Thankfully, the law of appropriation is relatively clear and established. It was explained in good detail in the Court of Appeal case[amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest'] Thomas v Ken Thomas Ltd [2006] EWCA Civ 1504 where at para 19 it was stated (author added words [landlord] and [tenant]):

19.  The relevant principles are accurately set out in Chitty on Contracts, 29th Edition Vol 1 at paragraph 21.059-21.061:

“21.059: Rights to appropriate payments. Where several separate debts are due from the [tenant] to the [landlord], the [tenant] may, when making a payment, appropriate the money paid to a particular debt or debts, and if the [landlord] accepts the payment so appropriated, he must apply it in the manner directed by the [tenant]; if, however, the [tenant] makes no appropriation when making the payment, the [landlord] may do so.

“21.060: Debtor’s rights to appropriate. It is essential that an appropriation by the [tenant] should take the form of a communication, express or implied, to the [landlord] of the [tenant's] intention to appropriate the payment to a specific debt (or debts) so that the [landlord] may know that his rights of appropriation as [landlord] cannot arise. It is not essential that the [tenant] should expressly specify at the time of the payment, which debt or account intended the payment to be applied to. His intention may be collected from other circumstances showing that he intended at the time of the payment to appropriate to a specific debt or account. ….

“21.061: Creditors’ right to appropriate. Where the [tenant] has not exercised his option, and the right to appropriate has therefore devolved upon the [landlord], he may exercise it at any time “up to the very last moment” or until something happens which makes it inequitable for him to exercise it. [I omit the rest of the paragraph].”

Therefore, if the tenant when paying the £200.00 says “this payment is for my new tenancy” (or similar) then, the landlord is bound by that statement. However, if the tenant remains silent, it is for the landlord to decide where to appropriate the amount (unless it can be somehow implied as to which tenancy the payment was for). Of course, the landlord should always appropriate to the previous tenancy because that way the new tenancy is developing arrears making the section 8 notice on rent arrears grounds easier.

Where an appropriation is done by the landlord, it would very wise to insert details of the appropriation on any receipt issued as this would assist with any questions that may arise later and would also help with any question of “implied” appropriation.

Housing Benefit

One unanswered question (by the courts) though is what about a housing benefit payment? The cheque or statement will always contain the dates to which the payment relates. Are these dates appropriating the amount to those specific dates and no other? I would respectfully submit no. Our view is that the law of appropriation remains as described above and that the dates on the cheque or statement are nothing more than showing the dates of the tenant’s “entitlement” to housing benefit and are not necessarily dates showing the actual “rent” being paid. It is therefore still acceptable for a landlord to appropriate a housing benefit payment to an earlier tenancy for example in our view.

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The significant changes mainly affecting landlords are as follows:

• Accelerated Possession Claims: £175.00 (from £150.00)
  
• Standard Procedure Possession Claim (e.g. rent arrears): £175.00 (from £150.00)
  
• On-Line Possession Claim (rent arrears): £100.00 (same as before)
  
• Application fee (set aside, restore etc.): £80.00 (from £75.00)
  
• Warrant of Execution (Bailiff fee): £110.00 (from £95.00)

In addition, from 1 April 2011 (so before the fees increase) the Tribunal Service is to merge with HM Court Service to produce HM Courts and Tribunals Service, so any cheques or postal orders paid on or after 1 April should be made to HM Courts and Tribunals Service or HMCTS.

This case, although quite rare was in our view certainly interesting and was one that made the mice in our heads revolve on the spinning wheel at great speed and for long periods of time. That being said, full credit must go to Evicthem as they did the vast majority of work.

Background

During January 2010, the landlord (KT Property) was approached by a prospective tenant but he was under 18 and so could not be granted an assured shorthold tenancy (see here). The local authority stepped in and agreed to rent the property from the landlord for a period of six months whilst the tenant became 18, the intention being that the landlord would then offer an assured shorthold tenancy to the occupier (subject to there being no problems during the six months).

On 11 January 2010, the landlord granted a contractual tenancy to a subsidiary of Bristol Council for a period of six months. They then placed the defendant into the property.

At the end of six months, they stopped paying the rent (most likely quite rightly because the tenancy had come to an end). The landlord though was unsure as to the current position and because he had demanded rent after the end of the tenancy, a safe route was taken and a notice to quit was served on 22 September 2010 to ensure the tenancy was truly at an end.

After expiry of the notice to quit, the landlord offered an assured shorthold tenancy to the occupier defendant but he refused to sign or accept the tenancy.

It should be noted that the landlord was perfectly happy with the occupier but neither they nor the council were paying any rent and the council had not given back the property with vacant possession so clearly it was a situation that needed resolving somehow.

This left a difficult question. What was the position of the occupier? A local authority can only grant a secure tenancy and not an assured shorthold tenancy but was this still in existence when the tenancy between landlord and the council ended? If so, was the landlord stuck with a secure tenant for life? Or, was it possible for the secure tenancy to convert into an assured shorthold tenancy?

Where [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']there is a tenancy and sub-tenancy like this situation, the common law position (as was graphically expressed) is that the branch falls with the tree [Moore Properties (Ilford) Ltd v McKeon (1976) 1 W.L.R. 1278] so when the head tenancy ends, all sub-tenancies underneath also end. In this case, there was nothing to suggest that this common law principle didn’t apply.

Note: if the sub-tenancy was lawfully granted on an assured shorthold tenancy, the occupier would become the tenant of the head landlord [s.18 Housing Act 1988] but that wasn’t the case here.

The occupier in this case was not liable to pay rent because all tenancies had ended and there was no legal relationship between head landlord and occupier. This also meant technically, it was exempt from the requirements of a court order under Protection from Eviction Act 1977 but this was not worthy of risk.

