Law in relation to a tenant 'improving' leased premises without consent

Rhonda9000

Missing from the recesses of my memory are what happens where, say, a tenant unilaterally carries out (and pays for) improvements on the premises without the landlords consent?

Supposing T tears out the kitchen and puts in a new one or builds a new annex onto the property etc. (all without asking L). Is it simply a case of the rules of ameliorating waste? Would such improvements be sufficient to push a court to lean more in favour of "lease" where the original agreement was described as a "licence agreement"?

johnnyskeleton

I think the improvements need to be on consent or at least on notice to the landlord before the tenant will be compensated, and even then it is based more on the added value than on the cost of the improvements.

I don't think improvements would make a difference when determining whether it was a lease or licence, as anybody could unilaterally decide to tear out a kitchen without approval, and it would be unfair to let them get a benefit from that.

Arguably, the act of tearing out the kitchen without consent is criminal damage.

Rhonda9000

Interesting, especially re. T's compensation; would seem unfair to compensate T for value added if for example:

Year 0 Property = 70,000
Year 1 T carries out unauthorised work costing 10,000
Year 1 Property = 100,000
Year 2 Property = 100,000. T leaves. L owes T 30,000, T profits 20,000 on foot of carrying out work for 10,000.

?? Or am I on the wrong track completely.

It seems Deasy's Act (s 67, 68) provides that T is free to carry out improvements (provided no covenant in lease), L cannot unreasonably withold consent. Not sure what RTA 2004 has to say on the matter.

johnnyskeleton

Rhonda9000 wrote: »

Interesting, especially re. T's compensation; would seem unfair to compensate T for value added if for example:

Year 0 Property = 70,000
Year 1 T carries out unauthorised work costing 10,000
Year 1 Property = 100,000
Year 2 Property = 100,000. T leaves. L owes T 30,000, T profits 20,000 on foot of carrying out work for 10,000.

That would be some great workmanship, as AFAIK most extensions cost more than the value they add to a house. S11(4) of the Landlord and Tenant Act 1931 provides that the compensation shall not exceed 15 times the annual addition to the letting value. So if the house is worth 30k more, but the annual rent only goes up by 500 pa, the maximum compensation would be 7.5k.

Rhonda9000 wrote:

It seems Deasy's Act (s 67, 68) provides that T is free to carry out improvements (provided no covenant in lease), L cannot unreasonably withold consent. Not sure what RTA 2004 has to say on the matter.

S17 Landlord and Tenant Act, 1931:
(3) A tenant shall not be entitled to compensation for improvements in respect of an improvement made after the passing of this Act unless—

( a ) an improvement notice was duly served in accordance with this Act in relation to such improvement, and

( b ) the tenant by whom such notice was so served became entitled under this Act to execute such improvement either on consent or by virtue of an improvement order, and

( c ) such improvement was duly executed in accordance (as the case may be) with such improvement notice and this Act or with such improvement order.

I don't know about the residential tenancies act, 2004. I believe it merely notes that the Board can award compensation for improvements, but I would imagine that the basic procedure under the 1931 act still applies. Sorry about the vagueness (please see my sig) .

Rhonda9000

Great workmanship or handy profession choice by T Did not realise compensation was calculated as above.

Possible bombshell: I am looking at the Repeal of Enactments (Schedule) of the Landlord and Tenant Act, 1980 and *drum roll*:

Short title:
Landlord and Tenant Act, 1931.

Extent of repeal:
The whole Act

Any ideas??

Re. your signature, I may steal it from you as I personally hate the area of L&T

Tom Young

So do I, hate it. Had a pretty dull teacher, so teaching ones self Land is not good. Doing Conveyancing now and its like a blast from the past ....

Words of what?

Tom Young

Rhonda, the westlaw citator will have that in it.

11. Land Act 1931
s.28 – repealed: 2005, No.24, s.12.
55. Landlord and Tenant Act 1931
see Shanley v Commissioners of Public Works
[1992] 2 I.R. 477, H.C.; Metropolitan Properties
Ltd v O’Brien [1995] 8 I.C.L.M.D.
104, Irish Times, August 7, 1995, S.C., April
3, 1995.
s.19 – see Twil Ltd v Kearney [2001] 4 I.R. 476 S.C.

johnnyskeleton

Rhonda9000 wrote: »

Great workmanship or handy profession choice by T Did not realise compensation was calculated as above.

My reading of it is that you are entitled to the capital added to the property, subject to the limit of 15 times what is added to the annual rent. And it seems its for a court to determine what the benefit is.

Rhonda9000 wrote: »

Possible bombshell: I am looking at the Repeal of Enactments (Schedule) of the Landlord and Tenant Act, 1980 and *drum roll*:

Short title:
Landlord and Tenant Act, 1931.

Extent of repeal:
The whole Act

Any ideas??

Yeah it's crazy alright. So, if you read s.54 of the 1980 act, it seems to simply restate s17 with the rider that where no notice has been served the landlord has:

Section 54 wrote:

.—(1) A tenant shall not be entitled to compensation for improvements in respect of an improvement made before the passing of the Act of 1931 in contravention of the lease or other contract of tenancy under which the tenement was held.

(2) A tenant shall not be entitled to compensation for improvements in respect of an improvement made after the passing of the Act of 1931 (whether before or after the commencement of this Act) unless a notice under section 12 (1) of the Act of 1931 or an improvement notice was served or, where no such notice was served, if the landlord, or where appropriate, a superior landlord, satisfies the Court that—

( a ) he has been prejudiced by the notice not having been served, or

( b ) the improvement is in contravention of any covenant contained in the contract of tenancy, or

( c ) the improvement injures the amenity or convenience of the neighbourhood.

And s47 of 1980 is almost the exact same as s11 of the old act. But if they have repealed the 1931 act, then tenants would not be entitled to any compensation, if you see my point.

Rhonda9000 wrote: »

Re. your signature, I may steal it from you as I personally hate the area of L&T

As I in turn stole it from that seminal authority of English Criminal Law - Rumpole of the Bailey. Brownie points for anyone who knows which character said it.

Victor

Rhonda9000 wrote: »

Missing from the recesses of my memory are what happens where, say, a tenant unilaterally carries out (and pays for) improvements on the premises without the landlords consent?

Supposing T tears out the kitchen and puts in a new one or builds a new annex onto the property etc. (all without asking L). Is it simply a case of the rules of ameliorating waste? Would such improvements be sufficient to push a court to lean more in favour of "lease" where the original agreement was described as a "licence agreement"?

Without getting into your licence agreement, the standard FRI and IRI contracts have clauses on this topic. If it is a licence agreement, the occupier is a licensee or occupier, not a tenant.

I can't see a court agreeing to pay a tenant because the occupier puts gold leaf on all the walls of the outside of the building. There may however, be a case where occupier carries out necessary repairs (is a repair and improvement) or modifications required to bring the building in line with say the Building Regulations, Factory Acts or other health and safety type issue or work to preserve the building from damage.