Forfeiture for Disrepair
If a freeholder intends to forfeit in respect of disrepair, whether by peaceable re-entry (the exercise of a landlord’s right to terminate a lease by taking physical possession of the premises) or civil claim (where the term of lease was originally granted for 7 years or more and has at least 3 years left to run), the Leasehold Property (Repairs) Act 1938 applies. Therefore the forfeiture notice must make reference to the right of the leaseholder to serve a counter notice within 28 days which will provide the leaseholder with the opportunity of claiming the protection of the Act which is stated in the landlord’s s146 notice.
Once the leaseholder has claimed this protection, (which can be done by letter) the freeholder has to make a preliminary claim for the court’s permission before taking any further action. The 5 alternative grounds on which the court can, at its discretion, give permission are:
- That immediate remedy of the disrepair is necessary in order to protect the value of the landlord’s reversion (and evidence from a valuer will be needed);
- That immediate remedy is needed in order to comply with a legal requirement, such as a repairs notice issued by the local authority;
- The immediate remedying of the breach is necessary to “prevent substantial diminution in the value of the landlord’s reversion”;
- The reversion “has already been substantially diminished by the breach”;
- Special circumstances render it just and equitable that leave should be give;
Note: Even if the landlord proves one or more of the grounds, the court has an overriding discretion to refuse leave to forfeit.
Jervis v Harris Clause
A common device for avoiding those restrictions from the 1938 Act is to include a ‘Jervis v. Harris clause’ in a lease. This allows the landlord to enter the premises and spend their own money on the necessary repairs, then claim that sum from the leaseholder as a debt. This can however still be difficult to enforce if access is refused because it then becomes necessary to sue for an injunction, which is a discretionary remedy. It can also be expensive to enforce and creates uncertainty in that the tenant may dispute the need for particular repairs or defaults in payment.