Termination of Tenancies for Tenant Default - Law Commission

More documents

Recommendations

Info

7.88 We do not wish to discourage tenants from remedying the relevant default or reaching a negotiated settlement with the landlord, even after service of a summary termination notice. If a tenant receives a summary termination notice and is able to persuade the landlord that the tenant default can be remedied, then the landlord may agree to withdraw the summary termination notice. If the landlord refuses, it is open to the tenant to apply to court for the summary termination notice to be discharged. 67 Landlord’s election 7.89 The statutory scheme comprises two forms of termination action, making a termination claim and using the summary termination procedure, which are each distinct from the other. They cannot be invoked concurrently in relation to the same tenant default. The landlord must elect between the two. 7.90 Once the landlord has given a tenant default notice specifying a tenant default, he or she may not give a summary termination notice specifying the same default unless the tenant default notice is withdrawn or (where proceedings have ensued) the termination claim is dismissed or abandoned. Similar protection is given to the tenant where a termination claim has been initiated by the landlord without having given a tenant default notice (whether or not the landlord has obtained an order dispensing with the requirement to such a notice). 7.91 The same policy is advanced where the landlord elects to use the summary termination procedure. Once the landlord has given a summary termination notice specifying a tenant default, he or she may not give a tenant default notice specifying the same default unless the summary termination is withdrawn or a discharge order has effect in relation to the default. The period between service and expiry of the summary termination notice 7.92 Where a summary termination notice has been given, the tenancy will terminate on the expiry of the notice. The tenant and any qualifying interest holders must have sufficient time to consider their position and respond. We recommend that the period between service of the notice and its expiry should in every case be one month. 7.93 Although there is a statutory power for the court to dispense with service of a tenant default notice on a tenant or a qualifying interest holder, we do not propose a similar power in relation to a summary termination notice. Nor will the court be able to dispense with delivery of the summary termination notice to the demised premises addressed to “The Occupier”. As the summary termination procedure is instigated by the service of a summary termination notice, in the absence of such a notice there would be no basis on which it could be said that the tenancy is terminated. Applying to the court to discharge a summary termination notice 7.94 During the one-month period following the giving of a summary termination notice, the tenant (and any qualifying interest holder) may apply to the court for 67 See para 7.94 and following. 152
an order that the notice be discharged. The application itself will have the effect of suspending the notice until the application can be heard, so the tenancy will continue unaffected by the notice. 7.95 It is important to stress that the hearing we contemplate at this stage is quite different from the hearing that will take place if and when the landlord brings a termination claim. The nature of the tenant’s application is analogous to an application for summary judgment under the Civil Procedure Rules (“CPR”). 68 7.96 Although the application will be made by the tenant or a qualifying interest holder, the respondent landlord will bear the burden of resisting the application. The court will therefore be required to discharge the summary termination notice unless the landlord can show that: (1) the landlord is entitled to use the summary termination procedure on the ground of the default; (2) the applicant would, on a termination claim made on the ground of the default, have no realistic prospect of persuading the court not to make a termination order; and (3) there is no other reason why the matter should be disposed of by way of a trial of a termination claim made on the ground of the default. 