Section 168(4) of the Commonhold and Leasehold Reform Act 2002 permits a landlord under a long lease to apply to the First-tier Tribunal for a determination that there has been a breach of a covenant or condition in the lease. Such a determination is often sought by a landlord as a precursor to exercising the right to forfeit.
In Kyriacou v Linden [2021] UKUT 288 (LC); [2021] PLSCS 197, the Upper Tribunal (Lands Chamber) has underscored that the FTT has a statutory duty to make a determination that a breach of covenant has occurred if the evidence supports such a finding.
The appellant was the freehold owner of a mid-terrace Victorian house in London E17. The building had been split into an upper maisonette and a groun- floor flat. The appellant and her husband were long lessees of the upper maisonette. The respondent was the long lessee of the ground floor flat.
Both properties were tenanted, but the relationship between the parties had been strained for many years. In 2019, the appellant applied to the FTT for a determination under section 168(4) that, among other things, the respondent had breached a covenant in her lease requiring her to give notice in writing to the respondent within one month of every underletting of the flat. The FTT found that in February 2019 the respondent had committed a technical breach by failing to give the appellant required notice of subletting. It made a determination under section 168(4) to that effect.
In March 2020, eight months after the FTT’s 2019 determination, the appellant again applied to the FTT for a determination that the respondent had breached covenants in her lease, including a covenant to insure the ground-floor flat in both parties’ names “against loss or damage by fire storm and other insured risks including two years’ loss of rent…” The appellant also sought a determination that the respondent was in breach of covenant by obstructing the entrance way with her refuse bins. This alleged breach had been dismissed in the 2019 application.
The FTT refused to make any determinations of breach. In respect of the insurance cover, the FTT found that by December 2020 the respondent had obtained a policy that was compliant with the terms of the lease. At the date of hearing no actionable breach existed as it had been remedied.
The UT was highly critical of the FTT’s approach. It observed that this was another example of the FTT “erroneously refusing to make a determination that a breach had occurred on grounds that the breach has been waived or remedied”. The UT underscored that the FTT had no jurisdiction in respect of such matters.
Additionally, section 168 did not restrict the FTT from determining whether a breach of covenant existed at the date an application was made. The question the FTT had to consider was whether a breach had occurred. In doing so, the date the application was made was irrelevant. Provided an applicant had clearly explained what breaches were alleged to have been committed, and the respondent has had the opportunity to respond to those allegations, there would be no good reason for the FTT to fail to make a determination in light of the evidence.
Elizabeth Dwomoh is a barrister at Lamb Chambers
