Landlord must comply with statutes to succeed at forfeiture

The forfeiture of a tenant's 900-year lease for non-payment of rent failed as the landlord had not complied with statutory provisions, said the Upper Tribunal in the case of Cheerupmate2 Ltd v Calce.

The appellant, Cheerupmate2 Ltd, was the landlord of the respondent, Mr Calce. The appellant claimed to have brought the respondent’s under-lease to an end by forfeiture for arrears of ground rent. The judge of the First-tier Tribunal decided that no forfeiture had taken place, and the appellant appealed that decision. That appeal failed.

The land to which this appeal related was to the north of 2 Railway Bank, Hyde. The appellant held a long lease of the land and the respondent held an underlease, granted out of that lease in 1948 for a term of 900 years. The appellant was therefore the respondent’s landlord.

For the forfeiture to be valid, the landlord had to comply with ss.166 and 167 of the Commonhold and Leasehold Reform Act 2002. The Upper Tribunal pointed out that the effect of s.166 was that the landlord could not forfeit for arrears of ground rent until two years after the due date set by the section 166 notice served in respect of those arrears; and that because the sum involved was less than £350, s.167 meant that the landlord could not forfeit for arrears of ground rent until three years had elapsed from the date for payment specified by the section 166 notice served in respect of those arrears. The important point was that the two/three year periods ran from the date specified in the notices, not from the date the arrears arose. If that wasn’t enough, the appeal also failed because an out of date version of the section 166 notice had been used containing wording which Parliament had specifically decided should not be used – that defect was sufficient to invalidate the notice which meant that the forfeiture was also invalid.

 

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