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ACP > 4.2 Property Management: Remedies for Breach of Covenant > Flashcards

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

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2
Q

Liability of original T in old lease

A

Liable for whole term as PoC

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3
Q

Within how many days must debt be paid after serving statutory demand before petition for bankruptcy/winding up issued?

A

21 days

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4
Q

What can FT do once 17 LTCA notice served

A

Ask for overriding lease within 12 months under s.19

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5
Q

In the event of insolvency, what is the effect of L’s rights against FT/G

A

Entirely unaffected

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6
Q

Personal covenants case

A

BHP v Chesterfield

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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

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8
Q

What rent is not recoverable through CRAR

A

SC and IR

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9
Q

Procedure for forfeiture from non-payment of rent

A

Serve formal demand on T and NO need for 146 notice

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10
Q

Liability of OL under new lease

A

No automatic release on A of reversion - have to apply to court

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11
Q

Rainbow Estates key

A

SP

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12
Q

What provision releases OT on assignment

A

5 LT(C)A

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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

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14
Q

What is ‘non-derogation from grant’?

A

L cannot substantially deprive T of benefit of the lease (of use of the premises)

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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’

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16
Q

What is A likely to negotiate w/ L in the end of T’s administration

A

Surrender

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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

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18
Q

What is the notice period that must be given before CRAR

A

7 clear days’ notice

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19
Q

Liability of guarantors for under new and old lease

A

Guarantee for whole term and may extend to assignees

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20
Q

What does forfeiture enable L to do

A

Take back premises and terminate lease

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21
Q

Hindcastle v Barbara case

A

Disclaim lease does not affect FT/G

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22
Q

Before what date is an old lease

A

01/01/96

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23
Q

Forfeiture peacefully for non-payment of rent - T relief when?

A

T pays arrears + costs within 6 months of forfeiture

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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

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25
Q

Forfeiture via court action for non-payment of rent - T relief when?

A

T pays all arrears + costs before hearing - stays Ps

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26
Q

What is the aim of administration

A

Rescue insolvency company by imposing moratorium

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27
Q

How is power of sale under 101 LPA limited?

A

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

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28
Q

For what action by L is there no need for 146 notice

A

Forfeiture for non-payment of rent

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29
Q

Depending on terms of guarantee, what may G be required to do in T’s insolvency

A

Accept lease for remainder of the terms

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30
Q

What action can secured creditor with fixed charge take in insolvency of C

A

Appoint LPA Receiver

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31
Q

What is disclaiming lease

A

Rights and liabilities of T end

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32
Q

In what scenario of forfeiture is T’s right to relief never lost

A

Peaceable re-entry + for breach of covenant other than rent

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33
Q

Is self-help recovery of repairs as debt limited to diminution in value of reversion?

A

No

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34
Q

What clause must be in lease for L to use self-help for breach of T’s repairing covenant

A

Jervis v Harris

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35
Q

What may TiB do if CRAR recovery when bankruptcy petition pending

A

Unwind recovery

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36
Q

How might L impliedly waive T’s breach of a covenant and lose right to forfeit

A

Accept rent

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37
Q

What may liquidator do if rent recovered in 3 months prior to liquidation petition

A

Clawback rent recovered

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38
Q

For what kind of forfeiture does T never lose right to relief (technically)

A

Peaceable forfeiture for breach of covenant other than rent

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39
Q

Four options for T’s breach of covenant that isn’t rent or repair

A

Damages, injunction, SP or forfeiture

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40
Q

What can L do re: disclaiming lease for TiB/liquidator

A

Require TiB/liquidator to disclaim within 28 days, or right lost

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41
Q

Effect of fixed charge holder appointing LPA Receiver on L’s remedies

A

No effect

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42
Q

Procedure for winding up Ps

A

Statutory demand - if debt not paid within 21 days, petition can then be issued

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43
Q

When can CRAR be used

A

Entirely commercial premises + min 7 days’ rent owed up to 6 years’ arrears

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44
Q

4 options L has for T’s breach of repair covenants

A

SP, forfeiture, damages and self-help

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45
Q

Who is appointed for individual insolvency

A

TiB

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46
Q

Pending outcome of liquidation petition, effect on L’s remedies

A

Can begin any method, but creditor/liquidator can apply to stay Ps

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47
Q

What case shows that SP is not possible for breach of a ‘keep open’ covenant

A

CIS v Argyll

48
Q

What remedy does L retain in bankruptcy of individual, w/ restrictions

A

CRAR

49
Q

Disclaim lease does not affect FT/G

A

Hindcastle v Barbara

50
Q

When will SP not be imposed for L’s breach of repairing covenant

A

If damages adequate

51
Q

What case shows that for both OT and OL in a new lease personal Cs are not released

A

BHP v Chesterfield

52
Q

When can forfeiture NOT be used

A

If no re-entry clause in lease

53
Q

What is court action for rent arrears

A

To HC/CC as a debt

54
Q

SP N/A for keep open case

A

CIS v Argyll

55
Q

What rent is recoverable under CRAR

A

Rent + VAT + interest

56
Q

Liability of OL under old lease

A

PoC + PoE + liable to OT even when reversionary interest sold

57
Q

CIS v Argyll key

A

SP N/A for keep open

58
Q

What is usually the appropriate remedy for T’s breach of any covenant that isn’t rent or repair

A

Damages, limited to diminution in value of reversion

59
Q

Effect on L’s remedies pending outcome of bankruptcy

A

L can begin any method, but court can stay any legal process

60
Q

Lee-Parker v Izzet

A

Self-help for T

61
Q

Which is usually cheaper - winding up Ps or court action

A

Winding up

62
Q

Why is court forfeiture often preferable

A

Risks involved with peaceable re-entry

63
Q

What is 1 of the 3 conditions in 101 LPA ‘25 that gives mortgage by deed power of sale

