Breach Of Lease: How To Avoid Making The Situation Worse
Breaches of a lease need to be dealt with very carefully to make sure that you do not limit the landlord’s legal options. As a solicitor, I have come across multiple instances in the past of managing agents seeking to be helpful but inadvertently intervening in a way that can cause problems when it comes to forfeiture proceedings. Here are some thoughts on how to reduce the chances of making costly errors.
If unsure of a potential breach do not DEMAND or ACCEPT ground rent or service charges.
Gather evidence supporting the belief that there has been a breach of the lease.
Avoid communicating with the lessee if at all possible before seeking legal advice.
Does the lease contain a re-entry provision? This provision will not always be obvious and so the lease should be checked carefully.
Seek advice on the cost provisions in the lease regarding forfeiture.
Do not attempt to re-enter the property with or without bailiffs as this constitutes a criminal offence; residential property court proceedings are always required.
Make sure automated systems are updated accordingly so no demands are made to the tenant either by letter, email or by telephone as this may also waive the right to forfeit the lease.
Remember, where the breach does not concern rent, it will be necessary to apply to the Leasehold Valuation Tribunal (‘LVT’) for a declaration that a breach has occurred before forfeiture proceedings can be issued.
Make sure legal advice is obtained before the service of a Section 146 Notice under the 1925 Law of Property Act demanding remedying of a breach of covenant.
Alternatively, if rent arrears have been accrued, you may wish to consider a Letter Before Action copied to the tenant and its lender. Depending on the tenant and lender this may result in payment but it will prevent you continuing with forfeiture.
If you are in any doubt concerning the above legal advice we would suggest that legal advice be taken avoid prejudicing any actions following from the apparent breach and the resultant costs and delays. We at Bishop and Sewell are more than happy to help in this regard.