Failing to adhere to small print in apartment leases can cost serious money

Finbarr Kelleher has been asked to pay dearly for installing a wooden floor in the hall of his large apartment in Dun Laoghaire…

Finbarr Kelleher has been asked to pay dearly for installing a wooden floor in the hall of his large apartment in Dun Laoghaire, and putting up a stud partition in his livingroom to create an extra room.

Last week, he lost a case in the Circuit Civil court, which found he had not complied with the management lease to which every purchaser signed up. That had specified that no structural alterations could be made to the property, and that carpets or "other approved materials" should be used on the floors.

In addition to losing the case and being ordered to reinstate the apartment to its original condition, he was ordered to pay the management company of the complex £7,500 in damages.

Mr Kelleher, a builder, had bought the apartment in Rosses Court, a complex on the seafront in 1997, about 20 years after it was built. Most of the other occupants of the building are owner-occupiers, many of them elderly, but he intended it for letting purposes.

READ MORE

When he bought the apartment, he signed a 500-year lease containing a number of covenants, including an undertaking not to make any structural alterations or change the lay-out. The lease also ruled out altering principal bearing walls, or changing wiring or plumbing, and specified the laying of carpet or approved floor covering in order to minimise noise.

His counsel, Conor Bowman, told the court the work carried out did not constitute a structural alteration. However, Judge Devally ruled that the creation of a third bedroom with extra electrical wiring and plumbing constituted a significant change in the internal layout.

Management companies are usually constituted by the owners of individual apartments, who are the shareholders. They elect directors and a chairman, and agree on issues such as maintenance of the overall building and common areas.

But the leases drawn up by these management companies also usually contain clauses governing what can be done with the individual apartments, which could impinge on the other occupiers or on the overall safety of the building. They might include not displaying washing on the balcony, or having domestic pets. These leases are part of the conditions of buying the apartment.

"A lot of people spend a lot of money on apartments like this and think they can do what they like with them. They can't," said one legal source. "For example, they might find they can't put in wooden floors, because of the noise. They find they can't interfere with the wiring or the plumbing, because these blocks are built to comply with building regulations."

However, "some of these things can be done after consultation with the management committee.

"People should read management leases very carefully, especially long-term leases," said the source.

Another lawyer said "these cases are rare enough. Landlord and tenant cases very rarely concern breaches of a covenant relating to internal changes."

Such cases may not remain rare. Apartment living has come to stay in Ireland and most apartment blocks have management companies.

This case is important for these companies, as it means that lease agreements can be enforced through the courts. Previously there was no case law in this area.

But not everyone is happy about it. One architect with apartment experience feels that the terms of the leases are often very vague and do not allow for variations which may be either necessary or desirable for the occupier, without impinging on neighbours.

"A lot of these leases were drawn up 20 years ago or so, when things were very different."

Perhaps. But in their haste to secure a home, a prospective apartment-buyer should not stint on the time spent reading and considering the lease.