Introduction
This is a report on legal advice on dilapidations, health and safety matters, asbestos, Equality Act (and DDA), and fire safety issues to the tenant and the landlord. The report uses various laws of the UK.
The property owner of 65 Gresham Street is Pain Estates Plc (Pain) and the tenant that holds the Head Lease is Youens Finance Ltd (Youens). The lease is on full repairing and insuring (FRI) basis for 20 years. FRI basis implies that Youens must cater for “all costs of insurance on the building and take on responsibility for all repairs, both internal and external, during the term of the tenancy so that it will be in as good a condition at the end of the leasing period as it was at the start” (Landlord Zone, 2013a).
Dilapidations
Dilapidations refer to all repairs Youens is responsible for and must carry out before vacating 65 Gresham Street after the end of the lease period. However, Youens must recognize that dilapidations have legal liability for conditions of damages to the property. Thus, Youens, Music Recording Studio, and other sub-tenants occupying the two floors must understand terms of dilapidations, laws, and possible compensations and claims.
In dilapidations, three factors are necessary for both Pain and Youens. There must be a lease, the property, and a state of damage or disrepair in which Youens must accept legal liability and must incur costs of repairs.
The main factor in dilapidations between Pain and Youens is the legal and valuation advice obtained at the right time. The legal advice must reflect the condition of 65 Gresham Street, repair obligations, and the dates of the lease agreement.
Youens and sub-tenants should seek legal advice in order to understand terms within the tenancy agreement and any repair obligations within the covenant. This enables tenants to understand their obligations with regard to redecoration and repairs. In this case, Youens must cater for all costs of both internal and exterior repairs and decorations based on the FRI basis. On the other hand, sub-tenants shall only cater for internal repairs and decorations as their covenants state. Pain shall not incur any costs towards repairs.
However, Pain should not expect Youens to repair areas that were already in a state of disrepair before they moved into 65 Gresham Street. This also applies to the Music Recording Studio and the sub-tenants, who should only cater for internal repairs and decorations under their covenants. Therefore, this case starts with a Schedule of conditions that show the state of the property before all tenants moved into the building.
This process of undertaking inventory may require both Pain and Youens by any third party (in this case, the third party was Lister Estates). Lister Estates provided an Interim Schedule of Dilapidations on Youens. Both Pain and Youens must sign and date the covenant or a Schedule of Dilapidations.
The pain must expect some conditions of wear and tear in the property. However, damages resulting from the actions of tenants cannot be the responsibility of Pain. In this case, Youens and sub-tenants must bear the costs of repairs and maintenance.
In most cases, property owners only serve tenants with a Schedule of Dilapidations if tenants have failed to comply with the initial agreement on repairs and maintenance.
Lister Estates served Youens with the Interim Schedule of Dilapidations with a list of all repairs obligated to it. It is appropriate for Youens to seek legal advice on receiving the Interim Schedule of Dilapidations. Consequently, it is also necessary for Youens to involve the services of a surveyor to conduct an inspection on damages to 65 Gresham Street. Under this process of reviewing the Interim Schedule of Dilapidations, the surveyor should also review the covenant of repair and maintenance to verify if Youens is under legal obligations of fulfilling listed repairs. If Youens is responsible for such damages, then it must perform them within a given period at its own cost.
The final Schedule of Dilapidations would imply that the tenancy of Youens has ended after 20 years, and Pain is seeking compensation for damages to the property. This goes beyond the demand for repairs. Instead, it seeks for compensations to cater for costs of repairs Youens and sub-tenants caused. This also requires Youens to consult a surveyor in order to review Pain’s claims for compensation.
Youens must understand that if it is responsible for damages, then it must pay for all costs as agreed on the tenancy agreement based on the FRI basis. However, Youens’ surveyor can reach an agreement with Lister Estates on the amount for compensation and avoid extra costs associated with legal proceedings. Pain can also allow Youens to make all arrangements for repairs by itself.
