The importance of Jervis v Harris [1996] – a contractual self-help tool for landlords

The dispute in Jervis v Harris [1996] Ch.195 (“Jervis“) concerned a tenant who was obligated under the terms of the lease to keep their premises in “good tenantable repair and condition”.

The lease contained a clause allowing the landlord to inspect the property for compliance with the tenant’s repairing covenants and to serve notice on the tenant outlining any required repairs.

If the tenant failed to remedy any identified disrepair within three months, the lease permitted the landlord to enter the premises and undertake the repairs itself.

Crucially, the clause provided that the landlord could recover its costs and expenses incurred from such repairs from the tenant as a debt.

The tenant argued that any claim by the landlord for repair costs pursuant to the clause should be treated as damages pertaining to the breach of tenant covenant, which would be subject to common law rules requiring the landlord to prove breach and take reasonable steps to mitigate itfs losses, and not as a debt.

The Court of Appeal disagreed with the tenant. It was held that recovery under the clause (now known as a ‘Jervis v Harris clause’) constituted a contractual debt, not a claim for damages.

This distinction drawn was crucial because it enshrined the right for landlords to bypass the procedural hurdles associated with pursuing damages claims, which would include (amongst other steps) obtaining leave of the court under s.1 Leasehold Property (Repairs) Act 1938 prior to issuing a claim.

The outcome of the case was that a landlord should not have to incur time and expense via the courts to recover costs arising due to the failure of the tenant to comply with its repair covenants (or, to go a step further, pay costs incurred to remedy disrepair). Lord Justice Millett confirmed this point in his decision:

“…it was not the intention of Parliament to put obstacles in the way of a landlord whose object is to secure that necessary repairs are carried out, preferably at the expense of the tenant, but if necessary at his own…”

Importance and risks

Landlords should include a Jervis v Harris clause in their commercial leases. The clause gives landlords a streamlined and effective mechanism for managing tenant failure to comply with their repairing obligations.

Treating repair costs as a contractual debt enables landlords to recover expenses without the procedural difficulties, costs and time of a damages claim.

However, exercising a Jervis v Harris clause is not a silver bullet. Landlords need to be aware that there are risks and factors that must be considered when deciding when or whether to engage a Jervis v Harris clause:

• Financial Risk – the landlord has to incur the cost itself before it can seek to recover the cost from the tenant. If such works are expensive and the tenant cannot afford to pay (or the tenant challenges the costs incurred in respect of the works – e.g. using expensive materials), the landlord may struggle to recover the costs.
• Procedural Risk – the landlord must take care to correctly follow the procedure prescribed under the lease exercising rights under the clause.
• Dispute Risk – the tenant may argue that works were not required and the landlord works have exceeded the repair obligations stipulated in the lease.

Drafting implications

A key takeaway from Jervis is the critical role of precise drafting in leases. Repair clauses must be carefully worded for landlords to benefit from the principles established in the case

Accordingly, landlords (and their advisers) should:

• Clearly outline the landlord’s right to inspect the property.
• Include a mechanism enabling the landlord to serve a repair notice on the tenant and to give the tenant a set period to remedy disrepair (this can be defined by reference to a time period (e.g. within one month) or a more broadly drafted term such as ‘within a reasonable time’). Time periods offer greater certainty and less chance for disputes as to objective ‘reasonableness’.
• Provide for the landlord’s right to enter the property and carry out repairs if the tenant fails to comply with such notice.
• (Most importantly!) specify that repair costs incurred by the landlord are recoverable as a debt.

It is also worthwhile including a provision which states that any actions taken by the landlord in respect of the Jervis v Harris clause are in addition to (and not instead of) the landlord’s right to forfeit the lease.

This ensures that the proprietary right of the landlord to forfeit is not fettered or prejudiced if they decide to take separate forfeiture action in addition to other actions (e.g. for an order of specific performance).

Whilst Jervis underscores the value of well-drafted repair clauses in commercial leases, providing landlords with a powerful tool to enforce tenants’ repairing obligations efficiently, landlords should exercise caution when exercising such clauses to mitigate financial, procedural, and dispute risks.

Sharpe Pritchard’s Real Estate team regularly advises commercial landlords across a range of sectors. If you would like to discuss the information or issues raised in this article in further detail, please contact James Mallery-Nelson (jnelson@sharpepritchard.co.uk) or on 0207 405 4600.

James Mallery-Nelson is an Associate at Sharpe Pritchard LLP.

This video is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email enquiries@sharpepritchard.co.uk.