The Meaning Of Yielding Up In Good Repair And Condition Where A Site Has Asbestos

A recent high court case looks at the meaning of yielding up in good repair and condition where a site has asbestos

The High Court (HHJ Keyser QC) discussed how a yield up covenant in a lease applied where asbestos was left buried across the site at the end of a lease.

The tenant had appointed consultants to remove buildings from the site. The consultants’ works in dismantling the buildings had disturbed asbestos-containing materials and distributed them across the site.

Overall, the case was decided on the facts. The yield up covenant required the tenant to deliver up the site “in good and substantial repair and condition to the satisfaction of the [lessor]”. The court made the following key points (referring to case law):

• Use of the word “condition” shows that the obligation was capable of extending to doing works that went beyond strict repair.
• The lessor did not have unlimited discretion in deciding on the appropriate standard of “good condition” or the remediation works. However, it could form its own judgment as to what was required to satisfy the appropriate standard, provided its judgment was within the range of views that could reasonably be held.
• The presence of the asbestos meant that the site was in a damaged or deteriorated condition and was not in a good condition or in proper repair.

Removal of the asbestos was reasonably required for compliance with the covenant, even if the asbestos had been present before the grant of the lease (which was not the case here). The court held that the tenant was liable for damages for breach of the covenant. The case highlights the importance of tenants undertaking environmental due diligence to ascertain the presence of any hazardous substances or contamination before entering into a lease.

The case (Pullman Foods Ltd v The Welsh Ministers and another [2020] EWHC 2521 (TCC) (23 September 2020)  (HHJ Keyser QC)) can be viewed here