7.97 This is a deliberately low threshold. The court need not be satisfied that the applicant would be successful in resisting the landlord’s application for a termination order (were a termination claim to have been made). It need simply decide that the applicant would have a realistic prospect of so doing. The court will not investigate the substantive merits of any defence raised, except in so far as that is necessary to decide if the defence is realistic. In most genuinely contested cases, therefore, the landlord will be unable to persuade the court not to grant a discharge order. 7.98 Once aware of the intention of the tenant or a qualifying interest holder to apply for the summary termination notice to be discharged, the landlord will be able to assess the strength of that application. We would expect the landlord to withdraw the summary termination notice whenever the facts disclosed an arguable case, as any well-advised landlord will realise that to continue would be likely to be a waste of time and might result in cost penalties. 7.99 If the landlord does not withdraw the notice voluntarily and the tenant goes on to obtain a discharge order, the effect is that the tenancy will not terminate on the date set in the summary termination notice. It will continue as before. The landlord will effectively be put back to square one. The landlord may decide to make a termination claim. However, if the default period for the relevant tenant default has expired, it will no longer be possible to serve a valid tenant default notice in respect of that tenant default. In those circumstances the court has a discretion to allow a landlord to serve a tenant default notice outside the default period or to make a termination claim without serving a tenant default notice. This 68 Civil Procedure Rules, r 24.2. 153
Page 1 and 2:
The Law Commission (LAW COM No 303)
Page 3 and 4:
THE LAW COMMISSION TERMINATION OF T
Page 5 and 6:
Consultation 40 Reform recommendati
Page 7 and 8:
Consultation 68 Reform recommendati
Page 9 and 10:
(7) Any other matter 102 THE LEASEH
Page 11:
Restrictions on using the summary t
Page 14 and 15:
where appropriate using the various
Page 16 and 17:
etains an equitable jurisdiction to
Page 18 and 19:
of the law”. A number of leading
Page 20 and 21:
procedure, the tenancy will not ter
Page 22 and 23:
Part 6 examines the position of tho
Page 24 and 25:
2.7 When a tenancy is terminated un
Page 26 and 27:
unless valid notices have been give
Page 28 and 29:
Transfer order 2.30 Only a qualifyi
Page 30 and 31:
2.41 Where a landlord serves a summ
Page 32 and 33:
PART 3 TENANT DEFAULT INTRODUCTION
Page 34 and 35:
scheme by characterising the obliga
Page 36 and 37:
to include such clauses and to allo
Page 38 and 39:
perform their obligations under the
Page 40 and 41:
SPECIAL CASES OF TENANT DEFAULT Den
Page 42 and 43:
Assignment 3.51 Most tenancies cont
Page 44 and 45:
the incoming tenant of the assigned
Page 46 and 47:
often stipulate that a right to for
Page 48 and 49:
insolvency process having the same
Page 50 and 51:
3.93 In addition, section 81 of the
Page 52 and 53:
1996 and Chapter 5 of the Commonhol
Page 54 and 55:
covenant is non-payment of rent, a
Page 56 and 57:
Reform recommendations 3.132 We rec
Page 58 and 59:
The CP’s provisional proposals 4.
Page 60 and 61:
do so by delaying until the default
Page 62 and 63:
it is unlikely that a tenant would
Page 64 and 65:
(4) give the date by which action m
Page 66 and 67:
Specify the time for remedial actio
Page 68 and 69:
(3) must specify in respect of the
Page 70 and 71:
agreement (subject to a maximum ext
Page 72 and 73:
underlying principle that qualifyin
Page 74 and 75:
all tenancies granted for seven or
Page 76 and 77:
4.92 As we intend to retain the sam
Page 78 and 79:
PART 5 MAKING A TERMINATION CLAIM (
Page 80 and 81:
e set off against the cost of carry
Page 82 and 83:
future liabilities under the terms
