landlord's remedies and ending a lease

Question 1

landlord’s remedies following breach of the rent covenant?

Answer 1

1. forfeiture (end the tenant’s lease)
2. action for debt (not practical; if a tenant can’t afford rent, it can’t afford damages)
3. distress and CRAR

Question 2

in an action for debt, what is the max arrears that can be recovered?

Answer 2

max 6 years arrears

Question 3

landlord’s remedies following breach of a non-rent covenant?

Answer 3

1. injunction (stop a breach of user provisions; prevent an unauthorised sublease or assignment)
2. forfeiture (end the tenant’s lease)
3. specific performance (rare; damages usually adequate)
4. contractual damages

Question 4

CRAR

Answer 4

from 6 April 2014: landlord is required to serve an enforcement notice on the tenant, giving 7 clear days’ notice that it will seize goods

Question 5

what happens after the landlord gives 7 clear days’ notice that it will seize
goods

Answer 5

tenant can:
- apply for it to be set aside; or
- for its execution to be delayed

provided there is a minimum of 7 days rent arrears

Question 6

what other limitations are on the tenant’s application to set aside / execution to be delayed? (CHECK THIS: DOES IT MEAN THE CRAR REMEDY ITSELF, OR THE TENANT’S APPLICATION?)

Answer 6

the remedy is not available in respect of mixed use or residential premises

Question 7

what is the effect of giving 7 clear days notice?

Answer 7

reduces the effectiveness of the remedy from a landlord’s perspective, because tenants have the opportunity to remove goods from the premises and put
them out of the landlord’s reach.

Question 8

what is a landlord’s right of re-entry known as?

Answer 8

forfeiture

Question 9

what is forfeiture?

Answer 9

landlord’s right to terminate the lease
prematurely for breach of covenant by the tenant

Question 10

is a right of re-entry legal?

Answer 10

yes, it is one of the 5 legal interests

Question 11

can forfeiture be exercised from a legal lease without an express right?

Answer 11

no, needs to be express

can never be implied

Question 12

can forfeiture be exercised from an equitable lease without an express right?

Answer 12

yes, a right to forfeit for non-payment of rent is implied into equitable leases

Question 13

how does a landlord exercise forfeiture?

Answer 13

• peaceable re-entry; or
• obtaining a court order

Question 14

do both methods of forfeiture (court order or peaceable re-entry) apply to both types of breach?

Answer 14

yes, both apply to breaches of non-payment of rent and breaches other than for non-payment of rent

Question 15

where the premises are residential and mixed residential/commercial, can a landlord forfeit without a court order?

Answer 15

no. they must obtain a court order

Question 16

can a landlord forfeit after waiving its right to forfeit?

Answer 16

no

Question 17

examples of landlord waiver

Answer 17

Demanding, accepting or suing for rent due after the breach; or

distraining for (seizing) rent due, despite
knowing about the breach.

Question 18

when may a landlord waive its right to forfeit?

Answer 18

• It is aware of the acts or omissions giving rise to the right to forfeit; and
• It does some unequivocal act recognising the continued existence of the lease.

Question 19

can waiver take place inadvertently?

Answer 19

yes - e.g., if the landlord’s agent sends out a rent demand where the landlord (though not the agent) is aware of the breach

Question 20

Where there is a continuing breach (eg failure to repair), when does waiver lasts until?

Answer 20

until the next day the
breach continues

meaning minimal impact

Question 21

where there is a noncontinuing breach (once and for all; one-off), how long does the waiver last?

Answer 21

the waiver is permanent

meaning that once rent is accepted, the landlord can never again forfeit for that specific breach

Question 22

when might waiver operate?

Answer 22

breach of rent covenant:

landlord can waive the right to forfeit for failure to pay the previous month’s rent by demanding the
next month’s rent.

Question 23

what type of breach is non-payment of rent classified as?

Answer 23

non-continuing breach

meaning each individual non-payment of rent (ie each missed payment) is deemed to be a separate breach, creating a separate right to forfeit

Question 24

if each missed payment is a separate breach, what impact does this have on the right to forfeit?

Answer 24

creates a separate right to forfeit each time

Question 25

what does the landlord need to do before exercising its formal right to forfeit for non-payment of rent?

Answer 25

formal demand for the exact amount of rent due, between the hours of sunrise and sunset unless: - the lease expressly waives this requirement; or - at least 6 months' rent is in arrears and there are insufficient seizable goods on the premises to satisfy all the arrears to due

Question 26

when might the landlord **not need to exercise its formal right to forfeit** for non-payment of rent?

Answer 26

Leases usually waive the requirement that the rent be formally demanded by including in the forfeiture or rent payment clause words such as *‘whether formally demanded or not’*. Landlord can proceed to exercise its right by court order or peaceable re-entry

Question 27

the tenant can then apply for relief. what does relief mean?