Therefore, the procedure chosen was the trespasser procedure on the basis that the defendant was nothing more than a trespasser. This meant a hearing would be held within around seven days of the application so was a useful remedy. The claimant gave a letter before action to the defendant before any proceedings were commenced making it absolutely clear that they really needed to seek urgent legal advice.

Held

At the hearing, the judge had to ask the landlord to come back in an hour whilst he “called a friend!” The court ordered possession and held that the occupier was a trespasser due to the “branch falling with the tree” and the failure by the defendant to accept the assured shorthold tenancy offered by the landlord.

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A problem that this can cause is that the tenant attends the hearing and states that they paid the landlord x amount in cash three days ago which of course is more often than not a lie.

Although this article doesn’t get rid of that argument altogether, it is helpful for a landlord to remind the court of section 9, Civil Evidence Act 1995 which provides that the records of a business (which includes a rent statement) may be given as evidence “without further proof”.

A document shall be taken to form part of the records of a business if there is produced to the court a certificate to that effect signed by an officer of the business [s.9(2)].

Below is a suggested certificate for the benefit of members which may also be downloaded in word format. The certificate should be signed and attached to the court bundle at the point of commencing proceedings. If proceedings have already been commenced, then the certificate should be taken in on the day of the hearing.

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Certificate that rent statement forms part of business records

Section 9, Civil Evidence Act 1995

I, the claimant hereby certify that the rent statement provided with the section 8 notice served on the tenant and the rent statement(s) provided to the court form part of the records of my business.

Signed …………………………………………………………………………….

Dated ………………………………………………………………………………

Civil Evidence Act 1995
9.— Proof of records of business or public authority.

(1) A document which is shown to form part of the records of a business or public authority may be received in evidence in civil proceedings without further proof.

(2) A document shall be taken to form part of the records of a business or public authority if there is produced to the court a certificate to that effect signed by an officer of the business or authority to which the records belong.

For this purpose—

(a) a document purporting to be a certificate signed by an officer of a business or public authority shall be deemed to have been duly given by such an officer and signed by him; and

(b) a certificate shall be treated as signed by a person if it purports to bear a facsimile of his signature.

(3) The absence of an entry in the records of a business or public authority may be proved in civil proceedings by affidavit of an officer of the business or authority to which the records belong.

(4) In this section—
“records” means records in whatever form;
“business” includes any activity regularly carried on over a period of time, whether for profit or not, by any body (whether corporate or not) or by an individual;
“officer” includes any person occupying a responsible position in relation to the relevant activities of the business or public authority or in relation to its records; and
“public authority” includes any public or statutory undertaking, any government department and any person holding office under Her Majesty.

(5) The court may, having regard to the circumstances of the case, direct that all or any of the above provisions of this section do not apply in relation to a particular document or record, or description of documents or records.

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The corresponding date rule was explained by the House of Lords in [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest'] Dodds v Walker (1981) 42 P. & C.R. 131. Although this case relates to a notice served under section 29(3) Landlord and Tenant Act 1954 by the tenant of business premises requesting a new lease, the principles of the corresponding date rule equally apply to all notices served including possession notices.

In this case, the landlord served on the tenant a notice terminating the tenancy dated 29 September 1978 and served on 30 September 1978. The tenant had under section 29(3) “… not less than two nor more than four months after the giving of the landlord’s notice ….” to apply for a new lease.

The tenant applied to the court on 31 January 1979 for a new lease and the landlord defended saying it was too late. The landlords case was that four months from 30 September was 30 January and so the tenant was one day too late. The tenants case was that because the notice was served on the last day of September, four months was until the last day of January.

The tenants claim was dismissed through all courts (although only by majority in the Court of Appeal) and finally the tenant unsuccessfully appealed to the House of Lords.

Lord Diplock explains the corresponding date rule:

… My Lords, reference to a “month” in a statute is to be understood as a calendar month. The Interpretation Act [1889, s. 3 ] says so. It is also clear under a rule that has been consistently applied by the courts since Lester v. Garland (1808) 15 Ves. 248 that in calculating the period that has elapsed after the occurrence of the specified event such as the giving of a notice the day on which the event occurs is excluded from the reckoning. It is equally well established, and is not disputed by counsel for the tenant, that when the relevant period is a month or specified number of months after the giving of a notice, the general rule is that the period ends upon the corresponding date in the appropriate subsequent month, i.e. the day of that month that bears the same number as the day of the earlier month on which the notice was given.

The corresponding date rule is simple. It is easy of application. Except in a small minority of cases, of which the instant case is not an example, all that the calculator has to do is to mark in his diary the corresponding date in the appropriate subsequent month. Because the number of days in five months of the year is less than in the seven others the inevitable consequence of the corresponding date rule is that one month’s notice given in a 30-day month is one day shorter that one month’s notice given in a 31-day month and is three days shorter if it is given in February. Corresponding variations in the length of notice reckoned in days occur where the required notice is a plurality of months.

This simple general rule which Cockburn C.J. in Freeman v. Read (1863) 4 B. & S. 174 , 184 described as being “… in accordance with common usage, …, and with the sense of mankind,” works perfectly well without need for any modification so long as there is in the month in which the notice expires a day which bears the same number as the day of the month on which the notice was given. Such was the instant case and such will be every other case except for notices given on the thirty-first of a 31-day month and expiring in a 30-day month or in February and notices expiring in February and given on the thirtieth or twenty-ninth (except in leap year) of any other month of the year. In these exceptional cases, the modification of the corresponding date rule that is called for is also well established: the period given by the notice ends upon the last day of the month in which the notice expires…

The tenants appeal was dismissed as the request should have been made on or before 30 January 1979 and no later.

