Termination of Tenancies for Tenant Default - Law Commission

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future liabilities under the terms of the tenancy. This would normally operate to release sureties and guarantors from their contractual liabilities to the landlord, although each case would depend upon the relevant contract between the surety or guarantor, the landlord and the tenant. Consultation 5.24 The principle that a termination order should have the effect of terminating the tenancy proved uncontroversial. At a meeting, HM Land Registry made the important point that once they were presented with a termination order they would be able to close the title of the relevant tenancy immediately as there would be no possibility of the tenancy being revived retrospectively. 16 5.25 Consultees were in general sympathetic to the policy that the court should normally order the tenant to give up possession on the same day as the tenancy terminates. Such dissent as there was to this proposal concerned the extent of the court’s discretion to postpone the date of termination once the landlord had satisfied the court that termination should be ordered. 5.26 Four respondents suggested a maximum postponement of four weeks. 17 Two respondents felt that the proposal lacked flexibility and that the length of the respite period should vary according to the circumstances. The Judges of the Chancery Division argued that the provisionally proposed six-week period “should be capable of extension in cases of special hardship or where it is not practicable for the tenant to vacate within that period”. Greater flexibility was also advocated by Slaughter and May, who contended that the parties should be able to agree to alter the respite period or should have the power to ask the court to alter it. Reform recommendations 5.27 Save that we no longer intend to refer to termination orders as “absolute” (as we do not think that this adds anything to the description of the order), we confirm the provisional proposal that a termination order should have the effect of terminating the tenancy on the date specified in the order. We also intend to proceed with the CP’s provisional proposal that this date should, as a general rule, be no later than six weeks after the date that the order is made. We are, however, persuaded by those consultation responses urging more flexibility in cases where exceptional hardship would be caused by a strict application of a six-week limit. We therefore recommend that the court may set a longer period in such cases, subject to a maximum of 12 weeks. 5.28 We also intend to proceed on the basis that a distinction must be drawn between the termination of the tenancy and the landlord taking possession of the demised premises. We recognise that in the overwhelming majority of cases the landlord will be entitled to possession of the premises on the termination of the tenancy and will want to take possession as soon as the tenancy comes to an end. 16 Under current law, HM Land Registry delays closing title for a period after a forfeiture has been effected to take account of the possibility that the tenant or a derivative interest holder may be granted relief which has the effect of reviving the tenancy. 17 Peter Smith of the University of Reading, Brian Jones & Associates, English Partnerships and Lovells. 80
However, there may be circumstances in which the landlord does not want an order for possession or it is not appropriate for the court to grant one. 5.29 It should be stressed that where a termination order is made, the tenancy will terminate on the specified date whether or not the tenant does in fact vacate the demised premises. A tenant who continues in occupation after the tenancy has terminated will be liable to the landlord for damages as compensation for the use and occupation of the premises. We therefore recommend that a termination order may provide that, pending recovery of possession, the tenant must pay the landlord a specified sum or sums of money. This recommendation will, we hope, reduce the need for a landlord to return to court to recover damages where there is some delay in actually recovering possession. 5.30 We recommend that a court should be able to make an order for the termination of the tenancy (a termination order). 18 5.31 We recommend that: (1) a termination order must specify the day on which the tenancy is to come to an end; 19 (2) that day may not be more than six weeks after the day the order is made, 20 save where the court is satisfied that there would be exceptional hardship, in which case it may not be more than twelve weeks after the day on which the order is made; 21 (3) a termination claim may include a claim for possession of the demised premises on the termination of a tenancy; 22 (4) a termination order may provide that on the termination of the tenancy the landlord is entitled to possession of the demised premises; 23 (5) where a termination order provides that on the termination of the tenancy the landlord is entitled to possession of the demised premises, it may further provide that, pending recovery of possession by the landlord, the tenant is to make a specified payment to the landlord; 24 and 18 Draft Bill, cl 9(2)(a). 19 Draft Bill, cl 12(1). 20 Draft Bill, cl 12(2). 21 Draft Bill, cl 12(3). 22 Draft Bill, cl 3(4). 23 Draft Bill, cl 12(6)(a). 24 Draft Bill, cl 12(6)(b). 81
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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
Page 32 and 33: PART 3 TENANT DEFAULT INTRODUCTION
Page 34 and 35: scheme by characterising the obliga
Page 36 and 37: to include such clauses and to allo
Page 38 and 39: perform their obligations under the
Page 40 and 41: SPECIAL CASES OF TENANT DEFAULT Den
Page 42 and 43: Assignment 3.51 Most tenancies cont
Page 44 and 45: the incoming tenant of the assigned
Page 46 and 47: often stipulate that a right to for
Page 48 and 49: insolvency process having the same
Page 50 and 51: 3.93 In addition, section 81 of the
Page 52 and 53: 1996 and Chapter 5 of the Commonhol
Page 54 and 55: covenant is non-payment of rent, a
Page 56 and 57: Reform recommendations 3.132 We rec
Page 58 and 59: The CP’s provisional proposals 4.
