Unqualified rights to make internal alterations includes landlord’s fixtures

South Essex Partnership University NHS Foundation Trust v Laindon Holdings Ltd [2016] BLR 355, [2016] EWCA Civ 377, 19 April 2016

The Court of Appeal considered the effect of a lease which provided that the tenant could make any internal non-structural alterations to the building without the landlord’s consent. Shortly before the end of the term, the tenant informed the landlord that it would replace the tiled carpets with a strip carpet system. The landlord did not object until after termination of the lease, when the landlord claimed that the re-carpeting had been in breach of covenant. Briggs LJ took the view that the tiled carpets were landlord’s fixtures and fittings, regardless of the fact that they were re-laid at the tenant’s cost at the start of the term. It was observed that the lease contained a heavily qualified right for the tenant to make structural or external alterations, in contrast to the entirely unqualified right to make internal non-structural alterations. Accordingly, Briggs LJ held that the only sensible interpretation was that the lease provided a right to the tenant to make alterations affecting any of the landlord’s property within or forming part of the building, save for the structure and exterior. The replacement of the tiled carpets was thus a permitted alteration. More importantly, Briggs LJ concluded that once the landlord has been put in funds by payment of damages, further delay by the landlord in carrying out the repairs were not to be imposed as a further recoverable loss upon the tenant.