No forfeiture clause in lease; what can L do re T's arrears?

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    No forfeiture clause in lease; what can L do re T's arrears?

    I own a Freehold which has a long lease granted out of it. I have checked the lease and there is no forfeiture clause, i.e 21 days to pay or LL can retake possession. If the tenant is not paying the rent or service charges, what action can I take. Am I still able to re-take possession.

    #2
    Your remedy is to sue for the rent and service charge. Without a forfeiture clause you cannot forfeit. Even with a forfeiture clause your chances of getting possession are so remote they are not worth considering.

    Comment


      #3
      So when as a tenant I receive letter of threat to forfeiture if the rent or service charge is not paid, does it mean, in reality, the only remedy of a LL is to sue in the County Court

      Comment


        #4
        No landlord has a realistic prospect of forfeiting a long lease at a low rent for non-payment of rent etc. This is because it would give the landlord a windfall grossly out of proportion to what was owed. Of course if forfeiture proceedings are begun they must be defended.

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          #5
          Sorry, I should make my above statement clear. I also own several leaseholds and ofetn the LL send out threatening letters about forfeiture even if I am a few days late in paying. Am I right to think that whether a lease has a forfeiture clause or not, the real remedy for any LL is to sue in the County Court.

          Does anyone know of any time a LL has been able to forfeit a long leasehold.

          Comment


            #6
            Thank you Lawcruncher. My above post was being typed at the same time as your reply.

            Comment


              #7
              The letters are just to frighten people. Suing for rent is the only real remedy.

              There was a case some years ago when a landlord tried to forfeit a long lease for non-payment of rent. The tenant won.

              Comment


                #8
                Well done to that tenant. I would be shocked to learn of a LL ever really getting back possession.

                Comment


                  #9
                  Originally posted by Lawcruncher View Post
                  Your remedy is to sue for the rent and service charge. Without a forfeiture clause you cannot forfeit. Even with a forfeiture clause your chances of getting possession are so remote they are not worth considering.
                  This is quite wrong. Gaining possession is unlikely because the tenant (and more importantly any mortgagee of the flat) has the right to seek relief from forfeiture within SIX months of the landlord issuing a Section 146 Notice. The Section 146 notice puts the lease into a "coma"; it is neither alive or dead at that stage.

                  The landlord then has to make an application for possession and the maximum period a court can give a lessee to pay is 28 days. The court cannot make an order whereby the charges are paid over a number of months or years

                  If the tenant does not pay (at this stage most lender will settle) and the landlord enters with the court baliff (an important destinction from a normal baliff) then the lessee loses his interest and is then barred from all relief. End of the story no chance of any relief

                  However the landlord when issuing proceedings has to note the interest of any mortgagee and they will almost always pay if a Section 146 Notice is issued so as to protect their security.

                  Comment


                    #10
                    Is this applicable even if there is no forfeiture clause or must there be such a clause in the lease. What if there is not, can the LL still serve a s.146 notice.

                    Comment


                      #11
                      sgclacy, have you ever come accross a case where the LL has been able to take back a long lease. It would be interesting to find out details about such a case.

                      Comment


                        #12
                        Originally posted by sgclacy View Post
                        This is quite wrong.
                        We are talking about forfeiture for non-payment of rent to which section 146 does not apply.

                        You are overlooking the provisions of section 210 of the Common Law Procedure Act 1852 which, as amended, provides as follows:

                        In all cases between landlord and tenant, as often as it shall happen that one half year’s rent shall be in arrear, and the landlord or lessor, to whom the same is due, hath right by law to re-enter for the nonpayment thereof, such landlord or lessor shall and may, without any formal demand or re-entry, serve a writ in ejectment for the recovery of the demised premises, which service shall stand in the place and stead of a demand and re-entry; and in case of judgment against the defendant for nonappearance, if it shall be made appear to the court where the said action is depending, by affidavit, or be proved upon the trial in case the defendant appears, that half a year’s rent was due before the said writ was served, and that no sufficient distress was to be found on the demised premises, countervailing the arrears then due, and that the lessor had power to re-enter, then and in every such case the lessor shall recover judgment and execution, in the same manner as if the rent in arrear had been legally demanded, and a re-entry made; and in case the lessee or his assignee, or other person claiming or deriving under the said lease, shall permit and suffer judgment to be had and recovered on such trial in ejectment, and execution to be executed thereon, without paying the rent and arrears, together with full costs, and without proceeding for relief in equity within six months after such execution executed, then and in such case the said lessee, his assignee, and all other persons claiming and deriving under the said lease, shall be barred and foreclosed from all relief or remedy in law or equity, other than by bringing error for reversal of such judgment, in case the same shall be erroneous; and the said landlord or lessor shall from thenceforth hold the said demised premises discharged from such lease; provided that nothing herein contained shall extend to bar the right of any mortgagee of such lease, or any part thereof, who shall not be in possession, so as such mortgagee shall and do, within six months after such judgment obtained and execution executed pay all rent in arrear, and all costs and damages sustained by such lessor or person entitled to the remainder or reversion as aforesaid, and perform all the covenants and agreements which, on the part and behalf of the first lessee, are and ought to be performed.

                        I did specifically say that if proceedings are begun that they must be defended. Even if undefended, I cannot imagine any court allowing a landlord to re-enter premises with a significant capital value because ground rent or service charge is unpaid.

                        Comment


                          #13
                          Originally posted by Lawcruncher View Post
                          Even if undefended, I cannot imagine any court allowing a landlord to re-enter premises with a significant capital value because ground rent or service charge is unpaid.
                          Not so. If there are large service charge arrears and T does not defend, the Court will usually grant forfeiture (making very sure that T has been served, given a chance to respond, and knows the consequences of not doing so).
                          But you're right about:
                          a. the 1852 Act; and
                          b. s.146 of LPA 1925 not applying to ground rent arrears cases.
                          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                          4. *- Contact info: click on my name (blue-highlight link).

                          Comment


                            #14
                            Not so. If there are large service charge arrears and T does not defend, the Court will usually grant forfeiture (making very sure that T has been served, given a chance to respond, and knows the consequences of not doing so).
                            Or an order for sale where a money claim has been issued because forfeiture is not an option.

                            Comment


                              #15
                              Forfeiture can and is used where the lessee has disappeared. I think (someone tell me I'm wrong) if the flat or property is not occupied and ground rent unpaid then peaceful repossession is possible.

                              E.g. Client has 998 year underlease of house. Immediate landlord has 999 year lease of whole area. Local landed estate owns freehold and sells it to an investor (known locally to solicitors and not a rip off merchant). Client wants to buy freehold. Investor happy to sell for reasonable price but cannot transfer unincumbered freehold because of the continued existence of intermediate lease. This intermediate lease owned by local unfriendly loan shark who died some years ago and widow has gone to US and can't be found. Answer - Landed estate and investor co-operate to forfeit intermediate lease for non-payment of very small ground rent . Land Registry gets rid of intermediate title and client can buy freehold.

                              2nd e.g. Council sells flat in tower block under right to buy with Council mortgage. Borrower/lessee defaults on mortgage and hands in keys to Council and disappears. Estate agents instructed by Council cannot find a buyer for the flat! By this time £10 annual ground rent unpaid so Council forfeits lease and puts it back in Housing Stock for letting.
                              RICHARD WEBSTER

                              As a conveyancing solicitor I believe the information given in the post to be useful (provided it relates to property in England & Wales) but I accept no liability except to fee-paying clients.

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