Topic 8 - Ending a Lease and Remedies

Question 1

What is the basic rule regarding tenant actions in a lease?

Answer 1

A tenant may do all the things that an owner of an estate can do unless the lease prohibits such actions.

Question 2

What is a common remedy available to a landlord for breach of a rent covenant?

Answer 2

Action for debt

A landlord can sue the tenant on its covenant to pay rent and recover six years’ arrears.

Question 3

What is forfeiture in the context of landlord’s remedies?

Answer 3

Forfeiture involves bringing the lease to a premature end because of the tenant’s breach.

Question 4

What is CRAR?

Answer 4

Commercial Rent Arrears Recovery (CRAR) is a self-help remedy that replaces distress, allowing landlords to recover unpaid rent.

Question 5

What conditions must be met for CRAR to be used?

Answer 5

• The premises are purely commercial
• A minimum of seven days’ principal rent is owed
• The lease has not been forfeited

Question 6

What is an injunction in landlord’s remedies?

Answer 6

An injunction is a remedy to prevent an unauthorized sublease or assignment.

Question 7

What is specific performance in the context of landlord’s remedies?

Answer 7

Specific performance is rarely ordered for a repairing covenant; damages are usually adequate.

Question 8

What are the different ways a lease can end?

Answer 8

• Effluxion of time
• Notice to quit
• Merger
• Forfeiture
• Break Clause
• Surrender

Question 9

What does effluxion of time refer to in lease termination?

Answer 9

It is the usual common law way in which a lease for a fixed term comes to an end without notice.

Question 10

What is security of tenure?

Answer 10

Security of tenure is a right for a tenant to remain in the premises at the end of the lease term and to request the grant of a new lease.

Question 11

What is a break clause in a lease?

Answer 11

A provision allowing either party to serve notice to bring the lease to a premature end.

Question 12

What is surrender in the context of lease termination?

Answer 12

Surrender is the handing back of the lease by the tenant to the landlord with the landlord’s consent.

Question 13

What is merger in lease termination?

Answer 13

Merger occurs when the tenant acquires the landlord’s interest, thus becoming its own landlord.

Question 14

What is the landlord’s right of forfeiture?

Answer 14

The right to terminate the lease prematurely for breach of covenant by the tenant.

Question 15

What must a legal lease contain regarding forfeiture?

Answer 15

An express forfeiture clause allowing the landlord to forfeit the lease in the event of breach of covenant.

Question 16

How can a landlord exercise the right to forfeit?

Answer 16

• Peaceably re-entering the property
• Obtaining a court order

Question 17

What is the procedure for forfeiture?

Answer 17

• Step 1: Has there been a breach?
• Step 2: Is there a forfeiture clause?
• Step 3: Has there been a waiver?

Question 18

What constitutes a waiver of the right to forfeit?

Answer 18

The landlord must not have waived his right by recognizing the continued existence of the lease after knowing of the breach.

Question 19

What happens if the landlord accepts rent after a breach?

Answer 19

The landlord may permanently waive the right to forfeit for that specific breach.

Question 20

What is required for a landlord to forfeit for non-payment of rent?

Answer 20

The landlord must make a formal demand for the exact amount of rent due.

Question 21

What is ‘relief from forfeiture’?

Answer 21

The court’s discretion to allow the lease to continue and end the forfeiture process.

Question 22

What must happen for a tenant to apply for relief from forfeiture at or after the court order?

Answer 22

The tenant must pay all arrears and costs.

Question 23

What is the effect of forfeiting a head-lease on sub-leases?

Answer 23

Any sub-lease will also be destroyed if a head-lease is forfeited.

Question 24

What is required for forfeiture for breach of covenants other than non-payment of rent?

Answer 24

The landlord must follow the same forfeiture procedure but with a s 146 Notice.

Question 25

What is the purpose of a forfeiture clause?

Answer 25

To allow a landlord to terminate a lease upon certain breaches by the tenant ## Footnote A forfeiture clause specifies conditions under which a landlord can reclaim possession of the property.

Question 26

What must a landlord serve before forfeiting for breach of covenants other than non-payment of rent?

Answer 26

LPA 1925, s 146 notice ## Footnote This notice informs the tenant of the breach and the required remedy.

Question 27

What are the three main requirements of a s 146 notice?

Answer 27

* Specify the breach complained of * Require remedy within a reasonable time if capable * Request compensation if the landlord requires it

Question 28

What does 'relief' mean in the context of forfeiture?

Answer 28

The court’s discretion to allow the lease to continue despite a breach ## Footnote Relief helps tenants avoid losing their lease due to breaches.

Question 29

In cases of non-remediable breaches, how much time must a landlord give the tenant before proceeding to forfeit?

Answer 29

14 days ## Footnote This allows the tenant to consider their position before forfeiture occurs.

Question 30

What case established that unauthorized alterations may be capable of remedy?

Answer 30

Billson v Residential Apartments Ltd [1992] AC 494 ## Footnote This case highlights the flexibility in determining whether a breach is remediable.

Question 31

What is the significance of the Leasehold Property (Repairs) Act 1938?

Answer 31

It limits landlords' ability to enforce repair obligations until the last three years of the lease ## Footnote This Act provides additional protection for tenants regarding repair covenants.

Question 32

What happens if a tenant does not remedy a breach within a reasonable time?

Answer 32

The landlord may proceed to forfeit ## Footnote This can be done through either peaceable re-entry or by obtaining a court order.

Question 33

How does the court assess whether a breach is capable of remedy?

Answer 33

By determining if the harm suffered by the landlord can be effectively remedied ## Footnote This was established in Expert Clothing (Services and Sales) Ltd v Hillgate House Ltd [1986] Ch 340.

Question 34

What is the tenant's right under LPA 1925, s 146(2)?

Answer 34

To apply for relief from forfeiture in the landlord's action ## Footnote This right is crucial for tenants facing forfeiture.

Question 35

What must a tenant do if a landlord exercises forfeiture through peaceable re-entry?

Answer 35

Apply for relief under s 146(2) ## Footnote Relief can still be granted even after peaceable re-entry.

Question 36

What does the term 'reasonable time' refer to in the context of remedying a breach?

Answer 36

A timeframe that depends on the nature of the breach ## Footnote Textbooks often suggest three months as a guideline.

Question 37

Is a breach of a covenant against assignment or sub-letting usually capable of remedy?

Answer 37

No ## Footnote Such breaches are often considered not capable of remedy due to the nature of the covenant.

Question 38

What case confirmed that illegal use could be considered incapable of remedy?

Answer 38

Hoffman v Fineberg [1949] 1 CH 245 ## Footnote This case involved unlawful gaming as the illegal use.

Question 39

What is the effect of a tenant serving a counter-notice under the Leasehold Property (Repairs) Act 1938?

Answer 39

The landlord cannot claim forfeiture or damages without court leave ## Footnote This counter-notice provides the tenant with additional rights.

Question 40

What is the general conclusion regarding breaches and remedy?

Answer 40

Most breaches are technically capable of remedy if the mischief can be corrected ## Footnote However, some breaches like assignment or immoral use may still be seen as incapable of remedy.

Question 41

What does s 146(4) of the LPA 1925 allow subtenants to do?

Answer 41

Apply for relief against forfeiture for breach of other covenants ## Footnote This highlights the rights of subtenants in forfeiture situations.