The recent case of Andrew Toms v Marilyn Ruberry is an interesting one; it illustrates why you should give careful consideration to the contents of the forfeiture provisions of a lease before taking enforcement action. This case shows the importance of interpreting the right of re-entry and forfeiture clause in the lease against the backdrop of Section 146(1) of the Law of Property Act 1925.
Section 146(1) provides “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."
However, in this case, the lease provided a right of re-entry and forfeiture on the Landlord on the occurrence of a business partner committing any other breach of its obligations under the agreement and (where such breach is capable of remedy) the business partner fails to remedy any such breach within 14 days following the receipt of the written notice from the company to remedy the breach, namely by a Default Notice. However, the Landlord served the Default Notice and the Section 146 Notice at the same time, rather than serving the Default Notice and allowing the Tenant 14 days to remedy the breach.
It was decided that the Landlord was not entitled to serve a Section 146 Notice until a Default Notice had been given and the period of 14 days specified in that clause had passed without the breach being remedied. Only then would a Landlord’s right of re-entry be exercisable.
The Judge went on to state that upon the proper construction of Section 146(1), a Notice under the provisions could not be given until the Landlord’s right of re-entry had accrued under the provisions of the lease.
It is important to ensure you have complied with the terms of the lease prior to attempting to enforce the provisions of Section 146 of the Law of Property Act 1925.
If you have any queries regarding Section 146 of the Law of Property Act 1925, or any other queries in relation to lease disputes, please contact our expert Richard Harriman on 01494 521301.