Beware The Pitfalls of Residential Leasehold Covenants

Most leases relating to residential properties in England and Wales contain what is known as a forfeiture clause. Such clauses provide the landlord with the right to take back ownership of the property where a covenant (obligation) in the leases has been breached. Examples of such covenants are: 

  • Not to play loud music during certain times of the day;  
  • Not to sell the property without first informing the Landlord; and, very commonly 
  • Not to make alterations and/or additions to the property without first obtaining the Landlord’s consent.  

Leaseholders should become familiar with the covenants contained in their lease to ensure that they continue to observe the terms of the lease whilst in ownership of the property. Failure to do so may result in a tenant having to pay considerable damages to the landlord or, even worse, face the prospect of losing their homes. 

A leaseholder has discovered the above to his great cost in a now-widely publicised case in the Willesden County Court. Charles McCadden owned a leasehold property in Willesden, north-west London. He was found by the First Tier Tribunal Property Chamber to have committed the following breaches of his lease:  

  • He repeatedly failed to grant his landlord access to inspect the flat; 
  • He carried out unauthorised structural alterations and removed landlord’s fixtures; 
  • He caused a nuisance to the occupants of the downstairs flat. 

Following the finding, the landlord served a notice under section 146 of the Law of Property Act 1925 and took the matter to the County Court to seek forfeiture of the lease. The application was granted by the Court and Mr McCadden was consequently dispossessed of his leasehold property which was unmortgaged and had an estimated value of £600,000! 

There has been much comment in the media and online about the disproportionality of the landlord’s remedy in relation to the tenant’s breaches. It certainly will not have helped his case that he was not present at either the Tribunal or County Court hearings, though the reasons for that are unclear. No doubt Mr McCadden will be seeking advice as to the possibility of making an application for relief from forfeiture.  

What is clear is that the case should serve as a reminder to leaseholders to be aware of their leasehold covenants and comply with them and respond to communications form their landlords. 

Hodders have years of experience of advising on forfeiture and relief applications and leasehold matters more generally. Do not hesitate to contact us for assistance to resolve your leasehold concerns and prevent them for getting out of hand. 

-Jan Marzec

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