Sheffield City Council v Hazel St Clare Oliver LRX/146/2007 [links to PDF]

This is a case which touches on an issue familiar to those involved with right to buy leases: replacement of windows by the landlord.

The landlord council wished to replace metal framed windows with new uPVC in the leaseholder’s block. The terms of the demise in the lease were clear: the windows were part of the leaseholder’s property. Consistent with that, the leaseholder’s covenant to repair required her to keep the windows in repair. The covenant to repair looked like this:

“(3) To keep the demised premises and every part thereof (except those parts of the demised premises which the Council are by virtue of the covenant implied by paragraph 14(2)(a) of Schedule 6 to the 1985 [Act] liable to keep in repair) and all fixtures and fittings therein and all additions thereto and all (if any) sewer drains cables pipes wires ducts radiators tanks cisterns and valves and channels within and serving the demised premises and all doors and windows (including the glass and frames thereof) floors ceilings internal walls and surfaces and skirtings therein in good repair AND where necessary to renew or replace all worn or damaged parts of the demised premises which the lessee is liable as hereinbefore provided to repair”.

The council’s covenant to repair was complementary:

“(3) To keep in repair (the definition of repair where appropriate including decorative repair) and (if desirable in the opinion of the Council) to improve (a) the structure and exterior of the demised premises and of the Building (including drains gutters and external pipes) and to make good any defect affecting that structure …”

The LVT decided that, on a straightforward construction of these covenants, the “exterior of the demised premises” did not include the windows so that replacement of them could not be said to fall within the council’s covenant to repair and improve. As a result, the council could not include a charge for their replacement in the service charge bill.

On appeal to the Lands Tribunal, the President thought otherwise. The Lands Tribunal reached its conclusion based on its construction of Paragraph 14 of Schedule 6 to the Housing Act 1985 which is implied into every right to buy lease by s.139 of the same act. Paragraph 14(2)(a) reads:

“(2) There are implied covenants by the landlord— (a) to keep in repair the structure and exterior of the dwelling-house and of the building in which it is situated (including drains, gutters and external pipes) and to make good any defect affecting that structure;”

The Lands Tribunal found that for the purposes of paragraph 14(2)(a) the windows were within the meaning of “structure and exterior of the dwelling-house”, based on a long line of authorities starting with Irvine v Morgan [1991] 1 EGLR. The fact that the windows were part of the demised premises would be of no relevance.

As it happens this was not enough. The council’s reasons for doing the window replacement work (for instance to improve the thermal properties of the flats) indicated that the works were improvements not repairs — a suggestion not denied by the council. In that case the council would have to rely on their duty to improve (found in the council’s covenant) not on the statutory implied duty to repair.

The Lands Tribunal went on to find that the council’s covenant was to be construed in the same way as paragraph 14(2)(a), so that “structure and exterior of the demised premises” included the windows. The windows fell within the council’s duty to improve and hence the LVT had erred and the council would be able to recover the costs of replacing the windows via the service charge bill.

This part of the appeal had become academic because, as a result of the Respondent’s objection to the work being done, the Council had agreed not to replace her windows. For the leaseholder at least, the case had a happy ending.

The decision is not entirely satisfactory. The lease appears to have quite carefully specified that the responsibility for repair of the windows fell on the leaseholder. It would be reasonable to conclude that the corresponding freeholder covenant was meant to exclude the windows. Such a view is buttressed by the fact that the windows were a part of the demise. All the term implied by the Housing Act 1985 could do is override the tenant’s duty to repair. It should have no effect on the duty of the council to improve.

The Lands Tribunal appears to have moved dangerously close to using the meaning of a statutory implied term as a determinant for the meaning of a term in the lease, rather than constructing the lease itself.

Furthermore, the Tribunal’s conclusion is odd. The council were able to remove items of property that belonged to the leaseholder (the windows) and replace them with others as they saw fit. The lease in question could like many right to buy leases have reserved the windows to the council. The fact that it did not suggests that the lease was intended to preclude the council’s interference in just such a fashion.

The decision may have wider implications because the President expressed his surprise and unhappiness with a clause which both required and empowered the council to carry out arbitrary improvement works (in my experience invariably present in right to buy leases). At the end of the decision he said:

“I would hope that, as a matter of practice, the council would not without the lessee’s approval carry out improvement works to the demised premises for which the lessee is to be charged unless the works are no more than a limited extension of works of repair.”

The disapproval the Lands Tribunal have expressed may be useful in persuading councils against interfering with their leaseholder’s property when carrying out works of improvement.