Leaseholder Breaching The Terms Of Their Lease?

Has Your Tenant Broken The Terms Of Their Lease?

It can be very stressful if your leaseholders breach their lease terms. Breaches can result in damage to your property, disruption and additional expense.

Whether deliberate or an honest mistake, breaching lease terms is a legal matter. To find a suitable remedy that does not leave you out of pocket, you must speak to an expert.

A lease is a contract between the landlord and the leaseholder.

If a leaseholder breaches the terms of their lease, the contract has been broken. As a landlord, you will have legal remedies available to help resolve the problem.

How Can A Leaseholder Break A Lease Agreement?

One of the most common breaches of a lease agreement is failing to pay service charges. However, there are numerous others, including:

subletting the property
antisocial noise issues
keeping pets
carrying out alterations to the property without consent
failing to comply with obligations relating to repairs and decoration.

The remedies available to you will depend on the nature of the breach and the terms of the lease.

What Is The Penalty For Breaking A Lease Agreement?

You should seek legal advice before approaching the leaseholder. You may waiver your right to certain remedies if you make any initial contact with them.

You should also not look to demand or accept any service charges or ground rent from the leaseholder without having obtained legal advice first.

There are several options available to landlords when a leaseholder is in breach, providing the matter is dealt with correctly.

For example, if a leaseholder structurally alters their flat and the lease does not permit structural alterations, the leaseholder may need to remedy this breach by putting the flat back to how it was before the breach occurred.

Our legal advisors can take you through the options available. It may be that the dispute can be remedied without requiring court action.

Initially, we will look to write to the leaseholder. If the leaseholder fails to remedy the breach or does not admit to a breach, we can help you to make an application to the First Tier Tribunal, under Section 168 (4) of the Commonhold and Leasehold Reform Act 2002.

By providing sufficient evidence, we can help to secure confirmation from the Tribunal that a breach has occurred. Much like a County Court Judgment, this can then be enforced against the leaseholder – so you can rectify the issue, reclaim your costs and be assured that there will be no future breaches.

However, in extreme instances, the leaseholder may still fail to fulfil their obligations. What happens then?

Many leases contain an express forfeiture clause which can be actioned by court order (though this is very much a last resort).

Forfeiture Of The Lease

To start forfeiture proceedings, you must first serve a valid notice under Section 146 of the Law of Property Act 1925.

The notice must:

detail the breach complained of
state whether the breach is capable of remedy (and require the leaseholder to remedy it)
in any case require the leaseholder to make financial compensation for the breach.

If the breach can be remedied, the leaseholder will be given a reasonable time to do so following service of the Section 146 notice.

If the leaseholder fails within a reasonable time to remedy the breach to the satisfaction of the landlord, forfeiture proceedings can begin.

For Amy-Paige Gregory, Chartered Legal Executive:

“Amy and her team dealt with the renewal of our commercial lease. They handled dealing with our tenant professionally and we were always kept well informed. The pricing for services was very fair. Thank you.”