Brady Solicitors’ Michael Young investigates ‘Moorjani v Durban’ and highlights how damage caused by a landlord’s breach of covenant can lead to a valid claim for special damages.

This long-running property management dispute concerned water damage to a leaseholder’s flat and came to a conclusion in the Court of Appeal in December 2015. The decision is a clear reminder of leaseholders’ rights to ‘peaceful enjoyment’ of their property and has far-reaching implications for both landlords and managing agents.

Morjani v Durban Ltd [2015]* – no hurt feelings

The leaseholder concerned had suffered a loss arising from the landlord’s breach in regards to the repairing and insuring covenants held within the lease. The leaseholder claimed that the disrepair and subsequent damage due to a flood in the flat caused not only physical damage to the property but also personal discomfort, inconvenience and distress.

The leaseholder therefore claimed both general and special damages.

The claim raised multiple issues. The damage to the property had occurred in 2005 and the landlord sent in contractors to make the repairs. The repairs were inadequate and the contractors had to visit the property twice more to ensure the job was completed correctly.

There were further claims made against the landlord for a breach of lease caused by not repairing the damage caused to the communal areas.

In this first hearing the leaseholder was successful on the points of repair and won on general damages, but failed on the special damages element – the ‘hurt feelings’ aspect of the claim. The judge decided that the leaseholder had failed to prove the special damages.  The leaseholder hadn’t lived at the flat between 2005 and 2008 for reasons unrelated to the damage, and the judge decided that the special damages they claimed were ‘too remote’.

Judgement overturned – special damages awarded

The claimant appealed and Lord Justice Briggs overturned the original decision on awarding special damages.

The crucial change in decision was not that the claimant actually in a physical sense suffered special damages by living in the property, but that the discomfort, inconvenience and distress was consistent with impairment to the rights afforded under the terms of the lease.

The glimmer of light in the Judgement for the landlord was the damage was concluded to be cosmetic and therefore the financial damages were reduced on that basis.  It was also taken into account that the claimant did reside at other premises during the event.

This case reflects some very basis block management issues, namely:

  • The arrangement of adequate insurance cover
  • Balancing contractor costs and expertise to undertake repairs properly
  • Understanding the landlord’s obligations as detailed in the covenants in the lease.

The case highlights how damage to a property can stretch beyond a claim for physical repair, but can also end up costing a landlord for ‘hurt feelings’. The Judgement highlighted that enjoyment of a property is expressly protected in the lease and this opens landlords up to risks of special damages being awarded against them.

Our advice for landlords and managing agents?

Keep to the terms of the lease! Get it checked by a solicitor if there is any doubt on what the lease requires you to do.

Be wary of opting for the cheapest contractor quote. Using low end prices for contractors can cost more in the long run; it’s important to balance the cost of a contractor against their expertise and ability to get the job done.

One rule for one, and one for another? Firm action is usually taken against leaseholders who withhold service charge payments without good reason; however bear in mind that when a landlord has breached the terms of the lease it can be difficult to enforce this same rule on the leaseholders.

Consider the distress that can be caused to leaseholders. Damages caused by a landlord’s breach of covenant can go beyond the physical repair element, causing a leaseholder significant distress and upset and potentially adding another element to their claim.

Need help with a lease review or a property management dispute? Talk to the specialists at Brady Solicitors; we will be pleased to talk you through your options.

Call the property management specialists on 0115 985 3450 or click here to send us an email.

*Moorjani v Durban Ltd [2015] EWCA Civ 1152; [2015] WLR (D) 509 i