The landlord, the tenant and the “Banksy” mural

The recent case of The Creative Foundation v Dreamland Leisure Ltd [2015] EWHC 2556 (Ch), made for interesting reading not just for lawyers but for landlords and modern art lovers.

The case revolved around who owned a mural which had been spray-painted onto the outside wall of a leased building without anyone's consent. It turned out that this wasn't any normal bit of graffiti, being attributed to the well-known street artist "Banksy". The tenant removed the section of the wall containing the mural and sent it abroad to be auctioned. It then rebuilt the section of the wall.

The landlord believed the mural belonged to it and transferred its purported interest in the mural to a charitable arts foundation (who for the purposes of this article is referred to as the "landlord") which took action in place of the landlord to have the mural delivered to it, rather than to be auctioned for the benefit of the tenant.

Under the lease, the tenant's premises included the structure and exterior of the building. The tenant argued that it had (or was entitled) to remove the mural from the building in order to comply with its obligations to repair the premises under the lease. Once removed, the tenant believed the lease implied that the mural became the tenant's property to do as it wished with it.

The landlord argued:

• that that the mural belonged to it the basis that the bricks and walls of the building formed part of the landlord's land and once created the mural became part of the landlord's land;
• the tenant had no right or obligation to remove the mural; and
• the removal was not permitted under the lease.

The Court thought that most people would see the mural as disrepair and that the tenant, as part of its repairing obligations, could well be obliged to deal with the mural. However removing the wall was not a reasonable way to do this as painting over or other non-invasive treatment may work just as well.

Following on from that the Court confirmed that those parts of the building removed or replaced by a tenant naturally belonged to the landlord although it may be implied such items could be disposed of by the tenant. However where such items had any real value, the implied ability of the tenant to dispose of the items did not apply.

As a result the Court determined that the mural belonged to the landlord.

So what implications does this decision have?

• be aware of any potentially valuable items attached to a property both before and during the lease term
• for tenants proposing to remove such items from the property, consider whether such items belong to the landlord. Give consideration to the terms of the lease to see whether it clarifies the position.
• for landlords, any uncertainty may be avoided by including express wording in a lease to protect their position should such a situation arise.

Before you think this is a fairly unique case, bear in mind with the UK City of Culture landing in Hull in 2017, maybe a "Banksy" could turn up on your wall sooner than you think!

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.