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Where a tenant wishes to leave during a fixed term, or simply vacates without notice, this is an offer to surrender. A landlord may accept such a surrender or refuse to accept (see this article for much more detail).

In the case that the landlord is willing to accept the surrender, it is best to have a notice to surrender from the tenants.

A suitable notice to surrender is available here

Notice to surrender by tenant to landlord guidance

Where a tenancy is running periodic, a NOTICE TO QUIT from tenant is normally more suitable than this notice (Guild Form F019, see this group of posts). This notice should only be used on rare occasion and you should contact us before using this notice to clarify the reasons for using this notice.

A few key points to note:

This notice should be used where ALL parties agree that the tenancy is to end, that is to say [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']ALL tenants and the landlord must agree for this notice to have effect. By agreeing with this notice, the landlord will be no longer entitled to claim any further rent after the expiry of this notice. (But if the tenant remains in occupation, damages for use and occupation will be payable by the tenants)

Anything less than ALL tenants signing this notice will render the notice invalid.

This notice is normally used where a notice to quit is not possible for example if a tenant wishes to leave during a fixed term (where the landlord agrees), or if a tenant has already vacated without notice and the landlord is seeking clarification that the tenant has indeed surrendered the tenancy.

If the tenant is wishing to simply give short notice (i.e. less than four weeks) during a periodic tenancy, a notice to quit is equally suitable because a landlord may accept an invalid notice to quit.

The tenant does not have to give any specific length of time with this notice so it could be an agreement to give one days notice or one months notice. Nor, does this notice need expire on any particular date.

If the tenants fail to vacate on the date given in this notice, a court order will still be required to gain possession.

If a landlord asks the tenant to sign this notice on the same date or before the tenancy is granted, it will have no effect [s.5(5) Housing Act 1988].

Completing the notice (in order of form fields)

• Insert name and address of landlord
• Insert names of all tenants
• Insert tenancy address
• Insert the date the tenancy is to be surrendered and the premises given back to landlord
• Insert date of the notice
• All tenants to sign, each signature must be witnessed
• Landlord to sign and must be witnessed
• Both landlord and tenant should retain a copy each

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Sometimes a fixed term tenancy agreement can contain a clause which brings the fixed term to an end early. For example, you might have a one year fixed term with a break clause that states the fixed term may be brought to an end by notice after the first 6 months. (In my opinion break clauses simply confuse the matter. If there is power to end a tenancy after six months, [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']why not simply grant a six month tenancy and let it run on?)

Strict Requirements

Where the clause lays down time limits for the service of a notice exercising a break clause, those time limits are of the essence of the contract and must be strictly observed [United Scientific Holdings v Burnley Corporation [1978] A.C. 904].

A notice which is served even a day too late will be invalid [Quartermaine v Selby (1889) 5 T.L.R. 223]

To give an example on the strict requirements of exercising a break clause, it was said in Mannai Inv. Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 25 EG 138 that if the lease requires a notice to be served using blue paper, then a notice using pink paper will be invalid.

Sample break clauses

For a one off break (for tenant only) at some point during the fixed term:

“The Tenant may by serving not less than six months notice in writing on the Landlord or its solicitors such notice to expire on the third anniversary of the term commencement date determine this Lease and upon expiry of such notice this Lease shall cease and determine and have no further effect.”

[Mannai Investment Co Ltd v. Eagle Star Assurance [1997] UKHL 19]

For a break clause at any time after a set period (for both parties):

“The landlord or the tenant may determine the tenancy hereby created at or at any time after the end of the first six months of the tenancy provided one month’s prior notice in writing of such desire is given to the other party.”

[Aylward v Fawaz [1996] 29 HLR 408 CA (see below)]

Aylward v Fawaz [1996] 29 HLR 408 CA

Introduction

Section 21 of the 1988 Act  makes provision for the recovery of possession on the expiry or termination of an assured shorthold tenancy. The court must order possession if satisfied: first, that the assured shorthold has come to an end; secondly, that no further assured tenancy is in existence; and, thirdly, that “the landlord … has given to the tenant not less than two months’ notice stating that he requires possession of the dwelling-house”: section 21(1)(b). There is no requirement that the notice take a particular form: see Panayi & Pyrkos v. Roberts (1993) 25 H.L.R. 421, C.A.

A lease for a fixed term may contain a “break clause”, i.e. an option given to one or either party to the lease to determine the lease before the expiry of the fixed term: see Woodfall, Landlord and Tenant paras. 17.285 et seq. A notice operating a break clause must be clear and unambiguous and is to be strictly construed. It need not refer to the clause in the lease but must comply with its terms.

Facts

On June 27, 1995, the plaintiff landlords granted the defendant an assured shorthold tenancy of a property for the term of one year. Clause 7 of the tenancy agreement provided that:

“The landlord or the tenant may determine the tenancy hereby created at or at any time after the end of the first six months of the tenancy provided one month’s prior notice in writing of such desire is given to the other party.”

On February 13, 1996, the landlord served a notice under section 21(1)(b) of the Housing Act 1988, requiring possession of the dwelling after April 14, 1996. The landlord brought proceedings for possession of the property. The tenant defended the claim on the basis that the notice served on him had not validly determined the term of the tenancy in accordance with clause 7 of the tenancy agreement. The judge held that the notice was sufficient both to determine the tenancy and to comply with section 21(1)(b) and made an order for possession. The tenant appealed to the Court of Appeal.

Held (dismissing the appeal):

The notice served by the plaintiff landlord was clear and unambiguous; it indicated that possession of the premises was required, and the requirement of possession was only consistent with the determination of the fixed term of the tenancy agreement.

