Key dilapidations issues
Decoration
Most leases contain a specific, separate obligation to decorate the property. Where the lease does not contain a separate covenant to decorate, one will be reliant on the covenant to repair. However, just because the property may be in a poor decorative condition does not mean that it is out of repair and that decoration needs to be undertaken to meet the covenant to repair.
Under the test in Proudfoot v Hart, if the decorative standard falls below the standard that would be accepted by a reasonably-minded tenant of the type likely lease the property, then decoration may be required under the repairing covenant. The effect of the Proudfoot test is that it is clearly inappropriate to apply the decorating standards of high class executive offices in a major city centre commercial district to the administration offices in an old industrial unit in a secondary location outside a minor provincial town.
Cases with no express covenant to decorateProudfoot v Hart (1890) ‘“Good tenantable repair” is such repair as having regard to the age, character and locality of the [property] as would make [it] reasonably fit for the occupation of a reasonably minded tenant of the class who would be likely to take [it] ... [the property] need not be put into the same condition as when the tenant took [it], [it] need not be put in perfect repair.’ Irvine v Moran (1991) The question in this case was: Did an implied obligation to keep the structure and exterior of a residential property include an obligation to decorate?
Cases with express covenant to decorateGemmell v Goldsworthy (1942) This was an Australian case. An express covenant to decorate within a specified, recurring, period was absolute and unconditional but the covenant to repair would still apply and decoration in the middle of any such period could still be required if that was the effect of meeting the obligation to repair. Simmons v Dresden (2004) As this case suggests, it does not matter, in terms of assessing performance, whether the property needs decorating - if the covenant says one must decorate and it is not carried out, there is a breach. |
The covenant may dictate how, and how often, the obligation is to be met. For example, it may prescribe the colour scheme or standard of materials to be used, or it may make it a condition that, prior to decoration being carried out, the choice of colour and/or materials be approved by the landlord or its surveyor. What happens in such circumstances very much depends on the specific wording of the lease. The covenant may state that the landlord or its surveyor may not unreasonably withhold consent or it may be that the appointment of the surveyor operates as a condition precedent so that the obligation to decorate does not bite until then.
Law of Property Act 1925, section 147
By contrast with the entitlement to seek relief from forfeiture where a notice is served under section 146 of the Law of Property Act 1925, after a notice is served on a tenant relating to the internal decorative repairs to a house or other building, under section 147 of the Act the tenant may apply to the court for relief. If, having regard to all the circumstances of the case (including in particular the length of the term or interest remaining unexpired), the court is satisfied that the notice is unreasonable, it may, by order, wholly or partially relieve the tenant from liability for such repairs. In practice, one rarely sees the entitlement under section 147 operated. In part that is due to the exceptions to it, but if one can make an application, it could be of advantage to a tenant because the outcome could be to relieve the tenant altogether from an obligation to perform the covenant in relation to internal decorative repair.