Remedies And Ending A Lease

Question 1

What remedies are available to a landlord for breach of a rent covenant?

Answer 1

The landlord has the following remedies: Action for debt, Forfeiture, Distress (abolished, replaced with CRAR), and CRAR.

CRAR may be used where the premises are purely commercial, a minimum of seven days’ principal rent is owed, and the lease has not been forfeited.

Question 2

What is the action for debt in the context of rent covenants?

Answer 2

The tenant can be sued on its covenant to pay rent, and a landlord can only recover six years’ arrears.

Question 3

What is forfeiture?

Answer 3

Forfeiture involves bringing the lease to a premature end due to the tenant’s breach.

Question 4

What is CRAR?

Answer 4

Commercial Rent Arrears Recovery (CRAR) is a self-help remedy allowing landlords to recover unpaid rent from commercial premises without court proceedings.

CRAR requires a minimum of seven days’ notice and can only be used for principal rent.

Question 5

What remedies are available for breach of a non-rent covenant?

Answer 5

Remedies include Injunction, Specific performance, Forfeiture, and Damages.

Question 6

What is an injunction?

Answer 6

An injunction is a remedy to prevent an unauthorized sublease or assignment.

Question 7

What is the significance of security of tenure?

Answer 7

Security of tenure is the right for a tenant to remain in the premises at the end of the lease term and request a new lease.

Question 8

What is a notice to quit?

Answer 8

A notice to quit is required to determine a periodic tenancy, with specific notice periods depending on the tenancy type.

Question 9

What is a break clause?

Answer 9

A break clause allows either party to serve notice to terminate a fixed-term lease prematurely.

Question 10

What is surrender in lease terms?

Answer 10

Surrender is the handing back of the lease by the tenant to the landlord with consent, resulting in premature termination.

Question 11

What is merger in lease terms?

Answer 11

Merger occurs when the tenant acquires the landlord’s interest, thus becoming its own landlord.

Question 12

What is required for forfeiture to be valid?

Answer 12

There must be an express forfeiture clause in the lease allowing the landlord to forfeit in case of breach.

Question 13

How is forfeiture exercised?

Answer 13

Forfeiture is exercised by peaceable re-entry or by obtaining a court order.

Question 14

What is waiver in the context of forfeiture?

Answer 14

Waiver occurs when a landlord recognizes the continued existence of the lease after being aware of a breach.

Question 15

What steps must a landlord take to forfeit for non-payment of rent?

Answer 15

1. Formal demand for rent. 2. Exercise the right to forfeit. 3. Tenant may apply for relief from forfeiture.

Question 16

What is a s 146 notice?

Answer 16

A s 146 notice specifies the breach, requires remedy if capable, and may request compensation.

Question 17

What happens if a breach is not capable of remedy?

Answer 17

The landlord must give the tenant enough time to consider their position before proceeding to forfeit.

Question 18

What is the rule of thumb for breaches capable of remedy?

Answer 18

Three months as a rule of thumb.

Question 19

What are breaches capable of remedy?

Answer 19

Breaches which are capable of remedy include continuing breaches, for example, failure to repair or unauthorized use.

Question 20

What can a landlord do if a tenant does not remedy a breach within a reasonable time?

Answer 20

The landlord may proceed to forfeit either by peaceable re-entry or by obtaining a court order, which is compulsory in a residential case.

Question 21

What must a landlord do if a breach is not capable of remedy?

Answer 21

The landlord must give the tenant enough time to consider its position, for example, 14 days, before proceeding to forfeit.

Question 22

Is a breach of an illegal or immoral use covenant capable of remedy?

Answer 22

It depends on the facts of the case; recent case law has been more flexible.

Question 23

What did the House of Lords establish in Expert Clothing (Services and Sales) Ltd v Hillgate House Ltd?

Answer 23

The test for assessing whether a breach of covenant is capable or incapable of remedy.

Question 24

What additional protection does the Leasehold Property (Repairs) Act 1938 provide to tenants?

Answer 24

The landlord must inform the tenant of its right to serve a counter notice within 28 days, limiting the landlord’s ability to enforce a repairing obligation until the last three years of the lease.

Question 25

What is the conclusion regarding breaches and their capability of remedy?

Answer 25

Most breaches are now technically capable of remedy provided the mischief can be put right by making full recompense to the landlord.

Question 26

What happens if a tenant does not remedy a breach?

Answer 26

The landlord may forfeit by peaceable re-entry or by obtaining a court order.

Question 27

What does LPA 1925, s 146(2) provide regarding tenant relief?

Answer 27

The tenant may apply to the court for relief, which the court may grant or refuse based on various circumstances.

Question 28

What must a tenant do if the landlord applies for a court order?

Answer 28

The tenant must apply for relief before the court order is made.

Question 29

What is the subtenant’s right to relief for non-rent breaches?

Answer 29

LPA 1925, s 146(4) allows a subtenant to apply to the court for relief against forfeiture for breach of other covenants.

Question 30

What are the steps for forfeiture for breach of other covenants?

Answer 30

1. There must be a breach of covenant. 2. There must be a forfeiture clause in the lease. 3. The landlord must not have waived the right to forfeit. 4. The landlord must have served a LPA 1925, s 146 Notice. 5. The landlord can forfeit the lease by peaceable re-entry or court order. 6. The tenant and any sub-tenant can apply for relief from forfeiture.