Remedies for Breach of Leasehold Covenants Flashcards
What are the 4 main remedies for a Breach of RENT Covenant?
(1) Forfeiture
(2) CRAC (Commercial Rent Arrears Recovery)
(3) Debt Action
(4) Guarantor / Deposit
What are the 4 main remedies for a Breach of RENT Covenant?
(1) Forfeiture
(2) CRAR (Commercial Rent Arrears Recovery)
(3) Debt Action
(4) Guarantor / Deposit
What is a ‘Debt Action’?
L SUE T for UNPAID RENT in the past 6 years
(1) What is the number of years an ‘Action in Debt’ is limited to for Rent Recovery?
(2) What is the only thing the L can Recover?
(1) Past 6 years (unpaid rent)
(2) RENT (NOT service charge, insurance etc)
In a NEW & OLD LEASE, a debt action can also be used to pursue a FORMER Tenant (i.e. if Lease Assigned & Assignee breaches rent covenant).
(1) What must be served and on whom?
(2) When must this be served to recover any arrears owed?
(1) S17 Notice (on former T)
(2) Serve notice within 6 MONTHS of ARREARS FALLING DUE
What is ‘Commercial Rent Arrears Recovery’ (CRAR)?
ENFORCEMENT AGENT seizes & sells GOODS by T to cover UNPAID RENT
For a L to use ‘COMMERCIAL RENT ARREARS RECOVERY’ (CRAC). What 3 conditions must be met?
(1) Solely COMMERCIAL PROPERTY
(2) Only recover RENT (+ interest + VAT) (NOT service charge, insurance etc)
(3) AT LEAST 7 DAYS Rent Owed
For a L to use ‘COMMERCIAL RENT ARREARS RECOVERY’ (CRAC).
(1) How many days Rent must be owed?
(2) What is the only thing L can Recover?
(1) At least 7 days
(2) Rent (+ interest + VAT)
NOT service charge, insurance etc
For a L to use ‘COMMERCIAL RENT ARREARS RECOVERY’ (CRAC), what must they do?
Give T 7 CLEAR DAYS Notice
What are the 2 main limitations of using ‘Commercial Rent Arrears Recovery’ to recover unpaid rent?
(1) CANNOT remove items / goods up to £1350 T NEEDS FOR BUSINESS
(2) CANNOT remove LEASED / RENTED items
What does ‘Forfeiture’ allow? (3 components)
(1) L right ENTER Premises
(2) Take POSSESSION
(3) TERMINATES Lease
For the Breach of a RENT COVENANT, for L to use ‘FORFEITURE’, what must they do first and what are the 2 exceptions to this?
(1) FORMAL Demand (for unpaid rent)
(2)
(a) EXCLUDED by lease
(b) > 6 months ARREARS
What 5 elements should be considered if the Landlord wishes to exercise ‘FORFEITURE’ for a breach of a RENT COVENANT?
(1) FORFEITURE CLAUSE - Lease have FC?
(2) BREACH - Has T breached it?
(3) WAIVER - Has L ‘Waived’ right to F?
(4) METHOD - correct method (court order / peaceable re-entry used)
(5) RELIEF - Court granted relief from F?
To use ‘FORFEITURE’ for a breach of a Covenant, what must the Lease contain?
Forfeiture Clause
A Landlord can ‘WAIVE’ their Right to Forfeit.
(1) What does this mean?
(2) What are 2 examples?
(1) L Acknowledges the continued existence of the Lease & ∴ CANNOT Forfeit
(2)
(a) ACCPETING Rent
(b) DEMANDING Rent
(1) What are the 2 methods of ‘Forfeiture’?
(2) What method(s) can be used for:
(a) RESIDENTIAL property
(b) COMMERCIAL property
(1)
(a) Peaceable Re-entry
(b) Court Order
(2)
(a) ONLY Court Order
(b) Peaceable Re-entry or Court Order
A T can claim ‘RELIEF’ from ‘Forfeiture’ from the court
(1) What type of remedy is this?
(2) For breach of a RENT Covenant, when will the court typically grant ‘RELIEF’?
(1) Equitable (court DISCRETION)
(2) T agrees pay back UNPAID RENT + COSTS
For the breach of a RENT Covenant, will L need to serve the T with a S146 Notice under ‘Forfeiture’?
NO (only for breach Repair / Other Covenants)
What is the only method for a breach of a RENT Covenant that will TERMINATE the Lease and give the L VACANT POSSESSION?
Forfeiture
