terminating a lease (week 10)

Question 1

what is efflux of time?

Answer 1

lease ends at the end of the contractual term

Question 2

what is a break clause?

Answer 2

it requires a positive action by a party to end a lease

Question 3

what is surrendering a lease?

Answer 3

tenant gives up leasehold interest to landlord (need landlord’s agreement)

Question 4

what is a notice to quit?

Answer 4

periodic tenancy means either landlord or tenant can give notice that they intend the tenancy to end (quits at end of the periodic time period)

Question 5

what is a merger (for a lease ending)?

Answer 5

either tenant acquires landlord’s interest or a third party acquires not interest. freehold and landlord are merged and come to an end

Question 6

what is a Jervis v Harris clause (self-help)?

Answer 6

for commercial leases

It provides a relatively quick and efficient way to deal with breaches of the repairing obligation, and if the tenant does not remedy the breach, allows the landlord to carry out the work and recover the whole cost of remedying the breach as a debt.

Question 7

what does damages do as a landlord remedy?

Answer 7

puts landlord back into position they would have been in if not for the breach
this is when tenant breaches covenants

Question 8

what is an action in debt?

Answer 8

landlord can issue court proceedings to recover a debt (such as unpaid rent, service charge or insurance rent)

Question 9

what are the limitations of an action in debt? (time period)

Answer 9

action for debt is limited to rent due in the 6 years before issuing of proceedings

Question 10

what is the remedy of guarantor?

Answer 10

if landlord has concerns about covenant strength or assignee at time of the grant then landlord may have obtained a guarantor who will typically cover all Tennant’s obligations

Question 11

what is the remedy of rent deposit?

Answer 11

landlord can draw on a rent deposit (usually limited to 6 months rent) if there were any arrears.
tenant will be required to top up the deposit after withdrawal

Question 12

what is commercial rent arrears recovery (CRAR)?

Answer 12

self-help remedy for commercial rent. allows landlord to enter the premises and take goods and may sell them

Question 13

when can commercial rent arears recovery (CRAR) be used? (3 requirements)

Answer 13

1. premises is purely commercial
2. minimum of 7 days principal rent owed
3. lease has not been forfeited

Question 14

what is the process of commercial rent arears recovery (CRAR)?

Answer 14

1.landlord appoints enforcement agent
2. gives 7 clear days notice
3. wait and if tenant doesnt repay the debt
4. then landlord can go into property and seize goods
5. serve a further 7 days notice
6. can then sell the goods

Question 15

what is forfeiture?

Answer 15

right of the landlord to re-enter premises before the contractual term ends (brings the lease to an end)

Question 16

when does the landlord have a right to forfeiture?

Answer 16

not an automatic right
landlord can forfeit if:
- tenant fails to pay rent
- breach obligations
- insolvency event

Question 17

when does a landlord not need to serve a s146 notice for forfeiture?

Answer 17

tenant fails to pay rent

Question 18

what are the two ways that forfeiture can happen?

Answer 18

peaceful re-entry (get bailiffs in and change locks and put notice on door)
court order

Question 19

when does a landlord waive their right to forfeiture? (3 requirements)

Answer 19

landlord does some unequivocal act recognising the continuing existence of the lease
with knowledge of the breach in question; and
communicates that act to the tenant

Question 20

what is a relief from forfeiture?

Answer 20

remedy for tenant or other party affected by the lease (eg, mortgage) it restores the forfeited lease and aims to put the parties back in the position they would have been if the forfeiture had not taken place

Question 21

when can a landlord forfeit a lease for a breach of a repairing covenant?

Answer 21

lease is 7+ years and there is at least 3 years left on the lease
(landlord needs to serve a s146 notice of its intention to forfeit)

Question 22

when can a landlord issue proceedings for damages for a repairing obligation?

Answer 22

must serve a s146 notice and then give the tenant 28 days to serve a counter notice.

Question 23

how are damages calculated for breach of repairing obligation?

Answer 23

measure of the damages is the loss of value to the landlord’s reversion not the cost of putting premises into full repair (eg, makes landlord lose £1,000 rent but costs £8,000 to repair - they can only recover the £1,000)