🏡Property 7: Landlord’s Remedies and Lease Termination

Question 1

5

What are landlords remedies for breach of:
1. covenant to pay rent
2. repair covenant

Answer 1

RENT
1. Action for debt
2. Commercial rent arrears recovery (CRAR)
3. Persue guarantors
4.. Use rent deposit
5. Forfeiture

REPAIR
1. Specific performance
2. Damages
3. Self help/Jervis v Harris clause
4. Forfeiture

Question 2

Where does the LL get the authority for an action for debt

Answer 2

Lease likely to contain express cov to pay rent OR will be implied in parole lease

Question 3

Will an action for debt bring the lease to an end?

Answer 3

NOT a damages claim and doesn’t bring lease to an end

Question 4

Limitation period for briniging claim for action for debt?

Answer 4

6 years

Question 5

Who can be sued for an action for debt

Answer 5

□ Current tenant
□ Former tenant (via privity of contract/AGA)

Question 6

What is Commercial rent arrears recovery (CRAR)

Answer 6

Enter prop and seize and sell goods belonging to current tenant and rent paid from proceeds of sale

Question 7

What are the procedural rules for Commercial rent arrears recovery (CRAR)

Answer 7

1. Rent must be due for min 7d
2. Give tenant 7d notice
3. use enforcement agency to seize goods
4. if tenant doesnt pay, give 7d notice and sell at public auction

Question 8

What cannot be seized in Commercial rent arrears recovery (CRAR)?

Answer 8

◊ Items up to value of £1350 which are necessary for tenants business (eg computers/phones)
◊ Items not belonging to tenant (eg leased/hired)

Question 9

Can Commercial rent arrears recovery (CRAR) be used to cover service charge/insurance premiums?

Answer 9

no, only ‘normal’ rent

Question 10

What is the effect of Forfeiture

Answer 10

Brings lease to end and enable landlord to gain vacant possession of prop

Question 11

Breach of cov to pay rent and repair cov

CONDITIONS and procedure for forfeiture

Answer 11

CONDITION
1. Can only be exercised against tenant in possession
2. Lease must contain forfeiture clause
3. Right must not be waived

PROCEDURE
a. RENT: LL make formal demand for rent due by presenting at premises on date due between sunrise/sunset UNLESS lease dispenses with this
b. REPAIR: Serve s146 notice specifying breach, requiring it to be remedied within reasonable time and for tenant to pay compensation
□ If lease for 7y with 3y left, notice must inc.T’s right to serve a counter notice within 28 days.
□ If they do, LL can only forfeit with leave of the court.

2. Then forfeit via:
   a. Peaceable re-entry
   b. Court order (required where premises partly/wholly a dwelling and occupier resides there)
3. Tenant can apply to court for relief from forfeiture

Question 12

How many days does the rent need to be outstanding before forfeiture?

Answer 12

Lease can vary how many days

Question 13

When will the landlord have waived their right to forefiture?

Answer 13

Via act demonstrating an intention to continue the relationship of landlord/tenant
Eg demand/accept rent after breach

Question 14

Effect of tenant being granted relief from forfeiture?

Answer 14

T can retake premises on terms of original lease

Question 15

How does a tenant apply for relief from forfeiture?

Answer 15

1. T pays all arrears before trial where LLs suing for possession (court MUST)
2. apply to court within 6mo of landlord re-entry pursuant to court order (court has discretion)
   (6mo limit n/a If LL forfeits non-residential lease without court proceedings)

Question 16

What form must a guarantee be in?

Answer 16

In writing

Question 17

What will a guarantee oblige guarantor to do?

Answer 17

◊ pay rent/other sums due under lease if tenant doesn’t
◊ OR indemnify landlord against loss caused by breaches of tenant cov

Question 18

How long will a guarantee last?

Answer 18

*Old lease: extend through duration of the lease, regardless of assignment
*New lease: guarantor automatically released from liability on an assignment (BUT landlord may require guarantor of outgoing tenant to guarantee the outgoing tenant’s obligations under AGA)

Question 19

When perusing former tenant/their guarantor, what must the landlord comply with?

