Leasehold Covenants — SQE1 practice question

A unit on a trading estate is let for use as a printing works only. The tenant has for the past year run a busy retail outlet from the front half of the unit, in breach of the use covenant, and has ignored two letters asking it to stop. No part of the unit is used as a dwelling and nobody lives there. The lease contains the usual forfeiture clause. The landlord has had enough and wants to bring the lease to an end as quickly as it lawfully can.

What must the landlord do before it can lawfully forfeit the lease?

Option A. Incorrect answer. It must issue possession proceedings, peaceable re-entry having been abolished for all leases.
Option B. Correct answer. It must serve a notice specifying the breach and allow reasonable time to remedy it.Correct
Option C. Incorrect answer. It must simply change the locks, no formality being needed where the breach is a continuing one.
Option D. Incorrect answer. It must give the tenant three months to remedy the breach and then apply to the court.
Option E. Incorrect answer. It must obtain the court's leave before serving any notice in respect of a breach of use.

Why

The correct answer is B. Forfeiture for any breach other than non-payment of rent is conditional on a notice under section 146(1) of the Law of Property Act 1925. The notice must specify the breach complained of, require it to be remedied if it is capable of remedy, and require the tenant to make compensation in money if the landlord wants it; the landlord must then allow a reasonable time for compliance before re-entering. Breach of a user covenant is ordinarily remediable, in the sense that the offending use can be stopped and the mischief brought to an end, so the notice must call for it to be remedied. Once the notice has expired unsatisfied the landlord may forfeit either by proceedings or, because no part of these premises is a dwelling and nobody is living there, by peaceable re-entry.

A is incorrect because peaceable re-entry survives for premises of this kind; what is barred is re-entry against premises let as a dwelling while someone is lawfully residing there. C is incorrect because it skips the section 146 notice altogether, which is the one step the statute makes mandatory. D is incorrect because the statute fixes no period; what is reasonable is judged on the facts, and three months is not a rule. E is incorrect because it borrows the leave requirement that applies to disrepair claims under the Leasehold Property (Repairs) Act 1938; no leave is needed to serve a notice about a breach of use.