Termination of Tenancies for Tenant Default - Law Commission

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20 Preliminary 196 Landlord and Tenant (Termination of Tenancies) Bill Schedule 2 — Tenant default: special cases SCHEDULE 2 Section 2(4) TENANT DEFAULT: SPECIAL CASES 1 This Schedule applies for the purposes of section 2. Covenants in long leases of dwellings 2 The Commonhold and Leasehold Reform Act 2002 (c. 15) is amended as follows. 3 In section 167 (the cross-heading above which becomes “Termination of long leases of dwellings”), for subsection (1) substitute— “(1) In the case of a long lease of a dwelling, a failure by a tenant to pay an amount consisting of rent, service charges or administration charges (or a combination of them) (“the unpaid amount”) is not to be treated for the purposes of section 2 of the 2006 Act as a breach of a covenant or condition of the lease unless and until the unpaid amount— (a) exceeds the prescribed sum, or (b) consists of or includes an amount which has been payable for more than a prescribed period.”. 4 (1) In section 168 (the title to which becomes “Breach of covenant other than failure to pay rent, etc.”) for subsection (1) substitute— “(1) A breach by a tenant of a covenant or condition of a long lease of a dwelling is not to be treated for the purposes of section 2 of the 2006 Act as a breach by him of that covenant or condition unless and until subsection (2) is satisfied. (1A) This section does not apply in relation to a failure by a tenant to pay an amount coming within section 167(1).”. (2) In subsection (3) of that section, for “a notice may not be served by virtue of subsection (2)(a) or (c) until” substitute “in a case within subsection (2)(a) or (c) the default period for the purposes of section 4 or 18 of the 2006 Act does not begin until”. 5 In section 169 (section 168: supplementary), omit subsections (6) and (7). Payment of rent: tenancies other than long leases of dwellings 6 (1) A covenant to make a payment of rent is to be treated as breached only if— (a) the payment is not made on or before the last payment day, and (b) where the tenancy expressly requires a formal demand for the payment, a formal demand for it is made. (2) The last payment day is the last day of the period of 21 days beginning with the day on which the payment first becomes due. (3) But in the case of a post-commencement tenancy which specifies a different day for the purposes of this paragraph, the last payment day is that day. 5 10 15 20 25 30 35 40
Landlord and Tenant (Termination of Tenancies) Bill Schedule 2 — Tenant default: special cases (4) And if, in the case of a pre-commencement tenancy, a provision of the tenancy or implied right would, but for section 1, entitle the landlord to forfeit the tenancy on the ground of the failure to make the payment, the last payment day is the day before that on which the landlord would become so entitled. (5) This paragraph does not apply to a covenant in a long lease of a dwelling. (6) The reference to a long lease of a dwelling is to be read with section 166 of the Commonhold and Leasehold Reform Act 2002 (c. 15) (duty of landlord to notify tenant that rent due). Disclaimer of title 7 A breach of an implied covenant not to deny or disclaim the landlord’s title is not a tenant default. Assignment 8 (1) This paragraph applies where premises demised by a tenancy are assigned in breach of a covenant of the tenancy. (2) If the assignment is of the whole of the demised premises, the breach is to be treated as a breach by the person who is the tenant as a result of the assignment. (3) If the assignment is of part only of the demised premises, the breach is to be treated as a breach by the person who is the tenant of the part as a result of the assignment (as well as being a breach by the tenant who made the assignment). Manner of giving a notice to a person SCHEDULE 3 Sections 4(7), 18(6) and 32(4) GIVING AND DELIVERING NOTICES 1 (1) A notice under this Act may be given to an individual by— (a) handing it to him, (b) sending it by registered post to his proper address, (c) leaving it at his proper address, or (d) sending the text of it to him electronically. (2) A notice under this Act may be given to a body corporate by— (a) handing it to a director or secretary of the body, (b) sending it by registered post to the body’s proper address, (c) leaving it at the body’s proper address, or (d) sending the text of it to a director or secretary of the body electronically. (3) A notice is not to be regarded as given under sub-paragraph (1)(d) or (2)(d) unless the text of the notice is— 197 21 5 10 15 20 25 30 35
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The Law Commission (LAW COM No 303)
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THE LAW COMMISSION TERMINATION OF T
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Consultation 40 Reform recommendati
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Consultation 68 Reform recommendati
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(7) Any other matter 102 THE LEASEH
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Restrictions on using the summary t
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where appropriate using the various
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etains an equitable jurisdiction to
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of the law”. A number of leading
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procedure, the tenancy will not ter
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Part 6 examines the position of tho
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2.7 When a tenancy is terminated un
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unless valid notices have been give
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Transfer order 2.30 Only a qualifyi
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2.41 Where a landlord serves a summ
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PART 3 TENANT DEFAULT INTRODUCTION
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scheme by characterising the obliga
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to include such clauses and to allo
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perform their obligations under the
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SPECIAL CASES OF TENANT DEFAULT Den
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Assignment 3.51 Most tenancies cont
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the incoming tenant of the assigned
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often stipulate that a right to for
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insolvency process having the same
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3.93 In addition, section 81 of the
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1996 and Chapter 5 of the Commonhol
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covenant is non-payment of rent, a
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Reform recommendations 3.132 We rec
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The CP’s provisional proposals 4.
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do so by delaying until the default
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it is unlikely that a tenant would
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(4) give the date by which action m
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Specify the time for remedial actio
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(3) must specify in respect of the
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agreement (subject to a maximum ext
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underlying principle that qualifyin
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all tenancies granted for seven or
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4.92 As we intend to retain the sam
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PART 5 MAKING A TERMINATION CLAIM (
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e set off against the cost of carry
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future liabilities under the terms
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(6) where a tenancy comes to an end
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5.43 During the period of the stay,
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described. During the consultation
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termination of a tenancy under the
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5.69 We recommend that the proceeds
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5.75 The First Report therefore rec
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making any order under the scheme t
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5.93 The CP provisionally proposed
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of the parties. 78 Proportionality
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past conduct of the parties. This m
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(7) Any other matter 5.127 It would
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PART 6 QUALIFYING INTERESTS INTRODU
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1925 extends to lessees, under-less
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according to the lease without any
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interchangeably by the courts, by s
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entitled to use the scheme to prote
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(2) if not in occupation, a right w
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property. The simplest means of ens
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(1) What should the landlord be exp
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claim with the court for service on
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have to apply for relief, which, if
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qualified covenant not to assign th
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that it is both appropriate and pro
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order unless the person who holds t
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CP suggested, close down any potent
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PART 7 SUMMARY TERMINATION PROCEDUR
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action rather than by physical re-e
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Paper was published. 22 It proposed
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7.28 It was hoped that this recomme
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equirement for service of a notice
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7.51 The final restriction was: It
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in the sub-tenant being removed fro
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Page 150 and 151: 7.71 The summary termination proced
Page 152 and 153: Repairing covenants 7.79 The repair
Page 154 and 155: 7.88 We do not wish to discourage t
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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 200 and 201: 22 Proper address 198 Landlord and
Page 204 and 205: 26 Settled Land Act 1925 (c. 18) 4
Page 210 and 211: 32 Protection from Eviction Act 197
Page 212 and 213: 34 Landlord and Tenant Act 1985 (c.
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
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