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Property Law - Blocking Damages For Disrepair - A 20th Century Provision To Use In The 21st Century

By : Michelle Stevens-Hoare

Blocking damages for disrepair - The Leashold Property (Repairs) Act 1938 significantly limits a landlord's right to claim damages or forfeiture for disrepair during the currency of a tenancy. The provisions of the 1938 Act rarely feature in litigation. Is that because practitioners forget the existence of this potentially far-reaching Act? Michelle Stevens-Hoare provides some answers.

The Leasehold Property (Repairs) Act 1938 significantly limits a landlord’s right to claim damages or forfeiture for disrepair during the currency of a tenancy. The provisions of the 1938 Act rarely feature in litigation. Is that because practitioners forget the existence of this potentially far-reaching Act?

The 1938 Act applies to all leases for a term of not less than 7 years, provided there are 3 years or more to run from the date of service of a notice of dilapidations under s146 of the LPA or the commencement date of an action for damages. The Act’s provisions apply to leases, underleases and agreements for leases alike.

The limitation created by the Act applies only to the enforcement of a tenant’s covenants to repair during the term. Covenants to clean or insure against damage are not caught by its provisions even if the obligation is actually contained in the same covenant as the obligation to repair. Similarly, a tenant’s obligation to put premises into repair upon taking possession or to yield up the premises at the end of the term in good repair is not covered. Further the limitation applies only to claims for damages for disrepair. Claims for a debt associated with disrepair (such as the costs and expenses of s146 proceedings or reimbursement of the costs incurred by the landlord in meeting the tenant’s obligations) are not covered by the provisions of the 1938 Act. Where a landlord wishes to make a claim to which the 1938 Act applies he must, at least one month before proceedings are commenced, serve a notice under s146 of the LPA or under s1(2) of the 1938 Act.

Such claims are not enforceable by action unless and until the notice requirements under the 1938 Act have been complied with. The notices must include a statement referring to the tenant’s entitlement to serve a counter-notice claiming the benefit of the Act within 28 days. That statement must be no less conspicuous than the rest of the notice. The effect of such a counter-notice is to prevent a landlord from taking proceedings for forfeiture or for damages unless and until the leave of the Court is secured. For these purposes the Court will usually be the County Court.

The Court can only give the landlord leave to take such proceedings if he proves that one or more of the grounds under the 1938 Act apply, namely:

  1. the immediate remedying of the breach is necessary to prevent substantial diminution in the value of the landlord’s reversion or its value has already been substantially diminished;
  2. the immediate remedying of the breach is necessary to comply with an enactment or by-law or similar matter;
  3. the tenant is not occupying the whole of the premises affected and the immediate remedying of the breach is necessary in the interests of the other occupier(s);
  4. the cost of immediately remedying the breach is small relative to the likely cost occasioned by postponement;
  5. there are special circumstances which make the giving of leave just and equitable.

When granting or refusing an application under the 1938 Act for leave to commence proceedings the Court may impose such conditions as it thinks fit upon either the landlord or tenant. Further it should be noted that a landlord’s application for leave under the Act is capable of registration under the Land Charges Act 1972 as a pending land action.