Disrepair in long leasehold properties: landlords beware

In Moorjani v Durban Estates Ltd (2015) the Court of Appeal has established that a residential long leaseholder may still claim damages for loss of amenity following its landlord’s breach of repairing covenant, even though the leaseholder had chosen to live elsewhere for reasons unconnected with the disrepair.

Mr Moorjani owned a long leasehold flat, but moved out of it to live with his sister.  The landlord was responsible for maintaining and repairing the common parts and insuring and reinstating the building.  After Mr Moorjani moved out, the building flooded, damaging Mr Moorjani’s flat and the common parts.  When the landlord failed to carry out all the required repairs, Mr Moorjani engaged contractors to complete the remedial works himself, and then issued a claim for his loss against the landlord. 

Mr Moorjani’s claim for general damages for loss of amenity was dismissed at first instance. The trial judge held that Mr Moorjani had suffered no personal inconvenience, discomfort or distress (and therefore no loss) as a result of the landlord’s breach, because he had not been in occupation of the flat during that period for reasons unconnected to the disrepair.

On appeal, it was held that the trial judge had been wrong to treat Mr Moorjani’s non-occupation as fatal to his claim for compensation for loss of amenity.  The correct starting point for the valuation of Mr Moorjani’s loss was the rental value during the period of disrepair, which was then substantially discounted because he had chosen not to occupy the flat.

This case provides a warning for landlords of long leasehold properties that stand empty.  Even if the leaseholder is absent, the landlord may still face damages for the leaseholder’s loss of amenity if the property is in disrepair.

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