Page 60 and 61: do so by delaying until the default
Page 62 and 63: it is unlikely that a tenant would
Page 64 and 65: (4) give the date by which action m
Page 66 and 67: Specify the time for remedial actio
Page 68 and 69: (3) must specify in respect of the
Page 70 and 71: agreement (subject to a maximum ext
Page 72 and 73: underlying principle that qualifyin
Page 74 and 75: all tenancies granted for seven or
Page 76 and 77: 4.92 As we intend to retain the sam
Page 78 and 79: PART 5 MAKING A TERMINATION CLAIM (
Page 80 and 81: e set off against the cost of carry
Page 84 and 85: (6) where a tenancy comes to an end
Page 86 and 87: 5.43 During the period of the stay,
Page 88 and 89: described. During the consultation
Page 90 and 91: termination of a tenancy under the
Page 92 and 93: 5.69 We recommend that the proceeds
Page 94 and 95: 5.75 The First Report therefore rec
Page 96 and 97: making any order under the scheme t
Page 98 and 99: 5.93 The CP provisionally proposed
Page 100 and 101: of the parties. 78 Proportionality
Page 102 and 103: past conduct of the parties. This m
Page 104 and 105: (7) Any other matter 5.127 It would
Page 106 and 107: PART 6 QUALIFYING INTERESTS INTRODU
Page 108 and 109: 1925 extends to lessees, under-less
Page 110 and 111: according to the lease without any
Page 112 and 113: interchangeably by the courts, by s
Page 114 and 115: entitled to use the scheme to prote
Page 116 and 117: (2) if not in occupation, a right w
Page 118 and 119: property. The simplest means of ens
Page 120 and 121: (1) What should the landlord be exp
Page 122 and 123: claim with the court for service on
Page 124 and 125: have to apply for relief, which, if
Page 126 and 127: qualified covenant not to assign th
Page 128 and 129: that it is both appropriate and pro
Page 130 and 131: 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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termination claim, the summary term
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7.71 The summary termination proced
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Repairing covenants 7.79 The repair
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7.88 We do not wish to discourage t
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dispensation power will only be exe
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to costs under the summary terminat
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7.112 We recommend that: specifying
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PART 8 LIST OF RECOMMENDATIONS PART
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8.13 We recommend that the Insolven
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(a) the day after the deadline spec
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(6) if the court dismisses an appli
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8.39 We recommend that, where a ten
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8.49 We recommend that: (1) where t
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(4) the default is a breach of cove
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APPENDIX A DRAFT LANDLORD AND TENAN
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ii Interpretation, etc. 28 Meaning
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2 178 Landlord and Tenant (Terminat
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4 180 Landlord and Tenant (Terminat
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6 (8) This section is subject to se
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8 13 Remedial order 184 Landlord an
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10 186 Landlord and Tenant (Termina
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16 30 Meaning of “qualifying inte
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20 Preliminary 196 Landlord and Ten
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22 Proper address 198 Landlord and
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26 Settled Land Act 1925 (c. 18) 4
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32 Protection from Eviction Act 197
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34 Landlord and Tenant Act 1985 (c.
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38 (2) After that subsection, inser
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40 Settled Land Act 1925 (c. 18)—
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APPENDIX B EXPLANATORY NOTES TO THE
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landlord assigns the reversion, he
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33. For example, if a tenant defaul
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53. Subsection (5), although broadl
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If the court is satisfied of this,
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91. Subsection (4) mitigates the ef
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108. Under the current law, forfeit
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126. Subsection (2) applies where t
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145. Subsection (1)(d) includes wit
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unless he or she obtains a court or
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person who is the tenant as a resul
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termination notice (except where th
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Robin Sinclair, Solicitor Slaughter
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