Summary
1. This section extends the protection which was earlier given under Section 81 of the Housing Act 1996, which relates to Leaseholders who are threatened by their Landlord with Forfeiture for non-payment of a Service Charge, to Leaseholders who are threatened with Forfeiture for any other type of breach of Lease.
2. Other types of breach of Lease include alterations to a property which are not allowed by a Lease, failure to allow a Landlord access is required to do so by the lease, or sub-letting the property where the Lease does not allow it.
3. Being granted Forfeiture by a Court means a Landlord has the right back the property from a Leaseholder who thereafter has no legal rights to use the property, or sell it, even if they have an outstanding mortgage on that property.
Restrictions on the Right to Issue a Notice for Forfeiture
1. A Notice for Forfeiture is a special type of letter a Landlord must send to a Leaseholder before they can apply to a court for forfeiture of a lease.
2. Section 81 of the Housing Act 1996 states that a Landlord may not issue a Notice for Forfeiture in respect of non-payment of Service Charge unless either:
i. The leaseholder has ‘admitted’ that the Service Charge is due.
ii. A Court or tribunal has made a ‘Determination’. A Determination means a binding decision by a relevant legal body.
3. Once a determination has been made a landlord must wait 14 days before issuing their Notice for Forfeiture.
4. Section 168 extends the same protection to Leaseholders for non-Service Charge related breaches of Lease.
Application to a First Tier Tribunal for a Determination that a breach has occurred
1. Section 168 also gives a Landlord the right to apply to a First Tier Tribunal the right to a determination of whether a breach of Lease, in relation to any covenant or condition, has occurred.
2. A Landlord may not do so, however, if:
i. A dispute about whether a breach of Lease has occurred is in arbitration.
ii. The issue has already been decided by a court or tribunal.
Click on the link to read more about the Commonhold and Leasehold Reform Act 2002