Landlord Could Not Serve Section 146 Notice Before Right of Re-Entry Arose (Court of Appeal)
The Court of Appeal has held that a section 146 notice cannot be served until the right of re-entry has become enforceable under the terms of the lease.
Section 146 of the Law of Property Act 1925 provides that a right of re-entry or forfeiture under any proviso or stipulation in a lease for breach of any covenant or condition shall not be enforceable unless the landlord serves a notice specifying the breach and (if it is capable of remedy) requiring the tenant to remedy the breach. The tenant is to be allowed a reasonable time in which to remedy the breach.
In this case, the lease provided that there was a right of re-entry and forfeiture where the tenant failed to keep its pub in good repair and, if the breach was capable of remedy, failed to remedy it within 14 days of receipt of a written notice from the landlord to remedy the breach (default notice). The landlord sent a default notice requiring the tenant to remedy breaches of the repairing covenants within 14 days, together with a section 146 notice.
The court held that section 146(1) was concerned with the exercise by a landlord of rights of re-entry or forfeiture conferred by the terms of the lease. The opening words of the sub-section made clear that it was directed to those covenants and conditions. The particular breach in this case was the failure to remedy the breach within 14 days of receipt of a default notice.
If the breaches had been incapable of remedy, the lease did not require the landlord to serve a default notice and the right of re-entry would have arisen immediately upon the breach of the repairing covenants.
Section 146(1) did not spell out the time at which a section 146 notice should be given. However, it was clear that it could only be after the breach of the covenant or condition triggering the contractual right of re-entry had occurred.
This decision highlights that landlords wishing to exercise their right of re-entry need to take care to follow the correct procedure and check that the right has indeed arisen.
Case: Toms v Ruberry  EWCA Civ 128 (8 February 2019) (Richards, Holroyde and Davies LJJ).