Termination of Tenancies for Tenant Default - Law Commission

2.13 It is, however, important that tenants are fully informed of the potential
consequences of failing to comply with their obligations under the tenancy. To
achieve this objective, a tenant under a post-commencement tenancy must be
given an “explanatory statement”. This statement will explain the landlord’s right
to take termination action in response to a tenant default. A landlord may not
serve either a tenant default notice or a summary termination notice in respect of
a tenant default unless either (a) an explanatory statement has been given to the
tenant in the prescribed form and manner; or (b) the court dispenses with the
need for a statement. Ideally, the statement should be given to the tenant at the
time the tenancy is entered into.
2.14 An explanatory statement is not a pre-requisite to taking termination action in
respect of a breach of covenant in a pre-commencement tenancy. The inclusion
of a forfeiture clause or equivalent provision for re-entry in the tenancy will serve
to warn the tenant of the potential consequences of breaking the covenant in
question.
MAKING A TERMINATION CLAIM (1): TENANT DEFAULT NOTICE
2.15 Where there has been a tenant default as a result of which the landlord wishes to
make a termination claim, the landlord should give the tenant a “tenant default
notice”. This notice must set out the details of the tenant default complained of
and the response that the landlord seeks from the tenant. It may require the
tenant to remedy the tenant default, including the payment of financial
compensation. The notice must set a deadline by which any remedial action
should be completed. This deadline must be reasonable in the circumstances
and in no case can it be less than seven days after the notice has been given.
2.16 The tenant default notice must be given within six months of the day on which the
landlord first knew that the facts constituting the tenant default had occurred or
any day on which the landlord knew those facts were continuing to occur. This
“default period” may be extended by written agreement of the parties.
2.17 This time limit displaces the current doctrine of waiver. Waiver is based on the
landlord, once the right to forfeit has arisen, having to elect between forfeiture
(that is, immediate termination of the tenancy) and the continuation of the
tenancy. The commencement of forfeiture proceedings itself operates to forfeit
the tenancy. Under our recommended statutory scheme, the commencement of a
termination claim does not cause the tenancy to terminate immediately. There is
no ambivalence in the landlord asserting the existence of the tenancy (for
example, by demanding or accepting rent) following the commencement of a
termination claim. The tenancy continues to exist unless and until the court
orders otherwise.
2.18 The tenant default notice must also be given to holders of any qualifying interests
in the tenancy of which the landlord has knowledge and must be delivered to the
demised premises addressed to “The Occupier”. This is to ensure that the
information in the notice is brought to the attention of all of those who may be
affected by a termination claim.
2.19 A major purpose of the tenant default notice is to initiate negotiation between the
landlord and the tenant (and, if relevant, any qualifying interest holders). A
landlord may not make a termination claim on the ground of a tenant default
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