4.2 Property Management: Remedies for Breach of Covenant Flashcards
1
Q
When must L serve 146 notice plus additional statement for forfeiture
A
If for breach of repair covenant + lease for 7+ years w/ at least 3 left
2
Q
Liability of original T in old lease
A
Liable for whole term as PoC
3
Q
Within how many days must debt be paid after serving statutory demand before petition for bankruptcy/winding up issued?
A
21 days
4
Q
What can FT do once 17 LTCA notice served
A
Ask for overriding lease within 12 months under s.19
5
Q
In the event of insolvency, what is the effect of L’s rights against FT/G
A
Entirely unaffected
6
Q
Personal covenants case
A
BHP v Chesterfield
7
Q
Process for CRAR
A
7 clear days’ notice on T + then EA can seize goods + further 7 days’ notice if want to sell goods
8
Q
What rent is not recoverable through CRAR
A
SC and IR
9
Q
Procedure for forfeiture from non-payment of rent
A
Serve formal demand on T and NO need for 146 notice
10
Q
Liability of OL under new lease
A
No automatic release on A of reversion - have to apply to court
11
Q
Rainbow Estates key
A
SP
12
Q
What provision releases OT on assignment
A
5 LT(C)A
13
Q
Two risks involved with peaceable re-entry
A
Potential tort of trespass if wrongfully exercised, and L may become bailee for T’s stock
14
Q
What is ‘non-derogation from grant’?
A
L cannot substantially deprive T of benefit of the lease (of use of the premises)
15
Q
When will T not be able to withhold rent for e.g. L’s breach of repairing covenant
A
If lease states to pay rent ‘w/o deduction or set off’
16
Q
What is A likely to negotiate w/ L in the end of T’s administration
A
Surrender
17
Q
When might L be able to recover some rent in T’s administration, as expenses of administration
A
When premises used for business by A during administration
18
Q
What is the notice period that must be given before CRAR
A
7 clear days’ notice
19
Q
Liability of guarantors for under new and old lease
A
Guarantee for whole term and may extend to assignees
20
Q
What does forfeiture enable L to do
A
Take back premises and terminate lease
21
Q
Hindcastle v Barbara case
A
Disclaim lease does not affect FT/G
22
Q
Before what date is an old lease
A
01/01/96
23
Q
Forfeiture peacefully for non-payment of rent - T relief when?
A
T pays arrears + costs within 6 months of forfeiture
24
Q
What must L do first if T has breached repairing covenant, before remedies
A
Serve schedule of dilapidations on T and ask to repair
25
Forfeiture via court action for non-payment of rent - T relief when?
T pays all arrears + costs before hearing - stays Ps
26
What is the aim of administration
Rescue insolvency company by imposing moratorium
27
How is power of sale under **101 LPA** limited?
Bank will not step into T's shoes - L cannot take action against bank, but bank must also still comply w/ lease on e.g. consent of L to sell
28
For what action by L is there no need for **146** notice
Forfeiture for non-payment of **_rent_**
29
Depending on terms of guarantee, what may G be required to do in T's insolvency
Accept lease for remainder of the terms
30
What action can secured creditor with fixed charge take in insolvency of C
Appoint LPA Receiver
31
What is disclaiming lease
Rights and liabilities of T end
32
In what scenario of forfeiture is T's right to relief never lost
Peaceable re-entry + for breach of covenant other than rent
33
Is self-help recovery of repairs as debt limited to diminution in value of reversion?
No
34
What clause must be in lease for L to use self-help for breach of T's repairing covenant
Jervis v Harris
35
What may TiB do if CRAR recovery when bankruptcy petition pending
Unwind recovery
36
How might L impliedly waive T's breach of a covenant and lose right to forfeit
Accept rent
37
What may liquidator do if rent recovered in 3 months prior to liquidation petition
Clawback rent recovered
38
For what kind of forfeiture does T never lose right to relief (technically)
**Peaceable** forfeiture for breach of covenant *other* than rent
39
Four options for **_T'_**s breach of covenant that **_isn't_** rent or repair
Damages, injunction, SP or forfeiture
40
What can L do re: disclaiming lease for TiB/liquidator
Require TiB/liquidator to disclaim within 28 days, or right lost
41
Effect of fixed charge holder appointing LPA Receiver on L's remedies
No effect
42
Procedure for winding up Ps
Statutory demand - if debt not paid within 21 days, petition can then be issued
43
When can CRAR be used
Entirely commercial premises + min 7 days' rent owed up to 6 years' arrears
44
4 options L has for T's breach of repair covenants
SP, forfeiture, damages and self-help
45
Who is appointed for individual insolvency
TiB
46
Pending outcome of liquidation petition, effect on L's remedies
Can begin any method, but creditor/liquidator can apply to stay Ps
47
What case shows that SP is not possible for breach of a 'keep open' covenant
CIS v Argyll
48
What remedy does L retain in bankruptcy of individual, w/ restrictions
CRAR
49
Disclaim lease does not affect FT/G
Hindcastle v Barbara
50
When will SP not be imposed for L's breach of repairing covenant
If damages adequate
51
What case shows that for both OT and OL in a new lease personal Cs are not released
BHP v Chesterfield
52
When can forfeiture NOT be used
If no re-entry clause in lease
53
What is court action for rent arrears
To HC/CC as a debt
54
SP N/A for keep open case
CIS v Argyll
55
What rent is recoverable under CRAR
Rent + VAT + interest
56
Liability of OL under old lease
PoC + PoE + liable to OT even when reversionary interest sold
57
CIS v Argyll key
SP N/A for keep open
58
