Leases: Remedies and Ending Flashcards
What remedies are available to a landlord in the event of a breach of the rent covenant?
Action for debt - sued on covenant to fail to pay rent - only up to 6 years
Forfeiture - bringing lease to an end
Distress and Commercial Rent Arrears Recovery (CRAR) - self-help remedy used if premises are purely commercial, as long as 7 days rent is owed (including VAT and interest), and lease has not yet been forfeited.
What remedies are available to a landlord in the event of a breach of a non - rent covenant?
Injunction
Specific performance [rare if a repairing covenant]
Forfeiture
Damages [measured by loss to the reversion]
What are the six different ways a lease can end?
Notice to quit (for periodic tenancies - half a year for yearly, or a full period for other periodic tenancies)
Merger (tenant acquires landlord’s interest)
Forfeiture
Break clause
Surrender (deed often used + maybe a premium fine)
Effluxion of time (commercial tenant might have security of tenure)
What must exist in a legal lease for the right to forfeit?
An express forfeiture clause allowing the landlord to forfeit the lease.
NEVER implied into a legal lease.
Creates a legal right of re-entry/
How is the right to forfeit found in equitable leases?
No need to be expressly included because right to forfeit for non-payment of rent is implied in.
How does a landlord forfeit?
Peaceable re-entry (for a pure business premises)
Court order (required for a residential or mixed premises)
What is the procedure for forfeiture?
1) Has there been a breach?
2) Is there a forfeiture clause?
3) Has there been a waiver?
When does a landlord waive his right to forfeit?
If they are aware of acts or omissions giving rise to the right to forfeit and
He does some unequivocal act recognising the continued existence of the lease
Give examples of ‘unequivocal acts’ which recognise the continued existence of a lease:
Demanding / accepting / suing for rent due after the breach
Distraining for rent due - despite knowing of breach
Can be inadvertent - e.g. landlord’s agent sends out a remand demand
How does waiver operate for a continuing breach versus a non-continuing breach?
Continuing - e.g. failure to repair - lasts only until the next day the breach continues
Non-continuing - e.g. sublet - waiver is permanent
How does waiver operate for breach of covenant to pay rent?
Non-continuing but each individual missed payment creates a new right to forfeit.
If a breach is for a non-payment of rent, what must the landlord do next?
1) Issue a formal demand for the exact amount of rent due on day it becomes payable, on the premises in daylight [unless over 6 months rent in arrears and there aren’t enough goods on the premises]
2) Exercise right by court order or re-entry [depending]
3) Tenant can apply for relief from forfeiture
When can relief be granted?
Before court order - If on suing for possession tenant pays into court all arrears and costs - proceedings stayed.
At / after court order: court has a discretion to grant relief i.e. to allow lease to continue on condition that arrears are paid - application for relief must be made within 6 months of re-entry
Relief normally given unless exceptional
When can a court grant relief after peaceable re-entry?
Landlord forfeits a non-residential lease without a court order - relief if rent and costs are paid + it is just and equitable.
Can a sub tenant get relief?
Sub tenant has the right to apply for relief from forfeiture - even if head tenant cannot have relief. Court can vest head lease with sub-tenant.
For covenants other than rent, what must a landlord do before they can forfeit?
Serve notice under S146 LPA which specifies the breach complained of, if capable of remedy, requires it to be remedied within a reasonable time, and requires compensation if needed.
What is a reasonable time for a S146 notice to allow breaches to be remedied?
3 months
Which breaches are capable of remedy?
Continuing breaches e.g. failure to repair / unauthorised use.
If breach is capable of remedy and not remedies, what can landlord do?
Proceed to forfeit
If breach is incapable of remedy, how long must landlord give?
Landlord must give tenant enough time to consider its position e.g. 14 days.
Is illegal / immoral use capable of remedy?
Depends on facts of the case.
yes if a subtenant if the tenant takes immediate steps to stop the use e.g. forfeiting the sublease in a reasonable time.
What test did the House of Lords apply in Expert Clothing as to whether a breach is capable of remedy?
Is the harm suffered by the landlord able to be remedied by the tenant complying with a S146 notice, and compensation?
What additional protection exists for breach of repair covenants?
For any lease of at least 7 years, with at least 3 years left to run
On top of standard requirements, landlord must inform tenant of its right to serve a counter notice within 28 days.
After this landlord must obtain leave of the court to forfeit.
If internal decorative repairs, court can relieve tenant wholly / partially of liability
For breach of a non-rent covenant, what will the court consider when judging whether to grant relief?
- How wilful / blatant the breach was
-Gravity of breach - Landlord’s motives for wanting forfeiture
- Damage to premises
- Whether breach can be rectified
When must tenant apply for court order for relief for breach of a non-rent covenant?
Court order: Before court order is made!
Re-entry: Can be after re-entry if tenant applies quickly
