consent to the removal or alteration of a physical feature at a tenant’s own expense A narrow interpretation of paragraph 2(8) would adversely affect the choice of accommodation by those with disabilities Over the years, parliament has introduced significant legislation to target discrimination of individuals on the grounds of disability. The effects of these changes have been felt in the residential landlord and tenant sphere, where the aim has been to enable disabled individuals to rent and enjoy their premises in a similar way to non-disabled individuals. Under section 20(3) of the Equality Act 2010 (the 2010 Act), a landlord, as the controller of let premises, has a duty to make reasonable adjustments. The Cardiff County Court decision in Smailes and another v Clewer Court Residents Ltd [2019] PLSCS 31, provides useful guidance on the extent of that duty when a landlord is faced with a tenant’s request for permission to alter premises where an absolute covenant prohibits the same. The dispute The claimants, Andrew Smailes and Stacey Poyner-Smailes, purchased a flat in Clewer Court, Newport in March 2014. Clewer Court was a converted Victorian Building. The defendant (CCR) was the freehold management company of which the residents were shareholders. Poyner-Smailes suffered from a variety of health conditions that manifested in her experiencing difficulties walking, standing and using her upper limbs. The claimants sought to alter their flat to make it suitable for her needs. The proposed works included relocating the kitchen to the lounge, relocating the lounge to a bathroom and the cutting of a doorway into a non-structural wall. Pursuant to clause 4.7 of the claimants’ lease, they covenanted not to “alter the internal planning or the height, elevation or appearance of [the flat] nor… make any alteration or addition thereto nor cut, maim or remove any of the party or other walls or the principal or load bearing… supports”. Although clause 4.7 was an absolute prohibition against alterations, other leaseholders at Clewer Court had been granted permission by CCR to knock down structural walls and alter the layout of their flats. In March 2014, informal discussions were held between the parties. In April 2014, Smailes and Poyner-Smailes commenced the works without obtaining express permission from CCR. In May 2014, CCR served a stop notice on the claimants, stating that the works amounted to a breach of clause 4.7. Further, CCR expressed its concern that the proposed reconfiguration of the rooms would result in high levels of noise emanating from rooms that had previously been quiet. CCR requested that Smailes and Poyner-Smailes obtain detailed reports in respect of the works. Their reports indicated that the works could be completed without harm to other residents and without cutting into load-bearing walls. The claimants also obtained an occupational therapist report, which confirmed that Poyner-Smailes would be at a considerable disadvantage in using the flat if the works were not carried out. Despite receipt of the reports, CCR continued to refuse consent. Attempts to resolve the dispute failed and Smailes and Poyner-Smailes moved out of their unfinished flat in May 2017. They brought a claim against CCR under the 2010 Act. At trial, CCR conceded that Poyner-Smailes was disabled within the meaning of the 2010 Act. Reasonable adjustments The main claim before the court was whether CCR had breached its duty under section 20(3) of the 2010 Act, which provides that, where a “provision, criterion or practice” of a controller of let premises puts a disabled person at a substantial disadvantage in comparison with persons who are not disabled, that controller must take “reasonable” steps to avoid the disadvantage. CCR argued that it was not in breach because, in accordance with paragraph 2(8) of Schedule 4 of the 2010 Act, it was “never reasonable for a [controller of let premises] to have to take steps which would involve the removal or alteration of a physical feature”. Smailes and Poyner-Smailes argued that all that was required by CCR was to consent to the works being carried out. The steps that CCR was being required to take did not involve the removal or alteration of a physical feature. The decision The court found that CCR had failed to make reasonable adjustments. In reaching its decision the court had regard to the legislative history of paragraph 2(8) of schedule 4 to the 2010 Act. The precursor to that provision was section 24(E) of the Disability Discrimination Act 1995 (the 1995 Act). The court noted that under section 24(E) of the 1995 Act the exclusion only applied to acts of alteration or removal of physical features by a landlord or manager. This position was reinforced by the Disability Discrimination (Premises) Regulations 2006. Accordingly, the scheme prior to the 2010 Act required a landlord, where the other requirements were fulfilled, to consent to alterations of demised premises by a disabled tenant made at the tenant’s own expense. The court determined that the advent of the 2010 Act was not intended to limit the scope of the duty by excluding all alterations. The clear intention was to continue the previous scheme. In support of this position the court relied on the legislative intention behind the enactment of paragraph 2(8). It was intended to enable the United Kingdom to comply with its treaty obligations under the United Nations Convention on the Rights of Persons with Disabilities and Articles 8 and 14 of the European Convention on Human Rights. Clause 4.7 and the practice of CCR in respect of it put Poyner-Smailes at a substantial disadvantage within the meaning of section 20(3) of the 2010 Act in comparison to persons who were not disabled. Elizabeth Dwomoh is a barrister at Lamb Chambers