Repairs Act 1983 and Case Law - Assignment Example

Research Exercise Two A In regard to the lease Bakewell Ltd has with Ahmed, the original lease does contain the forfeiture clause for re-entry, including the provisio that Ahmed is to obtain the landlord’s prior written consent before subletting, which has not been done in this case. The existences of these clauses in the agreement will work in Bakewell’s favor in the event the matter is brought for dispute before the Courts. However, there is a real danger that the right to forfeit may have been lost, since the tenant can claim that the notice sent out by Bakewell’s surveyors for advance payment of the next quarter’s rent constitutes a waiver of the forfeiture clause. Acceptance of rent in advance is in particular, a waiver of the right to forfeiture and re-entry, as established in the case of Windmill Investments (London) Ltd. v Milano Restaurant Ltd.*1 especially since in this case, the issue at stake is not non payment of primary rents due under the lease agreement to Bakewell, but rather the question of the unauthorized rent Ahmed has been collecting from Zoe. Under Section 146(1) of the Law of Property Act of 1925, a landlord may only re-enter or forfeit the lease if (a) the lease reserves this right, which it does in Bakewell’s case (b) the lease is subject to conditions which have been violated; in Bakewell’s case the condition was that no subletting was permissible, which has been violated and (c) if tenant denies landlord’s title, which Ahmed has done by subletting the premises. However, the right to take action on forfeiture will be contingent upon Bakewell serving a notice upon Ahmed and not doing any act that could constitute a recognition of the lease.*2 In Bakewell’s case, it is true that after having gained knowledge of Ahmed’s violation of the lease, the notice for advance rent payment has been sent out. This demand for rent is a signal of recognition of the lease and therefore it is possible that Bakewell may have forfeited his right to re-enter the premises. This position was supported in the case of David Blackstone Ltd. v Burnett.*3 However, this does not mean that Bakewell has forfeited the right to re-entry for an indeterminate period of time. It can still issue notice to Ahmed of his violation and as per the provisions of Section 146(i)*4, notice can be sent out to Ahmed specifying the details breach and requiring him to terminate the sub lease immediately and make compensation for the breach by way of rents collected from sub lessee. The notice must also specify a reasonable period of time for Ahmed to remedy and rectify the breach. In the event the breach continues, the waiver on forfeit will not constitute a bar on Bakewell re-entering the premises, after the period of time stipulated in the notice of breach of lease terms ends and in the event that Ahmed does not take corrective steps during this period. The limitation of waiver on continuing breaches was also established in the case of New River Co. Ltd. v Crumpton.*5 It is only in the event of non payment of rent that a landlord can forcibly re-enter the premises on an immediate basis.*6 Other issues such as subletting will require the issue of notices*7 and Bakewell must wait for an appropriate period to provide Ahmed the opportunity to take remedial action. Since Ahmed has been paying his rents, the major issue involved here is the issue of unauthorized sub letting, therefore Bakewell must immediately service notice on Ahmed about the breach of the lease terms. Unless and until Bakewell services notice on Ahmed, the right to forfeit will not be enforceable*8. Since Bakewell has specified in the contract that sub letting is not to be done without the landlord’s permission, the agreement is a “qualified” covenant, however the Land Lord and Tenant Act of 1988 states that it is the duty of the landlord to give his consent unless there are reasonable grounds for his refusal. Since the property that has been sub let is not in a residential area but is a commercial property and the sub lessee is also carrying out a commercial courier service, Section 19(1) of the Landlord and Tenant Act of 1927 will apply in this case, which states that consent must not be unreasonably withheld. Therefore at best, Bakewell can take action to recover rents due from Zoe through Ahmed. It is only when Bakewell is seen to be acting reasonably under Section 19(1) of the Land and Tenant Act that he will be eligible for an authorized guarantee agreement, as laid out in the case of Wallis Fashion Group Ltd v CGU Life Assurance Ltd.*9 In this case, the assignment of the lease to Zeo constitutes a violation of the original lease agreement between Bakewell and Ahmed and therefore, both Ahmed and Zeo will then have joint liability. However, Bakewell cannot take action directly against Zeo but will have to work through Ahmed, so that he can secure an authorized guarantor agreement. Bakewell can demand such an agreement as a condition for his agreement to the sublease*10. However, this is the extent of the action that Bakewell can take on Zoe. The fact that the head landlord cannot enforce or act upon any of the provisions of the sub lease was laid out in the case of Amsprop Trading Ltd. v Harris Distribution Ltd.