Landlord's Remedies and Ending a Lease

Question 1

What remedies does a landlord have for breach of a rent covenant?

Answer 1

• forfeiture
• action for debt
• distress and commercial rent arrears recovery (CRAR)
• breach of a non-rent covenant
• injunction
• forfeiture
• specific performance
• damages

Question 2

What is forfeiture?

Answer 2

The right of the landlord to terminate the lease prematurely for breach of covenant by tenant

Question 3

What is the effect of a forfeiture clause being in a lease?

Answer 3

It creates a legal right of re-entry

Question 4

In a legal lease, will a right of forfeiture ever be implied?

Answer 4

No - there must be express forfeiture clause

Question 5

In an equitable lease, will a right of forfeiture ever be implied?

Answer 5

Yes - right of forfeiture for non-payment of rent is automatically implied

Question 6

What are the two ways by which forfeiture can be exercised?

Answer 6

• peaceably re-entering the property or
• by obtaining a court order

Question 7

What difference does it make if the right of forfeiture is being exercised in relation to pure business premises compared to premises that have a residential aspect?

Answer 7

• pure business premises - the landlord may forfeit by peaceable re-entry ie by physically entering, changing the locks and putting up an unequivocal notice that it is forfeiting the lease
• residential premises - landlord cannot forfeit without a court order

Question 8

How can a landlord waive their right to forfeiture?

Answer 8

• if they are aware of acts or omissions giving rise to the right to forfeit and
• they do some unequivocal act recognising the continued existence of the lease

Question 9

What happens if the landlord waives their right to forfeiture in relation to continuing breaches?

Answer 9

Waiver only last until the next day the breach continues at which point the landlord gains a new right of forfeiture

(Continuing breach = failure to repair, insure)

Question 10

What happens if the landlord waives their right to forfeiture in relation to non-continuing breaches?

Answer 10

Waiver is permanent ie once rent is accepted right to forfeiture for that specific breach is lost forever

(Non-continuing breach = subletting without consent, not paying rent)

Question 11

What must a landlord do before exercising their right of forfeiture in relation to non-payment of rent?

Answer 11

They must make a formal demand for the exact amount of rent due on day which it becomes payable unless

• the lease expressly waives this requirement
• a least six months’ rent is in arrears and there are insufficient seizable goods on the premises to satisfy all arrears due

Question 12

What is relief from forfeiture?

Answer 12

Process by which tenant can apply to court for them to exercise their discretion in deciding to allow the lease to continue and thereby end the forfeiture process

Question 13

What happens if the tenant pays into the court all arrears and costs before the landlord obtains a court order for possession?

Answer 13

Proceedings will be stayed and the lease will continue

Question 14

What happens if the tenant pays into the court all arrears and costs after the landlord obtains a court order for possession?

Answer 14

The court has discretion to grant relief. Application must be made within six months of re-entry.

Relief will normally be given unless circumstances are exceptional

Question 15

When has relief not been given even though tenant has paid all the costs?

Answer 15

• where the property has already been relet to a new tenant
• where the non-payment of rent is exceptionally bad

Question 16

What happens if the tenant pays into the court all arrears and costs after the landlord after peaceable re-entry?

Answer 16

The court has an inherent equitable jurisdiction to grant relief if:

• the rent and landlord’s costs are paid
• it is just and equitable to grant relief

Question 17

What must the landlord do before he exercises his right to forfeit for breach of covenants other than rent?

Answer 17

They must serve notice on the tenant detailing:

• the breach complained of
• if capable of remedy, requiring it to be remedied within a reasonable time
• require the lessee to make compensation in money for the breach if the landlord requires such compensation (this is not compulsory though)

Question 18

What is the breach of covenant other than rent cannot be remedied within a reasonable time?

Answer 18

The landlord may proceed to forfeit either by peaceable re-entry or by obtaining a court order

Question 19

What is a reasonable time for a tenant to remedy a breach?

Answer 19

Depends on the nature of the breach but some textbooks suggest three months

Question 20

What breaches are seen as incapable of remedy?

Answer 20

• assignment
• subletting
• possibly immoral or illegal use

Question 21

When will immoral or illegal use be incapable of remedy?

Answer 21

• when forfeiture is in keeping with magnitude of offence
• when the harm suffered by the landlord cannot be effectively remedied by the tenant complying with a s146 notice and making proper compensation

Question 22

What will the court consider in deciding whether to grant relief from forfeiture for breach of a covenant other than rent?

Answer 22

• the wilfulness and blatantness of breach
• gravity of breach
• landlord’s motives for wanting forfeiture
• damage to the premises
• whether breach can be put right

Question 23

Will the court grant relief where a court order for possession has been made for breach of a covenant other than rent?

Answer 23

No - no further relief is available

Question 24

Will the court grant relief where a landlord has exercised its right by peaceable re-entry for breach of a covenant other than rent?

Answer 24

Yes possible.

Court will consider the circumstances, including speed with which the tenant applies for relief

Question 25

What additional protection does the Leasehold Property (Repairs) Act 1938 provide tenants in relation to breach of repair covenants?

Answer 25

• provides protection where lease granted for at least 7 years and there are three years left to run
• landlord must inform tenant of right to serve counter notice within 28 days, which if they do means landlord must obtain leave of the court

Question 26

What happens if the landlord serves notice of breach of covenant for internal decorative repairs?

Answer 26

Tenant may apply to the court to be wholly or partially relieved all liability to the extent the court thinks the notice is unreasonable

Question 27

What protection is there for subtenants when the headlease is forfeited meaning their own lease is also destroyed?

Answer 27

Subtenants can also apply for relief from forfeiture where the head tenant cannot get relief themselves.

Court can vest head-lease in subtenant on such terms as it see fit, including rent, but cannot grant the sub-tenant a lease for any longer than the term of the original sub-lease

Question 28

If a subtenant is applying for relief for non-rent breaches what must they do?

Answer 28

Apply to the court for relief within a reasonable time

Question 29

What ways can a lease end?

Answer 29

• notice to quit
• merger
• forfeiture
• break clause
• surrender
• effluxion of time