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A recent Court of Appeal decision sheds light on issues relating to Notices to Quit by tenants. In Bradford Community Housing Ltd v Hussain & Kauser the Court of Appeal ruled on the validity of a Notice to Quit which contains a saving provision and on whether the acceptance of rent or holding back on enforcement can invalidate a Notice to Quit.

Mr Hussain and Ms Kauser held an assured tenancy from Bradford Community Housing Ltd and after allegations of domestic violence their relationship collapsed and Ms Kauser (at the urging of Bradford) served a notice to quit on Bradford. As the tenancy was periodic by this stage the notice was valid to terminate the tenancy without the involvement of Mr Hussain following the well-known decision in Hammersmith & Fulham LBC v Monk. On the back of this notice possession proceedings were taken.

Before the Court of Appeal two arguments were made. The first was that the date on the notice was wrong and that the standard saving provision made the notice ambiguous as the saving provision and the given date ultimately referred to different dates. The second argument was based around correspondence between Bradford and Ms Kauser whereby Bradford had suggested suggested that they would not enforce on the notice to quit immediately and would continue to accept rent monies on an ad hoc basis. It was argued that this arrangement had the effect of renewing the tenancy and thereby made the notice to quit ineffective without the consent of Mr Hussain.

The Court of Appeal dismissed both arguments out of hand.
The Court was in no doubt that the use of the saving provision did not create and doubt in the mind of a reasonable recipient of the notice. This is an interesting point as the same question has been raised (although not at such a level) in relation to section 21(4)(a) notices and the possibility of ambiguity if they contain both a date and a saving provision. It would seem that this argument is now dead.
The Court was also not prepared to accept that a statement by Bradford that they might not immediately enforce the notice to quit and would in the meantime accept rent in any way acted to create a new tenancy. The Court made reference to the case of Clarke v Grant and made clear that mere acceptance of rent after the expiry of a notice could only create a new tenancy if this was the settled intention of the parties.

While this is a small case it provides clarity over one or two points of interest.

Rent arrears

The procedure below does not relate to rent arrears.

Breach of tenancy

Is there a breach?

The first thing to establish is, has there been a breach of a covenant? For example [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']there may be a term in the tenancy for no pets. If a tenant has a dog, this is a clear breach. However, you need to first check that the clause in the tenancy is not an unfair term.

For example, if the clause simply said “No pets allowed” this may be an unfair term and so not binding on the tenant (although the court can re-word the clause to make it fair). A correct clause should say something like “no pets without the landlords written consent, consent not to be unreasonably withheld.”

If a landlord unreasonably withholds consent, there will be no breach of the covenant.

Much of below is sourced from: Residential Possession Proceedings Gary Webber and Daniel Dover 7th Edition & Woodfall Landlord and Tenant

Section 146 notice

If a landlord has established a breach, the landlord cannot (subject to certain limited exceptions, see below) exercise any right of re-entry in respect of the breach unless he has first served a notice under s.146(1) Law of Property Act 1925. The notice must be in writing.

146.
Restrictions on and relief against forfeiture of leases and underleases.
— (1) A right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice—
(a)specifying the particular breach complained of; and
(b)if the breach is capable of remedy, requiring the lessee to remedy the breach; and
(c)in any case, requiring the lessee to make compensation in money for the breach;
and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach.
(2) Where a lessor is proceeding, by action or otherwise, to enforce such a right of re-entry or forfeiture, the lessee may, in the lessor’s action, if any, or in any action brought by himself, apply to the court for relief; and the court may grant or refuse relief, as the court, having regard to the proceedings and conduct of the parties under the foregoing provisions of this section, and to all the other circumstances, thinks fit; and in case of relief may grant it on such terms, if any, as to costs, expenses, damages, compensation, penalty, or otherwise, including the granting of an injunction to restrain any like breach in the future, as the court, in the circumstances of each case, thinks fit.
(3) A lessor shall be entitled to recover as a debt due to him from a lessee, and in addition to damages (if any), all reasonable costs and expenses properly incurred by the lessor in the employment of a solicitor and surveyor or valuer, or otherwise, in reference to any breach giving rise to a right of re-entry or forfeiture which, at the request of the lessee, is waived by the lessor, or from which the lessee is relieved, under the provisions of this Act.
(4) Where a lessor is proceeding by action or otherwise to enforce a right of re-entry or forfeiture under any covenant, proviso, or stipulation in a lease, or for non-payment of rent, the court may, on application by any person claiming as under-lessee any estate or interest in the property comprised in the lease or any part thereof, either in the lessor’s action (if any) or in any action brought by such person for that purpose, make an order vesting, for the whole term of the lease or any less term, the property comprised in the lease or any part thereof in any person entitled as under-lessee to any estate or interest in such property upon such conditions as to execution of any deed or other document, payment of rent, costs, expenses, damages, compensation, giving security, or otherwise, as the court in the circumstances of each case may think fit, but in no case shall any such under-lessee be entitled to require a lease to be granted to him for any longer term than he had under his original sub-lease.
(5) For the purposes of this section—
(a)“Lease” includes an original or derivative under-lease; also an agreement for a lease where the lessee has become entitled to have his lease granted; also a grant at a fee farm rent, or securing a rent by condition;
(b)“Lessee” includes an original or derivative under-lessee, and the persons deriving title under a lessee; also a grantee under any such grant as aforesaid and the persons deriving title under him;
(c)“Lessor” includes an original or derivative under-lessor, and the persons deriving title under a lessor; also a person making such grant as aforesaid and the persons deriving title under him;
(d)“Under-lease” includes an agreement for an under-lease where the under-lessee has become entitled to have his underlease granted;
(e)“Under-lessee” includes any person deriving title under an under-lessee.
(6) This section applies although the proviso or stipulation under which the right of re-entry or forfeiture accrues is inserted in the lease in pursuance of the directions of any Act of Parliament.
(7) For the purposes of this section a lease limited to continue as long only as the lessee abstains from committing a breach of covenant shall be and take effect as a lease to continue for any longer term for which it could subsist, but determinable by a proviso for re-entry on such a breach.
(8) This section does not extend—
(i)To a covenant or condition against assigning, underletting, parting with the possession, or disposing of the land leased where the breach occurred before the commencement of this Act; or
(ii)In the case of a mining lease, to a covenant or condition for allowing the lessor to have access to or inspect books, accounts, records, weighing machines or other things, or to enter or inspect the mine or the workings thereof.
(9) This section does not apply to a condition for forfeiture on the bankruptcy of the lessee or on taking in execution of the lessee’s interest if contained in a lease of—
(a)Agricultural or pastoral land;
(b)Mines or minerals
(c)A house used or intended to be used as a public-house or beershop;
(d)A house let as a dwelling-house, with the use of any furniture, books, works of art, or other chattels not being in the nature of fixtures;
(e)Any property with respect to which the personal qualifications of the tenant are of importance for the preservation of the value or character of the property, or on the ground of neighbourhood to the lessor, or to any person holding under him.
(10) Where a condition of forfeiture on the bankruptcy of the lessee or on taking in execution of the lessee’s interest is contained in any lease, other than a lease of any of the classes mentioned in the last sub-section, then—
(a)if the lessee’s interest is sold within one year from the bankruptcy or taking in execution, this section applies to the forfeiture condition aforesaid;
(b)if the lessee’s interest is not sold before the expiration of that year, this section only applies to the forfeiture condition aforesaid during the first year from the date of the bankruptcy or taking in execution.
(11) This section does not, save as otherwise mentioned, affect the law relating to re-entry or forfeiture or relief in case of non-payment of rent.
(12) This section has effect notwithstanding any stipulation to the contrary.

