Termination of Tenancies for Tenant Default - Law Commission

etains an equitable jurisdiction to relieve for breach of non-rent
covenants outside section 146 of the Law of Property Act 1925. 13
(4) Tenants are denied the right to claim relief from forfeiture by statute in
certain exceptional circumstances, a restriction which is now anomalous
and unnecessary. 14
(5) The law concerning formal demands for rent is obsolete.
(6) A landlord may suffer injustice as a result of the rule that a breach of
covenant, once remedied, cannot be the subject of a forfeiture. It should
be possible for the tenancy to be terminated where the tenant has been
persistently late in paying rent or has been responsible for persistent
breaches of obligation.
(7) A tenant may suffer injustice as a result of the rule that a breach of
covenant which casts a “stigma” on the premises cannot be remedied
and so currently is almost certain to lead to a refusal of relief by the court.
(8) In general, the rules concerning sub-tenants, mortgagees and others
holding derivative interests in the tenancy confer insufficient protection on
those parties. This can lead not only to the uncompensated loss of
occupational, security or other rights but also to extremely late
applications for relief from holders of derivative interests which may be
prejudicial to the landlord who has forfeited.
(9) The inability of the court to grant relief to fewer than all of a number of
joint tenants is a source of potential unfairness.
THE CASE FOR REFORM
1.13 The CP was published some 20 years after the First Report identified the
problems inherent in the law of forfeiture, and ten years after the publication of a
draft Bill to give effect to its recommendations for reform. 15 Given these moves
towards reform, and the apparent general acceptance among those involved with
landlord and tenant law that there should be change, the CP did not explicitly ask
consultees to comment on the case for reform. The CP was nevertheless
premised on the basis that the “frequent criticisms” of the current law of forfeiture
rendered the need for reform axiomatic. 16
1.14 Many respondents to the CP did, however, volunteer the view that reform was
necessary, citing as the main reason the need for the clarification, simplification
and modernisation of the current law. In addition, respondents generally felt that
the reforms we proposed would properly balance the rights of the interested
parties.
13 This question, discussed at length in a series of cases, remains open: see Official
Custodian for Charities v Parway Estates Departments Ltd [1985] Ch 151; Smith v
Metropolitan City Properties [1986] 1 EGLR 52; and Billson v Residential Apartments Ltd
(No 1) [1992] 1 AC 494.
14 Law of Property Act 1925, s 146(8)-(10).
15 Landlord and Tenant Law: Termination of Tenancies Bill (1994) Law Com No 221.
16 CP, para 1.1.
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