Landlords’ limited liability

Courts are increasingly demonstrating that they are not willing to impose an unrealistic duty of care on landlords beyond that reasonably expected of the landlord and tenant relationship.

Notable Cases

In the case of Eaton Square Properties v Shaw [2001] the residential tenant agreed to permanently relocate to an alternative residential property owned by the landlord so maintenance work could be carried out on the property currently leased. As the tenant was relocating for the convenience of the landlord, both parties agreed that the new premises would be refurbished and that there would be considerable rent concessions.

After moving, the tenant claimed the landlord had not carried out the refurbishment to a satisfactory standard and had breached the agreement. The dispute lasted for several years and consumed much of the self-employed tenant’s time and energy, leaving her unable to peruse her business interests to the extent she wished.

After the tenant failed to pay the full rent, the landlord brought possession proceedings against the tenant. The tenant argued the landlord was prevented from claiming rent over and above what she was currently paying and counterclaimed for breach of the agreement to refurbish the property and for loss of business income due to the time spent perusing the dispute with the landlord.  

High court decision

The High Court Judge decided the tenant should not be allowed to counterclaim and seek damages for loss of business income and profits. The court held the purpose of relocating the tenant was not to further or assist her business as this was a residential, not a commercial tenancy.

Whilst the landlord had knowledge of the tenant’s commercial activities and her desire to minimise disruption to these, there was nothing to suggest the landlord had undertaken a sufficiently wide duty that would require the landlord to take reasonable care to allow the tenant to maintain or grow her business income.

Holmes & Hills Solicitors provide specialist services and Landlord & Tenant Law advice to landlords covering all areas of the landlord and tenant relationship. David Dixey is the firms Landlord & Tenant Law specialist.