If, in addition to a breach of the tenancy, there are rent arrears, firstly it is easier for a landlord to forfeit on the basis of those arrears so perhaps it’s not worth serving a s.146 notice. However, if the landlord chooses to serve a s.146, it should not contain a demand for arrears of rent accruing since the breach complained of in the notice. This is because the demand may possibly waive that breach, it not being necessary to serve a s.146 notice in respect of arrears of rent.

Contents of the notice

Section 146(1) of the Law of Property Act 1925 requires that the notice should:

specify the breach complained of; and
if the breach is capable of remedy, require the tenant to remedy it; and
in any case, require the tenant to make compensation in money for the breach.

The notice does not need to refer to the statute [Van Haarlam v Kasner (1992) 2 E.G.L.R. 59 Ch D).

A s.146 notice must be served even if the breach is not capable of remedy. The notice has a two-fold purpose; first, to give the tenant the opportunity to remedy the breach (if it is capable of remedy) before the landlord forfeits and secondly, to give the tenant the opportunity to apply to the court for relief [Expert Clothing and Sales Ltd v Hillgate House Ltd (1985) 2 All E.R. 998).

Specify the breach

The breach complained of should clearly be set out in the notice. The usual practice is to set out the terms of the lease that have allegedly been breached and then to give details of the breach by reference to those terms. The notice will be invalid if it refers to the wrong covenant [Jacob v Down (1900) 2 Ch 156).

Remedy the breach

If the breach is capable of remedy, the notice should require the tenant to remedy the breach. It has been held that this predicates that the notice is served before the breach is remedied. Accordingly where the tenant allowed property to fall out of repair, and the landlord, acting under a right of entry under the lease entered and carried out the necessary work at his own cost, he could not thereafter serve a s.146 notice on the tenant, because he had himself remedied the breach. [S.E.D.A.C. Investments v Tanner [1982] 1 W.L.R. 1342.] In order to require the tenant to remedy the breach it is not necessary to specify the remedial action required, [Piggott v Middlesex County Council [1909] 1 Ch. 134.] or to give the tenant a specification of work. [Fox v Jolly [1916] 1 A.C. 1.]

The notice need require the tenant to remedy the breach only if it is capable of remedy. If the breach is irremediable, the notice is not bad if it does not require the tenant to remedy it. If, however, the breach is remediable, and the s.146 notice does not require the tenant to remedy it, the notice is bad. [Expert Clothing Service & Sales v Hillgate House [1986] Ch. 340.] Thus section 146 distinguishes between remediable and irremediable breaches. Accordingly, it is good practice to require remedy of all breaches insofar as they may be remediable so as to avoid narrow disputes in cases where it may be doubtful as to whether the breaches are remediable.

Require compensation

The third statutory requirement is that in any case the notice must require the tenant to make compensation in money for the breach. Despite the apparently mandatory language, a notice is not bad for not requiring compensation in money [Lock v Pearce [1893] 2 Ch. 271; Civil Service Co-operative Society v McGrigor’s Trustee [1923] 2 Ch. 347; Rugby School (Governors) v. Tannahill [1935] 1 K.B. 87; Egerton v Esplanade Hotels (London) Ltd [1947] 2 All E.R. 88; Hoffman v Fineberg [1949] Ch. 245.]

If, however, the notice fails to require compensation in money, the landlord may be precluded thereafter from claiming damages for the breach.

Time limit to remedy breach given in the notice

“The s.146 notice does not have to limit a time within which the breach is to be remedied. All that the statute requires is that a reasonable time to remedy the breach must elapse between service of the notice and the exercise of the right of re-entry or forfeiture”. [Billson v Residential Apartments Ltd (No.1) [1991] 3 W.L.R. 264, CA per Browne-Wilkinson v-C. (unaffected on this point by reversal by HL).]

