Renewing and terminating a lease

Question 1

Who serves a s25 notice?What are the two types?

Answer 1

1. landlord
2. friendly to renew the lease and hostile to end the lease

Question 2

What are the statutory grounds on which the landlord can end the lease using a s25 notice? (6)

Answer 2

1. serious breach of repair obligation
2. persistent delay in paying rent
3. other substantial breaches
4. suitable alternative accommodation
5. intention to demolish or reconstruct premises
6. landlord intends to occupy premises (has owned reversion at least 5 years before termination)

Question 3

From what date does a s25 hostile notice take effect? What is the minimum/maximum notice period?

Answer 3

from the date of termination

minimum = 6 months
maximum = 12 months

Question 4

Who serves a s26 notice? What is a s26 notice?

Answer 4

tenant wants to renew lease if landlord does not take steps to do so

Question 5

What right does the landlord have once a s26 notice is served on them? How long do they have to exercise this right?

Answer 5

to serve a counter notice within 2 months of service

Question 6

From what date does a s26 notice take effect? What is the minimum/maximum notice period?

Answer 6

from the date of proposed commencement

minimum = 6 months
maximum = 12 months

Question 7

Who serves a s27 notice? What is a s27 notice?

Answer 7

tenant when they want to terminate the lease (although they can simply vacate at end of contractual term)

Question 8

When must a s27 notice be served?

Answer 8

not less than 3 months before the end of contractual term

Question 9

What will both a friendly s25 and s26 notice propose?

Answer 9

principle terms of the renewal lease

Question 10

From when may the tenant party apply to court after receiving a s25 hostile notice? When is the deadline?

Answer 10

any time after service of the 25 notice

deadline is the date of termination specified in notice

Question 11

What can the tenant do if the landlord opposes the s26 notice? When is the deadline to take this action?

Answer 11

The tenant can apply to court after receipt of the counter notice

Deadline is the day before the proposed commencement date

Question 12

What if parties cannot agree terms for renewal?

Answer 12

Apply to the court who can grant term up to 15 years + open market rent

Question 13

What can the tenant do if they are not happy for a new lease to be granted? How must the courts respond?

Answer 13

1. apply to court to revoke the lease within 14 days
2. courts MUST agree

Question 14

When would the tenancy end if the landlord successfully applies for an order of termination?

Answer 14

3 months and 21 days after order (tenant has 21 days to appeal)

Question 15

In what circumstances can you not exercise a landlord or mutual break clause? How can you avoid this?

Answer 15

When there is SOT

Contract out SOT

Question 16

What are the 2 ways to surrender a lease?

Answer 16

1. parties agree by deed
2. operation of law: parties act inconsistent with the continuation of the lease

Question 17

Is forfeiture an automatic right of the landlord?

Answer 17

No. The lease must provide for it

Question 18

What must the landlord serve on the tenant to begin the forfeiture process? What is an exception?

Answer 18

s146 notice

unless it is a breach for non payment of rent

Question 19

What breach can the tenant serve a counter notice to a s146 notice? How long does the tenant have to serve this?

Answer 19

repair breach

within 28 days

Question 20

What is the purpose of a s146 notice?

Answer 20

It gives tenant reasonable opportunity to remedy the breach

Question 21

Is the tenant entitled to a relief after forfeiture? What are the 2 disadvantage of this?

Answer 21

1. Yes. Relief from forfeiture which allows the lease to be reinstated

i. costly - will also have to pay for landlord’s legal fees which would not be good if company is already suffering financially

ii. at the court’s discretion so may not be granted even after expenses paid

Question 22

What may the courts consider when deciding whether to grant relief from forfeiture? (3)

Answer 22

1. If the tenant has remedied the breach
2. Paid compensation
3. If they believe the business will be able to pay and stick to the terms of the lease in the future

Question 23

Why is forfeiture effective? (3)

Answer 23

1. Embarrassment to tenants business
2. Staff, customers unable to enter
3. Can be achievable with peaceable entry

Question 24

What are the disadvantages of the landlord using forfeiture? (3)

Answer 24

1. no tenant in the building
2. no rent
3. costly if achieved through court order

Question 25

Aside from forfeiture when else must a landlord serve a 146 notice?

Answer 25

if they want to claim damages for breach of repair clause