Legal Practice Notes

This Practice Note addresses matters arising where a tenant is insolvent, including surrender, sureties, subtenants, charges, access to the premises, goods the tenant has left behind and HM Land Registry’s requirements. Agreeing a surrender is often the swiftest route for a landlord to recover possession of the premises from an insolvent tenant. It serves to avoid the additional preconditions that must be satisfied before forfeiture can take place (eg the need for a court order or the administrator’s consent where the tenant is in administration). For more on the various forms of insolvency, see Practice Note: Quick guide to property insolvency. Landlords will typically be under pressure to complete any surrender swiftly. To avert difficulties arising at a later date, however, the following issues ought to be considered. How surrender operates There are two ways a surrender may arise: express and implied. For the...

This Practice Note explains how a surrender by operation of law (implied surrender) can arise, the impact of a landlord accepting keys, and situations that may prompt surrender... Main principles An implied surrender occurs where the parties’ unequivocal conduct is incompatible with the tenancy continuing. It is evidenced by the tenant yielding up possession and the landlord accepting it. A tenant cannot end its lease obligations unilaterally. The central question is whether the landlord’s behaviour is so inconsistent with the tenancy’s survival that it can only be justified on the footing that possession has been retaken. Their actions are assessed objectively, considering the totality of their conduct... In Artworld v Safaryan, the Court of Appeal upheld a finding of surrender by operation of law where the cumulative effect of the landlord’s conduct showed an intention to assume control of the premises and treat them as its own, even...

Although damages are the principal remedy for a contractual breach (see Practice Note: contractual damages—general principles and related content), there are times in contract disputes—particularly where the agreement has not, or not yet, been breached—when damages are unavailable or not the most fitting response. In those circumstances, the court has a discretionary power to grant equitable relief, which may include: specific performance of any outstanding contractual obligations declaratory relief, for example as to the construction of a particular contractual term injunctive relief (interim or final) compelling a party in breach/about to breach to act or to refrain from acting rectification of a contract or of a deed rescission of a contract or of a deed Where damages for breach are claimed they are ordinarily advanced and, if granted, assessed by reference to the accepted compensatory purpose of contractual damages, ie to place the innocent party in the position they would have...

This Practice Note on domestic enforcement sets out, in outline, the range of enforcement options available, which will vary according to the type of judgment obtained and the identity of the judgment debtor. The likelihood of success with any selected mode of enforcement depends heavily on the breadth and depth of your knowledge of the judgment debtor. Enquiries into the nature and location of assets held by the debtor should not wait until judgment is handed down, but should instead form part of diligent case management from first instructions and continue throughout the life of the claim. For guidance, see Practice Note: Successful enforcement—knowing your defendant. Successfully obtained judgment—what next? Unless they are experienced in litigation, a successful client will often assume that the other party will comply with the judgment or order made. However, unsuccessful parties do not always comply. It is...

Disclaimer Pursuant to sections 178 and 315 of the Insolvency Act 1986 ( IA 1986), a liquidator or a trustee in bankruptcy (the trustee) may disclaim property of the company or the bankrupt where it is regarded as onerous. This Practice Note focuses on the liquidator’s role, though the same principles apply to a trustee. For fuller guidance on disclaimer—its nature and the steps to implement it—see: Disclaimer—overview Practice Note: The process of disclaimer by a liquidator or trustee in bankruptcy under sections 178 or 315 of the Insolvency Act 1986 Practice Note: The effect of disclaimer by a liquidator or trustee in bankruptcy on property and third parties This Practice Note sets out what is treated, in practice, as ‘onerous’ for these purposes. What is onerous property?......

Practice Note: Claim form in a Part 7 claim This Practice Note outlines what to include when preparing a claim form for a Part 7 claim. It identifies what a claim form is and why it is necessary, and cites examples of the court forms to be used in such matters. It further details the particulars that must be supplied when completing the form, and clarifies how the parties should be described in the claim form, including situations where the defendant’s name is unknown or uncertain, as appropriate. The claim form must contain a statement of value and a statement of truth. Depending on the court dealing with your case, you should also be alert to any additional requirements—see: Court specific guidance for that court, where relevant. This Practice Note is to be read alongside Practice Note: Drafting statements of case, which provides...

Ground of opposition (c) A landlord may resist the grant of a renewed lease under section 30(1) of the Landlord and Tenant Act 1954 ( LTA 1954) by invoking ground of opposition (c): ‘ That the tenant ought not to be granted a new tenancy in view of other substantial breaches by him of his obligations under the current tenancy, or for any other reason connected with the tenant’s use or management of the holding.’ This ground comprises two limbs: substantial breaches of the tenant’s obligations, and other reasons tied to the use or management of the holding. It is not a prerequisite to show a breach under the first limb in order to rely on the second. As to the first limb, whether a cited breach is substantial is a matter of fact. Any breach may relate to any part of the premises demised by the...

