Leases 4 Termination - GDL Land Law

Land Law : Leases 4, Termination

Termination of leases

• Effluxion of time

  • Fixed term ends

  • Usual common law way in which a lease for a fixed term comes to an end.

  • NO notice to quit is needed to end a fixed term.

  • However, at end of the lease, the tenant may have security of tenure. EG:

  • (a) most business tenancies are protected by the Landlord and Tenant Act 1954, Part II. If tenant follows certain procedures and time limits, they may be entitled to require the L to grant a new lease (ch 15).

  • (b) a residential tenant may have rights to remain in occupation under the Rent Act 1977 (for private tenancies granted before 15 Jan 1989) or the Housing Acts 1985 (public sector tenancies) and 1988 (private tenancies granted after 15 Jan 1989).

• Break Clause

  • A lease for a fixed term may contain a provision allowing either party to service notice during its currency to bring it to a premature end.

  • Person with benefit of clause can end it early

• By Surrender

  • T is persuaded to give up lease. T hands back the lease to L with the L’s consent. Results in premature termination of the lease.

  • Surrender may be express or implied.

  • For effect on sub-tenants, see: s139 LPA 1925.

• Merger

  • Converse of surrender—the T acquires the L’s interest, thus becoming their own landlord—and lease is absorbed by the reversion and destroyed.

• Enlargement

  • A tenant may, by deed, enlarge their lease into a fee simple under s153 LPA 1925, where the term was originally for 300 yrs or more and the unexpired term has at least 200 years to run.

  • There are numerous other conditions.

  • Effort of enlargement: to increase T’s interest to that of an estate in fee simple, and thus extinguish the title of the previous fee simple owner.

  • Very rare.

• Disclaimer

  • T’ee in Bky gets rid of lease

• Notice To Quit

  • Periodic tenancies end this way.

  • If there are joint tenants, notice by one of them is sufficient: Hammersmith BC v Monk (1991).

  • Required period of notice:

  • (a) Yearly tenancy: either side must give at least half a year’s notice to quit (unless there is agreement to the contrary), expiring on the anniversary of its commencement. If a tenancy began on a quarter day, two quarters notice will be sufficient, otherwise the period is half a year (182 days).

  • (b) Other periodic tenancies: eg quarterly, monthly, weekly—must be determined by a full period’s notice to expire at the end of a complete period. These tenancies may be created expressly or by implication of acceptance of rent referable to a period.

  • (c) Dwelling Houses

  • Protection from Eviction Act (PFEA) 1977 (as amended by Housing Act 1988) requires a notice to quit:

    • (a) to be for a minimum of 4 weeks;

    • and (b) to be in writing, containing prescribed info informing the tenant of their rights, eg to security of tenure.

  • The PFEA 1977 and Housing Act 1988 also contain a number of provisions prohibiting eviction and harassment. Under 1977 Act, it is a criminal offence for any person unlawfully to evict a residential occupier, and under the 1988 Act, an illegal eviction is a statutory tort entitling the occupier to damages in a number of situations. PFEA 1977 also applies to residential licences.

  • (d) Tenancies at Will

  • No period of notice is necessary to bring a tenancy at will to an end.

  • But accepted by the landlord of a rent referable to a period while the tenant is in possession may convert a tenancy at will into a periodic tenancy.

• Frustration

  • In theory, is possible for a lease to be brought to an end by frustration, eg where the leasehold property has been destroyed.

• Repudiation

  • May be possible for a tenant to terminate the lease by repudiation.

• Forfeiture

Forfeiture

• Is a right for the L to terminate the lease prematurely for breach of covenant by the T.

• Is never implied into a legal lease—must be an express forfeiture clause in the lease, allowing L to forfeit in event of breach of covenant (or insolvency) by T.

• But in equitable lease, need not be an express forfeiture clause, a right to forfeit for non-payment of rent is implied into equitable leases as one of the usual implied covenants (Hodgkinson v Crowe, 1875)).

• In a legal lease, the forfeiture clause creates a legal right of re-entry , one of the 5 legal rights in s1(2) LPA 1925—so forfeiture clause AKA re-entry clause.

4 essential ingredients for forfeiture

• (1) There must be a breach of covenant by T

• (2) There must be a forfeiture clause in a legal lease (implied in equitable lease)

• (3) L must choose to forfeit

• (4) There must be no waiver of forfeiture

WAIVER of forfeiture (applies to both non-payment of rent and other breaches)

• If landlord has waived their right to forfeit, they cannot forfeit

• Landlord may waive IF:

  • (1) they are aware of the acts or omissions giving rise to the right to forfeit;

  • and (2) they do some unequivocal act recognising the continued existence of the lease.

• Eg, accepting or suing for rent due after the breach; or distraining for rent due, despite knowing about the breach.

• Breach by T

• L deemed to ‘forgive’ breach

• Unequivocal act by L recognises leases will continue

• Waiver is strict, can take place inadvertently where L’s agent sends out a rent demand and L knows of breach : Central Estates v Woolgar (1972)

  • Had waived right to forfeit when L’s agent had by mistake accepted the next rent.

• Blackstones v Burnetts (1973)

  • HELD: the L had knowledge of breach where his solicitor had knowledge of the breach. So when L accepted the next rent he lost right to forfeit.

• Other egs: John Lewis v Viscount Chelsea; Thomas v Ken Thomas (2007); and Osibanjo v Seahive Investments (2008), CA.

• Continuing CF non-continuing breach:

  • For a continuing breach (eg failure to repair), L only loses right to forfeit for that period of non-repair, but can reapply on new period of non-repair, a continuing breach.

• Where there is a continuing breach (eg failure to repair), waiver only lasts until the next rent day, at which point L can then choose to reject the rent and forfeit the lease.

• But if...