DETERMINATION OF LEASES

Question 0

What is Forfeiture?

Answer 0

Forfeiture is the early termination of a lease by the Landlord because of some breach of covenant by the Tenant

Question 1

What are the relevant ways a lease can end?

Answer 1

1. Forfeiture
2. Peaceful re-entry
3. Notice

Question 2

Where a contract does not stipulate, where does the Lessor’s power to forfeit come from?

Answer 2

s107(d) PLA.
A landlord can forfeit:
1. If the rent is in arrears for one month; or
2. The tenant has been in default of any other covenant for TWO months.

Question 3

How is Forfeiture achieved?

Answer 3

1. First a notice under s124 PLA must be given

2. Then where the tenant fails to remedy the breach, a letter of unequivocal demand for possession: Ex Parte Whelan

Question 4

What are the requirements of s124 Notice?

Answer 4

It must:

1. Specify the breach
2. If the breach is capable of remedy, require the lessee to remedy the breach
3. Allow reasonable time for the remedy of the breach
4. if Compensation is claimed, then the LL must specify the Compensation that T is to pay

Question 5

Where would a breach not be able to be remedied?

Answer 5

Rugby School v Tannahill
Where the value of the premises has been seriously affected.
This does not mean s24 Notice need not be given, it should still be given, however does not have to require the Tenant to remedy the breach

Question 6

What is the relevance of Glass v Kencakes?

Answer 6

The subtenant used the premises for prostitution. The tenant did not know the Subtenant’s business activities.
The notice served under act was defective because it did not require the Tenant to remedy the breach. A fresh notice had to be given.

Question 7

Can the tenant get relief against forfeiture?

Answer 7

Yes, s124(2) allows the tenant to apply for relief, when a s124 notice has been served against them.

Question 8

What will the courts consider when granting relief to the Tenant against forfeiture?

Answer 8

1. All circumstances of the case;
2. Conduct of the tenant
3. Nature and gravity of breach
4. Any capability on the part of the Tenant to rectify consequences of breach
5. Whether breach was deliberate.

Question 9

What is the relevance of Gill v Lewis?

Answer 9

The tenant was in arrears of a substantial amount of rent and had been particularly bad payers of rent.
LL decided to forfeit lease and the notice was served. They go to court to get the lease forfeited.
At court, the tenants show u with money for arrears of rent and they request relief from forfeiture

Courts held: They grant forfeiture on the basis that the LL had recovered all he was entitled to and the breach was cured.

Question 10

What case where there was no relief against forfeiture?

Answer 10

Stieper v Deviot.
In this case, the Tenant had outstanding costs and arrears of rent.
The tenant in this case had highly flammable liquid stored on premises.
Because of this, the insurance companies refused to ensure premises with those chemicals which had exposed the premises to risk of fire.

Courts held: because of this, there was no relief against forfeiture.

Question 11

Where the breach is not remedied, what can the Landlord do?

Answer 11

1. Give a notice for the unequivocal demand for possession of premises - Ex Parte Whelan or
2. Commence proceedings for possession of premises: Moore v Ullcoats

Question 12

What does unequivocal demand mean?

Answer 12

Ex Parte Wheelan
The LL wanted to forfeit lease by gaining possession. He goes together with solicitor’s clerk and they say they are effecting a re-entry.
The tenant says go away and threatens to call police. They go away, and subsequently go to court.

Held: The courts indicate it is enough that the LL demands possession, there does not need to be actual surrender to be forfeiture.

Question 13

What is the relevance of Moore v Ullcoats?

Answer 13

This case, LL wanted to forfeit lease by commencing an action for possession.
The LL also brought an action for an injunction to restrain any breaches.

Courts held:
This would have been fine to allow forfeiture, however the second claim for the injunction indicated that there was no unequivocal demand as that claim was based on the fact that the lease would still be enforced.

Question 14

What is peaceful re-entry?

Answer 14

This is when after the lease has been forfeited, but the tenant remains in possession.

The LL can use force that is “Reasonably necessary” (Macintosh v Lobel) to remove the tenant.

Question 15

What is waiver?

Answer 15

Waiver is the unequivocal act by the Lessor which indicates the Lessor’s intention to keep the lease in existence where the LL has knowledge of the breach of covenant.
UNder s119 PLA: Waiver does not operate as a general waiver of the benefit of any covenant or obligation.

So where the LL waives a breach of a covenant, subsequent breaches of the same covenant are not waived.