Regulated tenancies Regulated tenancies—often referred to as protected, statutory or fair rent tenancies—arise under the Rent Act 1977 ( RA 1977) and constituted the chief private residential tenancy type until 15 January 1989. Where a tenancy was granted on or after 15 January 1989, when the Housing Act 1988 took effect and assured tenancies became the prevailing private residential model, inclusion within RA 1977 is possible only in narrowly defined situations. Nevertheless, a considerable proportion of protected tenancies persists and, if they are not properly recognised, a purchaser acquiring property subject to a regulated tenancy may pay too much and be unable to achieve vacant possession. RA 1977 tenancies carry very strong security; in the majority of cases the landlord must await the tenant’s departure, though the parties may sometimes negotiate a surrender in exchange for a financial incentive. Be aware that, although several...

This practice note examines property disputes arising from negligence and trespass. For statutory liability connected to property and the law of nuisance, see Practice Notes: Property disputes in Scotland (delictual and statutory) and Property disputes in Scotland—common law and statutory nuisance. Negligence Negligence claims in property contexts frequently stem from inadequate property advice given by a professional—such as an architect, surveyor or conveyancer—or from substandard construction work undertaken by a contractor, for example a builder, roofer or plumber. Negligence creates liability for loss or injury caused by carelessness or a failure to exercise reasonable competence by the relevant professional or contractor. What is the test for negligence? Negligence is assessed by a three-part test considering whether: a duty of care exists that duty has been breached the breach of duty brought about the loss or harm complained of See further: The rise of the concept of duty of...

Guarantees and third party security from individuals Guarantees (see Practice Note: Guarantees) and third party security (see Practice Note: Third party security) provided by individuals are common forms of credit support in financing transactions. For example, in deals involving a corporate borrower, a lender may require the borrower’s directors to give guarantees or offer security. Where the borrower is an individual, the lender may instead seek a guarantee or security from a related family member, such as a spouse, civil partner or a parent... When taking a guarantee or security from an individual, a number of additional considerations arise beyond the general law on guarantees and security. The principal issues are explored in the following Practice Notes: Key issues in taking a guarantee from an individual in a commercial financing context Key issues in taking security from...

Side letters are commonly utilised in practice: to set arrangements and allow concessions (eg concerning the permitted use, the standards of repair or rent concessions), or to remove uncertainty, for instance on assignment or on rent review The provisions of such letters are ordinarily intended to be: legally enforceable personal to the parties to the letter or binding on successors in title temporary and/or capable of termination Successors in title—who is bound? A key issue is whether a side letter binds the landlord’s and the tenant’s successors in title. When preparing a side letter, it is crucial to state expressly if the successors of the original landlord and tenant are to be bound. If a side letter is expressed as personal to either party, it will not bind the successors of that party. If it is silent on this point, then it may bind successors......

This Practice Note sets out the requirements under common law and the Agricultural Holdings Act 1986 ( AHA 1986) in respect of notices to quit served in respect of an agricultural holding and the special grounds (or ‘ Cases’) under AHA 1986, Sch 3. Any notice given under the Agricultural Holdings Act 1986 ( AHA 1986) must, at the very least, meet the common law rules for notices to quit, except where altered by the tenancy agreement. Nevertheless, where the AHA 1986 imposes stricter obligations, those will take precedence over both common law and contractual provisions. In the vast majority of situations, an agricultural holding will be an annual periodic tenancy, either because it was originally granted on that basis or because it has been treated as such by the operation of AHA 1986, ss 2 and 3. The following common law and statutory rules...

The route to obtaining relief from forfeiture differs widely with the type of default. This Practice Note specifically addresses relief from forfeiture arising from rent arrears. For guidance on seeking relief for any alternative breach, refer to Practice Note: Relief from forfeiture for breach of covenant. Which interests does relief from forfeiture apply to? Beyond leases, relief may extend to certain other relevant proprietary interests. Consult the guidance in Practice Note: Relief from forfeiture for breach of covenant— Which interests does relief from forfeiture apply to? Jurisdiction Historically, the courts have exercised an inherent jurisdiction to grant relief from forfeiture for non-payment of rent. In some areas, this equitable jurisdiction has been supplanted by statute, including in relation to breaches other than non-payment of rent (see Practice Note: Relief from forfeiture for breach of covenant— Jurisdiction to grant relief in respect of breaches of covenant (other than...

