Can assignor of lease sue landlord after the assignment?

An assignor of a lease can, even after the assignment, bring proceedings against a landlord in respect of breaches of a landlord’s covenant that caused loss during the time that the lease was vested in the assignor.

In City and Metropolitan Properties Ltd v Greycroft Ltd ([1987] 1 WLR 1085) a tenant who had bought the residue of the 99 year lease of a flat as an investment could not sell it at auction because of the disrepair arising from the landlord’s breach of its covenant to keep the structure of the property in repair. Once the landlord had done the necessary works the tenant was able to sell the lease at a profit. After the assignment the assignor brought proceedings against the landlord in respect of the loss caused to it during the time that the lease had been vested in it. The landlord argued that assignors lose their right to bring proceedings once they have assigned the lease. This failed; the tenant could bring proceedings in respect of loss caused by a breach that occurred or was subsisting during the time that the lease was vested in it. The court argued by analogy with the fact that the assignor undoubtedly retained responsibility for breaches of tenants’ covenants during that period. The middle portion of the English equivalent of CPO s. 32 (LPA s. 142(1)) did not mean that the assignor lost this right to sue.

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