Following the article on the Dangers of Non Disclosure in March 2016, the recent case of First Tower Trustees Limited –v- CDS (Superstores International) Limited (2017) also highlights the need to ensure that replies to enquiries are kept updated.
In the case of First Tower Trustees, the landlord had responded to the tenant’s enquiries prior to completion of the lease, to the effect that they had not been notified of any breaches of environmental law or any other environmental problems relating to the property. By the time the lease was completed, however, the landlord had received a report indicating the presence of asbestos in the property and an email from a specialist firm advising that this could cause a health and safety risk.
The landlord neglected to update the replies to enquiries and, when the tenant discovered the asbestos following completion, the tenant claimed damages for the cost of the necessary remedial works and approximately 8 months’ worth of expenses for alternative accommodation.
The court held that there had been a misrepresentation of the position to the tenant which the tenant had relied upon when entering into the lease. Furthermore, the landlord was not entitled to rely on an exclusion clause within the lease which purported to prevent the tenant from relying upon any statements or representations made on behalf of the landlord. The court said that it was unreasonable for the tenant to be unable to rely on the replies to enquiries and, as a result, the tenant was entitled to damages.
As mentioned in our article last March, it is vital to remember to disclose any additional information or changes in circumstances. Both sellers and landlords are therefore advised to re-read the replies to enquiries just before exchange of contracts or completion of a lease and to provide updated responses if necessary.