This Practice Note examines misrepresentation, misstatement and non-disclosure in property transactions. It outlines: a seller’s potential liability for answers provided to pre-contract enquiries; the buyer’s possible remedies for non-disclosure, misrepresentation and misstatement; and contractual provisions that may protect the seller if a claim is made. What is misrepresentation? In this context, a misrepresentation is a false statement of fact by one party to another that is not a term of the contract but persuades the other to enter into it. For liability to arise, the statement must be material and actually relied upon by the other party. If a seller gives an untrue answer in replies to enquiries (or elsewhere), the buyer relies on it when deciding whether to enter into the contract and then suffers loss by entering the contract, the seller will be liable for...

This Practice Note sets out the timeframes for undertaking several frequently encountered tasks by property disputes practitioners, alongside links to added guidance. It is not a complete catalogue of all deadlines relevant to the areas noted, and supplies only concise points. Full particulars of the applicable law and procedure in each instance should be obtained from the supplementary materials. For wider guidance on limitation periods, see Practice Notes: Limitation—the principal limitation periods and Limitation Act 1980—general application. Step required Time limit Reference Further information Limitation periods for common court proceedings Court proceedings to recover rent (including sums reserved as rent). Six years from the date the arrears fell due. Section 19 of the Limitation Act 1980 ( LA 1980). See Practice Note: Recovering rent arrears. Court proceedings for breach of lease other than non-payment of rent. 12 years if the lease was executed by deed;...

Practice Note This Practice Note examines pre-action behaviour in ordinary and commercial civil disputes in Scotland. For guidance on: pre-action steps in Scottish personal injury matters, see Practice Note: The Scottish Personal Injury Pre- Action Protocol other issues to weigh before raising a civil claim in a Scottish court, and how to commence and advance a claim, see Scottish DR: prescription and limitation—overview and Scottish DR: case management and evidence—overview respectively, which lead to more detailed guidance the closest comparable process in England and Wales, see Pre-action: general—overview and Pre-action protocols—overview, which in turn link to fuller guidance on various aspects of pre-action conduct in England and Wales Note: this Practice Note does not provide guidance on pre-action requirements in ordinary actions that are partly governed by statute; for example, where a lender seeks to enforce a qualifying standard security under the...

Professional Arbitration on Court Terms ( PACT) Professional Arbitration on Court Terms ( PACT) is a collaboration between the Royal Institution of Chartered Surveyors ( RICS) and the Law Society, providing an alternative dispute resolution ( ADR) mechanism for lease renewal disputes under the Landlord and Tenant Act 1954 ( LTA 1954) (see: PACT— Lease renewal disputes for a link to the joint Law Society and PACT guidance note: Surveyors And Lawyers Involved In Tenancy Renewals Under PACT). This Practice Note outlines PACT’s objectives, how the process functions, which variant of PACT is most appropriate and the choice between appointing an arbitrator or an independent expert, alongside fee considerations, as well as the key advantages and disadvantages. PACT offers landlords and tenants a route to settle unresolved issues on a renewal lease without resorting to court. For additional guidance on lease renewals and the relevant...

This Practice Note summarises the provisions of the Leasehold and Freehold Reform Act 2024 ( LFRA 2024), much of which is not yet in force. bans the grant or assignment of certain long residential house leases makes major changes to multiple aspects of leasehold enfranchisement and lease extension procedures and provisions (including the price payable) gives long leaseholders a right to replace their ground rent with a peppercorn rent on payment of a premium brings in a set of reforms to the residential service charge regime, regulation of estate management, and leasehold and estate management redress schemes clarifies uses of estate rentcharges and regulates remedies for rentcharge arrears amends various provisions of the Building Safety Act 2022 ( BSA 2022), including defining ‘relevant steps’ a landlord must take to remedy ‘relevant...

Where the parties agree a lease variation so fundamental that it is entirely at odds with the original lease, the law may treat there as being an implied surrender and re-grant taking effect by operation of law. In that scenario, the existing lease is taken to have been surrendered and a fresh lease is taken to have been granted between the parties on the varied terms agreed. An unintentional surrender and re-grant arising in this way can produce serious adverse consequences for both the landlord and the tenant—see ‘ Consequences of inadvertent surrender and re-grant’ below. This Practice Note covers: amendments to lease terms that do, or do not, prompt surrender and re-grant by operation of law, including: enlarging the demise or lengthening the term reducing the demise or the term ...

This Practice Note explores the definition of an inherent defect, identifies whether the duty to remedy rests with the landlord or the tenant, considers any obligations implied by law to address inherent defects, and explains the position where a defect causes damage. It does not address repair liabilities under the Building Safety Act 2022 ( BSA 2022). For guidance on liability under BSA 2022, see Practice Notes: Building Safety Act 2022—key provisions and issues and Building Safety Act 2022—landlord and tenant issues... Inherent defects in leasehold property Design flaws, defective installation, or the choice of unsuitable or inadequate materials during construction can create serious issues over time... In a leading authority, failed joints in the basement of an office building allowed water ingress, leaving the basement unfit for use... In another case, inadequately designed double-glazing units caused condensation and black...