Landlord and tenant - landlord's rights of entry
In Heronslea (Mill Hill) Ltd v Kwik-Fit Properties Ltd, the High Court had to consider whether the landlord was entitled to carry out an "environmental investigation survey" on the tenant's premises. The landlord proposed to drill 13 boreholes at a depth below ground of five metres, and one 20 metre borehole. The work would take two days to complete.
The lease authorised the landlord to enter the premises to inspect them for any purpose, and to make surveys or drawings of the premises. This was qualified by the proviso that the landlord was to cause as little inconvenience and disturbance as was practicable and was to make good any damage caused. The landlord argued that its proposals were covered by its ability to carry out a "survey".
It is well established that, in construing a document, the court will seek to ascertain the meaning the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties at the time of the contract. This is a wider process of interpretation than simply looking at the dictionary definition of a word. However, it is still permissible to use the dictionary definition as an aid to construction.
The dictionary definition of "survey" before the court was "the process of surveying a tract of ground ... or any part of the earth's surface; the determination of its form, extent and other particulars, so as to be able to delineate or describe it accurately and in detail...". Taking this definition in the context of the rest of the lease, the court ruled that it did not cover the landlord's proposals.
If the landlord's interpretation was correct, taken to its full conclusion the landlord would be entitled to enter the premises to carry out a geological survey, involving (for example) prospecting for minerals. The court said that it would have expected the lease to have made provision to mitigate the impact of such activity on the tenant's right to quiet enjoyment. The proviso to the right of entry contained no provision for compensation for the fact that the tenant's quiet enjoyment would be disturbed. This derogation from the tenant's right to quiet enjoyment could not have been contemplated by the parties when they entered into the lease. The court should look for clear words when construing a covenant in a way which might significantly cut down the right to quiet enjoyment.
Things to consider
The Scottish courts have recently considered an almost identical issue – and with the same tenant. In Possfund Custodian Trustee Ltd v Kwik-Fit Properties Limited, the Inner House of the Court of Session also concluded that the lease wording did not permit the landlord to drill boreholes – reversing the decision of the court below.
The wording of the lease in Possfund differed slightly from that in Heronslea. It entitled the landlord to inspect and examine the premises, and to view their condition. The clause did not contain the qualification in Heronslea that the landlord had to cause as little disturbance as possible and make good any damage caused.
The Inner House thought that the lack of this qualification (which was present elsewhere in the lease) suggested that it was not intended that the exercise of the landlord's right of inspection would cause any material disturbance to the tenant, or would result in any material damage to the premises. It is therefore interesting to see that in Heronslea, where these words were present, the court still found in favour of the tenant. The Inner House did however go on to say that if it had been the intention of the parties that the landlord should be entitled to interfere with the tenant's possession of the premises to the extent contended for by the landlord, the court would expect to find a much clearer indication to that effect in the lease. This sentiment was echoed by the court in Heronslea.
The combined effect of these two cases means that it is unlikely that a right reserved to a landlord to inspect the property will entitle it to carry out intrusive environmental works. Although not necessary to decide the case, the court in Heronslea did however appear to draw a distinction between a "survey" and an "investigation". A subsequent court may therefore reach a different conclusion on the meaning of a clause which permits a landlord to carry out investigations at the property.
This analysis was written by Sarah Allen, associate in Wragge & Co's Real Estate group.
This analysis may contain information of general interest about current legal issues, but does not give legal advice.