Forfeiting A Lease – Getting A S146 Forfeiture Notice Right (Anders v Haralambous)
Landlords wanted to end a lease for breaches of a lease (other than for rent arrears) will need to serve a notice on the tenant under section 146 of the Law of Property Act 1925. The decision in the recent case of Anders v Haralambous illustrates how important it is to get the notice right. The court decided the notice served by the landlord had not provided the correct information as to the nature of the breach and was therefore invalid.
The tenant (Ms Anders) had allowed a number of students at the language school where she worked to stay in her property. Ms Anders’ lease contained two covenants:
- 1. Not to use the premises or permit the same to be used for any purpose whatsoever other than as a self-contained private dwelling for residential purposes only.
- 2. Not to assign, underlet or part with or share possession or occupation of part only of the premises.
The freeholders wrote to advise the tenant she was in breach of her lease by sub-letting the premises in a situation of ‘multi-occupancy’.
In this case it was a requirement that the freeholder first had to obtain a final determination that there has been a breach (Commonhold and Leasehold Reform Act 2002, s 168 (CLRA). Once that had been done a s 146 notice had to be served to forfeit the lease.
The freeholder obtained their determination, and served a s 146 notice. This referred to the covenants but went on to refer to the tenant’s having sublet the premises. In fact the critical point turned out to be that the court had found in the previous proceedings the breach by the tenant was an unlawful sharing of possession rather than an unlawful subletting. This distinction turned out to be critical.
The tenant on receiving the notice applied for relief from forfeiture. Her evidence in support asserted there had been no assignment and no under letting of any part of the property; she retained legal possession and occupation of the whole of the property. Any students that had been residing at the premises had left so, to the extent that there had been any earlier breach (which she denied) this had now been remedied.
The tenant’s barrister successfully argued that the issue of whether any reasonable recipient of the s 146 notice in this case could have been in any reasonable doubt as to the particular breaches being specified was not simply an academic or technical argument. If the court had earlier determined there had been an unlawful subletting, it would be an irremediable breach and there would have been no right to relief. However the determination in this case was there had been a sharing of possession or occupation which was capable of remedy if the students were no longer sharing possession.
The lessons to be learnt are to take great care when you seek a determination from the court to make sure you ask for the correct remedy and make sure it is clarified in the terms of the judge’s order; Secondly ensure the wording of the s 146, while both referring to the covenant of which breach is complained specifically identifies the exact same breach which the court has determined; Thirdly make sure there is no ambiguity or misunderstanding on the part of a recipient as to precisely what breach has been determined against them and is now being explicitly stated in the s 146 notice; and lastly if the breach is one that is capable of being remedied, this must be stated in the s 146 notice and a period of time allowed for such remedy to take place.
Fosters solicitors specialist property litigation team are available to advise you in connection with any property issues which may arise.
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This article was produced on the 30th September 2013 by our Litigation & Dispute Resolution team for information purposes only and should not be construed or relied upon as specific legal advice.