Q&As

The assignee of a mixed use premises vacated the commercial part of the premises over two years before the end of the term, leaving substantial rent arrears, but left residential tenants occupying the residential parts of the premises. The landlord has brought claims for the outstanding rent as it has fallen due and pursued the guarantor of the assignee, serving section 17 notices on the guarantor under the Landlord and Tenant (Covenants) Act 1995, but now wishes to recover possession: (1) has the landlord waived his right to forfeit by serving the section 17 notices?; (2) does the landlord need to serve a section 146 notice on the assignee before bringing forfeiture proceedings?; (3) does any notice need to be served on the residential tenants?

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Published on LexisPSL on 16/08/2017

The following Property Disputes Q&A provides comprehensive and up to date legal information covering:

  • The assignee of a mixed use premises vacated the commercial part of the premises over two years before the end of the term, leaving substantial rent arrears, but left residential tenants occupying the residential parts of the premises. The landlord has brought claims for the outstanding rent as it has fallen due and pursued the guarantor of the assignee, serving section 17 notices on the guarantor under the Landlord and Tenant (Covenants) Act 1995, but now wishes to recover possession: (1) has the landlord waived his right to forfeit by serving the section 17 notices?; (2) does the landlord need to serve a section 146 notice on the assignee before bringing forfeiture proceedings?; (3) does any notice need to be served on the residential tenants?
  • Waiver
  • Forfeiture

Waiver

A landlord will waive the right to forfeit, if in full knowledge of a breach of covenant, he takes steps which unequivocally confirms the existence of the lease. Examples include demanding and accepting rent, and it is likely that the service of a section 17 notice on a former tenant and guarantor would also amount to a waiver of the right to forfeit. If so, as the non-payment of rent is a once and for all breach of covenant, the landlord would need to wait for a fresh right to forfeit to accrue, such as for the non-payment of the next rent due, before steps could be taken to forfeit.

For further guidance, see Practice Note: Forfeiture of a lease.

One point to note, is that a party which is served with a section 17 notice and who pays the sums claimed in full, is entitled to call for an overriding lease. Such a request must be made to the landlord in writing within 12 months of the payment being made. For further guidance, see Practice Note: Former tenants, guarantors and overriding leases.

Forfeiture

As the property consists of residential parts, unless the landlord is completely certain that all residential occupie

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