Land: Lease Breach of Covenant

Question 1

Remedies for breach of rent covenant?

Answer 1

1. Commercial Rent Arrears Recovery
   - commercial leases
2. forfeiture
3. action for debt
   - for up-to past 6 years
   - unhelpful in practice

Question 2

Remedies for breach of repair covenant?

Answer 2

1. Damages
   - as right under contract
2. specific performance
3. self help
   - do repair yourself and claim cost from other party
4. forfeiture
   - if granted for 7+ years and 3+ left to run
   - must inform tenant of Rights to serve counter notice

Question 3

When is forfeiture available?

Answer 3

Breach of Rent Covenant
- legal lease needs to be express
- equitable lease is implied

Breach of non-rent covenant
- always needs to be express

Question 4

How can forfeiture be done in commercial vs residential premises?

Answer 4

Commercial
- can forfeit by peaceful entry

Residential (and mixed)
- must obtain court order

Question 5

Process of forfeiture for breach of rent covenant?

Answer 5

1. Has there been a breach
2. Is there a forfeiture clause
3. Has there been a waiver
4. Formal demand
   - unless 6 months of arrears; or
   - expressly waived in lease
5. Exercise the right
6. Relief
   - tenant can apply
   - court discretion to allow lease to continue

Question 6

When might landlord waive right to forfeiture?

Answer 6

If waived the right to forfeit than cannot do it

Is aware of breach:
- and accepts payment
- and demands payment
- and serves notice requiring repairs to be done
- if above is done by agent who does not know of breach (but landlord knows of breach)

Question 7

When is waiver of forfeiture permanent vs continuing?

Answer 7

Continuing breach: waiver only lasts until next day the breach is continued
- failure to repair
- failure to ensure
- prohibited use

Once and for all (non-continuing)
- rent arrears (for each payment separately)
- alienation
- alteration

Question 8

Process of forfeiture for non-rent covenant breach.

Answer 8

1. Has there been a breach
2. Is there a forfeiture clause
3. Has there been a waiver
4. s. 146 Notice
5. exercise the right
6. Relief

Question 9

What must be included in s. 146 notice?

Answer 9

Must be served on tenant. It must:
- Specify the breach complained of

• If capable of remedy, require it to be remedied within reasonable time (around 3 months)
• if not capable of remedy need give 14 days before forfeiture
• CAN require the tenant to make compensation in money for the breach if the landlord desires

Question 10

When can self help apply for breach of repair covenant?

Answer 10

If ‘Self Help’ clause is expressly included in lease

• landlord to serve notice specifying breach of covenant and requiring them to do it
• if tenant fails then landlord can enter to carry out work
• can recover costs from defaulting party

Significant
- can recover costs as a debt (not damages)
- easier to recover (debt claim)