Demands for rent and waiver

In Greenwood Reversions Ltd v World Environment Foundation Ltd ([2008] EWCA Civ 47) the English Court of Appeal (Thomas LJ delivering the judgment) had to consider whether letters from a landlord’s solicitor to the assignor of a lease amounted to a waiver of the right to forfeit.

The long lease of a flat was vested in M. The lease required the landlord’s consent (not to be unreasonably withheld) to any assignment.

M. fell into arrears with the rent and then assigned the lease to WEF without obtaining the landlord’s consent.

The landlords’ solicitors wrote to M to say that forfeiture proceedings would be brought unless the landlords received the pre- and post-assignment arrears. The letter was copied to WEF (who later reassigned the flat to M, again without consent).

M contended that the letters from the landlord’s solicitors amounted to a waiver of the breach of the prohibition on assignment without consent (applying the test propounded by Neuberger J. in Yorkshire Metropolitan Properties Ltd v Co-Operative Retail Services Ltd ([2001] L& TR 26 at [91]).

Thomas LJ assumed, without deciding, that an unqualified demand for future rent would operate as a waiver ([27]).

Even on that assumption, there was no waiver first because the demand was addressed to M (the assignor) not WEF (the assignee and actual tenant at the time of the letters) ([28]).

More important, the letters were not ‘an unqualified demand’:

‘What the letter to Dr Mehra said was that, unless the sums enumerated in the letter (which included the unpaid judgment sum, interest and costs of the first action against Dr Mehra) were paid, proceedings which would include a claim for forfeiture, would be taken. The letter made it quite clear that it was only on payment of the rent that the landlord would accept the tenancy as continuing.’ ([29]).

Michael Lower

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