Making a leasehold security more secure
Fresh light has been thrown on the law of forfeiture by Dorian Brunt, of Eversheds, who looks at the whole thing through the eyes of a prospective mortgagee of the tenant’s interest: see
Dorian’s main concern is for the lender who could find its security taken from under its nose because it was unaware of the action being taken by the landlord. The suggested remedy is to obtain a covenant (wording supplied) from the landlord to notify the mortgagee in certain events and to allow the mortgagee sufficient time to remedy the breaches complained of.
The article does not underestimate the difficulty of obtaining such a covenant when the landlord has been invited to vary an existing lease.
Making a leasehold security more secure
Fresh light has been thrown on the law of forfeiture by Dorian Brunt, of Eversheds, who looks at the whole thing through the eyes of a prospective mortgagee of the tenant’s interest: see Variation on a lease Estates Gazette 13 July 2002, p123 (continued sub nom Practical solutions on p144 of the issue of 20 July).
Dorian’s main concern is for the lender who could find its security taken from under its nose because it was unaware of the action being taken by the landlord. The suggested remedy is to obtain a covenant (wording supplied) from the landlord to notify the mortgagee in certain events and to allow the mortgagee sufficient time to remedy the breaches complained of.
The article does not underestimate the difficulty of obtaining such a covenant when the landlord has been invited to vary an existing lease.
