A Tenant Loses Out!

23 September 2015

Celia Worthington, Partner, considers the High Court in England and Wales' recent decision that the Tenant of a building used as an amusement arcade in Folkstone is not entitled to claim ownership of a portion of its building which was covered in a street mural attributed to the street artist Banksy

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The High Court in England and Wales has very recently decided that the Tenant of a building used as an amusement arcade in Folkstone is not entitled to claim ownership of a portion of its building which was covered in graffiti. This was no ordinary graffiti. This was a street mural attributed to the street artist Banksy. The tenant, who leased the building for 20 years, removed the section of the wall with the artwork, made good the damage caused and shipped the piece of the wall to New York to be sold. The landlord assigned its claim and interest in the artwork to a charitable art foundation who instigated the action to have the artwork delivered up to it.

The lease was a full repairing lease, included the usual painting obligations and prohibited alterations without the written consent of the landlord. The alterations clause specifically prohibited "maiming or injuring" the walls. The tenant argued that it was complying with its repairing obligations. Genuine repair works would not constitute a breach of the prohibition on alterations. The Court did not agree with this argument and held that the removal of the wall constituted an interference with the fabric of the building and was more intrusive than painting a wall or using abrasive cleaning methods to remove graffiti which would be repairs. The Court held that the tenant was only required to do such remedial work as was prudent, using such methods of repair as a sensible person would adopt. Removing the artwork was not an objectively reasonable means of complying with the repairing covenant.

The tenant then argued that the artwork once removed was a chattel and that it could be implied that a tenant has a right to dispose of chattels removed whilst carrying out repairs. Unfortunately for the tenant the Judge didn’t agree due in part to the value of the artwork. The Judge found that the artwork was the result of the spontaneous actions of a third party that had created a potential windfall and it was the landlord who had the right of ownership to realise that windfall.

Celia Worthington, senior partner of the Commercial Department of Worthingtons Solicitors Belfast Office 

 

 

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