What will constitute a reasonable time will vary in each case. [Hopley v Tarvin Parish Council (1910) 74 J.P. 209.] The reasonable time must be sufficient for remedying all the breaches specified in the notice, and no action for forfeiture lies on any of the breaches until the reasonable time for remedying them all has expired. [ibid.; Kent v Conniff, per Slade J.; not reported on this point.] However where the tenant’s actions make it clear that he has no intention of remedying the breach but is committing further breaches, a reasonable time must have elapsed. [Billson v Residential Apartments, ante per Browne-Wilkinson v-C. (unaffected on this point by reversal by HL).]

In considering what is a reasonable time, regard may be had to previous requests to the tenant to make good the breach in question. [Bhojwani v Kingsley Investment Trust [1992] 2 E.G.L.R. 70.]

What is a reasonable time is a question of fact. Thus:

(a) where the breach alleged was failure to keep allotments in good heart and, as a matter of fact, it would have taken a year to put the whole of the land into good condition, the issue of a writ six months after the date of the notice was premature [Hopley v Tarvin Parish Council, above.] ;

(b) where the breach alleged was a failure to keep the property insured, a reasonable time to arrange insurance cover was, on the evidence, four weeks [Cardigan Properties v Consolidated Property Investments [1991] 1 E.G.L.R. 64.] ;

(c) where the breach was the carrying out of alterations without consent, thirteen days was sufficient for the tenant to stop work and either apply for consent or put forward proposals for remedying the breach. Since the tenant did neither, a forfeiture after thirteen days was justified [Billson v Residential Apartments, above per Browne-Wilkinson v-C.] ;

(d) where the breach was a failure to repair, three months was sufficient to remedy the disrepair [Penton v Barnett [1898] 1 Q.B. 276; Gulliver Investment v Abbott [1966] E.G.D. 299.] ; but two months was insufficient where the works required included rectifying subsidence by underpinning [Bhojwani v Kingsley Investment Trust [1992] 2 E.G.L.R. 70.]

(e) where there was a breach of a covenant not to do anything which might be a nuisance to the lessor or adjoining occupiers four working days was not a reasonable time to remedy the breach. [Courtney Lodge Management v Blake (2005) 1 P&CR 264] .

These cases are cases of remediable breach.

Where the breach alleged is an irremediable breach, the tenant needs time only in order to be able to consider his position. In particular he needs time to consider whether to make an immediate application for relief against forfeiture. Two days is insufficient for this purpose. [Horsey Estate v Steiger [1899] 2 Q.B. 79.] However, five days has been held to be sufficient, [Fuller v Judy Properties [1992] 1 E.G.L.R. 75.] and a fortiori fourteen days is ample. [Civil Service Co-operative Society v McGrigor's Trustee [1923] 2 Ch. 347.]

Service of the s.146 notice

The section 146 notice is sufficiently served if it is left at the last-known place of abode or business in the United Kingdom of the lessee or other person to be served, or, if it is affixed or left for him on the land or any house or building comprised in the lease. [Law of Property Act 1925, s.196(3).] Accordingly, affixing the notice to the door of the property is sufficient. [Cusack-Smith v Gold [1958] 1 W.L.R. 611.] A notice of breach of covenant is properly served on a tenant if it is left with some person on the premises and there are reasonable grounds for supposing that that person will, if possible, pass it on to the tenant. [Cannon Brewery Co. v Signal Press Ltd (1928) 44 T.L.R. 486.]

The notice is also sufficiently served, if it is sent by post in a registered letter addressed to the lessee or other person to be served, by name, at the last-known place of abode or business, office, or counting-house, and if that letter is not returned through the post-office undelivered; and that service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered. [Law of Property Act 1925, s.196(4).] The recorded delivery service may be used as an alternative to registered post. [Recorded Delivery Service Act 1962.]

A requirement that a notice be “given” is of the same effect as a requirement that it be “served”. [Re 88, Berkeley Road, NW9. Rickwood v Turnsek [1971] Ch. 648.] Once served it cannot be withdrawn, even if it has not come to the attention of the recipient, at least for the purposes of section 196 of the Law of Property Act 1925. [Kinch v Bullard [1999] 1 W.L.R. 423.] Proof on the balance of probabilities of the sending, by recorded delivery, of a prepaid letter, properly addressed, containing the notice was sufficient for service. [ibid.; and see Chiswell v Griffon Land and Estates [1975] 1 W.L.R. 1181.]

It has been held, under the similar provisions of the Agricultural Holdings Act 1948, s.92, that for a notice to be “left at his proper address” within that section “it must be left there in a proper way, that is to say, in a manner which a reasonable person minded to bring the document to the attention of the person to whom the notice is addressed would adopt”. [Newborough (Lord) v Jones [1975] Ch. 90, per Russell L.J. (notice to quit property served by being pushed under the door, even if, fortuitously, it went under the linoleum and was lost to sight)].

See also Blunden v Frogmore Investments Ltd (2002) EWCA Civ 573; where the building was destroyed by a bomb and the notices sent to various addresses by recorded delivery were returned: nevertheless service was good.

The methods of service set out in s.196 are permissive. They do not have to be used. If the notice is in fact served by some other method, and it can be proved, that will be sufficient.

[copy s.196]

Sample s.146 Notice

NOTICE SERVED PURSUANT TO section 146 OF THE LAW OF PROPERTY ACT 1925

Re: [address of property]

To: [name of tenants]

I, [insert name and address of landlord] hereby give you notice that:

The above-mentioned premises were let to you by me under a lease dated the [insert date] for a term of [state number] [years / months] commencing on the [start date]

By clause [state number of clause] of the lease you covenanted to Not keep any pets or other animals in the premises without the prior written permission of the landlord (not to be unreasonably withheld)

In breach of this clause you are keeping one dog in the premises.