Youens must note that it has a right to statutory relief based on the Leasehold Property Repairs Act 1938. However, this may only occur under certain conditions based on the covenant. McAllister notes that the landlord (Pain) cannot “recover what he has not lost, Section 18(1) of the 1927 Landlord and Tenant Act also states that the landlord cannot recover more than the amount by which the value of the property has been diminished by virtue of the repairs” (McAllister, 2011, p. 2).
Youens must be careful with the Interim Schedules of Dilapidations. This document gives Pain advantages over Youens in case of failure to adhere to claims. It has a strict period for compliance and renders Youens liable for further claims in case of failures. The Interim Schedules of Dilapidations come in the form of debt instead of damage claims. This prompts Pain to make claims in the form of rent arrears.
Pain and Lister Estates must also be cautious with the Interim Schedules of Dilapidations. They must observe the terms of the lease and avoid any exaggerated claims of non-repair items. Otherwise, this may lead to a breach of an agreement with counter-claims and expensive lawsuits.
Asbestos
Asbestos became a common building material from the 1930s to 1970s due to its nature of resisting heat, fire, rigidity, and insulation abilities. 65 Gresham Street is a property developed in 1935. This explains the availability of powdery and friable asbestos in the flue.
Youens and sub-tenants have responsibilities regarding the discovered asbestos in 65 Gresham Street. However, they can demand compensations from Pain where appropriate (such claims can only be successful under proven injuries).
Youens and sub-tenants must bear all responsibilities arising from the asbestos removal. This is because Youens is responsible for all exterior and internal repairs under the FRI agreement. In addition, Pain had no knowledge of asbestos before its discovery. Still, Pain has little control over the premise. Currently, Youens is the Duty Holder of the premise, and it is responsible for maintenance and repair of the premise under the lease agreement (Asbestos UK Surveys, 2012). However, Pain is liable for injury claims and any links to the deaths of Mickey Most and Malcolm Mac Laren. The UK has several laws to regulate asbestos found in commercial properties. The Control of Asbestos Regulation 2006 (CAR 2006) and Health and Safety at Work Act 1974 require employers to have a safe working environment (Hollywood Internet Ltd, 2010). Thus, Pain and Youens must comply with these regulations.
Pain has the responsibility to prepare a risk assessment of the discovered asbestos and provide written arrangements on how it shall protect Youens, sub-tenants, and other visitors who are at risk of exposure to asbestos as provided under the Management of Health and Safety at Work Regulations 1992 (Waldman and Williams, 2009).
On the other hand, Youens must provide appropriate arrangements to handle asbestos during the refurbishment of the building as required under the Construction (Design and Management) Regulations 1994. In addition, Youens shall rely on CAR 2006 in order to curb any risk from asbestos exposure. The company must support the process by an Approved Code of Practice (ACOP) and related guidance.
Pain (the freeholder of the premise) must update its Asbestos Register. The process requires Pain to call experts and conduct a survey in order to identify all materials with asbestos elements apart from the flue and put in place management strategies.
From the results of the survey, Pain must develop an Asbestos Register that has all details about the location, magnitude, and state of the materials within 65 Gresham Street. The pain must manage potential risks from exposure to asbestos by observing the following:
- Identifying all materials with asbestos and establishing their status
- Presuming that most materials may have asbestos unless confirmed otherwise
- Maintaining a record of locations and status of asbestos
- Assessing possible risks
- Providing a detailed plan for managing the discovered asbestos
- Evaluating the management process
Youens must involve the services of qualified persons in managing the discovered asbestos.
The property owner must also assess risks from asbestos to all tenants and visitors. In turn, it must implement all recommendations from the survey.
Youens and sub-tenants have the legal duty to cooperate with Pain and other professionals managing the discovered asbestos.
According to the Health and Safety Executives (HSEs), if the level of asbestos is high, then it is appropriate to remove it from the building.
