A tenant’s repair and re-decoration obligations…

…when the graffiti on the outside of the premises is art.

Leases routinely require tenants to carry out repairs and re-decoration both internally and externally.  A property in London was let on a 20 year lease with standard repair and re-decoration obligations.  The tenant had frequently had to paint over graffiti on its walls.
However, in September 2014 a mural, which was attributed to Banksy was spray painted on to the wall.  It was considered valuable and, having taken advice, the artwork was removed and shipped to New York to be sold at an auction.
The tenant claimed that it was able to do this because it was under an obligation to repair and re-decorate and that it had routinely removed other spray paint on the wall.
The landlord assigned its claim to a charitable organisation who brought a claim in court that the artwork belonged to it.
The court held that the artwork may well have been held to be an item of disrepair under the lease and that as such there were three ways in which the artwork could have been dealt with:

• It could be painted over
• It could be removed by chemical or abrasive treatments
• The section of the wall could be removed and then made good.

The tenant had carried out the third option but the court held that the most invasive method was not reasonable.  Once the artwork had been removed from the building it had become a chattel and the court considered whether the chattel belonged to the landlord or the tenant.
The default position of land law is that every part of the building belongs to the landlord.  Although it could be implied that a tenant has a right to dispose of some chattels which have no value that was certainly not the case here.  The court held that a windfall had been generated by Banksy but that windfall did not belong to the tenant but to the landlord.
There aren’t many cases on disputes relating to disposal of chattels because the value of such items is often extremely low and so this case is useful guidance on what should happen.  But it is also interesting to think that a street artist such as Banksy can help to clarify the law.
For further information please contact Tom Warrender.