Cases - Daejan Properties Ltd v Griffin and another
Record details
- Name
- Daejan Properties Ltd v Griffin and another
- Date
- [2014]; [2014]
- Citation
- UKUT 206 (LC); PLSCS 172
- Legislation
- Keywords
- Service charges – historic neglect – disrepair – increase in cost of remedial works
- Summary
-
This case concerned a 3 storey Victorian building comprising 9 shops and flats above. The respondents were the lessees of 2 of the flats, each of which was let on a long lease that contained a landlord’s covenant to repair the structure of the building and a tenant’s covenant to pay for such repairs through a service charge.
Unbeknown to either the building’s occupants or the landlord, concealed steelwork supporting a parapet had become corroded. In 2008 this resulted in structural failure requiring emergency repairs. On starting the repair works further destructive opening up and inspection work was carried out (at a cost of nearly £16,000) which revealed that all 27 beams needed to be replaced. The landlord sought to recover the cost of the work (over £300,000) from his tenants via a service charge.
It was agreed that the landlord, despite being unaware of the corrosion until 2008, had been in breach of its repairing obligations ever since acquiring the building in the 1970s as the beams had already deteriorated significantly from their original condition by that time.
'Where part of a building is not demised, but remains within the possession of a landlord which has covenanted to keep it in repair, the risk of undetected deterioration falls on the landlord whether or not it has, or could have, knowledge of the condition of that part (see British Telecommunications plc v Sun Life Assurance Society plc [1996] Ch 69).'
The tenants argued that, had the landlord carried out repair works earlier (and under a single contract) the works would have cost less. However, the court found that substantially the same work would have been required at any time in the 30 years preceding the commencement of the works in 2008. Accordingly, the tenants’ appeal was rejected.
Prospective tenants should remember that, even where they propose only to lease part of a building, an inspection of the whole building is extremely important when the liability for repair and maintenance works effectively still rests with the tenant via a service charge. However, this case also highlights the problem that such defects may not be visually apparent – or may only be properly discovered with destructive and costly testing.