Need for clarity in section 146 notices

The High Court appeal in Anders v Haralambous [2013] EWHC 2676 (QB) highlights the need for clarity in notices issued under section 146 of the Law of Property Act 1925.

Private dwelling

Anders was the tenant of a residential flat. The lease contained user and alienation covenants: “(k) Not to use… other than as a self-contained private dwelling for residential purposes only” and “(m) Not to assign, underlet or part with or share possession or occupation of
part only of the premises.”

Anders had connections with
a language school and used the flat to accommodate students.

Proceedings were issued in the county court for a determination of breach, pursuant to section 168 of the Commonhold and Leasehold Reform Act 2002 (CLRA), relying on multiple occupation and subletting.
A summary hearing took place, which Anders did not attend.

DJ Hart declared on the face of the order that: “The defendant is in breach of the covenants contained at paragraphs (k) and (m) of... the lease.”

That declaration was based on the findings that: “Miss Anders used [the flat] on a commercial basis for lodging students from the language school with which she is associated. That is not use as a private dwelling. I therefore find that there has been a breach of the covenant at (k),” and:
“Miss Anders had had lodgers
in residence in various of the bedrooms in the property.
This amounts to parting with or sharing possession of part of the premises. I therefore find there has been a breach of paragraph (m).” There was no express finding of sub-letting.

A 146 notice was served, setting out the user and alienation covenants and citing the following breach: “The above-mentioned covenants have been broken and you
have sublet the premises to students and received payments therefrom, thus operating the premises as a business as opposed to residential purposes only, as determined by the court on 15 August 2012.” Possession proceedings were issued, relying on the 146 notice.

At first instance, the 146 notice was held to be valid. On appeal, Jay J overturned that finding and dismissed the claim.

Clear notice

The purpose of a 146 notice is
to inform the tenant of a breach to give her the opportunity to remedy the same or apply for relief from forfeiture, if they are incapable of remedy (Akici v LR Butlin Ltd [2006] 1 WLR 201).
The notice must be clear enough to inform the tenant of what she is said to have done, so that she may address the situation.

Anders’ notice was squarely founded on subletting, which had not been determined by
the DJ. Jay J acknowledged that the 146 notice also referred to operating the premises as a business, but concluded that
that allegation, as worded,
was inextricably linked to the allegation of sub-letting.
Severing the two could not, therefore, save the notice.

Having not been at the hearing, all Anders knew was that it had been determined that she was in breach of covenants (k) and (m). However, the alienation covenant contained diverse prohibitions.

Anders would not have known that the breach that had been determined (“parting with or sharing possession of part
of the premises”) was not the breach relied upon in the
notice: subletting. This was demonstrated by
her application for relief from forfeiture founded on the irremediable breach of subletting. In fact, by the
time of the hearing, she had remedied the breach which had been determined, by removing the students from the flat.

The purpose of the 146 notice is to leave the tenant in no reasonable doubt as to what must be done to either remedy the breach or to mitigate any damage caused, so as to facilitate the granting of relief from forfeiture. Although there is no requirement to tell the tenant how to remedy the breach (Fox v Jolly [1916] 1 AC 1), she must know what she is being asked to remedy. Keeping that in mind will go a long way to ensuring notices are good.

There is no requirement to cite the covenant which is alleged to have been breached (Van Haarlam v Kasner [1992]
64 P&CR 214). In so doing
may lead to ambiguity and
an invalid notice.

In residential cases, the court or the property chamber must determine the covenant that has been breached, and the breach. Both should be recorded on the face of the order, or in the determination, and the latter accurately reflected in the 146 notice. SJ

Peter Petts is a barrister practising from Hardwicke chambers