Termination of Tenancies for Tenant Default - Law Commission

enter has arisen. 14 The landlord’s knowledge (or ignorance) of the law is
therefore irrelevant to the question of whether the landlord had knowledge of the
breach.
4.24 On any definition, knowledge for the purpose of defining the start of the default
period must include “actual” knowledge. That should not, however, be interpreted
as meaning that the landlord must know that, as a matter of law, a tenant default
has occurred. Rather, the landlord must have knowledge of the relevant facts that
constitute the alleged tenant default. A landlord’s knowledge of the statutory
scheme will therefore be irrelevant to the question of whether the landlord had
knowledge of the tenant default complained of.
4.25 Although we do not recommend that the types of knowledge that will apply for the
purposes of the scheme should extend to constructive knowledge, we do believe
that there is a role for the related concept of what is sometimes called “Nelsonian
blindness”. This is where a court rejects a landlord’s assertion that he or she did
not have knowledge of the facts comprising the breach because those facts were
so gross and obvious that the landlord must have known or, at the very least,
have chosen to ignore them. In such a case, the landlord is not being fixed with
constructive knowledge but with actual knowledge, despite the landlord’s
assertion to the contrary. We do not need to make express provision to
accommodate this situation as it is part of the general law.
Imputed knowledge
4.26 Under the doctrine of waiver, a third party’s knowledge can be imputed to the
landlord in certain circumstances. Knowledge acquired by an employee or agent
of the landlord will be imputed to the landlord where it is part of the employee or
agent’s duty to report the matter in question to the landlord. 15 Where there is no
such duty, knowledge of any breach will not be imputed.
4.27 We appreciate the practicality of this principle, as it is often the case that
landlords will delegate the day-to-day management of their properties to
employees and agents. We therefore intend to put this principle on a statutory
footing by incorporating it in our scheme.
Extending the default period
4.28 We intend to proceed with our provisional proposal that parties should be free to
extend the default period by agreement. We do not wish to raise the prospect of
disputes arising over whether an extension has in fact been agreed, and
therefore recommend that any agreement to extend the default period must be in
writing or evidenced in writing. We do not propose any more onerous formality
requirements as we feel that they would invite disputes and create the potential
for litigation. We also recommend that any extension should be agreed before the
expiry of the default period (as extended by any previous agreement). In practice
14 David Blackstone Ltd v Burnetts (West End) Ltd [1973] 1 WLR 1487, quoted with approval
by Aldous LJ in Cornillie v Saha and Bradford & Bingley (1996) 72 P&CR 147, 156.
15 Metropolitan Properties Co v Cordery (1980) 39 P&CR 10: the knowledge of a porter in a
block of flats that an unauthorised sub-letting had taken place was imputed to the landlord.
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