The London Borough of Tower Hamlets v Lessees of Brewster House and Malting House

A covenant to maintain a building may include preventive work, but does not ordinarily require the landlord to remedy an inherent structural defect or make safe a building that was unsafe when constructed. A general “sweeper” clause must be construed in the context of the specific obligations preceding it. Without express words, it does not impose a liability radically different in kind or scale. A service-charge definition cannot itself create a substantive liability absent elsewhere in the lease.

Long leaseholders applied to the First-tier Tribunal under sections 27A and 19 of the Landlord and Tenant Act 1985 concerning proposed service charges for works to remedy structural defects in blocks constructed using the Large Panel System.

The FTT held that the leases did not permit recovery under the landlord’s covenants to maintain the building, undertake works necessary for its safety and management, or under the definition of “Total Expenditure”. The landlord appealed. The central issue was whether the lease wording extended to remedying structural defects and strengthening the buildings against normal loading.

1. Appeal dismissed. The FTT’s decision stood. The landlord could not recover the cost of the structural-strengthening works through the service charge.
2. The leases were construed objectively and contextually, applying Arnold v Britton [2015] UKSC 36. The relevant considerations included natural and ordinary meaning, the lease as a whole, contractual purpose, relevant background and commercial common sense.
3. The covenant to “maintain and keep in good and substantial repair and condition” did not cover the works. “Maintain” is distinct from “repair” and may include preventive work, but neither covenant ordinarily extends to remedying an inherent structural defect or making safe a building that was unsafe when constructed.
4. Clause 5(5)(o) was a future-proofing or sweeper clause, but its preceding obligations supplied the relevant context. It did not impose a potentially ruinous liability of a wholly different kind and scale from the specified repair and maintenance obligations. Express wording would be required.
5. The potential cost was relevant to construing the unclear general clause as part of the factual and commercial context. It would not be relevant merely because work clearly fell within an existing obligation and happened to be expensive.
6. The definition of “Total Expenditure” could extend the service charge to some expenditure beyond the landlord’s express obligations, but could not itself create a substantive liability for structural-defect remediation.
7. The right-to-buy statutory provisions no longer affected recovery under these leases, which had all been granted after the relevant amendment. The appellant accepted that an order under section 20C of the Landlord and Tenant Act 1985 could prevent recovery of its litigation costs through the service charge.

1. Upper Tribunal (Lands Chamber): appeal from the First-tier Tribunal decision in references LON/00BE/LRM/2023/0038–0041. Appeal dismissed and the FTT decision stood.