Answer 19

s17 of Landlord and Tenant (Covenants) Act 1995:
1. serve default notice on former tenant/their guarantor if landlord intends to recover ‘fixed charge’ (monetary payment such as rent, service charge or other liquidated sum)
2. within 6mo breach

Question 20

Guarantors: How can you regain control of a property after having a default notice served on you?

Answer 20

*Paying sum claimed under default notice
*Calling for ‘overriding lease’ (headlease between the landlord and the former tenant/guarantor)

Question 21

What is a rent deposit and how much are they usually and what will a rent deposit deed normally require?

Answer 21

Cash tenant deposited at start of lease as security for payment of rent and performance of tenants cov contained in lease
6-12mo rent
Deed will normally require:
1. Tenant to top up deposit
2. Deposit balance returned to tenant at end of lease/on lawful assignment

Question 22

What is needed for specific performance and what are its limitations?

Answer 22

Court order
Equitable remedy=Will only be granted where other remedies inappropriate

Question 23

What type of breach is specific perfomance appropriate for?

Answer 23

For breach of positive cov

Question 24

Example of when specific perfomance was granted for breach of repair cov

Answer 24

*there was no forfeiture or landlord’s self- help clause
AND damages weren’t adequate, particularly where the condition of the property was deteriorating;
AND court was sure that the order was not being sought by the landlord simply to harass or otherwise put pressure on the tenant

Question 25

# Breach of repair cov How much can be revovered for damages v Self Help/Jervis v Harris clause

Answer 25

DAMAGES: limited to amount by which landlords reversion has diminished in value as a result of disrepair SELF HELP: unlimited, can get all money back

Question 26

Process for damages

Answer 26

If lease granted for **7y with 3y left** serve notice of damages claim on tenant *Tenant can **serve counter notice within 28d** meaning landlord needs leave of court to peruse claim

Question 27

How may a lease be surrendered?

Answer 27

Requires **mutual act which treats the lease as no longer being in existence** eg. □ Informally-ie handing keys back □ Commercial-best formally by deed of surrender ( will deal with issues eg: Arrears)

Question 27

Possible remedies for breach of other covenants

Answer 27

1. **Damages** (normal contractual rules) 2. **Specific performance** (where obligation sufficiently precise and doesnt require supervision) 3. **Forfeiture** (if right reserved in lease) 4. **Injunction** (breach/anticipated breach of negative cov )

Question 28

What will the choice of landlord remedy depend on?

Answer 28

1. Cost 2. Time 3. Want to continue relationship? 4. Likelihood of problem occurring again 5. Tenants financial position

Question 29

What is security of tenure?

Answer 29

generic name for statutory protection meaning leases can only be terminated in prescribed ways

Question 30

How may a lease be terminated at common law?

Answer 30

1. **Effluxion of time** 2. **Notice to quit** (periodic) 3. **Surrender** (tenant yields lease to landlord which merges with their reversion) 4. **Merger** (Tenant acquires lanlords estate in land)

Question 31

Is notice needed to terminate a lease due to effluxation of time?

Answer 31

no

Question 32

When may the common law methods of lease termination not apply?

Answer 32

If the tenancy is protected by the LTA 1954

Question 33

When does the 1954 act apply?

Answer 33

1. There's a **tenancy** (exclusive possession +certain duration) 2. of a **property** 3. Which is **occupied** by tenant 4. For **business purposes**

Question 34

For the 1954 act, what does the condition 'occupied by the tenant' include?

Answer 34

personally or via agent or manager

Question 35

For the 1954 act, what does 'business' include?

Answer 35

Trade, profession or employment, need not be a business or commercial activity, can be clubs and charities

Question 36

1954 act: can a property still come within 'business purposes' if theres a residential aspect of occupation?

Answer 36

Yes if dominant use is business and residential component is incidental to dominant business use

Question 37

What types of business tenancy are NOT protected by the 1954 act?

Answer 37

1. **Tenancies at will** which can be terminated at any time by either party 2. **Fixed term tenancies under 6mo** (will gain protection if same business in occ for 12mo/lease can be extended beyond 6mo) 3. **Agri/farm/mining** leases 4. Fixed term tenancies that are **contracted out** of the Act

Question 38

How can you contract out of the 1954 act?

