Melt-Down Fear Sets Tone for Judicial Year; 1998 Saw a Number of Interesting Legal Cases Relating to Commercial Property. Jane Rothwell, a Partner at Dibb Lupton Alsop, Looks at Some of the Landmark Decisions
Rothwell, Jane, The Birmingham Post (England)
The threat of a Millennium melt-down as a result of the Year 2000 bug is causing consternation for those taking on new builds and assignments of property which may not be compliant.
For example, if the lifts do not work as a result of computer failure, who picks up the tab?
The courts have gone some way down the road of addressing this issue in case law on repair, notably in Minja Properties Limited v Cussins Property Group plc and Creska Limited v Hammersmith & Fulham London Borough Council.
In Minja it was held that the replacement of existing single glazed windows with double glazing was repair and not replacement as the tenant argued.
In Creska, the property had underfloor heating and the tenant was obliged to repair all electrical heating installations. The heating had become defective and the tenant installed storage heaters.
When the landlord sued, it was held that the tenant was responsible for the repair of the underfloor heating. Even though this involved improvement, and would be expensive, it was still repair.
It is likely that the replacement of existing chips will amount to a repair rather than a renewal if the above cases are followed, and will thus fall within the tenant's repair obligation.
However, to say it amounts to repair does not suffice: the tenant's repair obligation will only be called upon if there is a disrepair.
Similarly it may be that the fault with the chip will be an inherent defect which would, if the lease were correctly drafted, fall within the landlord's repair responsibility.
As added comfort for the landlord, should the lease fail to provide landlords with rights to enter and carry out the works at the tenant's cost, the case of Rainbow Estates Limited v Tolkenhold Limited reinforced the view that specific performance is available as a remedy for breach of the tenant's repairing obligation.
Indeed the courts appear increasingly willing to assist landlords whose tenants are in breach and who do not want to go down the forfeiture or damages route.
In Rainbow Estates the repair works amounted to some pounds 300,000, the lease contained no forfeiture clause and no rights of entry for the landlord to carry out the works and reclaim the costs.
In 1998 the courts seemed keen on ensuring that parties to the lease comply with the time limits set out.
In Fox & Widley v Guram, the tenant was entitled to challenge the landlord's rent review proposals and elect for arbitration. It failed to serve the appropriate notice and then applied for an extension of time, which was refused. …