Answer 27

‘Relief’ means the court’s discretion to allow the lease to continue and thereby end the forfeiture process.

Question 28

what happens if the the tenant pays into court all arrears and costs **before the trial**?

Answer 28

all further proceedings are stayed

Question 29

what happens if the the tenant pays into court all arrears and costs **at or after the court order**?

Answer 29

- court has discretion to grant relief ie to allow the lease to continue on condition that the arrears are paid. - When the landlord has re-entered under a court order, the application for relief must be made within **six months of re-entry**. **Relief is usually given unless the circumstances are exceptional**.

Question 30

what might constitute exceptional circumstances, where relief may not be granted?

Answer 30

* **Where the property has already been lawfully let to a new tenant after the forfeiture** (Stanhope v Haworth (1886) 3 TLR 34). * **Where the non-payment of rent is exceptionally bad**. No relief was given in Public Trustee v Westbrook [1965] 1 WLR 1160 where no rent had been paid for 22 years, as the site was bombed out and everyone thought that the lease had ended.

Question 31

what if: a landlord forfeits a non-residential lease without a court order?

Answer 31

the court has an inherent equitable jurisdiction to grant relief if: (a) The rent and landlord’s costs are paid; and (b) It is just and equitable to grant relief.

Question 32

what if less than six months’ rent is in arrears?

Answer 32

the court has an inherent equitable jurisdiction to grant relief if: (a) The rent and landlord’s costs are paid; and (b) It is just and equitable to grant relief.

Question 33

for breaches other than for non-payment of rent, what does the landlord have to do before it can forfeit?

Answer 33

serve a **s146 notice**

Question 34

what info should be in the s146 notice?

Answer 34

* Specify the breach complained of * If capable of remedy, require it to be remedied within a **reasonable time** * Require the lessee to make compensation in money for the breach (if the landlord requires such compensation - **compensation is not essential**)

Question 35

when can a landlord proceed to forfeit either by peaceable re-entry or by obtaining a court order?

Answer 35

If capable of remedy and the tenant does not remedy the breach within a **reasonable time**

Question 36

what constitutes a **reasonable time**?

Answer 36

suggestion (textbooks): **3 months**

Question 37

what must the landlord do if the breach is not capable of remedy?

Answer 37

the landlord must **merely give the tenant enough time to consider its position** (e.g., 14 days) before forfeiting (Scala House v Forbes)

Question 38

what breaches are actually capable of remedy?

Answer 38

- Unauthorised alterations - Continuing alterations (e.g., failure to repair, unauthorised use) - If the lessee did not know of the illegal or immoral use by a subtenant, as long as the lessee takes immediate steps to stop the use, including forfeiting the sublease within a reasonable time (Glass v Kencakes)

Question 39

which breaches are incapable of remedy?

Answer 39

- A breach of **absolute alienation covenants** - not to assign or sublet (Scala House v Forbes) - **Immoral use**, because of the stigma attached to the premises (Rugby School (Governors) v Tannahill) Note: Immoral conduct constitutes conduct that the **great majority of people would condemn as being immoral** (London Scottish Properties v Mehmet) - **Illegal use (unlawful gaming)** - Illegal use (spying) - but in this case the landlord was held to have waived the right to forfeit. **Obiter: judge would however have given relief from forfeiture if there had not been waiver, because forfeiture was out of proportion** (Van Haarlam v Kasner)

Question 40

test for establishing whether a breach if capable or incapable of remedy (*Expert Clothing v Hillgate House Ltd*)

Answer 40

could the harm suffered by the landlord could be effectively remedied by the tenant complying with a s 146 notice and making proper compensation / leaving the landlord with no lasting damage.

Question 41

following *Expert Clothing*, what is the general consensus?

Answer 41

- most breaches are now technically capable of remedy provided the mischief can be put right by making full recompense to the landlord, leaving the landlord with no lasting damage.

Question 42

since *Expert Clothing*, what about breaches of covenant against assignment or sub-letting, and possibly immoral or illegal use?

Answer 42

probably still not capable of remedy (Akici v LR Butlin)

Question 43

what does LPA 1925, s146(2) provide?

Answer 43

**for breaches other than rent**, the tenant may apply to the court for relief in: - the landlord’s action, or - in any action brought by itself

Question 44

what is considered in a s146(2) application?

Answer 44

- how wilful and blatant the breach was - the gravity of the breach - the landlord's motives for wanting forfeiture - damage to the premises - can the breach be put right?

Question 45

do relief have conditions attached?

Answer 45

often yes. Relief is usually given on condition that the breach is remedied and that the tenant undertakes not to breach the covenant again.

