Give notice to a tenant that they are in breach of the lease with this section 146 notice. This breach of covenant notice will allow you to take the first step to forfeiting the lease if the breach is not rectified. It covers details of the breach, formal requirements for the notice to be valid, and a request for compensation.
When should I use a notice of breach of covenants?
Use this section 146 notice
- to give notice to a tenant that they are in breach of the lease
- to inform the tenant that the breach must be put right
- to take the first step to forfeiting the lease if the breach is not rectified
What's included in a notice of breach of covenants?
This notice covers
- details of the breach by the tenant
- formal requirements for the notice to be valid
- a request for compensation
What's a notice of breach of covenants??
A breach of covenant notice - also known as a Section 146 notice (which reflects the relevant section under the Law of Property Act 1925) - can be served on tenants who are in breach of a covenant under their lease. It is the first legal step towards forfeiting the lease. Typically, this type of notice is only used in respect of commercial leases.
Do I need a breach of covenant notice?
If a landlord is made aware of a tenant breaching covenants under a fixed term lease, and the leaseholder is not in rent arrears, issuing a Section 146 notice may be the best way of taking legal action with a view to forfeiting the lease. A breach of covenant notice provides details of the breach, informs the tenant how to rectify the breach and may also outline any potential compensation.
What is a covenant in a lease?
Covenants are essentially rules contained in a lease which set out the obligations of a tenant (or leaseholder) under the terms of the lease. There can be restrictive covenants (eg. not allowing pets inside the property or prohibiting the installation of hardwood flooring) or positive covenants (eg. cleaning the windows once every six months or replacing blown light bulbs).
What are some common types of breaches of covenant by tenants?
Although the most common type of covenant breach is non-payment of rent (for which a breach of covenant notice is not required), for purposes of Section 146 notices, covenant breaches often involve:
- Tenants making alterations to the property without consent;
- Leaseholders removing carpets and installing hardwood flooring;
- Non-payment of service charges (if these are separate from the rent);
- Noise complaints;
- Allowing pets on the property (more common in residential tenancies);
- Issues regarding parking spaces;
- Leaks or damage to the property caused by negligence of tenant;
- Repairing obligations (although these usually relate to the landlord); and
- Sub-letting parts or whole of the property without consent.
How much time should I give a tenant to rectify a breach?
A Section 146 notice should allow the tenant a reasonable time to rectify the breach. What is considered 'reasonable' will vary depending on the particular situation. So, for example, more time will need to be given to a tenant to repair significant damage compared to removing their vehicle from another tenant's parking space.
What are the consequences of breaches of covenants by tenants ?
Initially, tenants will be expected to rectify any breaches of their covenants. If they fail to take remedial action, they can be served with a Section 146 notice and the lease can be forfeited.
When can a breach of covenant notice not be used?
A Section 146 notice cannot be used on account of non-payment of rent. But this is not really an exclusion; in the case of rent arrears, this notice is not actually required in order to take further steps towards forfeiting a lease.
What are the next steps after a breach of covenant notice has been served?
Once the notice has been served, landlords should ensure that the leaseholder has received and understood how the covenant has been breached, and then provide a reasonable amount of time for the breach to be remedied. Compensation may also be requested as part of the Section 146 notice. If a tenant fails to put right the breach, steps can be taken towards forfeiture of the lease, repossession as well as any claiming compensation. Ask a lawyer for more information.
Ask a lawyer for:
- tenants who have not paid the rent
- tenants who have not repaired the property
This notice is governed by the law of England and Wales.