I’m letting a commercial property as Trustee, am I liable for the replies to enquiries that I give to the Tenant?
Well, the short answer to that question is “yes”.
The High Court, in the case of First Tower Trustees v CDS (Superstores International), decided that a claim for misrepresentation by a commercial tenant against its landlord made the landlord, who failed to up date a reply to an enquiry, liable.
The landlord who was a trust company stated in its replies to enquiries that it was not aware of any notices or breaches regarding environmental problems. The landlord later became aware of the presence of asbestos but failed to tell the tenant before entering in to the lease of the premises, which was a warehouse.
The tenant claimed damages for the costs of the remedial works and alternative accommodation. The Court held that the landlord misrepresented the position and was therefore liable.
To limit your liability clauses should be included in the lease that the trustee’s liability is limited to the assets of the trust and to the end of your trusteeship. You may also wish to limit your liability for pre-contract misrepresentation.
What you should do, in every case, is that if you make a representation in replies to enquiries that later turn out to be untrue or was made by you on a misunderstanding, up date that reply as soon as possible and in any event prior to the lease or sale contract being entered in to.