Equality Act (and DDA)
The Equality Act 2010 implies that Pain has substantial responsibilities to tenants than it previously had under Disability Discrimination Act 1995 (DDA). According to Equality Act 2010, Pain must make a disability-related adjustments to common areas of 65 Gresham as requested by Youens. For a listed premise, such alterations favor landlords. Youens had requested the following:
- The demolition of the chimney breast from the sixth floor to the roof to increase floor space
- The removal of the fire lobby to the first floor to allow direct access to their reception area from the lifts
- The creation of a ramp from the street to the entrance hall to enable their clients to gain access to the premises
- The provision of a toilet for disabled users in the common parts for their visitors and other users
Under the Equality Act 2010, these are reasonable requests affecting common parts, which Pain must not refuse to fulfill. The Act provides many provisions, which attempt to make it easy for people with disabilities to make use of commercial or any other properties without difficulties (Avery, 2010).
Pain does not need to change its management style since none of the tenants has any disability. However, the need for alteration is to make easy the life of disabled people visiting the building. This is because the Act is clear on all alterations of physical features of common parts in a building to fit the needs of disabled people. Consequently, Pain must review all the replaced sections of DDA in the new Equity Act, especially with regard to common parts.
The pain must not incur costs in these alterations. It can only agree to reasonable alterations to the premise. This suggests that Youens and sub-tenants must bear all costs related to alterations of the premise. However, Pain shall be the ultimate beneficiary of such alterations to the building because they shall enhance accessibility.
The Act requires Pain to respond to such alteration requests within 21 days. In case the company fails to agree to such requests, then Youens can seek legal intervention to matter.
The pain must consult all occupiers of the building and neighbors on how such alterations to the premise shall affect them. This is necessary in order to avoid potential lawsuits from sub-tenants and neighbors.
Health and Safety
The UK has the Housing Health and Safety Rating System (HHSRS) with a detailed approach, which relies on the Housing Act 2004. This system identifies and rates the extent of a wide range of health issues in a premise and their risks of affecting the health and safety of occupants. HHSRS has 29 categories that include “damp or mold, cold, trips and falls, fire, hot surfaces, entry by intruders, electrical hazards, lighting, and noise among others” (the University of Bristol, n.d).
The pain must maintain all the above health and safety requirements. In failure to do so, Youens and sub-tenants can notify the local authority, which can then serve a notice and enforce the law to address health hazards in the Premise.
The pain must also focus on loose sockets and switches based on the Landlord and Tenant Act 1985. The Act requires property owners to maintain all installations for the supply of electricity. However, Pain must only involve qualified electricians in such works.
The pain must also install smoke and carbon monoxide detectors. It must consider that 65 Gresham Street is House in Multiple Occupation (HMO). Therefore, it needs extra provisions to ensure the health and safety of tenants. These must also include air vents, gas meters, electricity boxes, pavements, stairs, and decking.
The Local authority can identify any of those 29 issues under the HHSRS system and serve a notice to Pain based on their severity. Therefore, improvement is mandatory under such conditions.
Youens and sub-tenants must note that Pain is only responsible for health and safety matters it has caused based on Section 11 of the Landlord and Tenant Act 1985. The premise falls under the category of HMO. Thus, Pain must ensure additional responsibilities for fire safety. Under Section 11, Pain must take responsibility for the structure and exterior of the building, installations of water, gas, power, and sanitation (Shepperson, 2011). This implies that if Pain performs such repairs, then Youens must compensate for them. At the same time, Pain shall consider FRI basis and other tenancy covenant with Youens.
Fire Safety
The pain must refer to fire safety for commercial property for its HMO premise. The Housing Act 2004 and the Regulatory Reform (Fire Safety) Order 2005 provide guidance for all occupiers of premises (LACORS, 2008). LACORS combines both the Act and Fire Safety Order to provide comprehensive guidance to occupiers of buildings. The law has a compulsory risk-based approach to fire safety.
