Leasehold Covenants - 2 Flashcards
Landlord Remedies
Landlord Remedies
Where a tenant is in breach of a covenant in the lease
1 - Forfeiture
2 - Damages
3 - Injunction
4 - Specific Performance
Forfeiture
Also known as ‘a right of re-entry’
L takes back the let premises and the lease is terminated prematurely
What are the 4 steps for the remedy of forfeiture?
1 - Preliminary points that L must check
2 - Required procedure
> procedure of covt to pay rent
> for all other covt
3 - Does L need to apply for a court order to re-enter?
4 - its application to the court for relief
> for breach of covt to pay rent
> for all other covts
Preliminary points that L must check - 1
> The lease must contain a forfeiture clause (subject to exceptions)
L must not have waived his/her power to forfeit the lease
Waivee
> Two requirements:
1. Landlord has knowledge of the breach; and
2. Landlord (or agent) then does some unequivocal act that confirms the existence of the lease e.g. demanding or accepting rent
Type of breach
> Continuing Breach Examples:
- Use of premises as a private residence only (Segal Securities Ltd v Thoseby [1963] 1 QB 887)
- Covenant to keep premises in good repair.
- Illegal or immoral use
> ‘Once and for all’ Examples:
- Non-Payment of Rent
- Unauthorised alterations
- Unauthorised Assignments
Required Procedure - for breach of covt to pay rent (1)
L must make a FORMAL DEMAND for rent unless:-
The lease dispenses with the requirement (forfeiture clause above illustrates this)
OR
s. 210 Common Law Procedure Act 1852 applies
> rent at least 6 months in arrears &
> insufficient goods available for distress
Required Procedure - for all other covts: s.146 notice (2)
L must serve notice on T under s.146 LPA 25
The s.146 notice must:
> specify the breach of covenant complained of – Akici v LR Butlin 2006 1 WLR 201
> Ask for the breach to be remedied if it is capable of remedy
> Ask for financial compensation if L requires it
Required Procedure - for all other covts: s.146 notice (2) –> CONTENTS OF S.146 NOTICE
Whether a breach is capable of remedy
Earlier approach:
> Distinctions were made between:
> Positive / negative breaches
> Continuing / once for all breaches
Current approach:
> Expert Clothing Service and Sales Ltd v Hillgate House Ltd
> Savva v Hussein [1996] 47 EG 138
> Irremediable harm?
—> Assignment or sub-letting without consent Scala House
—> Stigma attaching to the premises Rugby School (Governors) v Tannahill 1935
Required Procedure - for all other covts: s.146 notice (2) –> CONTENTS OF S.146 NOTICE –> ADDITIONAL REQUIREMENT ON A BREACH OF A TENANT COVENANT TO REPAIR
Essentially protection for tenants from Landlords throwing them out over minor repairs
Additional protection for tenants:
> Leasehold Property (Repairs) Act 1938 applies to any lease (residential and commercial)
—-> granted for more than 7 yrs
—-> which has at least 3 yrs. left to run
What is the effect of this Act?
> If tenant serves a counter-notice claiming the protection of the Act, the landlord cannot proceed with forfeiture without leave of the court. S.1(5) sets out when court will grant leave.
Required Procedure - for all other covts: s.146 notice (2) –> WHETHER A BREACH IS CAPABLE OF REMEDY (cases)
Rugby School v Tannahill 1935
> Residential area was used for a brothel which was illegal / immoral use
> Court said it wasn’t capable of remedy due to the stigma attached to the school
Van Haarlem v Kasner
> Tenant who carried out spying offences from the property –> court said that even though it would be an irremediable breach, they wouldn’t punish and would grant relief
> Even if its not a remediable breach, there still could be some scope for relief perhaps due to their only being a short-term stigma rather than long-term
Required Procedure - for all other covts: s.146 notice (2) –> TEST FOR REMEDIABILITY OF A BREACH IS…?
If it is a positive breach it is always remediable as it just means having to do something.
Negative is harder to undo.
* Is it illegal or not?
* Whether late compliance with the covt and financial compensation can remedy harm to L?
Required Procedure - for all other covts: s.146 notice (2) –> EFFECT OF SERVICE OF S.146
If the breach is capable of remedy, then L must allow a reasonable time for T to carry out the remedy.
If T does & pays any compensation required then that is an end of the matter.
If T doesn’t the remedy the breach, L can go on to the next stage.
& if L reckons the breach cannot be remedied then L can go on to next stage very shortly after serving the notice
Does L need to apply for a court to re-enter?
If its residential leases : YES
> s.2 Protection from Eviction Act 1977 – essentially where a landlord entering without a court order where any person is lawfully residing in the premises constitutes an offence
> Patel v Pirabakaran 2006 –> it was mixed where there was both commericial (shop) and residential (home) –> S.2 still applies
If its commercial leases: peaceable re-entry (without a court order) is available but risky:
s.6 Criminal Law Act 1977
Billson v Residential Apartments 1992 –> dubious and dangerous method of entering property while court is far less risky
Peaceable re-entry - S.6 CLA 1977
It is a criminal offence to use or threaten violence for the purposes of securing entry into any premises where, to the knowledge of the entrant, there is someone present who is opposed to the entry.
T’s application to court for relief - for non-payment of rent (1)
Generally, if T pays the arrears and L costs, then the court will grant relief from forfeiture
T’s application to court for relief - for breach of all other covts (2)
IN ALL OTHER CASES OF BREACH OF COVENANT CAN APPLY UNDER s.146(2) LPA 25:
Time up to which T can apply for relief:
> see Billson v Residential Apartments
> when residential –> a tenant can apply for a relief up to the point that the landlord secures a court order
> when commercial –> tentant can apply even when Landlord has peacably re-entered
Relief is possible even though breach is irremediable
> Scala House v Forbes
> Van Haarlam v Kasner
