On 6 May 2020, in the case of Duval v 11-13 Randolph Crescent Ltd [2020] UKSC 18, the Supreme Court confirmed a previous Court of Appeal decision and found that a residential landlord was not able to grant a licence for alterations. The proposed alterations would have been in breach of an absolute covenant (i.e. there is no right for a tenant to apply for consent) within the relevant lease. The lease contained an obligation on the landlord to enforce covenants in the lease, at the request and cost of any other tenant (a mutual enforceability covenant). It also stated that all leases would be in similar form. Such provisions are extremely common in residential long leases.
The case was brought by another tenant within the building who argued that the landlord could not grant a licence allowing the breach, as it would render the mutual enforceability covenant ineffective. The Court of Appeal, and now the Supreme Court, agreed.
Landlords and managing agents will need to ensure that they do not grant licences to allow a tenant to commit what would otherwise constitute a breach of the lease where there is a mutual enforceability covenant within the lease.
This will not only apply to alterations, but other circumstances such as subletting or a user covenant. The restriction could also arguably apply to specified conditions for consent. For example, if a lease specifies the term or form of any sublease, landlords who deviate from those conditions could face claims for damages or an injunction.
