News & Insights

Limitations on responsibility for repair of retained parts

A recent case examines responsibility for repair where the lease terms appear not to allocate it.

In the recent case of Stonecrest Marble Ltd v Shepherds Bush Housing Association Ltd [2021] the court decided that a landlord owed no duty to its tenant to prevent water ingress into a commercial unit from a blocked gutter on the retained part of the building. The court could not imply a duty of repair on the landlord, nor could it establish any breach of the landlord covenant for quiet enjoyment.

This case serves as a helpful reminder that, with very few exceptions, the landlord is only responsible for repair if the lease terms specifically require it. There is a common misconception that if there is no mention of responsibility for repair of the retained parts of the building in the lease then the landlord must be responsible in default. However, this is only the case in very limited circumstances. First, where it is necessary to avoid damage to the tenant’s premises or can otherwise be implied (and even this may not apply if the terms of the lease are otherwise inconsistent with this obligation). Second, if the landlord constructed the premises, in which case there is a duty to ensure that they are reasonably fit for human habitation and free from defects that are likely to cause injury. Third, where responsibility is implied by statute, such as obligations on landlords under short residential tenancies or requirements for fitness for human habitation.

This is particularly important when taking a lease of part of the building. Insufficient covenants for repair could have major practical implications for the tenant and are likely to make the leasehold interest unsuitable security for mortgage finance (see, for example, paragraphs 5.14.4 and 5.14.5 of the UK Finance Mortgage Lenders’ Handbook which require adequate covenants for maintenance and repair of the structure etc):