As a trustee, am I liable for replies that I give to a tenant when letting a property?

The answer to this question is a “yes” following a decision by the High Court where the Court considered a misrepresentation claim brought by a commercial tenant against a landlord who failed to update its replies to enquiries (First Tower Trustees Ltd and another v CDS (Superstores International) Ltd [2017] EWHC B6 (Ch) (20 February 2017).

The landlord, in this case, was a trust company. It stated in its replies to pre-contract enquiries that it was unaware of notices or breaches relating to environmental problems. Later it became aware of the presence of asbestos but failed to update the replies before entering into a lease of warehouse premises.

The tenant claimed damages for the cost of remedial works and alternative accommodation and it was held that the landlord trustee was liable for misrepresentation.

So, how can you limit your liability? A prudent lawyer would always limit a trustee’s liability to the assets of the trust and to the period of his trusteeship in the lease. However, following this case, trustees may also want to limit, as appropriate, their liability for pre-contract misrepresentation.

The general rule though is that if you make a representation in replies to enquiries, and later you become aware that it is untrue, you should update those replies.

How can Morr & Co help?

For more information and advice, please contact Lily Meyer, Associate Solicitor in our commercial property  team at our Wimbledon offices on 020 8614 4590 or email lily.meyer@morrlaw.com.

Disclaimer
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.