The following Property guidance note provides comprehensive and up to date legal information covering:
The Landlord and Tenant (Covenants) Act 1995 (LT(C)A 1995) controls the liability of former tenants and their guarantors for rent and service charge after assignment of a lease. This Practice Note covers when arrears can be recovered from a former tenant or guarantor, the procedure for a s 17 notice and applications for (and the terms of) an overriding lease.
Landlords must promptly serve notice in relation to any fixed charge that has become due, or they lose their right to recover it. Former tenants and their guarantors are given the right to request an overriding lease following payment.
LT(C)A 1995, s 17 was enacted to address a significant problem experienced by former tenants and guarantors in the recession of the early 1990s. Under the old privity of contract rules, the original tenant and any former tenant who had given a direct covenant to the landlord, and their guarantors, remained liable for rent and service charge and could be called on to make payment if the current tenant fell into arrears. This could result in the former tenant or guarantor receiving a bill for several years' worth of arrears in respect of premises that had long since been assigned. The notice mechanism was intended to limit that unexpected liability, by requiring the landlord to inform the former tenant or guarantor within six months
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