I require you to remedy the breach by ceasing to keep the dog in the premises within 28 days of service of this notice. If you fail to do so I shall take proceedings to forfeit your lease.

I require you to pay compensation in money for the breach.

Signed

Date notice served

Tenants action on receipt of notice

A tenant in receipt of a s.146 notice (who wishes to retain his lease) has two choices where the tenancy is residential:

He may remedy the breach complained of within the time stated, if the breach is capable of remedy.

He may apply for relief from forfeiture. He is entitled to make the application immediately on receipt of the notice and does not need to wait for the landlord to commence proceedings but the tenant may wait until the landlord commences possession proceedings to apply for relief.

Tenants failure to comply with notice

If the tenant fails, within a reasonable time of service of the notice, to remedy the breach (if it is capable of remedy) and to make reasonable compensation in money to the landlord’s satisfaction (if the landlord has required compensation), where a person is lawfully residing in the premises he may forfeit the lease by the issue and service of proceedings. The landlord must not commence proceedings until a reasonable time has elapsed. This is the position even where the breach is incapable of remedy because the tenant needs time to consider his position and to decide whether to apply for relief, and to take such action as will assist his claim (Scala House – 14 days held sufficient in the circumstances of the case).

The landlords act of re-entry

At common-law peaceable re-entry brings the lease to an end, but a landlord is not permitted to enforce a right of re-entry where the premises were “let as a dwelling” otherwise than by proceedings in court while any person is lawfully residing in them or part of them [s.2 Protection from Eviction Act 1977]

2. Restriction on re-entry without due process of law.

Where any premises are let as a dwelling on a lease which is subject to a right of re-entry or forfeiture it shall not be lawful to enforce that right otherwise than by proceedings in the court while any person is lawfully residing in the premises or part of them.

Service of a claim for possession is equivalent to an act of re-entry and this is the normal method by which a landlord of residential premises forfeits a lease.

The effect of forfeiture

Forfeiture brings the tenancy, and all interests derived from the tenancy (i.e. sub-tenancies, mortgages and other charges), to an end so that the landlord is entitled to possession [Official Custodian for Charities v Mackey (1984) 3 All E.R. 689].

If the tenant wishes to retain possession he will have to apply for relief from forfeiture which will invariably require payment of any arrears and the remedying of any breach of covenant.

As forfeiture brings the tenancy to an end the landlord ceases to be entitled to rent that would otherwise become payable and may no longer rely upon the tenant’s covenants in the lease, although he may sue in respect of past arrears and breaches.

If the landlord elects to pursue an alternative remedy and to waive the right to forfeit in respect of a particular breach he will not subsequently be allowed to forfeit in respect of that breach.

Making the claim

As discussed above, in nearly all cases a landlord of residential premises will seek to forfeit the lease by taking proceedings for possession. Where he does so it is the service of the claim form (not its issue), which operates as the decisive election to forfeit and which is equivalent to re-entry [Ivory Gate v Spitale (1999) 77 P. & C.R. 141, CA).

This has two consequences where possession is granted and there is no relief from forfeiture. First, rent is payable by the tenant up until the date of service of the proceedings. From that date the landlord is entitled to recover payments for the occupation of the land from the ex-tenant as trespasser, as mesne profits (damages for use and occupation). Secondly, from the date of service of the proceedings the tenant is no longer bound by any of the other covenants in the lease, such as the covenant to repair. If after that date the ex-tenant damages the property the landlord’s remedy will be in tort [Associated Deliveries Ltd v Harrison (1984) 50 P.&C.R. 91, CA].

Claim form N5 and N119 are required

[to be completed by author with sample when necessary]

Landlord withdraw claim after tenants admission

Where a landlord serves a claim form unequivocally electing to forfeit a lease and the landlord’s claim is “admitted by the tenant” the landlord cannot subsequently withdraw the claim and argue that the lease remains in existence [GS Fashions Ltd v B & Q plc (1995) 4 All E.R. 899 Ch D)

Dismissal by court or discontinuance of claim no admission

The dismissal of a forfeiture claim, whether by compromise or otherwise, has the consequence that the forfeiture has not been established and the lease, whatever its status might have been during the action, is fully restored [Hynes v Twinsectra Ltd (1995) 2 E.G.L.R. 69, CA].

Relief from forfeiture (breach of covenant)

The tenant may apply for relief pursuant to s.146(2) Law of Property Act 1925. Where relief is granted to the tenant the relief reinstates the lease as if there had never been a forfeiture.

(2) Where a lessor is proceeding, by action or otherwise, to enforce such a right of re-entry or forfeiture, the lessee may, in the lessor’s action, if any, or in any action brought by himself, apply to the court for relief; and the court may grant or refuse relief, as the court, having regard to the proceedings and conduct of the parties under the foregoing provisions of this section, and to all the other circumstances, thinks fit; and in case of relief may grant it on such terms, if any, as to costs, expenses, damages, compensation, penalty, or otherwise, including the granting of an injunction to restrain any like breach in the future, as the court, in the circumstances of each case, thinks fit.

…

(13) The county court has jurisdiction under this section

Time for applying

The wording of subs (2) states that the tenant may apply for relief where the landlord “is proceeding, by action or otherwise”. The landlord is proceeding the moment he serves his s.146 notice [Pakwood Transport Ltd v 15 Beauchamp Place Ltd (1977) 245 E.G. 309]. The tenant may therefore apply for relief upon receipt of the notice.