Question 46

if the landlord has exercised its right to forfeit by applying for a **court order**, when must the tenant apply for relief?

Answer 46

before the court order is made. if/once an executed order for possession is made in favour of the landlord, no further relief application is then available

Question 47

if the landlord has exercised its right to forfeit by **peaceable re-entry**, when must the tenant apply for relief?

Answer 47

relief can still be given under s146(2), provided it is applied for in a **reasonable time**(*Billson v Residential Apartments*)

Question 48

what does the court consider in the tenant's application for relief following the landlord's exercise of its right by **peaceable re-entry**?

Answer 48

all the circumstances, incl: the speed with which the tenant applies for relief - must be **in reasonable time** after peaceable re-entry

Question 49

when has the court granted relief to T? (caselaw)

Answer 49

- relief was granted despite the tenant failing to comply with the repair and alterations covenants, **because the tenant gave a deposit of money to ensure the premises were restored to their original condition** at the end of the lease (Hyman v Rose) - Relief was granted, despite the use of a nightclub for immoral purposes, because **the immoral use had ceased, there was no more stigma attaching to the premises, the tenant was excellent in all other respects, the tenant had offered to sell the lease, and the managing director of the tenant was ill** (Ropemaker Properties Ltd v Noonhaven)

Question 50

what has the court refused relief to T? (caselaw)

Answer 50

- relief was not granted to a head-tenant or sub-tenant in the case of a blatant breach of the user covenant by an unlawful sub-tenant (St Marylebone Property Co v Tesco)

Question 51

is there any additional protection available for tenant from forfeiture for breach of repair?

Answer 51

Leasehold Property (Repairs) Act 1938 - any lease (except agricultural holding) - lease granted for at least **7 years** - at least **3 years** left to run

Question 52

what is required by the Leasehold Property (Repairs) Act 1938?

Answer 52

in addition to the s146 notice: - landlord must inform tenant of its right under 1938 Act to serve a **counternotice within 28 days**

Question 53

what happens if a tenant serves a counter-notice?

Answer 53

the landlord cannot proceed to claim forfeiture or damages **without first obtaining the leave of the court**

Question 54

what is the effect of the Leasehold Property (Repairs) Act 1938?

Answer 54

The effect of the Act is to limit **severely the landlord’s ability to enforce a repairing obligation until the last three years of the lease**

Question 55

what if the notice relates to internal decorative repairs?

Answer 55

the tenant may apply to the court and be **wholly or partially relieved of liability** to the extent that the court thinks the notice unreasonable

Question 56

what happens to a sublease if if a head lease is forfeited?

Answer 56

the sublease is also destroyed

Question 57

does the subtenant have the right to apply for relief from forfeiture?

Answer 57

yes, even where the head tenant cannot get relief itself

Question 58

what does the court have the power to do regarding the headlease and sublease?

Answer 58

vest the head-lease in the sub-tenant on such terms as it sees fit, including rent

Question 59

what does LPA 1925, s 146(4) provide?

Answer 59

subtenant to apply to the court for relief against forfeiture for breach of **other covenants** relief will be granted with discretion

Question 60

are there any time limits on applications for relief re s146(4)?

Answer 60

tenant must apply within a **reasonable time after peaceable re-entry** (*Billson*)

Question 61

what are the ways a lease ends? (5 ways)

Answer 61

1. effluxion of time 2. notice to quit 3. break clause 4. surrender 5. merger

Question 62

what is effluxion of time?

Answer 62

the lease term expires

Question 63

what is the limitation on effluxion of time?

Answer 63

some tenants have security of tenure

Question 64

how would a lease end by merger?

Answer 64

if the tenant becomes the owner of the freehold reversion

Question 65

how would a lease end by surrender?

Answer 65

if the landlord and tenant agree to end the lease

Question 66

how can a lease end by forfeiture?

Answer 66

landlord exercising a right of forfeiture in the event of tenant breach

Question 67

how can a lease end by break clause?

Answer 67

Either (or just one) party exercising a break clause

Question 68

how can a lease end by notice to quit?

Answer 68

Either party serving a notice to quit if the lease is a **periodic tenancy**

Question 69

For a yearly tenancy, how much notice must be given to determine the tenancy?

Answer 69

half a year’s notice to quit to determine the tenancy.

Question 70

for other periodic tenancies, how much notice must be given?

Answer 70

a full period's notice e.g., for quarterly, monthly, weekly

Question 71

what does the court NOT have the power to do regarding the head lease and sublease, if the head lease is forfeited?

Answer 71

cannot grant the sub-tenant a lease for any longer than the term of the **original sub-lease**.

Question 72

in the context of surrender; what document is used?

Answer 72

deed of surrender

Question 73

which two methods of ending a lease are **opposites**?

Answer 73

merger and surrender