Case considering a tenant’s liability for extraordinary repairs under a lease. Co-operative Insurance were the landlords and Fife Council were the tenants under a 25 year lease of the Unicorn house at the Kingdom Centre in Glenrothes. The Co-op claimed that the Council had breached their repairing obligations under the lease and sought damages of more than £1.3m. The matter for the court to decide was the relevancy of the Council’s argument that they were not liable for “extraordinary repairs” under the lease

The repairing clause contained the following:

“At their own cost and expense to repair and keep in good and substantial repair and maintained, renewed and cleansedin every respect all to the satisfaction of the Landlords the leased subjects”

The Co-op accepted that at common law a tenant is only liable for “ordinary repairs” and the responsibility for “extraordinary repairs” (such as the rebuilding or renewal of the subjects and making them wind and watertight) is normally that of the landlord. To make it the responsibility of the tenant would require clear stipulation or necessary inference. However, they argued that in this case the lease did make it clear that the tenant was liable for extraordinary repairs. The Co-op relied on the extent of the subjects included in the lease (which comprised the whole of the external walls and roof) and the fact that the repairing clause included an obligation to “renew” as well as to “repair”.

On the other hand, the Council contended that many of the repairs identified by the Co-op arose as a result of the impending expiry of lifespan of component parts of the property and both parties would have been aware that the lifespan of the parts in question was not much greater than the length of the lease. If it had been intended that the Council were to replace all such parts at the end of the lease it would have been made unambiguously clear.

Lord Glennie was not persuaded that the lease imposed liability on the tenants for extraordinary repairs. Indeed the clause did not go beyond the common law position. To argue that use of the word “renewed” meant that the tenants had assumed responsibility for “extraordinary repairs” put too much emphasis on the word renewed. As part of an obligation to repair the tenant may be obliged to renew certain elements in the structure but that is part of the repairing obligation.

If the Co-op’s arguments had been correct the lease would also have obliged the Council to give the property back at the end of the lease in as good condition as it had been 25 years earlier. They would have been obliged to renew parts even though they were not in need of repair. Whilst Lord Glennie agreed that it was possible to impose such an obligation, the intention would have to be made clear.

Although there were provisions in the lease which appeared to place responsibility on the tenants for structure that did not alter Lord Glennie’s opinion that the lease did not make the tenant liable for “extraordinary repairs”.

The full judgement is available from Scottish Courts here.

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