A

2 months’ arrears in payments

64
Q

When might forfeiture be an unattractive option

A

Poor location/market

65
Q

Liability of assignees for new and old lease

A

PoE and usually PoC through LtA

66
Q

Does administrator have power to disclaim lease

A

No

67
Q

How are bankruptcy/winding up Ps started

A

Statutory demand

68
Q

What case showed SP for breach of repairing covenant is only exceptional

A

Rainbow Estates

69
Q

Self-help for T (case)

A

Lee-Parker v Izzet

70
Q

Two methods of forfeiture

A

Peaceable re-entry or court

71
Q

How many months’ rent under CRAR can L recover pending outcome of bankruptcy petition

A

6 months’

72
Q

Why might OT of new lease still not be released on assignment

A

AGA under s.16 LT(C)A

73
Q

What is the impact of T appointing a receiver

A

Receiver manages the property on T’s behalf

74
Q

What is L refuses to negotiate surrender w/ A

A

Rent will be unsecured

75
Q

BHP v Chesterfield key

A

Personal covenants

76
Q

Remedies open to T if L has breached repair covenant

A

Damages, self-help, SP or appoint Receiver via the court

77
Q

What case showed that self-help is a CL right for T

A

Lee-Parker v Izzet

78
Q

Can liquidator disclaim the lease?

A

Yes

79
Q

Debt for winding up Ps

A

£750

80
Q

What must T do first if L has breached repair Os

A

Serve schedule of dilapidations and demand repair

81
Q

Usual remedy for L’s breach of implied covenants (non-derogation and quiet enjoyment)

A

Damages

82
Q

Four main options for L if T in rent arrears

A

CRAR, forfeiture, court and security

83
Q

What case shows damages for breach of covenant that isn’t rent or repairs is limited to diminution in value of reversion

A

Hadley v Baxendale

84
Q

Once in liquidation, effect on L’s remedies

A

L needs court leave to pursue any method (unclear on peaceable forfeiture but best to get permission)

85
Q

When does s.18 LTA ‘27 NOT apply to action for damages for breach of repair covenant - by who

A

Action by T against L for L’s breach of repair covenant

86
Q

Additional statutory provision that may have to be followed if L is seeking damages for T’s breach of repairing covenant

A

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
Q

Why is forfeiture a poor option if bad market

A

If forfeit, liable for business rates - if no forfeiture, can write off arrears as bad debt

88
Q

Rule on value of damages for breach of repairing covenant + provision

A

Limited to diminution in value of reversion - s.18 LTA ‘27

89
Q

When might right to forfeit be lost forever

A

If not a continuing breach + impliedly waived

90
Q

What is the only time in T’s insolvency that the effect on peaceable forfeiture is clear

A

Administration - cannot exercise w/o permission of court

91
Q

If suing FT under AGA of rent arrears, procedure

A

S.17 LT(C)A notice within 6 months of rent becoming due

92
Q

What action can secured creditor with mortgage take in insolvency of C

A

If in deed, power of sale under 101 LPA ‘25 if 1/3 conditions satisfied (one is 2 months’ interest in arrears)

93
Q

What are the two court procedures for rent arrears

A

Apply to court as debt, or start bankruptcy/winding up Ps

94
Q

What is the effect of disclaiming lease on rights and liabilities of FT/G

A

No effect - Hindcastle v Barbara

95
Q

What does the rent deposit deed usually state

A

If RD used by L, T has O to reinstate RD to full amount - failure = L can forfeit

96
Q

SP case

A

Rainbow Estates

97
Q

What usually triggers forfeiture

A

T’s breach of covenant

98
Q

Over what kind of premises only is CRAR an option

A

Entirely commercial

99
Q

What two implied covenants are there for L, given to T

A

Quiet enjoyment and non-derogation from grant

100
Q

How to claim rent arrears from FT w/ AGA

A

17 LTCA notice within 6 months of rent becoming due

101
Q

Forfeiture via court for breach of other covenant - T relief lost when

A

Once judgement enforced + L recovers actual possession

102
Q

What must 146 notice state

A

Breach, if remediable, and require T to pay L compensation

103
Q

Who is court action for rent arrears against

A

Either CT or FT under AGA

104
Q

When must a 146 notice be served for forfeiture

A

If for breach of any covenant other than rent

105
Q

CanTiB disclaim lease

A

Yes

106
Q

If CRAR is exercisable + T has UTs, what can L do

A

Recover directly from UTs

107
Q

What can T do if rights apply under LP(R)A to forfeiture

A

Serve counter-notice and L will then require court leave to continue w/ forfeiture

108
Q

What can T do once forfeiture sought by L

A

Apply for relief

109
Q

What is the aim of liquidation

A

Realise assets of company

110
Q

What is the effect of a moratorium on L’s remedies against T for rent

A

L needs permission court/consent of A before can recover rent in any way

111
Q

Two types of liquidation

A

Compulsory and voluntary

112
Q

When might forfeiture not be a good option

A

Falling market or L cannot find new T

113
Q

Liability of OT in new lease

A

Automatically released on assignment

114
Q

Three specific kinds of security to rely on for rent arrears

A

Guarantor, AGA or rent deposit

115
Q

Debt for bankruptcy Ps

A

£5k

116
Q

Effect on L’s remedies once individual bankrupt

A

L must get court leave to sue/forfeit by court action + potentially also for forfeiture by peaceable re-entry

117
Q

What is PoE

A

Liable for covenants touching and concerning land

ACP (12 decks)

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