COMMERCIAL PROPERTY – EXAM NOTES
REMEDIES
Options available to the landlord should a tenant fall into arrears
Options available to the landlord should a tenant breach a repairing covenant
Options available to the landlord should a tenant breach any other covenant in the lease
EXERCISE 1
Lease dated 1st Jan 2019
Premises – Unit 3 St Peter Industrial Estate Prestown
Tenant – Jason Hogarth t/a Tile Traders
Use – Manufacture of floor tiles
Term – 15 years (commenced 31st March 2018)
Rent - £500 pcm
GDL say that this tenant is now in arrears with rental. He has failed to pay the rental instalments for Feb and March 2019 and
GDL do not think he is about to pay. GDL went round to speak to the tenant yesterday and to serve him with the April 2019
demand for rental. Mr Hogarth said his business was going through a temporary slump but that it looked as though it may pick
up in the summer as some large orders for a new batch of tiles have been promised to him.
Advise GDL
POINTS TO NOTE
GDL’s (landlord’s) remedies are:
Damages for breach of contractual relationship
Forfeiture
Injunction
Specific performance
Commercial Rent Arrears Recovery - CRA
Bankruptcy
Commence proceedings for arrears:
GDL should sue the tenant
Maximum of 6 years debt can be claimed under Limitation Act 1980
Civil action commenced in either County or High Court depending on amount claimed
Can claim interest on arrears of rent
If lease is silent on interest, then it is at the prevailing civil procedure rate of currently 8% per annum
Lease may stipulate a higher rate
Forfeiture
Landlord’s right to re-take possession of the premises
Right that arises to re-enter the premises and bring the lease to an end because the tenant has breached his obligations
under the lease
Right for a landlord to forfeit a lease is not implied at common law – must be expressly reserved in the lease
REMEDIES
Options available to the landlord should a tenant fall into arrears
Options available to the landlord should a tenant breach a repairing covenant
Options available to the landlord should a tenant breach any other covenant in the lease
EXERCISE 1
Lease dated 1st Jan 2019
Premises – Unit 3 St Peter Industrial Estate Prestown
Tenant – Jason Hogarth t/a Tile Traders
Use – Manufacture of floor tiles
Term – 15 years (commenced 31st March 2018)
Rent - £500 pcm
GDL say that this tenant is now in arrears with rental. He has failed to pay the rental instalments for Feb and March 2019 and
GDL do not think he is about to pay. GDL went round to speak to the tenant yesterday and to serve him with the April 2019
demand for rental. Mr Hogarth said his business was going through a temporary slump but that it looked as though it may pick
up in the summer as some large orders for a new batch of tiles have been promised to him.
Advise GDL
POINTS TO NOTE
GDL’s (landlord’s) remedies are:
Damages for breach of contractual relationship
Forfeiture
Injunction
Specific performance
Commercial Rent Arrears Recovery - CRA
Bankruptcy
Commence proceedings for arrears:
GDL should sue the tenant
Maximum of 6 years debt can be claimed under Limitation Act 1980
Civil action commenced in either County or High Court depending on amount claimed
Can claim interest on arrears of rent
If lease is silent on interest, then it is at the prevailing civil procedure rate of currently 8% per annum
Lease may stipulate a higher rate
Forfeiture
Landlord’s right to re-take possession of the premises
Right that arises to re-enter the premises and bring the lease to an end because the tenant has breached his obligations
under the lease
Right for a landlord to forfeit a lease is not implied at common law – must be expressly reserved in the lease