Fire safety requires the involvement of Pain, Youens, and the sub-tenants in the premise. The pain must contact Communities and Local Government (CLG) for policy on fire safety for commercial property.
According to the law, Pain must ensure that the building is safe. The pain must ensure that the building complies with regulations on means of the emergency fire escape, fire doors, and other escape ways.
The building, 65 Gresham Street must have fire alarms and extinguishers.
The law compels Pain (the responsible person) to conduct a risk assessment, introduce the necessary fire protection measures, precaution, and fire management plan in the building.
The pain must consult the Building Regulations 2000 as it has provisions on new and altered buildings. It clarifies all the requirements for the building based on fire safety. In this context, it looks at “the health and safety of building users, energy conservation, access, facilities for the disabled, and fire safety including means of warning, escape routes, internal and external fire spread” (Landlord Zone, 2013b).
The pain must ensure due diligence in the premise. In case of any complaints from Youens, Pain must prove that it took all the necessary steps to avoid fire hazards through a written ‘due diligence’ report. Pain has the responsibility of carrying out all fire repairs in the building after notification and must respond to emergencies within 24 hours.
This also covers both electricity and gas safety. Under the Electrical Equipment (Safety) Regulations 1994, Pain has to ensure that all provided electric gadgets are safe to use. In addition, Pain must ensure that a qualified electrician (NICEIC) has verified wiring and appliances. The building must have Electrical Safety Certificate. The Gas Safety (Installation and Use) Regulations 1998 requires Pain to “ensure that gas appliances, fittings, and flues provided for tenants are safe” (HSE, 1999).
Pain cannot delegate such duties to Youens and sub-tenants. However, Youens and sub-tenants have the responsibility not to use any appliance they suspect may be dangerous. In addition, they must also be responsible for their own appliances.
Conclusion
Under FRI basis, Youens is responsible for all exterior and internal repairs and maintenance of 65 Gresham Street. It must incur all related costs. The Music Recording Studio and other sub-tenants are only responsible for internal repair based on their covenants. Pain and Youens can negotiate such terms in order to reduce costs of repair or damage claims. However, Pain must not claim for what it has not lost in the building.
Pain bears all responsibilities for asbestos found on the premises. However, it can only compensate for any injuries and deaths resulting from exposure to asbestos.
Pain has the responsibility of not rejecting reasonable requests for alterations in order to enhance access to the premise. However, Youens must bear such costs of alteration and is liable to restore the building to its original status upon the expiry of the lease.
Pain takes the responsibility of fire safety. It must ensure that the premises are safe from fire. However, Youens and sub-tenants must ensure that fire safety is the responsibility of all premise occupiers. However, Pain is not responsible for tenants’ electrical and gas appliances.
Under the law, Pain must ensure that the premise is not hazardous to the health and safety of tenants.
References
Asbestos UK Surveys 2012, Asbestos: Frequently Asked Questions. Web.
Avery, M 2010, The Equality Act 2010: What does it mean for landlords and tenants? Russell-Cooke LLP, London.
Hollywood Internet Ltd 2010, Asbestos Regulations – Facts. Web.
HSE 1999, Landlords. A guide to landlords’ duties: Gas Safety (Installation and Use) Regulations 1998, Crown, London.
LACORS 2008, Housing-Fire Safety: Guidance on Fire Safety Provisions for Certain types of Existing Housing, Newman Thomson Ltd, West Sussex.
Landlord Zone 2013a, Dilapidations in Commercial Property. Web.
Landlord Zone 2013b, Fire Safety: Fire Safety in Rental Property. Web.
McAllister, J 2011, Dilapidations On The Rise, The Dilapidations Consultancy, London.
Shepperson, T 2011, The top ten health and safety issues in rented properties. Web.
The University of Bristol n.d., A Guide for Landlords. Web.
Waldman, L and Williams, H 2009, As Safe as Houses? Dealing with Asbestos in Social Housing: A Report for UCATT, UCATT, London.