Sunlife V Tiger - Tenant be aware of your obligations

The Case: Sunlife were the owners of a building in Central London built to a high standard in 1973.  The premises were let under leases expiring in 2008 which were acquired by Tiger in 2000.  Tiger carried out a limited refurbishment but the premises were in a poor state of repair and these issues were not dealt with by Tiger.  In March 2009, after the leases had expired, Tiger was presented with a Terminal Schedule of Dilapidations claim in excess of £2.5m.

The Argument: Tiger contended that the dilapidations claim was capped by the diminution in the value of the premises which amounted to £240,000, with Tiger arguing that the extent of the works which had been carried out was far in excess of that required.

The Verdict: The High Court said that one needed to consider whether Sunlife could have let or sold the building without a significant price discount if Tiger had performed its obligations under the lease.  The Court considered the diminution in value to be £1.4m which was in excess of the cost of works required to remedy the breaches and therefore awarded Sunlife £1.3m in damages