Termination of Tenancies for Tenant Default - Law Commission

Parliament. However, since this power is strictly limited, clause 33(2) provides for
a lower level of scrutiny (though see the notes on clause 33 in this respect).
169. Note also the amendments made by Schedule 6 to some of the enactments
mentioned in this Schedule.
Schedule 2: Tenant default: special cases
170. This clause makes certain exceptions and qualifications to the definition of
tenant default contained in clause 2(1).
171. Paragraphs 2 to 5 amend sections 167, 168 and 169 of the Commonhold
and Leasehold Reform Act 2002 to take account of the Bill.
172. Paragraph 6 makes special provision for determining when a covenant to
pay rent is to be treated as breached. The question whether a breach of the
covenant is a tenant default will then depend on whether or not the covenant is
excepted under clause 2.
173. Paragraph 6 does not apply in relation to a long lease of a dwelling (as
defined by section 38 of the Landlord and Tenant Act 1985) by virtue of subparagraph
(5). It allows for payment of rent within any grace period provided for in
the tenancy. It is usually the case that the tenancy will provide that the tenant
must pay rent within so many days of the rent falling due. In the absence of any
such provision, the covenant will be treated as breached if the rent is not paid
within a period of 21 days from the date the rent becomes due.
174. Sub-paragraph (1) is prompted by the common law principle that nonpayment
of rent does not give rise to a forfeiture unless a formal demand is made
for the rent or the tenancy (as is often the case) dispenses with the need for such
a demand. Under the scheme, no formal demand is necessary unless it is
expressly required by the terms of the tenancy.
175. Paragraph 7 deals with the condition implied by law into every tenancy that
the tenant must not prejudice his landlord’s title by denying or disclaiming it.
Breach of this implied condition will not be a tenant default and so a landlord will
not be able to take termination action in respect of it. However, if the tenancy
contains an express covenant not to deny the landlord’s title, breach of that
covenant will be a tenant default (unless the covenant is excepted).
176. Paragraph 8 makes special provision for unlawful assignments (that is,
assignments made in breach of covenant).
177. Where there is an unlawful assignment, the first step will be to determine
under clause 2 whether breach of the covenant against assignment is a tenant
default. Assuming that it is, the question then is who committed the breach.
Clause 2 refers to breach by the tenant (or a person who has guaranteed the
tenant’s obligations under the tenancy). By clause 29(3), “tenant” means the
current tenant, who did not of course commit the breach. The landlord will not be
entitled (on an assignment of the whole) to take termination action against the
former tenant who was responsible for the assignment for the very reason that he
or she is no longer the tenant. Sub-paragraph (2) therefore provides that the
breach of the covenant against assignment is to be treated as a breach by the
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