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Breach of Repairing Covenant
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What happens when there has been a breach of repairing covenant in commercial property?
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Breach of Repairing Covenant Forfeiture
Before Landlord can forfeit, MUST serve a Section 146 Notice on the Tenant:
a. Specifying the particular breach complained of; and
b. If the breach is capable of remedy, requiring Tenant to remedy the breach;
and
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 section 146 notice does not require the tenant to
remedy it, the notice is bad.
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.
Ordinarily the breach of a positive covenant (whether a continuing breach
or a once for all breach) will be capable of remedy.
On the other hand, a ‘once for all’ breach of a negative covenant may not
be capable of remedy.
Thus, where the breach of a restrictive use covenant in a lease has
caused irretrievable harm to the landlord because the offending use has
caused a "stigma" to be attached to the property the breach is incapable of
remedy even if the use ceases.
Until recently it was assumed that breach of a covenant against carrying
out alterations without consent was also irremediable. However, the
position appears to have changed - Savva v. Hussein [1996]
c. In any case, requiring Tenant to make compensation in money for breach.
Leasehold Property (Repairs) Act [1938] – if Lease for more than 7 years with
at least 3 years left to run Landlord must follow a procedure before Landlord
can forfeit (or recover damages)
The procedure (Slide 6)
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