*11 A sub tenant is not liable on positive covenants on the head lease, but can be held liable on restrictive covenants according to Section 3(5) of the LTCA, as established in the case of Hall v Ewin.*12 Bakewell must deal with Zeo through Ahmed and secure the rents already paid to Ahmed on the premises, as well as the guarantee of future payments if the sub lease is to be expected to continue. The privity of the contract between Blackwell and Ahmed means that Ahmed remains liable on all the covenants and Bakewell’s actions can best be directed against him, since he is the direct violator of the lease in the first place.*13 Both Ahmed and Zeo will have room for relief from forfeiture under Section 146 of the Law of Property Act of 1925, since this section mandates the serving of a notice and allowance for a reasonable period of time within which to remedy the breach that has arisen. Breaches of negative covenants and relief of forfeiture were taken up in the cases of Scala House & District Property Co. Ltd. v Forbes*14 and Savva v Hussain.*15 Section 146 of the land and property Act includes the provision for unfettered relief that may be granted to the tenants for relief from forfeiture and this will be a matter for the Court to exercise its discretion. An example of this may be seen in the case of Hyman v Rose,*16 wherein this power of the Court to grant unfettered relief as it sees fit was established. Zeo in particular, as the sub tenant who is not entirely the guilty party, will be eligible for relief under Section 146(4) of the Land and Property Act, especially if she has paid a deposit and rents regularly to Ahmed. (1200 words) A (2) The Leasehold property repairs Act of 1938 imposes limitations upon a landlord in claiming damages due for repairs to his property during the term of tenancy and holds good in cases of leases not less then a seven year period. However in order to serve a notice for damages for repairs or a claim for forfeiture under Section 146 of the Land and property Act, there must be at least a three year period left to go. Moreover, the tenant’s obligation to clean and maintain the premises in good condition, so that it can be returned at the end of the lease in the same condition as received, are not covered under the Repair Act, even if they form part of the covenant between lessee and lessor. Any damages for dilapidation that will have to be incurred by the lessor are also not covered under the act but there is a provision for recovery of such damages at the discretion of the Courts, provided that a notice is served on the lessee under Section 1(2) of the Repair Act. Furthermore, the landlord must also obtain the Court’s permission before he can proceed to recover damages or take any action for failure to repair the premises. Without such Court permission, no action can be taken against the lesses, and the Lessor will have to clearly set out sufficient grounds for the cause of action and also establish conclusively that such action is necessary, either to prevent further substantial damages to the property or other similar reasons as identified by Michelle Hoare*17. A landlord can serve a notice of a tenant’s breach of his/her repairing covenant under Section 146 of the Land and property Act, but if the tenant serves a counter notice, the landlord is required*18 to seek the permission of the Court before taking action. While there are only a sprinkling of cases that have invoked the provisions of the repairs Act of 1938, two recent cases are significant. In the case of Smith v SPaul,*19 a mortgagee tried to claim that the provisions of s.146 of the Law of Property Act did not apply to him since he was a mortgagee and not the lessee. The Court ruled that the mortgagee was not entitled to the benefits of the Leasehold Property repairs Act and that the Lessor was not required to seek the permission of the Court under Section 1(3) to take action for possession. In another case of Landmaster properties Ltd v Thackerey,*20 the provisions of Section 1(3) requiring the service of notice about repairs before taking action on possession was duly adhered to and leave was given to proceed for forfeiture of the lease and claims for damages. However, a dispute arose in this case in reference to Section 1(5) of the Repairs Act, which dealt with the time that needed to be provided to the lessor to prove his case based upon which the court could grant leave for proceedings on damages and forfeiture. The issue at dispute was whether the date of grant of lessor’s application was the correct date or whether it was the date when the hearing took place before the court. Since there is no clear indication in the Act, the Court held that it must be the date of the hearing, since Parliament would have clearly qualified the clause if an earlier date had been intended. (565 words) B. Research Strategy: In order to fully understand