#3751 - Leases Termination - GDL Land Law

Effluxion of Time

• expiration of fixed-term lease – most common way fixed term leases ends.

• no notice to quit required.

• but: tenant may have security of tenure at end of lease.

  • business tenancies: most protected by Part II LTA 1954: may be entitled to new lease if follows certain procedures + time limits.

  • residential tenancies: t. may have right to remain in occupation –

    • Rent Act 1977: private tenancies granted before 15 Jan 1989.

    • Housing Acts 1985: public sector tenancies.

    • Housing Act 1988: private tenancies granted after 15 Jan 1989.

Break Clause

• provision in fixed term lease: allowing either party to serve notice during tenancy to bring to premature end.

Surrender

• surrender: t. hands back lease to l. with l’s consent premature termination.

  • can be express or implied.

  • effect on sub-ts: s139 LPA 1925.

Merger

• t. acquires l’s interest: lease absorbed by reversion destroyed.

Enlargement

• s153 LPA 1925: t. may enlarge lease into fee simple by deed.

  • conditions: original lease term >300 years + unexpired term >200 years.

• v. rare in practice.

Notice to Quit

- Notice to quit: method for determining periodic tenancy.

• joint tenants: notice by 1 sufficient – Hammersmith BC v Monk [1991].

- Required period of notice:

• yearly tenancy: year’s notice (182 days) tenancy expires on anniversary of commencement.

  • quarter day start of tenancy: 2 quarters notice sufficient.

  • (unless agreement to contrary).

• other periodic tenancies: 1 full period’s notice tenancy expires at end of complete period.

  • (period tenancies: created expressly or by implication – acceptance of rent referable to a period).

• dwelling houses: Protection from Eviction Act (PFEA) 1977 (as amended by Housing Act 1988).

  • extra requirements for notice to quit:

    • 4 weeks minimum.

    • in writing, containing prescribed information informing tenant of rights (e.g. security of tenure).

  • provisions prohibiting eviction + harassment:

    • PFEA 1977: criminal offence to evict residential occupier unlawfully.

    • HA 1988: illegal eviction statutory tort: occupier entitled to damages.

• tenancies at will: no period of notice necessary.

  • (but N.B. periodic tenancy if landlord accepts rent referable to period while t. in possession).

Frustration

• theoretically possible: e.g. where leasehold property destroyed.

Repudiation

• t. can end tenancy for repudiatory breach of cov. by l. – Hussein v Mehlman [1992].

Forfeiture

- Forfeiture: l. terminates lease prematurely for breach of covenant by t.

• 1. breach of covenant by t. required.

• 2. express clause required: right to forfeit never implied into legal lease.

  • but equitable leases: implied right to forfeit for non payment of rent – Hodgkinson v Crowe [1875].

• legal right of re-entry (s1(2) LPA 1925) created by forfeiture.

• methods of forfeiture:

  • 1. peaceable re-entry: l. physically enters, changes locks + puts up notice of forfeit.

    • but: only available for pure business premises.

  • 2. court order.

    • necessary for residential premises – s2 Protection from Eviction Act 1977

      • inc. mixed residential/commercial premises – Patel v Pirabakaran [2006].

- Waiver: l. loses right if l. has knowledge of breach + does unequivocal act recognising continued existence of lease.

• e.g. accepting/suing for rent after breach; distraining for rent due before or after breach despite being aware.

  • John Lewis plc v Viscount Chelsea [1993]: alleged breach of cov. to demolish + reconstruct a building; t. paid rent to l’s bank; bank initially accepted rent then returned it after a delay no waiver: l. had made desire to forfeit clear.

  • Thomas v Ken Thomas Ltd [2007]: l. accepted outstanding rent payment from t. waived right to forfeit.

  • Osibanjo v Seahive Investments Ltd [2008]: l. can accept part of t’s cheque + still reserve right to forfeit.

• can be unintentional: Central Estates (Belgravia) Ltd v Woolgar [1972]: l’s agent sent out rent demand where l. (though not agent) aware of breach.

• continuing vs. non-continuing breach:

  • continuing breach (e.g. failure to repair): waiver lasts only until next rent day l. can then choose to reject rent + forfeit lease.

  • non-continuing breach (‘once and for all’) (e.g. sub-letting without consent): waiver permanent once rent accepted, l. can never reject next rent due + forfeit later for previous arrears if still outstanding.

• can operate re: breach of covenant to pay rent: e.g. if t. fails to pay 1 month’s rent + l. demands next months’ rent, has waived right to terminate for failure to pay (but continuing breach: can reject next rent due after that + forfeit for previous arrears if still outstanding).

• waiver does not affect l’s other remedies: e.g. action for debt; damages.

Forfeiture for Non-Payment of Rent

- Forfeiture for non-payment of rent – procedure:

• 1. formal demand by l: for exact amount due, upon premises, on day it becomes payable, during daylight.

