Forfeiture for breach of a covenant other than rent: section 146 notice first (LPA 1925 s.146)
Rhiannon is the tenant of a shop in Gloucester, England, under a ten-year commercial lease that contains a covenant against structural alterations without consent and a forfeiture clause allowing the landlord to re-enter for breach of any tenant covenant. Without asking, Rhiannon has removed an internal load-bearing wall. The landlord, Fairway Properties Ltd, wants to forfeit the lease. Rent is fully paid.
What must Fairway do before it can enforce the right of re-entry?
Choose one answer to see the reasoning.
Worked answer
Correct answer C: Serve a notice specifying the breach, requiring it to be remedied if capable of remedy and compensation to be paid, and allow a reasonable time to comply.
THE RULE TO REMEMBER
Before forfeiting for breach of a covenant other than to pay rent, the landlord must serve a s.146 notice specifying the breach, requiring remedy if possible and compensation, and allow reasonable time.
Forfeiture for breach of a covenant other than rent: section 146 notice first (LPA 1925 s.146)
Section 146(1) of the Law of Property Act 1925 provides that a right of re-entry or forfeiture for breach of a covenant in a lease is not enforceable, by action or otherwise, unless and until the landlord serves a notice on the tenant (a) specifying the particular breach complained of, (b) if the breach is capable of remedy, requiring the tenant to remedy it, and (c) in any case requiring compensation in money, and the tenant fails within a reasonable time to remedy the breach and pay reasonable compensation. Rhiannon's breach is of the alterations covenant, not the covenant to pay rent, so s.146 applies; s.146(11) leaves forfeiture for non-payment of rent to separate rules. Only after the notice has been served and a reasonable time has passed without compliance can Fairway forfeit, by proceedings or by peaceable re-entry, and Rhiannon may then apply for relief under s.146(2).
Why A is wrong: Section 146(1) applies to re-entry 'by action or otherwise', so even peaceable re-entry must be preceded by a s.146 notice.
Why B is wrong: A formal demand for rent relates to forfeiture for non-payment of rent; rent is paid and the breach here is of another covenant.
Why D is wrong: A s.25 notice concerns termination and renewal of business tenancies under the 1954 Act, not forfeiture for breach.
Why E is wrong: Forfeiture is not automatic; the landlord must elect to forfeit and, for non-rent breaches, first comply with s.146.
A little more practice done.
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A GOOD HABIT, DELIVERED
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