Termination of Tenancies for Tenant Default - Law Commission

the incoming tenant of the assigned part (as well as the outgoing tenant of that
part, if he or she has retained any other part of the demised premises). 47
3.63 Severance of the reversion occurs where the landlord assigns part of the
reversionary interest, that is the interest that will revert to the landlord when the
tenancy ends or is brought to an end, 48 to another person (or a number of parts to
a number of people). The result is that while there appear to be two or more
landlords, as a matter of law there is still just one tenancy and one tenant. 49
Current law
3.64 In the case of tenancies granted on or after 1 January 1996, 50 a landlord’s right to
re-enter demised premises in respect of breach of covenant by an assignee of
part is limited to a right to re-enter that part only. 51 In the case of other tenancies,
the law is less clear and may depend on whether the breach of covenant is nonpayment
of rent or some other breach. 52
3.65 Where the reversion has been severed, statute governs how the benefit and
burden of the covenants in the tenancy are apportioned between the different
landlords. 53 Where breach of a covenant gives rise to a right of re-entry, each
landlord may re-enter only that part of the land to which he or she holds the
reversion. 54
The CP’s provisional proposal
3.66 The CP, following the First Report, argued that severance of a tenancy should
not result in the tenant of part being liable to a termination claim where the tenant
default was committed by the tenant of another part. We therefore proposed that,
if parts of the premises originally held as a whole under a single tenancy have
been the subject of separate assignments to different people, a tenant of any one
part should be at risk of termination proceedings only in respect of tenant default
occurring in relation to that part. 55 As the CP noted, assignment of part of the
demised premises is usually prohibited, so a landlord would be able to take
action under the scheme against both the tenant and any unlawful assignees.
3.67 The possibility of severance of the reversion was not discussed in the CP.
47 It must be borne in mind that “an assignment of separate parts of leasehold property to
separate assignees for the residue of the term is now-a-days tolerably rare…” (Lester v
Ridd [1990] 2 QB 430, 440, per Dillon LJ).
48 Also referred to as the reversion expectant on the determination of the tenancy.
49 It is immaterial whether the term of the tenancy is held by more than one person as “joint
tenants” as they are, in law, considered both individually and collectively to be “the tenant”.
50 Otherwise than in pursuance of an agreement entered into, or an order of a court made,
before that date: Landlord and Tenant (Covenants) Act 1995, s 1(1) and (3).
51 Landlord and Tenant (Covenants) Act 1995, s 21(1).
52 Woodfall’s Landlord and Tenant (Reprint 51, March 2002) para 17.062, n 3.
53 Law of Property Act 1925, s 140; Landlord and Tenant (Covenants) Act 1995, s 21.
54 Law of Property Act 1925, s 140(1).
55 CP, paras 4.17 to 4.18 and 12.4(8); First Report, paras 5.36 to 5.38, recommendation (19).
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