Q&As

What can managing agents for a freeholder do with monies transferred to them by a tenant that clear service charge arrears in full, but not the interest or legal fees, without losing the right to forfeit? Is there a specific account the monies should be allocated to, and what should it be money retained as so that it is not retained as 'service charges' (eg mesne profits)?

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Published on LexisPSL on 29/01/2018

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

  • What can managing agents for a freeholder do with monies transferred to them by a tenant that clear service charge arrears in full, but not the interest or legal fees, without losing the right to forfeit? Is there a specific account the monies should be allocated to, and what should it be money retained as so that it is not retained as 'service charges' (eg mesne profits)?

What can managing agents for a freeholder do with monies transferred to them by a tenant that clear service charge arrears in full, but not the interest or legal fees, without losing the right to forfeit? Is there a specific account the monies should be allocated to, and what should it be money retained as so that it is not retained as 'service charges' (eg mesne profits)?

It is assumed first that the lease contains a clause which permitted the landlord to re-enter in the event of the breaches of covenant of which complaint is made. A modern, well-drafted lease will usually contain an express right of re-entry on the part of the landlord for the breach of any covenant contained. It is necessary however to look at the words used to determine whether they extend to the breach of which complaint is made. For the circumstances in which a right of re-entry will be implied into a lease, see Q&A: Is there an implied right for the landlord to forfeit a commercial lease in the event of a breach of a covenant by the tenant, whether a breach for non-payment of rent or otherwise?

A distinction is to be drawn between leases of residential premises and commercial premises. A right of re-entry in respect of a long residential lease cannot be exercised in respect of

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