Incorrect Procedure Stymies Landlord

April 2, 2018

Incorrect Procedure Stymies Landlord

It is unusual when a case raises two different but significant points.

A recent case dealt with issues raised when a landlord sought to obtain possession by 'peaceable re-entry' and the forfeiture of a lease when ground rent was not being paid. It illustrates that there are strict procedures which must be followed in such circumstances and the failure to do so can lead to the forfeiture being invalid. Section 166 of the Commonhold and Leasehold Reform Act 2002 sets out what must be included in the landlord's notice to the leaseholder, which must be in a prescribed form and include explanatory notes.

The landlord duly issued the notice, but the notes supplied with the demand were the wrong ones. They were those from an earlier version of the relevant legislation, which Parliament had decided should no longer be used. Although the meaning was the same, the new version is clearer.

The notice was ruled to be invalid by the Upper Tribunal (UT) on that ground. However, the case also raised a second question relating to forfeiture clauses, which state that the process begins when the rent is in arrears by a certain length of time.

The Act stipulates that forfeiture is only available when there is a portion of the rent overdue for more than three years or the overdue rent exceeds £350.

The question arose as to whether the arrears in question are those relating to the payment dates under the lease or the amount outstanding in respect of arrears when the forfeiture notice is given.

The landlord claimed that the time period for rent arrears runs from the due date under the lease, but the conclusion of the UT was that it runs from the due date for payment specified in the notice. The landlord's application for forfeiture was therefore premature and so invalid on that ground as well.