Remedies for Breach of Leasehold Covenants

Question 1

What are the 4 main remedies for a Breach of RENT Covenant?

Answer 1

(1) Forfeiture
(2) CRAC (Commercial Rent Arrears Recovery)
(3) Debt Action
(4) Guarantor / Deposit

Question 2

What are the 4 main remedies for a Breach of RENT Covenant?

Answer 2

(1) Forfeiture
(2) CRAC (Commercial Rent Arrears Recovery)
(3) Debt Action
(4) Guarantor / Deposit

Question 3

What is a ‘Debt Action’?

Answer 3

L SUE T for UNPAID RENT in the past 6 years

Question 4

(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?

Answer 4

(1) Past 6 years (unpaid rent)
(2) RENT (NOT service charge, insurance etc)

Question 5

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) What is the time period ARREARS can be recovered against a FORMER T?

Answer 5

(1) S17 Notice (on former T)
(2) Arrears within 6 MONTHS from date notice served

Question 6

What is ‘Commercial Rent Arrears Recovery’ (CRAR)?

Answer 6

ENFORCEMENT AGENT seizes & sells GOODS by T to cover UNPAID RENT

Question 7

For a L to use ‘COMMERCIAL RENT ARREARS RECOVERY’ (CRAC). What 3 conditions must be met?

Answer 7

(1) Solely COMMERCIAL PROPERTY
(2) Only recover RENT (+ interest + VAT) (NOT service charge, insurance etc)
(3) AT LEAST 7 DAYS Rent Owed

Question 8

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?

Answer 8

(1) At least 7 days
(2) Rent (+ interest + VAT)
NOT service charge, insurance etc

Question 9

For a L to use ‘COMMERCIAL RENT ARREARS RECOVERY’ (CRAC), what must they do?

Answer 9

Give T 7 CLEAR DAYS Notice

Question 10

What are the 2 main limitations of using ‘Commercial Rent Arrears Recovery’ to recover unpaid rent?

Answer 10

(1) CANNOT remove items / goods up to £1350 T NEEDS FOR BUSINESS
(2) CANNOT remove LEASED / RENTED items

Question 11

What does ‘Forfeiture’ allow? (3 components)

Answer 11

(1) L right ENTER Premises
(2) Take POSSESSION
(3) TERMINATES Lease

Question 12

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?

Answer 12

(1) FORMAL Demand (for unpaid rent)
(2)
(a) EXCLUDED by lease
(b) > 6 months ARREARS

Question 13

What 5 elements should be considered if the Landlord wishes to exercise ‘FORFEITURE’ for a breach of a RENT COVENANT?

Answer 13

(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?

Question 14

To use ‘FORFEITURE’ for a breach of a Covenant, what must the Lease contain?

Answer 14

Forfeiture Clause

Question 15

A Landlord can ‘WAIVE’ their Right to Forfeit.

(1) What does this mean?
(2) What are 2 examples?

Answer 15

(1) L Acknowledges the continued existence of the Lease & ∴ CANNOT Forfeit
(2)
(a) ACCPETING Rent
(b) DEMANDING Rent

Question 16

(1) What are the 2 methods of ‘Forfeiture’?
(2) What method(s) can be used for:
(a) RESIDENTIAL property
(b) COMMERCIAL property

Answer 16

(1)
(a) Peaceable Re-entry
(b) Court Order

(2)
(a) ONLY Court Order
(b) Peaceable Re-entry or Court Order

Question 17

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’?

Answer 17

(1) Equitable (court DISCRETION)
(2) T agrees pay back UNPAID RENT + COSTS

Question 18

For the breach of a RENT Covenant, will L need to serve the T with a S146 Notice under ‘Forfeiture’?

Answer 18

NO (only for breach Repair / Other Covenants)

Question 19

What is the only method for a breach of a RENT Covenant that will TERMINATE the Lease and give the L VACANT POSSESSION?

Answer 19

Forfeiture