Page 84 and 85:
(6) where a tenancy comes to an end
Page 86 and 87:
5.43 During the period of the stay,
Page 88 and 89:
described. During the consultation
Page 90 and 91:
termination of a tenancy under the
Page 92 and 93:
5.69 We recommend that the proceeds
Page 94 and 95:
5.75 The First Report therefore rec
Page 96 and 97:
making any order under the scheme t
Page 98 and 99:
5.93 The CP provisionally proposed
Page 100 and 101:
of the parties. 78 Proportionality
Page 102 and 103:
past conduct of the parties. This m
Page 104 and 105: (7) Any other matter 5.127 It would
Page 106 and 107: PART 6 QUALIFYING INTERESTS INTRODU
Page 108 and 109: 1925 extends to lessees, under-less
Page 110 and 111: according to the lease without any
Page 112 and 113: interchangeably by the courts, by s
Page 114 and 115: entitled to use the scheme to prote
Page 116 and 117: (2) if not in occupation, a right w
Page 118 and 119: property. The simplest means of ens
Page 120 and 121: (1) What should the landlord be exp
Page 122 and 123: claim with the court for service on
Page 124 and 125: have to apply for relief, which, if
Page 126 and 127: qualified covenant not to assign th
Page 128 and 129: that it is both appropriate and pro
Page 130 and 131: order unless the person who holds t
Page 132 and 133: CP suggested, close down any potent
Page 134 and 135: PART 7 SUMMARY TERMINATION PROCEDUR
Page 136 and 137: action rather than by physical re-e
Page 138 and 139: Paper was published. 22 It proposed
Page 140 and 141: 7.28 It was hoped that this recomme
Page 142 and 143: equirement for service of a notice
Page 144 and 145: 7.51 The final restriction was: It
Page 146 and 147: in the sub-tenant being removed fro
Page 148 and 149: termination claim, the summary term
Page 150 and 151: 7.71 The summary termination proced
Page 152 and 153: Repairing covenants 7.79 The repair
Page 156 and 157: dispensation power will only be exe
Page 158 and 159: to costs under the summary terminat
Page 160 and 161: 7.112 We recommend that: specifying
Page 162 and 163: PART 8 LIST OF RECOMMENDATIONS PART
Page 164 and 165: 8.13 We recommend that the Insolven
Page 166 and 167: (a) the day after the deadline spec
Page 168 and 169: (6) if the court dismisses an appli
Page 170 and 171: 8.39 We recommend that, where a ten
Page 172 and 173: 8.49 We recommend that: (1) where t
Page 174 and 175: (4) the default is a breach of cove
Page 176 and 177: APPENDIX A DRAFT LANDLORD AND TENAN
Page 178 and 179: ii Interpretation, etc. 28 Meaning
Page 180 and 181: 2 178 Landlord and Tenant (Terminat
Page 182 and 183: 4 180 Landlord and Tenant (Terminat
Page 184 and 185: 6 (8) This section is subject to se
Page 186 and 187: 8 13 Remedial order 184 Landlord an
Page 188 and 189: 10 186 Landlord and Tenant (Termina
Page 194 and 195: 16 30 Meaning of “qualifying inte
Page 198 and 199: 20 Preliminary 196 Landlord and Ten
Page 200 and 201: 22 Proper address 198 Landlord and
Page 204 and 205:
26 Settled Land Act 1925 (c. 18) 4
Page 206 and 207:
28 204 Landlord and Tenant (Termina
Page 208 and 209:
Page 210 and 211:
32 Protection from Eviction Act 197
Page 212 and 213:
34 Landlord and Tenant Act 1985 (c.
Page 214 and 215:
Page 216 and 217:
38 (2) After that subsection, inser
Page 218 and 219:
40 Settled Land Act 1925 (c. 18)—
Page 220 and 221:
APPENDIX B EXPLANATORY NOTES TO THE
Page 222 and 223:
landlord assigns the reversion, he
Page 224 and 225:
33. For example, if a tenant defaul
Page 226 and 227:
53. Subsection (5), although broadl
Page 228 and 229:
If the court is satisfied of this,
Page 230 and 231:
91. Subsection (4) mitigates the ef
Page 232 and 233:
108. Under the current law, forfeit
Page 234 and 235:
126. Subsection (2) applies where t
Page 236 and 237:
145. Subsection (1)(d) includes wit
Page 238 and 239:
unless he or she obtains a court or
Page 240 and 241:
person who is the tenant as a resul
Page 242 and 243:
termination notice (except where th
Page 244:
Robin Sinclair, Solicitor Slaughter
show all

Termination of Tenancies for Tenant Default - Law Commission

Create successful ePaper yourself

Delete template?

Save as template?