[2024] UKUT 371 (LC)

No. 309 Barking Road in Plaistow is part of a terrace with commercial premises on the ground floor and residential flats above. It is on basement, ground and two upper floors and is said formerly to have been a doctor’s surgery with ancillary accommodation. The ground floor is now used as a hairdresser and the upper floors are residential.

The headlease is described on the title page of the document as a “Residential Lease”. The original parties were Caphill Developments Ltd as landlord and Jeevan Singh as tenant. It was granted on 30 October 2006 for a term of 999 years and comprises the two upper floors of No.309 and the roof space, with the landlord retaining the commercial unit on the ground floor and basement of the building which have their own separate entrance. Only a peppercorn rent was reserved by the headlease, and no premium is recorded in the prescribed particulars as having been paid. No rights over the property were reserved in the landlord’s favour and the only benefits which it appears to have obtained on granting the headlease were the right to insure the building and to recover a contribution towards the cost from the tenant, the right to a contribution towards the maintenance of certain parts of the building, and a number of indemnities.

Clause 3 of the headlease comprised the tenant’s obligations. These included payment of the peppercorn rent, the insurance charge “by way of future rent”, any outgoings, and a contribution to the cost of repairing party structures and things used or shared with other property (the last being clause 3.5).

Clause 3.7 contained the first of three separate indemnities, and was expressed as follows:

Clause 3.8 was a second indemnity, expressed in slightly different language: “By way of indemnity only and not further or otherwise, the Tenant shall observe and perform all covenants in respect of the Property arising from the Title Matters […]”. Once again, the expression “Title Matters” was not defined elsewhere in the document, so it is doubtful whether the second indemnity has any meaning.

The third and final indemnity, given by the tenant in clause 3.10, covered uninsured damage to the Property, or to persons or property, arising out of the state of repair or condition of the Property, any development carried out by the tenant, anything the tenant might attach to the Property, and the action of the tenant, any underlessee, or their respective servants or agents.

Apart from an express covenant for quiet enjoyment, the landlord’s only obligations in the headlease were to insure the building and any plant, and to maintain retained land (which included the commercial parts).

The headlease also includes an unusual form of forfeiture clause. It is entitled to recover possession of the property under clause 4 if the tenant is at least 21 days late in paying the rent (which includes the insurance charge and not simply the peppercorn) or if the tenant “has perpetually broken any of the terms of the lease”. Perpetual means continuing for ever and it is not at all clear when this forfeiture condition would be taken to be satisfied.

Finally, amongst other provisions at the end of the headlease, clause 7.3 was an exclusion clause in the following terms:

“Nothing in this Lease shall imply or warrant that the Building may lawfully be used for any use and the Tenant acknowledges and admits that no such representation or warranty has ever been made by or on behalf of the Landlord.”