the implications of obligations under covenants, I first examined the relevant provisions of the LPA 1925 and the Landlord and Tenant (Covenant) Act of 1995, which helped me to identify Sections 146 of the Land Property Act and Sections 3 and 19 of the Land and Tenant Act might be the most relevant sections that may be applicable in this case. I also found the books on Land Law by Royle and Sexton useful in gaining a broad picture of the issues involved. In order to examine relevant cases where these provisions may have been applied, I conducted a search on Westlaw under “forfeiture of lease” and was able to pull up several cases such as Windmill Investments v Milano, David Blackstone v Burnett, Expert Clothing v Hillgate House. Upon reading the cases, I found that the Clothing case may not be relevant for this report, because it deals with different issues. Moreover, since this case involves a breach of a positive covenant, the tenants were in a somewhat different position from the violators in this case. However, sSince the issue of waiver of forfeiture did arise in this case, I also searched Westlaw under “continuing breaches” and was able to find the case of new River Co v Crumpton which was significant for this case. I then sought additional help by searching for relevant articles that may be available on the subject of forfeiture of lease and found the article: The Future of Forfeiture by Stuart Bridge, which clarified the guidelines laid out within the body of the Acts. While examining the rights of the subtenants, I decided to examine case law that had invoked the provisions of Section 146 of LPA. Accordingly I searched for “S.146 LPA+ case law” and was able to find several cases listed, including Rugby School Governors v Tannahill, Scala House and District property v Forbes, Hyman v Rose and Savva v Hussain. I discovered that the Hyman case would be particularly relevant form the view point of relief that could be handed down to Zoe by the courts. I did not include the Rugby Hill case since I did not find it completely relevant to the scenario existing in the Bakewell case. However, the other cases were useful in establishing the rights of the tenants and sub tenants to plead for relief from forfeiture and since this was important from the point of view of formulating the appropriate strategy for Bakewell to pursue, I decided to include these cases in my report. I found the Scala case particularly useful, because it discusses several cases on intermediate breach of lease and especially those dealing with forfeiture. I read all the cases cited in the Scala judgment and they helped me to get a better understanding of the issues involved in forfeiture. For the question on the repairs Act, I first examined the Act carefully and identified the relevant provisions it contained. In gaining an idea of the scope of the Act, I conducted a search under “repairs Act 1938+provisions” and was able to pull up the article by Michelle Hoare at the Hardwicke Building site which I found very useful in gaining an idea of the provisions of the Act. I also discovered that it has is not often the subject of litigation. However, in order to examine any relevant case law that may exist, I conducted a search under “repairs Act 1983+case law” and was able to find brief commentaries of two recent cases that have come up in the Courts where the provisions of the Repairs Act were invoked. These were the cases of Smith v SPaul and Landmaster properties v Thackerey, which raised Sections 1(3) and 1(5) of the Act. Since these are recent cases and have brought victory to the landlords, I felt that they were significant and included them in my report. (648 words) Bibliography * Amsprop Trading Ltd. v Harris Distribution Ltd. [1997] 1 W.L.R. 1025 * Bridge, Stuart, The Future for Forfeiture. Law Commission Article. [Online] Available at: http://www.pla.org.uk/Resources/NotesBRIDGEedited.html * Commentary on Smith v SPaul (2002) EWCA Civ 1830 available at: http://www.oup.com/uk/booksites/content/0199272956/resources/cases/12976989/leaseact1938_01.pdf * Commentary on Landmaster properties Ltd v Thackerey (2003) EWHC 959 QB available online at http://www.oup.com/uk/booksites/content/0199272956/resources/ cases/12976989/landmaster.pdf * David Blackstone Ltd. v Burnett (West End) Ltd. [1973] 1 W.L.R. 1487 (M&B(L) 490) * Hall v Ewin (1888) 37 Ch.D. 74 * Hoare, Michelle Stevens (2000) Blocking Damages for disrepair – a 20th century provision to use in the 21st century. Hardwicke Building. [Online] Available at: http://www.hardwicke.co.uk/property/articles/00010101.htm * Hyman v Rose [1912] A.C. 623 * New River Co. Ltd. v Crumpton [1917] 1 K.B. 762 * Royle, Richard (2003) Briefcase on Land Law. 4th edn. Cavendish Publishing * Scala House & District Property Co. Ltd. v Forbes [1974] Q.B. 575 (M&B(L) 478) * Savva v Hussain (1996) 73 P & CR 150 (M&B(L) 481). * Sexton, Roger. (2004) Land Law textbook Oxford: Oxford University Press * Walkers Case (1587) 3 Co.Rep. 22a; 67 E.R. 676 * Wallis Fashion Group Ltd v CGU Life Assurance Ltd (2000) 81 P. & C.R. 28 Read More