Answer 38

1. LL give T notice (in prescribed form) warning theyre agreeing to a lease without security of tenure and advising them to obtain professional advice. 2. T makes declaration in a prescribed form that theyve received notice and agree 3. If T given notice less than 14 d before grant of lease, Ts’s dec must be made a statutory declaration before an independent solicitor. 4. Reference to service of notice and tenant’s declaration must be contained or endorsed on lease itself.

Question 39

Broadly, what are the important sections under the 1954 act?

Answer 39

s25: landlords notice s26: tenants request for renewal lease s30: landlords grounds for opposition (termination)

Question 40

What are the only 7 METHODS of termination under the 1954 act can be terminated?

Answer 40

1. landlords notice under **s25** 2. tenant request renewal for renewal under **s26** 3. **forfeiture** 4. **surrender** 5. periodic tenancy: tenant giving **notice to quit** 6. fixed term: **T 3mo written notice under s27** (if notice doesn't expire before the contractual expiry date) 7. fixed term: **tenant ceasing to be in occupation for business purposes at the end of lease** under s 27(1A)

Question 41

What will a s25 notice include?

Answer 41

1. whether LL opposes grant of a new tenancy 2. LL proposals abt terms of new lease 3. If opposing: s30 ground 4. Proposed termination date

Question 42

What are the conditions for the proposed termination date under s25 notice?

Answer 42

* Cant be earlier then date tenancy could have been terminated at common law * Doesn’t have to coincide with exact date fixed term lease expires

Question 43

Time limit of service of s25 notice

Answer 43

no less than 6mo but no more than 12mo before proposed termination date

Question 44

What happns if a 25 isnt served in time to terminate on contractual expiry date?

Answer 44

The tenancy will continue until the expiry of 6mo after the notice was served (or landlord can specify date at least 6mo but less than 12mo from when notice was served)

Question 45

If the landlord is opposing the grant of a new tenancy in a s25, what must the tenant do (and what can the landlord do to pre empt this)?

Answer 45

*Must apply (usually to county court) before expiry of s25 notice or will loose rights under 1954 act *Landlord can pre-empt this by applying for order to terminate lease on grounds stated in s25 (if app not already made by tenant)

Question 46

If the landlord is not opposing a new tenancy in a s25, what will happen?

Answer 46

*parties negotiate *but tenant should still apply top court to protect position *time limit can be extended by agreement between parties

Question 47

What type of lease may a s25 notice terminate?

Answer 47

term or periodic

Question 48

Tenants options if they want to terminate the lease ON the contractural expiry date?

Answer 48

a. Cease to occupy for business purposes by end of lease b. MAY serve s27 notice giving landlord 3mo prior written notice

Question 49

Tenant options if they want to terminate the lease AFTER the contractural expiry date?

Answer 49

a. MUST serve s27 giving 3mo notice b. OR agree a voluntary surrender with the landlord

Question 50

What can a tenant do if they wish to remain in the property after the contractural expiry date?

Answer 50

a. Do nothing and wait for landlord to serve s25 notice b. OR serve s26 request (brings current tenancy to end and requests a new one)

Question 51

What must a s26 request state?

Answer 51

*Proposed start date of new tenancy *Tenants proposals for new tenancy

Question 52

Time limit for service of s26?

Answer 52

Same as s25: between 6 and 12mo of date they want new tenancy to start which cant be earlier then tenancy could have been terminated at common law

Question 53

What happens if on recieving a s26, the landlord opposes the grant of a new tenancy?

Answer 53

1. Serve **counter notice within 2mo stating s30 ground** 2. Tenant must then **apply to court for new lease** before proposed start date of new lease in s26 or will loose rights under act (unless agree to extend time limit) 3. Landlord can **pre-empt by applying to terminate on grounds in counter notice**

Question 54

What happens if on recieving a s26, the landlord does NOT oppose the grant of a new tenancy?

Answer 54

*parties will negotiate *but tenant should still apply to court (in time limit) to protect position * Parties can agree to extend time limit

Question 55

Can a landlord serve a notice to quit or s27 3mo notice on a tenant?

Answer 55

No, only vice versa

Question 56

If a tenancy is protected by the 1954 act, how long will the tenancy go on for?

