Banksy mural sparks landlord and tenant dispute – who owns what?

A mural by the famous but secretive artist Banksy has highlighted some interesting points about who owns what when a tenant leases a property from a landlord.

The case involved the company Dreamland Leisure and a property it leased as an amusement arcade in Folkestone. Banksy painted a mural on one of the walls of the building without the permission of either the landlord or the tenant.

Dreamland realised the mural could be valuable so it removed the section of wall and had it shipped to America to be exhibited for sale. It was expected to raise up to £500,000, providing an unexpected Windfall for Dreamland.

The landlord objected, preferring to see the mural kept in place for the benefit of the people of Folkestone. It assigned its interest in the wall to the Creative Foundation, which took legal action to have it returned.

Dreamland submitted that it had been obliged to remove the wall in order to comply with its covenants to keep the building in good repair and to paint the outside every four years. It said that removing the wall would deter other graffiti artists in the future.

It also argued that because of an implied term in the lease, the wall and the mural became the tenant’s property once it was removed from the building.

The court found in favour of the Creative Foundation. It held that as the tenant, Dreamland was only required to carry out prudent remedial work. Removing the wall was significantly more invasive than painting over it or removing the mural with chemicals. Even if the fact that Banksy’s work had been on the wall would attract other graffiti artists, Dreamland had not identified why removal would solve or reduce the problem better than over-painting or cleaning.

The court also said that once parts of a building were removed, they reverted to the status of chattels. The issue therefore was who owned them. The law suggested that a tenant had an implied permission to dispose of chattels of little value but would not become the owner of goods of significant value, as in this case.

Dreamland’s defence was unsustainable in law and the landlord had the better right to the windfall. The application to have the wall returned was granted.

Please contact Janice Young if you would like advice about landlord and tenant issues.