  • exceptions:

    • expressly excluded by lease: e.g. words in forfeiture clause ‘whether formally demanded or not’.

    • s210 Common Law Procedure Act 1852: at least 6 months rent in arrears + insufficient distrainable goods on premises to satisfy arrears due (N.B. distress due for reform – TCA 2007).

  • other payments expressed in lease as additional rent (e.g. service charge): l. can forfeit for non-payment in same way as rent.

• 2. court order / peaceable re-entry: once formal demand made (or if formal demand not necessary).

• 3. t. may apply for relief: court’s discretion to allow lease to continue despite forfeiture.

- Relief from forfeiture: court usually allows lease to continue on condition t. pays of arrears.

• before trial: if t. pays into court all arrears + costs before trial, all further proceedings stayed.

  • High Court: s212 Common Law Procedure Act 1852.

    • provided at least 6 months rent in arrears – Standard Pattern Co Ltd v Ivey [1962].

  • County Court: s138 County Court Act 1984.

• at or after trial: court has discretion to grant relief (i.e. allow lease to continue on condition that arrears paid).

  • usually given unless circs. exceptional – Gill v Lewis [1956].

  • exceptions: e.g. non-payment of rent exceptionally bad.

    • Stanhope v Haworth [1886]: property lawfully let to new t. after forfeiture no relief.

    • Public Trustee v Westbrook [1965]: site bombed out; everyone thought lease ended; no rent paid for 22 years no relief.

  • must apply for relief within 6 months of re-entry:

    • High Court: s210 Common Law Procedure Act 1852.

    • County Court: ss138-140 County Courts Act 1984.

• after peaceable re-entry: CLPA 1852 does not apply but: s38 Senior Courts Act 1981 – court has equitable jurisdiction to grant relief.

  • conditions: 1. rent + l’s costs paid; 2. just + equitable to grant relief.

  • Thatcher v Pearce [1968]: lease of scrap yard determined by peaceable re-entry while t. in prison; t. applied more than 6 months after forfeiture relief granted.

• sub-tenant: can also apply for relief.

  • High Court: s38 SCA 1981.

  • County Court: s138 CCA 1984.

  • peaceable re-entry: s146(4) LPA 1925.

Forfeiture for Breach of Other Covenants

- Section 146 notice: l. must serve notice under s146 LPA 1925 – notice must:

• 1. specify breach.

• 2. require t. to remedy within reasonable time – if capable of remedy.

• 3. require t. to pay compensation – if l. requires compensation.

• (if cannot be remedied + l. does not want compensation, only specifying breach necessary – Rugby School (Governors) v Tannahill [1935]).

- Remedy of breach: t. must remedy within reasonable time.

• if t. fails to remedy in reasonable time l. can forfeit (peaceable re-entry or court order).

  • reasonable time: dep. on nature of breach – usually c. 3 months.

• if breach not capable of remedy: l. must give t. enough time to consider position.

  • e.g. Scala House and District Property Co Ltd v Forbes [1974]: 14 days.

• is breach capable of remedy?

  • continuing breaches capable of remedy: e.g. failure to repair; unauthorised use.

  • unauthorised alterations may be capable of remedy – Billson v Residential Apartments Ltd [1992].

  • immoral/illegal use: usually NOT capable of remedy, because of stigma.

    • Rugby School (Governors) v Tannahill [1935]: prostitution.

    • Hoffman v Fineberg [1949]: unlawful gaming.

    • Van Haarlam v Kasner [1992]: spying (although in this case l. had waived right to forfeit).

  • BUT: immoral/illegal use by sub-t capable of remedy if t. unaware + takes immediate steps to stop use (inc. forfeiting sub-lease) – Glass v Kenackes [1966].

  • immoral/illegal use: not necc. automatically incapable of remedy.

    • [Harman J] in Van Haarlam: dep. on facts of case.

    • + relief might still be granted:

      • immoral use – Ropemaker Properties v Noonhaven [1989]: use had ceased.

      • illegal use – Van Haarlam: obiter: relief would have been given b/c forfeiture too harsh.

  • test: can harm suffered by l. be effectively remedied by t. complying with s146 notice? – Expert Clothing (Services and Sales) Ltd v Hillgate House Ltd [1986; HoL].

    • facts: t. required to carry out works within stipulated time; had not commenced before time limit for completion capable of remedy.

    • Savva v Hussein [1996]: approach approved + relevant to negative covenants.

      • most breaches: capable of remedy – if t. can repair mischief by making full recompense to l.

      • breach of sub-letting covenant + possibly immoral/illegal use: technically not capable of remedy.

    • Akici v LR Butlin [2006]: [Neuberger LJ] obiter: approved.

- Leasehold Property (Repairs) Act 1938: lease of >7 years with >3 years left: no forfeit for disrepair without court’s leave.

• t. can serve counter notice to s146 notice within 28 days (+must...