As a landlord, have you ever thought about being responsible for the actions of your tenant? You could be fined, or worse, for their misdeeds. Recently, our Property Litigation team have provided commentary on two very different cases, looking at circumstances where a landlord might be held responsible for the actions of a tenant.
The first was a prosecution pursued by the Environment Agency for waste related offences. Mr Joyner was the owner of a site in Devon. He had leased it to two tenants who set up a wood recycling business, having assured Mr Joyner that they had the requisite permits for the waste operation they were running. However, the business was in fact operating illegally. When one of the tenants was sent to prison for an unrelated matter, Mr Joyner closed the site, but was left with a significant bill for clearing the site.
Mr Joyner pleaded guilty to an offence of knowingly permitting the keeping of controlled waste on land without a permit. He was ordered to pay fines and costs of £12,850. However, those sums are minimal by comparison to the cost he is facing of having the waste removed from the site which has been estimated at £750,000; the Environment Agency is now taking action to ensure the site is cleaned up (at Mr Joyner’s cost).
What lessons might you, as landlords, learn from this? Firstly, the Environment Agency clearly regard it as a landlord’s responsibility to ensure that sites are not used for illegal waste operations. This implies that landlords must be proactive. Mr Joyner should have asked for proof that the tenants had the relevant permits and were operating within them and if uncertain he could have sought assistance from the Environment Agency. Whilst the lease was in place, he could have taken action requiring the tenants to clear the site.
He could also have required a guarantor or a substantial deposit from the tenants given that he was aware that they would be carrying out waste-related activities.
The decision to forfeit is often not an easy one. Once the lease had been forfeited, the option of taking action requiring the tenants to clear the site was lost. Equally had the lease been forfeited earlier it might have minimised the cost of the clean-up exercise. This is a difficult balancing exercise which needs to be carried out by someone with expertise in the law of forfeiture and insight into the implications it has.
The second case, a very different issue, was raised in Fouladi v Darout Ltd and others. The facts of this case were far from unusual; the claimant was a lessee of a flat in a mansion block in London. The owners of the flat above had carried out work, including the relaying of the floor with wood rather than carpet. That resulted in noise nuisance, simply from day to day living activities. Ms Fouladi sought to argue that the landlord was liable for the nuisance.
Case law establishes that a landlord is only liable for nuisance caused by his tenant if he “participates” in it. The works carried out were done without the landlord’s consent, so it could have taken action against the leaseholder in question, which it had not done, even though it was aware. The High Court, however, held that was not enough to make the landlord liable for the nuisance. Ms Fouladi did successfully sue the lessee of the flat above for compensation and for an order requiring them to do further work to resolve the nuisance.
It seems the responsibility to be proactive is far greater where environmental offences might be committed, than where a residential leaseholder’s right to quiet enjoyment of their property is affected.
If you would like any advice on the above examples or have any questions, please get in touch with the Property Dispute Resolution team on 029 2267 5560.