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Repairing Covenant

QUESTION: What is meant by a covenant ‘well and substantially to repair’?

A covenant ‘well and substantially to repair’ does not require the tenant to put the property into perfect repair or into pristine condition.

In Riverside Property Investments v Blackhawk Automotive (2004), the tenant carried out extensive repair works to the roof of an industrial unit. Before the expiry of the lease, which contained such a covenant, the landlord then replaced the roof altogether and sought to reclaim the costs from the tenant, contending that only complete roof replacement would comply with the covenant.

The court found that the property could have been put into the covenanted condition without complete replacement. There was no evidence that the roof was handed back to the landlord in breach of the repairing covenant.

The standard of repair was that of an intending occupier of an industrial warehouse who judges repair reasonably by reference to its intended use of the premises. This is an objective test that must take account of a reasonably minded incoming tenant taking a lease on similar terms.

If there is a dispute over replacement or repair, replacement is only required if repair is not reasonably or sensibly possible. If there are two ways in which the covenant might properly be performed, the tenant is entitled to choose which method to use. No criticism can be made if, in doing so, it chooses the cheaper route.

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