For non payment of rent
A landlord who has not received his rent can pursue the following actions as remedy;
a) He can initiate a debt action under the Limitation Act to recover the rent. However, this must commence within six months of the sum falling due.
b) Forfeiture
c) Distress. Here the landlord can enter the property and seize chattels to the value of the debt. The rules regarding this are complex and not available in the case of residential property. Under the Tribunals, Courts, and Enforcement Act of 2007, distress is to be abolished and in the case of commercial tenancy, this shall be replaced by an alternative commercial rent arrears recovery procedure that allows recovery of rent from a commercial sub-tenant.
d) The Law of Distress Amendment Act makes it clear that a sub-tenant can be pursued for the recovery of rent. In these circumstances, the rent is to be paid directly to the head-landlord.
e) Bankruptcy and Winding Up: When the debt is more than £750, a notice to commence bankruptcy or winding-up proceedings can begin.
f) Pursue former tenants: The landlord also has the right to pursue his rent from former tenants.
g) Pursue any guarantors of the tenant.
For breach of other covenants
When tenants breach other covenants, the following are the remedies available to them;
a) Forfeiture
b) An injunction is another remedy that is used to prevent the breach of a negative covenant or even prevent an anticipated breach of covenant such as assignment (in breach of a covenant).
c) Damages. They can be recovered as per normal contractual rules. But when recovery of damages for the breach of repairing covenant, special rules are applicable.
d) Pursue former tenant(s). When former tenants remain liable, the landlord can pursue them.
e) Pursue any guarantors of the tenant
Forfeiture
Forfeiture refers to the right to retake the possession of the premises even before the expiry of the lease. This right is expressly reserved for the lessor & can be exercised in two ways; either by the court or by a peaceable re-entry. When the property is let as a dwelling, it is unlawful to enforce forfeiture except by a court proceeding, especially when the person is lawfully residing in the property. This is guaranteed under the Protection from Eviction Act of 1977, S2. Also, it is an offence to use threatening words or gestures to achieve re-entry when the landlord knows that there was someone in the property who is opposed to the re-entry.
Forfeiture for the non-payment of rent
The landlord should first make a formal demand for payment of rent, but this is usually waived in the lease. It is best to check in detail provisions regarding forfeiture before agreeing to the lease. When a tenant is able to pay all of the rent arrears and the costs before the hearing, he can claim relief against the forfeiture. He can also claim relief if payment is made after the hearing, if the court thinks that it is just and equitable to grant a relief.
Forfeiture for breach of other covenants
When seeking forfeiture for breach of a covenant, the landlord should first serve a notice under s 146 of the LPA 1925. This notice should;
a) Specify the breach
b) Specify that the breach should be remedied, if remedy is available
c) Specify about compensation, if required.
The tenant should be given sufficient time within which he could remedy the breach. He can prevent forfeiture by remedying the breach. The landlord’s costs are not included in the remedy unless this is provided in the terms of the lease. When the tenant does not remedy the breach, the lease is forfeited by applying for possession.
The tenant can also apply for relief against the forfeiture and the court can grant such relief as it thinks fit. Sometimes, additional requirements apply when the landlord is seeking to forfeit for breach of a repairing covenant.
Additional rules for breach of a tenant’s repairing covenant
Forfeiture
If a lease was originally for a period of seven years, and has at least three years left for its expiry, provisions of the Leasehold Property (Repairs) Act of 1938 is applicable. Thus, when a landlord serves notice under s146 of the LPA 1925 before forfeiture, it should include a statement that purports to inform the tenant of his right to serve a counter notice within 28 days. The landlord can proceed with the forfeiture process after the tenant has served such a counter notice only when he gets the leave of the court. This leave is granted only in special circumstances, for instance when the value of the reversion has been substantially diminished.
Damages
Damages for the breach of a tenant’s covenant for repair are determined by the reduction in the value of the landlord’s reversion caused by the breach. This is provided under S18 of the LTA 1927. When there is sufficient time for the lease to expire, the reduction in the value of the property would be little and hence costs for the repairs would be considerably low.
According to the LPA (R) A 1938, a landlord can bring about a claim for damages when the tenant has failed to repair the property. The landlord must however, first serve a notice to the tenant that includes a statement informing him about the right to serve a counter notice within 28 days. And when such a counter-notice is served, the landlord can proceed with forfeiture only with the leave of the court.
Self-help
Limitations with regards to bringing about forfeiture can be circumvented when the terms of the lease include a properly drafted self-help clause. Such a clause allows the landlord to enter the premises and undertake repairs when the tenant fails to comply with the covenant. The terms of the lease shall also include terms that the tenant shall pay costs for the repairs to the landlord. This was confirmed in the case of Jerris v Harris [1996] Ch 195, where it was held that the costs are to be recovered as a debt and not as damages. The breach here would be the tenant’s failure to pay the debt and not a failure to repair.
Photo courtesy: Daniel McDermott
