Repairing obligations

PRACTICE POINT: Poorly drafted repairing obligations resulted in a dispute that could, and should, have been avoided. Parties often end up paying expensive legal fees to ascertain the true nature and extent of poorly drafted obligations. As a result, getting repairing obligations right is of paramount importance to both landlords and tenants. Ryan v Villarosa [2017] UKUT 466 (LC); [2017] PLSCS 219 concerned the meaning of a lease of premises in a Victorian house in Shepherd’s Bush. The building had been split into two separate properties of unequal size and the lease contained provisions obliging the tenant of the larger area to pay a service charge that included three quarters of the cost of repairing, maintaining, renewing and insuring the building. This appeared to reflect the extent of the accommodation included in the tenant’s demise. However, the lease went on to state that the roof and the foundations shall be deemed to be party matters “to be maintained and repaired at the joint expense” of the tenant and the occupiers of the remainder of the building. And, when the roof fell into disrepair, the parties were unable to resolve the inconsistency between them. Consequently, it fell to the Upper Tribunal to determine what a reasonable person, having all the background knowledge that would have been available to the parties when they entered into the lease, would have understood the clauses in the lease to mean: Arnold v Britton [2015] AC 1619. The tribunal began by construing the parcels clause in the lease, which described the tenant’s accommodation as including “all that the whole of the building excepting the basement floor”. In the judge’s view, the natural meaning of these words was unambiguous. The demise included the roof – even though the landlord was responsible for its maintenance and repair. It was up to the parties how they allocated the repairing responsibilities under the lease, and there was nothing unusual about an arrangement like this. The judge made a number of points about the declaration that the roof and foundations were party matters. He noted that the phrase “joint expense” did not specify exactly how the costs of repairing the roof and foundations were to be divided between the occupants of the building, and appeared to accept the landlord’s argument that “joint need not be equal”. Furthermore, the declaration did not deal with the rights between the landlord and the tenant. It affected the rights between the tenant and the occupiers of the remainder of the building. However, they were not a party to the lease and it was difficult to see how they could be bound by it. The tenant’s premises comprised three of the four floors in the building – and it was both coherent and logical to require the tenant to contribute three quarters of the cost of the roof repairs. Consequently, in the judge’s view, the poorly drafted declaration, which purported to govern the relationship between the tenant and the occupiers of the basement flat, did not override the repairing and service charge obligations in the lease. Allyson Colby, property law consultant