Consultation Paper on the General Law of the Landlord and Tenant

whether, in the absence of an express provision for application ofinsurance proceeds on repairs or reinstatement, the Irish courts wouldfollow the English courts in their approach to cases where thelandlord has received the insurance proceeds but the tenant hasdirectly or indirectly paid for the insurance. The English courts hadheld that in such circumstances the tenant can require the landlord toapply the insurance proceeds on reinstatement; either by regarding thelandlord as, in effect, insuring for the joint benefit of both parties 16 orby implying an obligation by the landlord to exercise rights conferredby the insurance so as to preserve the tenant’s interests. 17 This matterought to be clarified.11.07 The Commission takes the view that in cases coming withinsection 40 of Deasy’s Act, ie destruction or damage rendering thepremises uninhabitable or incapable of beneficial occupation orenjoyment, through no fault of the tenant, the tenant should beentitled, as an alternative to surrendering the lease, to requireinsurance proceeds received by the landlord to be expended onreinstatement of the premises. If the landlord has failed to insure thepremises whether in breach of obligation or not, 18 the tenant shouldstill have the right to surrender. Where the premises cannot bereinstated, for instance because planning permission is refused, thetenant should again be entitled to surrender, but the landlord, who isleft with the destroyed premises, should be entitled to keep anyinsurance proceeds. The Commission provisionally recommends thatthe tenants coming within section 40 of Deasy’s Act should be entitledto require that insurance proceeds be used to reinstate the premises,as an alternative to surrender. If no insurance proceeds areavailable, or if the premises cannot be reinstated, the tenant shouldstill have the right of surrender, but in the latter case, the landlordshould be entitled to any insurance proceeds which are available.C Other Legislation11.08 The question remains whether other legislative provisionswould be appropriate. The Commission noted earlier that section161718Mumford Hotels Ltd v Wheler [1985] QB 755.Varal Ltd v Security Archives Ltd (1989) 60 P & CR 258.Ie even in cases where the tenant has provided the money, but the landlordhas failed to take out the requisite insurance.144