The Supreme Court's judgment in the Financial Conduct Authority's test case on non-damage business interruption cover for losses arising from the COVID-19 pandemic has wide-ranging implications. In terms of the impact on property, this is a significant decision for both landlords and tenants, where premises were forced to shut under the government's instructions to businesses to close and stay at home and following the introduction of social distancing instructions in March 2020.
A recent case concerning a landlord's counterclaim for the cost incurred by it in remediating its property prior to undertaking a major redevelopment project provides a useful reminder to tenants on the extent of their potential liability at the end of the term of their lease and sounds a cautionary note to any party undertaking works under licence. The landlord was entitled to recover the full cost of the remediation work to deal with asbestos contamination caused by the previous tenant and its parent company.
A recent Supreme Court case has clarified the law around challenges to covenants which seek to limit the use of land. The case involved an appeal by a retail anchor tenant against its landlord, which had sought to challenge a restrictive covenant in the lease which prevented it from letting space to businesses that competed with the tenant. The landlord sought to argue that the covenant was unenforceable as it fell within the doctrine of restraint of trade.