High Court finds former tenant breached repairing obligations but rejects the landlord’s full HVAC claim.
The High Court has awarded £648,141.47 to the owners of a Dartford office building in a terminal dilapidations claim against the former tenant and its surety.
His Honour Judge Keyser KC, sitting in the Technology and Construction Court, found that Westbury Homes (Holdings) Limited had failed to comply with its repairing obligations under the lease of premises at Crossways Business Park. The judgment was handed down on 29 September 2026.
The dispute concerned a two-storey office building formerly known as Persimmon House and now known as Cotton Lake House. The lease, granted in 2003, expired on 8 July 2023. The landlords, Craigard (Dartford) Limited and Craigard (Dartford) Nominees Limited, subsequently brought a claim for more than £1.6 million, including the cost of remedial works, lost rental income and professional fees.
A central issue was the condition of the building’s heating, ventilation and air-conditioning system. The court found that the former tenant had not properly maintained the HVAC system and that it was out of repair when the lease ended. The judge also found that works carried out shortly before expiry were minimal.
However, the landlords had not established that the entire HVAC system needed to be replaced to comply with the repairing covenant. The court concluded that if either repair or replacement could have been recommended by a reasonable specialist, damages should be assessed on the basis of repair because the tenant was entitled to perform its covenants in the least onerous manner.
The court also rejected the former tenant’s argument that the landlords’ intention to replace the HVAC system meant that the cost of repairing the existing system should not be recoverable. Judge Keyser held that the common law rules did not extinguish damages simply because of the landlord’s intentions. The statutory mechanism in section 18(1) of the Landlord and Tenant Act 1927 remained relevant to the limit on damages.
The court did, however, distinguish between the primary repair costs and consequential losses. Although the judge calculated that a period of remedial works would have resulted in £38,530.38 of lost rent and £5,600 in alternative accommodation costs, those losses were not awarded. The court found that they would have been incurred anyway because of the landlords’ intentions to improve the premises.
Professional fees were treated differently. The court found that the tenant’s breaches were a material cause of the fees incurred and that the relevant sums were recoverable under the lease.
In considering the statutory cap under section 18(1) of the Landlord and Tenant Act 1927, the court assessed the diminution in value of the landlord’s reversion. The judge preferred evidence that a hypothetical purchaser would have been satisfied with a functioning HVAC system in proper repair rather than replacing it entirely.
The final damages award was £648,141.47. The parties were asked to seek agreement on interest and costs, with any outstanding issues capable of being dealt with at a further short hearing or through written submissions.