Landlords are one of the main parties in any property transaction, but what happens if identifying who that is becomes problematic?
It is obvious that, where property is subject to a lease, many legal steps can be taken only by or against “the landlord”. It might reasonably be thought that identifying who that is ought not to be too difficult. However, two cases, albeit involving very different circumstances, required the assistance of the Court of Appeal in order to unravel this particular knot.
Who can forfeit?
In Scribes West Ltd v Relsa Anstalt (No 3) [2004] EWCA Civ 1744; [2005] 09 EG 190, the issue concerned who was entitled to forfeit a lease between the execution of the transfer of the reversion and the registration of the assignee as the registered proprietor. The problem arises because of the rule that, in respect of a registered title, legal ownership does not pass until the registration of the transferee as the new registered proprietor. (This difficulty will disappear once e-conveyancing comes into being, since this will require simultaneous completion and registration.) The question is of considerable importance since, for some time to come, the gap between completion and registration will remain.
In Scribes, the gap between the transfer of the reversion from the first to the third defendant, Relsa Barker Ltd, and the registration of the latter as the new registered proprietor came to almost a year. The terms of the transfer not only transferred the property to Relsa Barker but also expressly assigned to it “the benefit of any rights claims title or covenants to which it is entitled in respect of the property”.
On the day of that transfer, the new landlord gave notice to the fourth defendant tenant that rent should now be paid to the new landlord. Some five months later, Relsa Barker peaceably re-entered the premises on the basis of non-payment of rent, and, nine days later, it granted a new lease to the second defendant. The only issue before the court was whether that re-entry had been lawful, given that the landlord did not, at the time, hold the legal title to the reversion.
Since the lease in question was a pre-1996 lease, the key to deciding whether a new landlord in this situation can forfeit is section 141(2) of the Law of Property Act 1925. This provides that “any [lease] provision shall be capable of being… enforced… by the person from time to time entitled… to the income of the whole or any part… of the land leased”. The landlord argued that the transfer had effected an equitable assignment of the rent to it and it therefore had the right to forfeit under section 141(2).
The tenant contended that the statutory predecessor of section 141(2) had been introduced purely to ensure that a mortgagor in possession (which at that time did not retain the legal title to the property) could enforce lease covenants. It suggested that the (few) authorities on the point indicated that the subsection was confined to that situation.
The court accepted that the section had been interpreted in that way. It also agreed that the section did not allow an equitable owner of a reversion, to whom the right to receive rent had not been expressly assigned in writing, to enforce lease covenants.
However, their lordships were not persuaded that this meant that mortgages were the only context in which it could apply. They were satisfied that where, as here, the right to receive rent had been properly assigned to a transferee, the latter could subsequently exercise the right to forfeit. It is also worth noting that the court suggested that the same problem would not arise with post-1995 leases, since the Landlord and Tenant (Covenants) Act 1995 specifically includes equitable assignments.
Identifying the landlord following a death
Lodgepower Ltd v Taylor [2004] EWCA Civ 1367; [2005] 08 EG 192 concerned the validity of a notice served under the Agriculture (Maintenance, Repair and Insurance of Fixed Equipment) Regulations 1973. These allow some agricultural tenants to serve notice that requires the carrying out of specific repairs.
Such a notice must be served on either the current landlord or on any agent responsible for the management or farming, or, where a landlord has ceased to be entitled to the rents but the tenant has not been given notice of that fact, on that original landlord. If no objection is raised to the notice and the repairs are not carried out, the tenant can perform them and reclaim the cost from the landlord. It follows that if the initial notice is invalid, any subsequent claim to recover the costs will fall away.
A complicated situation
Simplifying a very complex tale, the landlords of the claimant’s farm had been two elderly people. One of these, Mrs Coulthurst, had always received the rent, which was paid into a joint account held by her and her husband. Three weeks following her death (which was known to the tenant), a notice to remedy was served on “the executors and Mrs Coulthurst deceased”. Her widower eventually replied that he could not deal with the matter. Some three years later, the tenant alleged that a proper notice had been served and that the landlord could be required either to remedy the disrepair or to pay damages.
The court held that the notice had not been served on the landlord personally (that is, the survivor of the two landlords). It overturned the trial judge’s ruling that the notice had been served on Mr Coulthurst as the landlord’s agent. His only principal could have been his wife, and any agency that he might have held must necessarily have terminated upon her death.
The court also rejected the trial judge’s conclusion that the statutory provision for service on a former landlord had been satisfied. Although Lindsay J accepted that this could be achieved by serving notice on an agent of a former landlord, he was satisfied that Mr Coulthurst’s agency had come to an end when Mrs Coulthurst had died. The statute did not allow for service on an erstwhile agent of a former landlord.
Sandi Murdoch, senior lecturer in law, Reading University
