Contact: Caroline King and Kate Symons at Boodle Hatfield (London, England)
This was the question in the recent case of Kettel and others v Bloomfield.
It is not uncommon for leases of residential premises to reserve a right in favour of the landlord allowing the landlord to redevelop the common parts. This is an area ripe for conflict, particularly where tenants have paid a significant premium for their interest in the property and do not wish to see the amenities granted in their leases diminished.
This case does not create any new law, but illustrates the need for clear and unambiguous drafting, where appropriate, to allow the landlord the flexibility to redevelop where to do so may impact on rights granted to its tenants.
The facts
The lease of each flat included the right to use a designated parking space. The landlord had not reserved a specific right to reallocate the spaces, but had instead reserved a general right to redevelop the neighbouring land notwithstanding any diminution in the light or air benefiting the tenants (the redevelopment provision). The landlord wished to redevelop the common parts, including the allocated car parking spaces. The landlord claimed that it was entitled to do this by way of the redevelopment provision and proposed to reallocate the tenants’ parking spaces elsewhere in the development.
The decision
The High Court awarded the tenants an injunction, preventing the redevelopment, on the basis that:
- The tenants’ right to park was an easement, notwithstanding that each tenant had exclusive use of its respective space, as the landlord retained sufficient rights over each space (such as the ability to drive or walk across the spaces and provide services such as resurfacing or cleaning).
- There was no express right to vary the easement sufficient to allow the landlord to unilaterally relocate the parking spaces, and it would not be correct to imply such a right. The right granted was for each tenant to park in a particular space and not a right to park in such space as from time to time designated by the landlord.
- The landlord had not reserved a right to redevelop the car parking spaces. The redevelopment clause conferred a right to build on “neighbouring property” but this did not (except in the case of one phase) include the car parking spaces and, in any event, the wording of the redevelopment clause was sufficient only to override rights to light and air, not an express easement to park.
- The landlord had adopted a bullish approach, and in the circumstances, an injunction was not an oppressive remedy given that the landlord had failed to provide substantive details of the proposed alternative spaces. Had an injunction not been appropriate, the judge indicated that damages of £517,500 (between the eight tenants and based on a share of the proposed development profit) would have been awarded.
What provisions should the lease have contained?
The landlord should have ensured that the right to park was granted to each tenant on terms that the car parking spaces would be allocated from time to time by the landlord and that the landlord could relocate the spaces on notice, without payment. Without such drafting the landlord was not able to override the easement to park, and in this case, its behaviour was such that it lost its ability to “buy out” the right and an injunction preventing the redevelopment was awarded rather than damages.
August 2012
Kettel and others v Bloomfold Ltd [2012] EWHC 1422 (Ch) (25 May 2012)
Further information
If you would like any advice on the issues above please contact your usual Boodle Hatfield lawyer or one of our experts below.
Caroline King
t: +44 (0)20 7079 8189
Kate Symons
t: +44 (0)20 7079 8127