In Rogers v Rice (1892) 2 Ch 170 the landlord had forfeited by bring proceedings. It was held that the words “is proceeding” mean that the tenant may apply for relief at any time up until the time the landlord has actually re-entered pursuant to the order for possession. After that date it is no longer possible to make an application for relief. If the landlord has obtained judgement for possession but has not actually re-entered the landlord is still “proceeding” and the tenant may apply for relief [Egerton v Jones (1939) 2 K.B. 702].

Where the lease is in joint names all tenants must join in the application for relief [T M Fairclough & Sons Ltd v Berliner (1931) 1 Ch 60].

Method of application

The tenant may apply for relief by the following:

• By application in the landlord’s proceedings (CPR 23)
• By counterclaim
• By application at the hearing for possession
• By claim form N5A (CPR 55)

Discretion to grant relief to the tenant

There is considerable discretion open to the court on whether to grant relief which is why, if possible it is often best to go down other routes for possession.

In the leading case of Hyman v Rose (1912) A.C. 623 (in relation to the statutory predecessor to s.146) it was stated:

“… the discretion given by the section is very wide. The court is to consider all the circumstances and the conduct of the parties. Now it seems ne that when the Act is so express to provide a wide discretion, meaning, no doubt, to prevent one man from forfeiting what in fair dealing belongs to someone else, by taking advantage of a breach from which he is not commensurately and irreparably damaged, it is not advisable to lay down any rigid rules for guiding that discretion … It is not safe I think to say that the court must and always will insist upon certain things when the Act does not require them, and the facts of some unforeseen case may make the court wish it had kept a free hand” [per Lord Loreborn at 631].
Remedying the breach as a condition of relief

“In the ordinary way relief is always granted to a person who makes good the breach of the covenant and is able and willing to fulfil his obligations in the future” [Bathurst (Earl) v Fine (1974) 2 All E.R. 1160, per Lord Denning at 1662 h).

In accordance with the principle that the court’s discretion under s.146(2) is unfettered, there is no rule of law that the breach must be remedied prior to the hearing of the application for relief. However, unless there is some good reason why the breach has not been remedied by that date or, at least, that all reasonable steps have been taken to remedy the breach, the court will usually take a dim view of the tenant’s case and may exercise its discretion in refusing to grant relief. It will almost invariably require the breach to be remedied as a condition precedent to relief.

Where the tenant makes good the breach and is able and willing to fulfil his obligations in the future he will usually be granted relief [Cremin v Barjack Properties Ltd (1985) 1 E.G.L.R 30 at 32, CA].[/amember_protect]

s 18 Tenants holding after the time they notify for quitting, to pay double rent.

And whereas great inconveniences have happened and may happen to landlords whose tenants have power to determine their leases, by giving notice to quit the premisses by them holden, and yet refusing to deliver up the possession when the landlord hath agreed with another tenant for the same: from and after the said twenty fourth day of June one thousand seven hundred and thirty eight, in case any tenant or tenants shall give notice of his, her, or their intention to quit the premisses by him, her, or them holden, at a time mentioned in such notice, and shall not accordingly deliver up the possession thereof at the time in such notice contained, that then the said tenant or tenants, his, her, or their executors or administrators, shall from thenceforward pay to the landlord or landlords, lessor or lessors, double the rent or sum which he, she, or they should otherwise have paid, to be levied, sued for, and recovered at the same times and in the same manner as the single rent or sum, before the giving such notice, could be levied, sued for, or recovered; and such double rent or sum shall continue to be paid during all the time such tenant or tenants shall continue in possession as aforesaid.

There are however strict rules that must be followed before a claim for double rent may be made. These were decided in Oliver Ashworth (Holdings) Ltd. v. Ballard (Kent) Ltd. [1999] 3 W.L.R. 57.

Laws L.J. states:
“…the right to double rent conferred by section 18 of the Act of 1737 only arises where (a) the tenant holding over after his own notice to quit is in fact a trespasser (thus, the notice must be valid), and (b) the landlord treats him as such. Any other case departs from what I regard as the plain purpose of the section…”

Though s.18 and Laws L.J. both specifically state that the notice must be “valid” a landlord is entitled to accept an invalid notice to quit. It is suggested by the Guild that acceptance of an invalid notice may provide an argument that the notice was “valid”).

One of the intentions of s.18 was to compensate the landlord should he have contracted a new tenant to take the property after the date specified in the notice, however there is no requirement to have a tenant in waiting to charge double rent.

Laws L.J. states
“…it is to my mind entirely clear that the legislature was concerned only to compensate landlords for the potential loss of rent arising where a tenant holds over against the landlord’s insistence that he should comply with his own notice to quit. I do not say that the section applies only where the landlord has a new tenant ready and waiting; the recital gives the thrust, but not necessarily the focus, of the section’s reach.”

Presumably, as the requirement is that the landlord treats the tenant as a trespasser, any request for double rent should be made using the words “mesne profits” so as to ensure the landlords intention is that the occupier is a trespasser. In addition, a landlord would be well advised to immediately commence possession.

Seeking possession

No notice by the landlord will be required because the service by the tenant of a valid notice to quit has ended the tenancy. However, a possession order in the usual way will be required.

You should contact the Guild for advice on seeking possession but essentially, it is an almost identical procedure to the rent arrears procedure after the service of a section 8 notice. It is the same court forms with some minor modifications explaining the reason for possession is because of the tenants notice to quit.

You should bear in mind that any claim for possession based on a tenants notice is extremely rare in the courts and therefore judges may be unfamiliar with what you are asking for. If an alternative method of possession is available (for example after service of a section 21) this maybe preferred.

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