223: Tenant left high and dry as commercial lease goes down the drain

A recent case has seen a landlord avoid liability to repair a blocked downpipe in the upper floors which left the commercial tenant’s ground floor tile shop in Wandsworth unusable. This in an important reminder for tenants to carefully review the terms of a lease of part regarding the landlord’s repair and insurance obligations.

Facts

In Stonecrest Marble Ltd v Shepherds Bush Housing Association Ltd (2021), the tenant’s shop premises was damaged by water ingress from the residential upper parts of the property, which remained under the Shepherd Bush Housing’s control as retained parts. Under the terms of the tenant’s lease of the ground floor commercial unit, the landlord was required to:

• allow the tenant quiet enjoyment of the property;
• clean, maintain and repair the ‘common parts’; and
• insure against the ‘insured risks’ which included ‘flood…and overflowing of water…apparatus’.

The landlord was not required to carry out any repair which the landlord was not obliged to insure. Nor was it required expressly to maintain or repair the retained parts. Gradual deterioration or wear and tear was excluded from the landlord’s insurance policy, therefore the blocked downpipe was not an ‘insured risk’.

The tenant argued that the landlord’s failure to remedy the blocked downpipe constituted a breach of the covenant for quiet enjoyment. The tenant had immediately reported the water damage resulting from a build-up of debris in the downpipe in the retained upper residential floors and continued to do so over two years. The damage eventually rendered the tenant’s shop premises unusable.

Judgment

The High Court found that the lease was a professionally drafted document which provided a comprehensive scheme of repair and insurance. There was no way to impose any liability on the landlord, either under the terms of the lease or in tort, to repair or keep in repair the guttering in the retained parts.

This case is a good reminder to tenants to instruct solicitors carefully to review the terms of any commercial lease. It was not for the court to consider the practical effectiveness of the lease in hindsight and fill in any gaps which should have been covered in the original drafting.