Limitation of Actions Consultation - Law Commission

6.16 Although a third party cannot start time running against a landlord by taking
physical possession of land while it is subject to a lease, 35
it has been established
since the last century that a third party can start the limitation period by
wrongfully receiving rents from the tenant. 36
This has been described as being
equivalent to adverse possession of the reversion, 37
or as a means by which the
stranger gains possession of the land. 38
The rule is now enacted as paragraph 6 of
Schedule 1 to the 1980 Act. Three conditions must be satisfied in order for time to
run:
(i) The lease must be a lease in writing reserving a rent of £10 or more a year;
(ii) The rent must be received, as rent, 39
by someone who wrongfully claims to be
the tenant’s direct landlord; and
(iii) No rent is subsequently received by the rightful landlord.
When these conditions are satisfied the right of action will accrue on the date
when the rent was first received by the claimant to the reversion. 40
Time will,
however, not run against the Crown under paragraph 6. 41
6.17 As with tenants under other types of tenancy, 42
time will not start to run in favour
of a tenant at will until the tenancy is terminated. 43
Before 1980 the law had
provided that a tenancy at will would be deemed to end, and therefore time would
run, as at the date one year after its creation, if it did not end earlier. 44
This led to a
sharp distinction, for limitation purposes, between a tenancy at will, and a licence,
the other hand, the original lease contained provisions validly contracting out of the
protection given by the 1954 Act, and the tenancy created by T holding over and paying
rent (in the absence of writing) was a periodic tenancy to which s 15(2) of the Limitation
Act 1980 applied, then time would run against L when T stopped paying the rent.
35 See para 6.13 above.
36 See T Prime and G Scanlan, The Modern Law of Limitation (1993), pp 184 - 185.
37 R E Megarry and H W R Wade, The Law of Real Property (5th ed 1984), p 1038 - 1039.
38 T Prime and G Scanlan, The Modern Law of Limitation (1993), p 185.
39 See Doe d Newman v Godsill (1840) 4 QB 603n, where the defendant received rent on
account of an annuity payable to the defendant by the plaintiff landlord. This was held not
to start time running against the landlord. Time will not run if the defendant receives rent
as the plaintiff’s agent: Lyell v Kennedy (1889) 14 App Cas 437 (see also para 6.32 below).
40 Schedule 1, para 6.
41 Ibid, para 6(2) See A McGee, Limitation Periods (2nd ed 1994), pp 155 - 156.
42 Except informal periodic tenancies.
43 The general wording of s 15(2) applies. In relation to tenancies at will generally see
Woodfall: Landlord and Tenant, para 6.062 - 6.074.
44 Limitation Act 1939, s 9(1), repealed by Limitation Amendment Act 1980, s 3(1).
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