Advice Flat Living at home in your block LEGAL


ThefirstsTep ToforfEiturE


JonathanUptontakes a closer look at Section 168 determinations


ForFeiting a lease is theultimate sanction when a leaseholder fails to pay the rent and/ or breachescovenants in thelease.Forfeiture representsahugewindfallfor thelandlord as he is able to grantanother lease, oftenfor alarge premium.Bycontrast, forfeiture is theflat owner’sworst nightmare–heloses everything. Becauseofthis, Parliament has introduced


numerous safeguards to protect leaseholders. A landlordmust jumpthrough various statutoryhoops before he canforfeit thelease and, even then,the flatowner canapply for relief.The threat of forfeiture is,however,a powerful weapon at thelandlord’sdisposalto force the tenant to comply with the terms of the lease. In cases of non-paymentofrent, it is


notnecessary to serveasection 146notice before forfeiting a lease (see EscalusProperties Ltd v Robinson [1996] Q.B. 231).Inall other cases, the landlordmust serve a section 146 notice specifying thebreachand giving the leaseholderareasonableperiodinwhich to remedy thebreach. Thelandlord, however, is notentitledtoserve asection 146notice unless theleaseholderhas admitted the breachorithas beenfinallydeterminedby theFirst-TierTribunal(Property Chamber) (previously knownasthe LVT) or acourt that abreachhas occurred.The FTT’sjurisdiction to determineapplicationsfor adetermination of breach of covenant is under section 168(4) of theCommonhold andLeaseholdReformAct 2002 andsuchclaimsare commonly knownas ‘s.168 determinations’. In the recent case of CussensvRealreed


Limited [2013]EWHC1229 (QB) theHighCourt decided that the County Court’s jurisdiction to determinewhether abreachofcovenant hasoccurredfor thepurposesofs.168 is under section15ofthe County Courts Act1984(the powertomakeadeclaration), rather than s.168 of the2002Act.Inpractical terms, itmakes no differencewhether thebreachisfinally determined by acourt or tribunal, although the costsmay differ. It is not uncommon


forabreachto 18 issue17 Flat Living


be remedied before thehearing.The recent case of Forest House Estates Ltd v Dakhil Allah RAl-Harthi [2013]UKUT 479(LC)isauseful reminder that the correct question on an application for a determination of breach is whether the breach has occurred, notwhether it has been remedied by thedateofthe hearing. In that case, theflat ownerhad laid


statutoryhoops before he canforfeit thelease and, even then, theflatowner canapply for relief


By thedatethe LVTinspected the property,


theleaseholder hadlaidcarpet throughout andwas no longer in breach


jumpthroughvarious Alandlordmust


wooden floorboards in breach of a covenant to maintain good quality carpeting and underlay throughout the flat in question (with the exceptionofthe kitchenand bathroom). There was a period of around threemonths inwhich 95%ofthe floorswerecovered by rugs.By the date the LVT inspected the property, the leaseholderhad laid carpet throughout and wasnolongerinbreach. TheUpper Tribunal held that theLVT waswrongnot tomake a determinationthatabreachhad occurred. If theflat ownerdoesremedythe breach


shortly before the hearing, itmay still be importantfor thelandlord to obtain a determinationsohecan recoverhis costs underthe usualcovenanttopay thecosts of and incidental to the preparation and service of a section 146 notice. Similarly, if a breach has been remedied, the tenantmay wantthe tribunal to record this so as to avoid anyfurther disputerelatingtoremedyand forfeiture. In Forest House Estates,the Upper Tribunal held that theLVT wasentitledto record the fact that the breach had been remedied by thetimeofits inspection,but that finding wasperipheraltoitsmain task unders.168(4).●


JonathanUptonisabarrister attanfield Chambers specialisinginproperty disputesand isco-author of theupcoming3rdEditionofService ChargesandManagement (Sweet&Maxwell).Heis amember of theChanceryBarAssociationandthe PropertyBarAssociation.


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