Remedies for breach of covenant to pay Flashcards
(13 cards)
what remedies are available?
- debt action
- commercial rent arrears recovery
- rent deposit
- forfeiture
what is the limitation period for a debt action?
6 years
who can a debt claim be brought against?
Claim can be against anyone liable but s17 Landlord and Tenant (covenants) Act 1995 procedure may apply
when does the s17 LTA 1995 procedure apply?
when LL is suing a former T/G for a fixed charge (i.e. rent, service charge).
what is the s17 LTA 1995 procedure?
o LL must serve notice of default within 6m of breach. LL can only recover sums backdating 6m from notice.
o Former T/G can then call for overriding lease. This makes them immediate LL. They could then terminate the lease/exercise remedies.
what are the important things to remember about s17 LTA 1995? (3)
o LL does not need to issue the claim within 6m but must serve notice
o the procedure doesn’t apply if not fixed charge i.e. if seeking damages for loss
o this only applies where the lease has been assigned. There is no ‘former T/G’ where the lease is underlet because those leases still exists
explain commercial rent arrears recovery
LL seizes & sell goods belonging to current T at commercial property.
what are the key rules of commercial rent arrears recovery? (5)
o Applies to rent only (not inc. insurance rent)
o At least 7 days rent o/s and give 7 days’ notice before entering
o Must use enforcement agent
o Cannot seize items necessary for T’s business up to £1350. Cannot take lease/hired items.
o Goods must be sold at public auction and T given 7 days’ notice of sale
explain rent deposit
T will have usually paid a deposit at the start of the lease.
The terms will be in the rent deposit deed but generally LL can use the deposit as soon as T has breached a covenant. T is then required to top up the deposit.
Advantage = no court action.
how is forfeiture different to other remedies?
this is the only remedy which ends the lease
when can forfeiture be used?
only if there is a forfeiture clause in the lease (the clause may also be called re-entry)
explain the forfeiture process
- LL will need to serve a formal demand pursuant to the terms of the lease (unless this common law requirement has been excluded from the lease).
- LL can forfeit by taking possession through peaceable re-entry. If this isn’t possible, a court order will be required.
- T can apply for relief from forfeiture if they pay the arrears and costs. This is at the court’s discretion.
how must the LL be cautious when liaising with T if they want to forfeit?
LL must be careful not waive their right to forfeit i.e. demanding/accepting money
