March 15, 2022
By Sarah Price
The Facts
The case concerned a 10-year lease of a ground floor commercial unit forming part of a larger building owned by the landlord. Over a period of time, debris gradually built up and blocked a gutter in the landlord’s building- causing water ingress and damage to the tenant’s unit.
Under the terms of the lease, the tenant was required to keep their unit in good repair and condition. The landlord was required to insure the building against the usual insured risks such as flooding and overflowing of water, and to repair any insured damage. However, the lease stated that the landlord was not liable for damage caused by a risk against which they were not obliged to insure, or which was excluded under their insurance policy. The landlord’s insurance did not cover wear and tear, and so the blocked gutter and damage was not covered by the policy.
Unfortunately, the lease did not include an obligation on the landlord to repair and maintain the structure of the building.
The Decision
The high court held that there was no obligation on the landlord to repair the damage caused by the overflow, as it fell within an exclusion in the insurance policy. In addition the court was not prepared to fill in any gaps in the lease by imposing an obligation on the landlord to repair as the terms of the lease were clear.
Practical Implications
This case highlights the importance for tenants in ensuring that there are no gaps in the repairing clauses of their leases, and to carefully consider the insurance provisions.
For more information or advice on commercial leases or a related topic, please contact Sarah Price on sprice@darwingray.com or 02920 829 105 for an initial free, no obligation conversation.
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