Leases 3 PDF

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Leases 3...

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Leases (3)

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Landlord’s remedies against a tenant for breach of leasehold covenants Objectives Acknowledge the contractual remedies available to a landlord Evaluate the remedies specific to leases – Distress – Forfeiture Explain how a tenant may be able to obtain relief from forfeiture Contractual remedies Specific performance, but not: – Continuing acts • Co-operative Insurance v Argyll Stores [1998] – Some repairs • Leasehold Property (Repairs) Act 1938 Injunctions Damages Accepting a repudiatory breach • Hussain v Mehlman [1992] Distress for rent Self help remedy • Quick, cheap, deterrent Right of seizure (right to distrain) day after rent becomes due No warning needed Fairness? • Fuller v Happy Shopper Markets [2001] • Tribunals Courts and Enforcement Act 2007 ss71 & 72 – Abolish distress (notably in relation to residential tenancies) – Commercial property – statutory procedure – Commercial Rent Arrears Recovery Part 2 Schedule 12

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Forfeiture - general Landlord (“L”) has right to determine lease early Actioned by either – Physical re-entry (save for residential tenancies) • Breach of condition, automatic right • Breach of covenant, need express forfeiture clause (or implied forfeiture clause in equitable lease) – Service of court proceedings

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Forfeiture - Waiving a breach T breaches covenant and L condones this L must know breach has occurred • Matthews v Smallwood (1910) Express waiver

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Implied waiver – L knows breach has occurred and has acted in a way that allows the lease to continue. • Segal Securities Ltd v Thoseby [1963] • Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] • Thomas v Ken Thomas [2007]

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Forfeiture - method Non – payment of rent Forfeiture - method Other covenants – s146 LPA 1925

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Wait a reasonable amount of time Capable or remedy? Historically, courts looked to the fact that a breach had occurred. – Hoffman v Fineberg [1949] – Rugby School (Govenors) v Tannahill [1934] – Negative covenants – Positive covenants • Modern approach looks at nature of breach – Expert Clothing Service v Hillgate House [1986] • To tell the landlord about any mortgage created • To carry out building work by a certain date • Irremediable harm – Stigma • Repairing Covenants The Leasehold Property (Repairs) Act 1938 •

Leases of 7 years or more with at least 3 years unexpired

• Permission of the court before pursuing any remedy of forfeiture or damages • Forfeiture - method Physical re-entry • Not residential property (while used as such) • s2 Protection of Eviction Act 1977 • Peaceable entry and without force • s6 Criminal Law Act 1977 “A dubious and dangerous method of determining a lease” Billson v Residential Apartments [1992] Court order

• Commencement of proceedings acts as forfeiture • Tenant’s relief from forfeiture The court may grant relief on such terms as it “thinks fit” s146(2) LPA 1925 • Can apply at any time – After receipt of notice – after proceedings have been issued or – even after re-entry Billson v Residential Apartments • Non payment of rent • pay arrears and L’s costs – High Court – s212 Common Law Procedure Act 1832 – County Court – s138(2) County Courts Act 1984 • Other covenants – willing or able to remedy breach • • • • • • •

Tenant’s relief from forfeiture If relief is granted, the effect is as if the lease had never been forfeited Sub-tenant or mortgagee has same right to apply for relief against forfeiture Objectives Acknowledge the contractual remedies available to a landlord Evaluate the remedies specific to leases – Distress – Forfeiture Explain how a tenant may be able to obtain relief from forfeiture...