What is usually the appropriate remedy for T's breach of any covenant that isn't rent or repair
Damages, limited to diminution in value of reversion
59
Effect on L's remedies pending outcome of **bankruptcy**
L can begin any method, but court can stay any legal process
60
Lee-Parker v Izzet
Self-help for T
61
Which is usually cheaper - winding up Ps or court action
Winding up
62
Why is court forfeiture often preferable
Risks involved with peaceable re-entry
63
What is 1 of the 3 conditions in 101 LPA '25 that gives mortgage by deed power of sale
2 months' arrears in payments
64
When might forfeiture be an unattractive option
Poor location/market
65
Liability of assignees for new and old lease
PoE and usually PoC through LtA
66
Does administrator have power to disclaim lease
No
67
How are bankruptcy/winding up Ps started
Statutory demand
68
What case showed SP for breach of repairing covenant is only exceptional
Rainbow Estates
69
Self-help for **_T_** (case)
Lee-Parker v Izzet
70
Two methods of forfeiture
Peaceable re-entry or court
71
How many months' rent under CRAR can L recover pending outcome of bankruptcy petition
6 months'
72
Why might OT of new lease still not be released on assignment
AGA under s.16 LT(C)A
73
What is the impact of T appointing a receiver
Receiver manages the property on T's behalf
74
What is L refuses to negotiate surrender w/ A
Rent will be unsecured
75
BHP v Chesterfield key
Personal covenants
76
Remedies open to T if L has breached repair covenant
Damages, self-help, SP or appoint Receiver via the court
77
What case showed that self-help is a CL right for T
Lee-Parker v Izzet
78
Can liquidator disclaim the lease?
Yes
79
Debt for winding up Ps
£750
80
What must T do first if L has breached repair Os
Serve schedule of dilapidations and demand repair
81
Usual remedy for L's breach of implied covenants (non-derogation and quiet enjoyment)
Damages
82
Four main options for L if T in rent arrears
CRAR, forfeiture, court and security
83
What case shows damages for breach of covenant that isn't rent or repairs is limited to diminution in value of reversion
Hadley v Baxendale
84
Once in liquidation, effect on L's remedies
L needs court leave to pursue any method (unclear on peaceable forfeiture but best to get permission)
85
When does s.18 LTA '27 **_NOT_** apply to action for **damages** for breach of repair covenant - by who
Action by T against L for L's breach of repair covenant
86
Additional statutory provision that may have to be followed if **_L_** is seeking damages for **_T's_** breach of repairing covenant
If lease for 7+ years w/ 3 or more left, must serve 146 LPA + notice setting out T's rights under LP(R)A '38
87
Why is forfeiture a poor option if bad market
If forfeit, liable for business rates - if no forfeiture, can write off arrears as bad debt
88
Rule on value of damages for breach of repairing covenant + provision
Limited to diminution in value of reversion - s.18 LTA '27
89
When might right to forfeit be lost forever
If not a continuing breach + impliedly waived
90
What is the only time in T's insolvency that the effect on peaceable forfeiture is clear
Administration - cannot exercise w/o permission of court
91
If suing FT under AGA of rent arrears, procedure
S.17 LT(C)A notice within 6 months of rent becoming due
92
What action can secured creditor with mortgage take in insolvency of C
If in deed, power of sale under 101 LPA '25 if 1/3 conditions satisfied (one is 2 months' interest in arrears)
93
What are the two court procedures for rent arrears
Apply to court as debt, or start bankruptcy/winding up Ps
94
What is the effect of disclaiming lease on rights and liabilities of FT/G
No effect - Hindcastle v Barbara
95
What does the rent deposit deed usually state
If RD used by L, T has O to reinstate RD to full amount - failure = L can forfeit
96
SP case
Rainbow Estates
97
What usually triggers forfeiture
T's breach of covenant
98
Over what kind of premises only is CRAR an option
Entirely commercial
99
What two implied covenants are there for L, given to T
Quiet enjoyment and non-derogation from grant
100
How to claim rent arrears from FT w/ AGA
17 LTCA notice within 6 months of rent becoming due
101
Forfeiture via court for breach of other covenant - T relief lost when
Once judgement enforced + L recovers actual possession
102
What must 146 notice state
Breach, if remediable, and require T to pay L compensation
103
Who is court action for rent arrears against
Either CT or FT under AGA
104
When must a 146 notice be served for forfeiture
If for breach of any covenant other than rent
105
CanTiB disclaim lease
Yes
106
If CRAR is exercisable + T has UTs, what can L do
Recover directly from UTs
107
What can T do if rights apply under LP(R)A to forfeiture
Serve counter-notice and L will then require court leave to continue w/ forfeiture
108
What can T do once forfeiture sought by L
Apply for relief
109
What is the aim of liquidation
Realise assets of company
110
What is the effect of a moratorium on L's remedies against T for rent
L needs permission court/consent of A before can recover rent **_in any way_**
111
Two types of liquidation
Compulsory and voluntary
112
When might forfeiture not be a good option
Falling market or L cannot find new T
113
Liability of OT in new lease
Automatically released on assignment
114
Three specific kinds of security to rely on for rent arrears
Guarantor, AGA or rent deposit
115
Debt for bankruptcy Ps
£5k
116
Effect on L's remedies once individual bankrupt
L must get court leave to sue/forfeit by court action + potentially also for forfeiture by peaceable re-entry
117
What is PoE
Liable for covenants touching and concerning land
