Landlord And Tenant Relationship

A covenant is an agreement creating an obligation contained in a deed. It may be positive, stipulating the performance of some act or the payment of money, or negative or restrictive, forbidding the commission of some act. In the context of landlord and tenant relationship, it signifies the various mutual and reciprocal obligations as between the two parties, the breach of which gives a right to personal action in favour of the party who suffers the breach. It is also in the nature of a promise or agreement under seal. Certain covenants run with the land.

A party may claim damages for breach of covenant. A covenant personal to the original landlord under a lease is not a landlord’s covenant within the meaning of Section 28 (1) of the Landlord and Tenant (covenants) Act 1995. See BHP Petroleum Great Britain Ltd. v Chesterfield Properties Ltd. (2002) All E.R. 821 CA. How does a landlord or tenant enforce a breach of any covenant beneficial or applicable to him? The most common covenant that binds the tenant is not doubt the covenant to pay rent. This covenant is usually treated separately from all the other covenants. The landlord may seek to enforce the covenant to pay rent by means of the exercise of his right of distress, when the rent is in arrears.

It may be levied within 30 days of the date when the rent falls due, wherever the tenants goods are found. See Distress for Rent Act 1737. Distress technically means the act of seizing moveable property of a wrongdoer, to compel the performance of an obligation or to procure satisfaction of a wrong committed. It is a mode of legal "self-help," e.g. levying distress (distraining) for rent due under a lease. At common law the right was to retain the things seized until compensation was made, and included no right of sale; the landlord’s power of sale of distress for rent is statutory. Walking distress is a seizure of goods, which are then left in the possession of the wrongdoer subject to conditions. Besides when the rent is in arrears (when the tenant consistently defaults in paying his rent), it gives the landlord a right of entry. See the case of Long v. Clarke (1894) Q B 119 in which a bailiff, in order to effect a distress for rent in a house, when through the next house and into the yard at the back. He then climbed over the wall into the yard of the house in which he was directed to distrain, and entered and distressed. The Court of Appeal held that this was a lawful distress. The right of the distress no doubt gives a right to the landlord to do that, which, if any other person did it, would be a trespass as far as what is permitted by the law of distress is concerned.

It should be noted that a bailiff must be given a warrant by the landlord who must have obtained it from a Court. The goods are then seized and impounded and are liable to be sold, if, five days after notice of the distress has been duly served on the tenant, he fails to replevy the goods. (i.e. replevin, means the re-delivery of the goods or chattel to their owner if wrongly seized or where distress has been wrongfully levied). Note that in order to succeed, the plaintiff whose goods have been seized must produce security for his rent and the costs of the case and undertake to pursue an action to determine the defendant’s right to distrain.

It should also be noted that in an action for arrears of rent, there must be a formal demand for rent on the landlord’s part before he can sue his tenant on the ground of forfeiting for non-payment of rent, and that a claim by the landlord for rent after the tenant has incurred liability to forfeiture of his lease for non-payment operates as a waiver by the landlord of his right to effect forfeiture. Furthermore, if there is a continuing breach of a covenant by a tenant, the mere acceptance of rent from him by the landlord does not amount to a waiver of his right to forfeiture, except for the period covered by such rent as he may have accepted from the tenant. A lease may also be held voidable on the grounds that all co-owners of the land have not executed the deed of lease.

It should also be noted that the landlord cannot pursue distress and an action for arrears simultaneously. It is always better to distress first, and then sue for any balance. If an action for arrears is pursued first, the remedy of distress is lost, even though the judgment remains unsatisfied.

There may also be express stipulation for re-entry in a lease or tenancy agreement. This is usually accompanied by a forfeiture of the lease. If rent is in arrears for twenty-one days, the tenant’s interest is liable to forfeiture; i.e., the lease is only voidable, not void. See Davenport v. R (1877) 3 APP. Cas 115 at 128. In the above mentioned case, a very learned Judge, Mr. Justice Williams, gave his opinion in the following terms:

"It was established as early as Pennants Case 3 Rep. 64 a that if a leasor, after notice of forfeiture of the lease, accepts rent which accrues after, this is an act which amounts to an affirmation of the lease and a dispensation of the forfeiture…"

Hence where money is paid and received as rent under a lease, a mere protest that it is accepted conditionally, and without prejudice to the right to insist upon prior forfeiture, cannot countervail the fact of such receipt. See the Privy Council’s decision in George Henry Davenport v. Her Majesty, The Queen (1877-1878) 3 App. Cas. 115.

Generally speaking, it is better to sue for the recovery of possession than to seek to effect a re-entry. In practical terms relief against forfeiture for non-payment of rent may be granted under Section 210-212 of the Common Law Procedure Act 1852. The relevant provision of the Act is to the effect that: "If the leasee pays or tenders to leasor or into court the rent, the arrears and costs before the trial, all further proceedings are stayed and the leasee regains possession. If the leasee fails to pay or tender, and judgment is given against him, he is barred from relief in law or in equity; unless he applies for relief within six months after the execution of the judgment. It should be noted that relief is always in the judge’s discretion.

The remedy of the landlord in the event of a breach of all other covenants, is either an action for damages for a breach that has occurred or an injunction to restrain a threatened or anticipated breach. In all cases before the landlord cannot proceed to enforce any of the covenants are remedies available to him as a leasor, both the 1881 and 1892 Conveyancing Acts provides that, in case of breach of most covenants by the leasee/tenant, the leasor must serve a notice upon the leasee/tenant specifying with sufficient clarity the breach or demanding compensation therefore certain covenants are said to run with the land or touches and concerns or related to the land. This means that such covenants are said to "run" with the land.

We cannot fully understand this without examining other concepts like privity of contract and privity of estate because until recently the law as to the enforceability of covenants in a lease depended upon, and was regulated by, the application of the twin concepts of Privity of Contract and Privity of Estates. In the law of Landlord and Tenant Privity of Contract means that the original landlord and the original tenant normally remain liable to perform their respective obligations for the whole of the period for which the lease was granted, even if they have parted with all interest in the property.

Privity of Estate means that the landlord and the tenant for the time being automatically assume responsibility for the lease obligations which relate directly to the property for the period during which they own an interest in it, but they are not necessarily bound to comply with all the terms of the lease. See the opening paragraph of the Law Commission report on Landlord and Tenant Law, Privity of Constraint and Estate (Law Com no. 174) Published in 1988 (the 1988 report).

Privity of Contract, on the other hand, simply means that only parties to a contract can sue or be sued on a contract. Hence subject to some exceptions, a third party cannot seek to enforce a contract between A and B. That is a fundamental principle of Common Law. However, Covenants in Lease are of such peculiar nature that in circumstances persons other than the leasor and the leasee can sue and be sued in respect of them. Thus, the leasor may assign his reversion to A, while the leasee may assign his lease to B. The fundamental question is to ascertain when the benefit and the burden pass to A and B respectively.

To Be Continued.

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Clement Chigbo, Barrister at Law, practices as a Registered Associate in the Law Firm of Cassar and Co., Norfolk House, Frederick Street and may be contacted at telephone 328-4695 or email: clemsweiss@hotmail.com.