Electrical installation safety in let properties

When the Court will imply a term that the landlord is responsible for electrical safety

The background

J N Hipwell & Son v Szurek [2018] concerned a commercial premises at which the tenant operated a café and function space business. The tenant stated that she was forced to close the business after experiencing losses totalling £22,750 as a result of unsafe electrics, causing a small fire and a sparking plug socket.

The Court assessed whether the issue was addressed by the lease terms, finding that no express terms were contained in the document referring to the property’s exterior, plumbing or electrical supply or maintenance. Further, the Court was required to consider whether an implied term was necessary to give business efficacy to the lease.

The decision

The Court of Appeal dismissed the landlord’s appeal, holding that a term should be implied in the lease which placed responsibility on the landlord to ensure the electrical safety of the premises. In reviewing a previous decision in Marks and Spencer plc v BNP Paribas Services Trust Company (Jersey) Ltd [2015], the Court of Appeal found that no express terminology containing obligations relating to electrical safety was contained in the lease. Before implying a term, the Court must ask whether this was omitted intentionally by the parties? Does the lease lack commercial or practical effect without the provision?

The decision held that a term should be implied for commercial and practical clarity, concluding that the term was required to give effect to the parties’ intentions and that, as drafted, the lease contained a ‘plain and obvious gap’. The lease also contained an ‘entire agreement’ clause. The Court found that this did not prevent the incorporation of an implied term where that term was required for business efficacy.

Advice and action for landlords

Clear drafting is, as ever, crucial to avoiding these sorts of cases. The Court was particularly minded to imply the term here given that the other covenants were notably more onerous on the tenant, and that there was a clear and obvious gap in the drafting.

In particular, landlords should note that an ‘entire agreement’ clause does not necessarily prevent the implication of terms where such terms are required to give business efficacy to the lease, and to give commercial and practical effect to the agreement.