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Commercial tenant ordered to pay cost of removing asbestos

Posted: 5th November 2020   In: Commercial Property

A commercial tenant that left behind asbestos-contaminated materials after having its lease terminated has been ordered to pay the cost of clearing the site.

There was a "yield-up" covenant in the lease that required the tenant to remove buildings erected on the site and to leave the site in "good and substantial repair and condition".

Following the termination, the tenant left the remains of various buildings, in the form of concrete slabs.

The landlord granted two successive licences to the tenant's parent company to remove them. During the removal, the company inadvertently unearthed asbestos-contaminated material (GTA) which had been buried close to the slabs and spread it across the site, necessitating remediation works.

The landlord sought to recover the cost of those works from either the tenant or the parent company.

The landlord argued that the tenant's failure to remove the GTA was a breach of covenant and the parent company's failure to remove the GTA was a breach of its obligations under the licences. The failure to remove the contaminated material also breached the Control of Asbestos Regulations 2012.

The High Court found in favour of the landlord.

It held that the tenant's failures to remove both the concrete slabs and the GTA were breaches of the covenant in the lease.

The court also found that the licences obliged the parent company to remove the GTA, even though it didn’t know of its existence when the first licence was granted. The covenant required the yielding up of the site in good and substantial repair and clear of any buildings.

The GTA was discovered during the currency of the first licence and had to be removed to achieve compliance with the covenant, and the licence expressly required the parent company to certify that the site was asbestos free.

The tenant was liable to pay the cost of putting the site into the state in which it should have been left upon termination of the lease.

Please contact Santokh Singh if you would like more information about the issues raised in this article or any aspect of commercial property law.

[2020] EWHC 2521 (TCC)
PULLMAN FOODS LTD (Claimant) v WELSH MINISTERS (Defendant) & BFS GROUP LTD (Third Party) (2020)
QBD (TCC) (Judge Keyser QC) 23/09/2020