Breach of Repair Covenant

Breach of repair covenant

Special case where law is more lenient to tenant because breaches are usually fixable

Reason for leniency

Most tenants breach repair obligations and breaches can be remedied

Forfeiture (repair breach)

Requires s146 notice + time to remedy

LPRA application

Lease ≥7 years AND ≥3 years remaining

Counter-notice (repair)

Tenant has 28 days to serve counter-notice

Effect of counter-notice

Landlord needs court permission to proceed (hard)

Damages (repair breach)

Requires s146 notice + 28-day counter-notice period

Measure of damages

Loss to reversion NOT cost of repairs

Problem with damages

Usually very low recovery for landlord

Specific performance (repair)

Rare and only in exceptional cases

Jervis v Harris clause

Self-help clause allowing landlord to repair and recover cost

Jervis v Harris advantage

No s146 notice needed

Jervis v Harris recovery

Full repair cost recoverable as debt

Jervis v Harris importance

Best remedy for repair breaches

Debt action

Claim for unpaid rent through court, slow and costly

Debt action use

Any sum under lease (rent or service charge)

CRAR

Seizure of tenant goods to recover rent (quick no court needed) but strict procedure must be followed

CRAR use

Only for principal rent

Forfeiture (rent)

Ending lease for non-payment

Forfeiture advantage

Quick and strong pressure but risk of losing tenant

Forfeiture use

Rent or sums treated as rent

Damages (repair strategy)

Weak remedy due to low recovery

Forfeiture (repair strategy)

Weak due to counter-notice barrier

Self-help clause (repair strategy)

Best option for landlord

Specific performance (repair strategy)

Last resort!!!!!

Damages (other breaches)

Compensates financial loss, preserves relationship but costly and uncertain recovery

Forfeiture (other breaches)

Forces compliance or ends lease

Forfeiture disadvantage

s146 required + risk losing tenant

Specific performance (other breaches)

Forces compliance

Specific performance (limitation)

rarely granted unless exceptional circumstances (eg lease with no forfeiture/self help clause)

Injunction

Stops threatened breach

Guarantor

Third party responsible for tenant obligations, offers better financial backing

Guarantor risk

May become tenant

Strategy (rent)

Use CRAR or deposit for speed

Strategy (repair)

Use Jervis v Harris clause

Strategy (other breaches)

Use injunction for future breaches

Strategy (security)

Use deposit or guarantor first