Answer 56

until terminated in accordance with act, even then, tenant has right to apply to court for new tenancy which can only be opposed by landlords on of 7 statutory grounds within s30

Question 57

What are the landlords grounds of opposition under s30?

Answer 57

a. T failure to repair b. T persistent delay in paying rent c. T substantial breach of other obligations d. L offered alternative accommodation suitable to Ts needs and on reasonable terms e. Tenancy is an underletting of part f. Landlord intends to demolish or reconstruct and could not reasonably do so without obtaining possession g. Landlord intends to occupy the holding for its own business or as a residence

Question 58

What is s30 ground f?

Answer 58

Landlord intends to demolish or reconstruct and could not reasonably do so without obtaining possession

Question 59

What is s30 ground g

Answer 59

Landlord intends to occupy the holding for its own business or as a residence

Question 60

Conditions on landlord relying on s30 ground g?

Answer 60

* Must have **owned interest for at least 5y** before ending of current tenancy (but is available to a landlord who buys prop with vacant possession, lets it and then seeks possession within 5y of buying it) * Must have **reasonable prospect of achieving its intention,** although doesn’t have to show that its business will be a success in that location

Question 61

What must a landlord show under s30 ground f?

Answer 61

1. **Firm settled intention** to carry out relevant work (eg planning permission/finances arranged) 2. Intends to demolish/reconstruct premises (or substantial part of them) or carry out substantial works of construction 3. Cant reasonably carry out works without obtaining possession

Question 62

What are the discretionary s30 grounds and what does this mean?

Answer 62

Court will decide whether to allow T new lease (Landlord has to est ground +that tenant shouldn’t be granted new tenancy in view of facts giving rise to ground) **A**Tenant’s failure to repair **B**Tenant’s persistent delay in paying rent **C**Tenant’s substantial breach of other obligations **E**Tenancy is an underletting of part

Question 63

What are the mandatory grounds under s30?

Answer 63

landlord just has to prove its offered alternative accom or intends to occupy itself **D** Landlord has offered alternative accommodation **F**Landlord intends to demolish or reconstruct and could not reasonably do so without obtaining possession **G**Landlord intends to occupy the holding for its own business or as a residence

Question 64

What is s30 ground d?

Answer 64

d. Landlord has offered alternative accommodation (must be suitable to tenant’s needs and on reasonable terms)

Question 65

When being granted a new lease, what is the current tenant entitled to?

Answer 65

Tenancy of the holding (ie current tenancy, not part not occupied by tenant) HOWEVER, landlord has right to insist any new tenancy will be of whole of originally demised property (inc parts underlet)

Question 66

What will the term of the new lease be?

Answer 66

such as is reasonable in circumstances but not exceeding 15y

Question 67

When will a new lease commence?

Answer 67

3mo and 4 weeks after order (3mo after proceedings finally disposed of plus 4w for appeal)

Question 68

What will the rent in a new lease be?

Answer 68

Open market rent regarding terms of the tenancy other than: (a) fact that the tenant and their predecessors have been in occupation; (b) goodwill attached to holding; (c) tenants voluntary improvements (d) forlicensed premises: addition in value due to the tenant’s licence.

Question 69

what can a court insert into a new lease?

Answer 69

rent review clause

Question 70

In the absence of agreement, how are the terms of a new lease fixed?

Answer 70

By court who will take existing clauses as starting point

Question 71

What are the options if a landlord or tenant is unhappy with the terms of a new lease fixed by the court?

Answer 71

□ tenant unhappy-may apply for order to be revoked □ landlord unhappy-only remedy is to appeal

Question 72

What are the no fault grounds under s30 and what must the landlord do if it successfully opposes a new lease on a no fault ground??

Answer 72

**e**-Tenancy is an underletting of part **f**-Landlord intends to demolish or reconstruct and could not reasonably do so without obtaining possession **g**-Landlord intends to occupy the holding for its own business or as a residence Landlord must pay tenant **compensation** *Amount= rateable value of the holding BUT if T and their predecessors in the same business have been in occupation for 14y, will be twice the rateable value. *Any agreement restricting/excluding payment of compensation void if tenant/predecessors in same business have been in occupation for 5y or more