Property Practise - Incorrect MCQs

What is the requirement for forfeiture for non-payment of rent?

The landlord can forfeit as soon as the lease allows for it.

What is the requirement for forfeiture for any other breach of obligation except for non-payment of rent?

The Landlord must serve a s146 notice and give the tenant a reasonable opportunity to remedy the breach, failing which the landlord will be entitled to forfeit.

What is the process for a tenant breach (other than non-payment of rent) in relation to forfeiture?

If the lease is for a term of 7 years or more, and there are at least 3 years left to run:

• the tenant has 28 days to serve a counter notice after the s146 (which must include reference to these rights)

• then, the landlord must get leave from court.

What is a Jervis v Harris Clause?

Commercial leases will often include this self-help clause which gives the landlord the right to:

• enter the property

• carry out any repairs

• recover the cost of doing so from the tenant

What is CRAR? What is the criteria for it to be used?

Commercial rent arrears recovery - a self-help remedy where:

• The premises is commercial

• A minimum of 7 days principal rent is owed (doesn’t include service charge, does include VAT and interest)

• The lease has not been forfeited.

What is the process for using CRAR?

• Landlord must appoint enforcement agent

• 7 clear days notice must be given to enter the tenant’s premises (including details such as amount of debt and how to repay it, powers used and contact details of enforcement agent)

• If notice expires without payment of debt, enforcement agent can enter the premises and take control of goods

• Landlord must serve a further 7 clear days notice if it intends to sell the goods

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What is the approach for an open market review?

Any improvements made by the tenant should be disregarded and assume the premises is vacant and available for letting.

What title guarantee can a company in liquidation provide?

No title guarantee - the company is often incapable or unwilling to provide any assurances about the quality of the title or confirm the absence of undisclosed encumbrances.

What is meant by possessory title?

It indicates that the seller has physical possession but may not have full legal ownership - title indemnity insurance is often required

If a lease is assigned, who is liable for if rent is unpaid?

The original tenant under privity of contract

The new tenant under privity of estate

Can a tenant create a charge over their lease, for example to secure a loan with a bank? Do they need Landlord consent?

Yes, the tenant can charge the lease without Landlord consent unless the lease explicitly prohibits it

What is meant by a qualified repairing obligation?

It requires a tenant to maintain the premises in the same state of repair as at the beginning of the lease term