Termination of Tenancies for Tenant Default - Law Commission

7.104 However, we do not think that this right to apply to the court after the tenancy has
terminated should be open-ended. The landlord must be able, after a certain
period, to re-let or to sell the premises without the risk of any potential claims in
relation to the terminated tenancy. We consider that there should therefore be a
time limit after which such applications cannot be brought. We recommend that
this time limit should be six months from the date on which the tenancy was
terminated. This mirrors the time limit under the current law for applications for
relief in non-payment of rent cases.
7.105 The circumstances in which an application may be made will inevitably be
diverse. The court should therefore have a wide discretion to consider the
circumstances in which the application has been brought and the substantive
merits of the case. The applicant’s delay in bringing the application (particularly if
the applicant was served with a valid summary termination notice at the requisite
time) will be a relevant factor, as will any unsuccessful application to discharge
the summary termination notice before the tenancy was terminated.
7.106 An application brought after the tenancy has been terminated (but within the sixmonth
time limit) will be unlike an application to discharge a summary termination
notice, where the court need only be satisfied that there is an arguable case to be
tried. Where an application is brought after the tenancy has terminated, the court
must consider the substantive merits of the application and may make any order
it considers appropriate in the circumstances. It may not, however, reinstate the
terminated tenancy. To allow this would be to replicate all of the problems of the
“twilight period” under the current law. A court may, however, order the grant of a
new tenancy to the applicant. Alternatively, where a third party has (in good faith)
taken a new tenancy of the premises previously demised to the applicant, the
court may grant an overriding tenancy. 73 In many circumstances, the court may
simply order that a payment be made to the applicant to represent his or her
loss. 74 Unlike current law, there is no certainty that a party who makes a late
application to the court will be granted an interest equivalent to that previously
held.
7.107 It should be stressed that we would expect applications of this nature to be made
relatively rarely. Under the current law, the only relief available to the tenant is
reinstatement of the forfeited tenancy. Under our recommended scheme, the
principal opportunity to challenge the landlord’s actions will be during the period
between service of the summary termination notice and the expiry of that notice.
Costs
7.108 The CPR are intended to play an important role in regulating the parties’ conduct
in the course of termination action. An important component of the case
management powers under the CPR is the possibility of adverse costs orders
being made against a party the court considers to have acted unreasonably or
inappropriately. We do not recommend that express provision be made in relation
73 An analogous power is provided by the Landlord and Tenant (Covenants) Act 1995. See
also Fuller v Judy Properties Ltd (1992) 64 P&CR 176, where the court made an order to
this effect.
74 The court has power to do this pursuant to draft Bill, cl 9(4)(a).
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