Assignor of lease loses right to sue for tenant’s breach of covenant

The effect of section 31 of the Conveyancing and Property Ordinance is that an assignor of the reversion loses the right to sue for breaches of covenant (including the covenant to pay rent) that occurred while the reversion was vested in him.

In Elegant Profit Ltd v Chung Lai Sang ([2005] HKEC 1300) a tenant was in arrears with the rent. The landlord assigned the reversion and then brought proceedings to recover the arrears. These failed. It was held that the effect of section 31 of the Conveyancing and Property Ordinance was to annex the right to bring these proceedings with the reversion. It would not be appropriate to allow both the assignor and the assignee to sue.

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