There are two things in life I really, really enjoy. The first is listening to Queen/Freddie Mercury. The second is leasehold property disputes. I am doing the first whilst writing about the second.
The case of Burchell v Raj Properties Ltd [2013] UKUT 433 (LC) is a notty little case. Mr Burchell was the leaseholder of a flat. Raj Properties Ltd was his landlord. Under the terms of the lease, Mr Burchell covenanted
to use the flat as a private dwelling for the lessee and his family and for no other purpose
When Mr Burchell came to extend his lease (see generally, Leasehold Reform, Housing and Urban Development Act 1993), there was a dispute about the terms of the new lease. He wanted to delete the words “for the lessee and his family”. The landlord objected. The LVT decision wasn’t very clear and, in effect, the Upper Tribunal appears to have approached the matter de novo.
The arguments for Mr Burchell are quite interesting. His primary contention is that he can already sublet the flat even on the current covenant, but that he’d like to put the matter beyond doubt by varying the wording in the new lease. In short, the existing covenant just described the class of permitted occupiers; the word “for” meant that the lessee and his family could rent it out and receive an income. If it was intended that they – and only they – could occupy the flat, then the covenant should have said “by” not “for”.
The Upper Tribunal rejected that construction. This was a personal user covenant, despite the clever attempts to argue to the contrary. The real question was whether, in the exericse of its statutory discretion (s.57, 1993 Act), the Tribunal should vary the lease as sought by Mr Burchell. Again, the Upper Tribunal found against Mr Burchell. The power to vary the terms of the new lease was a limited to remedying what could objectively be seen as a defect (from the perspective both of landlord and tenant). The covenant in this case was not such a defect.