Incoming tenant’s liability for pre-existing breaches
Incoming tenant’s liability for pre-existing breaches

The following Property Disputes practice note provides comprehensive and up to date legal information covering:

  • Incoming tenant’s liability for pre-existing breaches
  • Once and for all or continuing breach? A quick check guide
  • Continuing breaches
  • Assignee’s due diligence
  • Issues for the landlord
  • Is it reasonable to refuse to deal with the tenant’s application?
  • Is it reasonable to refuse consent on the basis that the tenant is in breach?
  • Can the landlord consent and preserve the right to forfeit in respect of the breach?

While this Practice Note primarily covers commercial property matters, it also touches on residential considerations.

As from completion of the assignment an incoming tenant is:

  1. (in the case of an old tenancy) bound by all tenant covenants that ‘touch and concern’ the land, and

  2. (in the case of a new tenancy) bound by all tenant covenants except those that:

    1. immediately before the assignment did not bind the assignor

    2. are expressed to be personal to any other person, or

    3. are unenforceable for want of registration under the Land Registration Act 2002 or the Land Charges Act 1972

Assignees are not directly liable for breaches of tenant covenants committed before the assignment. For old tenancies this proposition is derived from case law. For new tenancies, the LT(C)A 1995, s 23(1) expressly provides that assignees have no liability in relation to any time falling before the assignment. However, taking an assignment of a lease with outstanding breaches of tenant covenant can have severe consequences. The position depends on whether the breach is ‘once and for all’ or ‘continuing’.

Once and for all or continuing breach? A quick check guide

Nature of breach Continuing/once and for all
Non payment of rentOnce and for all
Unauthorised assignmentOnce and for all
Unauthorised alterationsOnce and for all
Unauthorised sub-lettingOnce and for all
Other unlawful sharing of occupationContinuing
Illegal or immoral useContinuing (but
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