Suggested Answer to Exercise 6.3 (Part 3)
A Detailed Answer Plan
IntroductionNeither Jane nor Keegan are original parties to the lease.
This lease was made after 1995 - the passing of the benefit and burden of its covenants is governed by the Landlord and Tenant (Covenants) Act 1995 (‘the 1995 Act’).
The RepairsNo evidence of express covenant by lessor to maintain the premises.
Implied covenant by lessor?
- Non-derogation from grant?
- rendered unfit or materially less fit to be used for the purpose of the demise (Browne v Flower  1 Ch 219).
- Landlord and Tenant Act 1985 - more extensive than non-derogation.
- implied covenant by lessor to repair structure and exterior (and other parts of the premises) (s.11(1));
- if the lease is of a dwelling-house, for a term of less than seven years (s.13(1));
- subject to limited exceptions in s.14.
- Specific performance: Carry out repairs and set-off cost of doing so from the rent (Lee Parker v Izzet  1 WLR 1688).
- A less direct approach: local authorities’ powers under Part 1 Housing Act 2004.
The Breaches of the Tenant’s Covenants
The tenant’s obligations were transmitted from Alan to Jane on the assignment of the lease (s.3(2) the 1995 Act). Alan is released from the covenants1 on the assignment (s.5). Alan may have provided an ‘authorised guarantee agreement’ (‘AGA’) as a condition of Keegan consenting to the assignment (see s.16).
The rights of re-entry automatically passed to Keegan on the assignment of the reversion (s.4). The rules relating to forfeiture (exercising a right of re-entry) are complex.
- Lease of a dwelling house: lessor must seek court order (s.2 Protection from Eviction Act 1977).
(Query, does Sally’s use of the premises have any consequences - are they ‘let as a dwelling house’?)
- Even if not a dwelling-house, a court order would be a wise precaution (s.6 Criminal Law Act 1977).
- The rules for non-payment of rent.
- Right of re-entry implied alongside ‘the usual covenants’ (express here, in any event).
- Discretionary relief.
- Possibility of ‘set-off’, but only if Jane pays for repairs to the roof.
- The rules for breach of other covenants.
- Right of re-entry must be expressly reserved (it is in this case).
- Lessor must serve notice complying with s.146 LPA 1925:
- ‘one last chance’ to remedy the breach (Expert Clothing Service and Sales Ltd v Hillgate House Ltd 1986 Ch 340);
- usually sufficient to address the mischief rather than perform the impossible (such as go back in time to paint the premises on time) - Savva v Hussein (1997) 73 C & PR 150;
- very few covenants are not capable of remedy (Akici v L R Butlin Ltd  1 WLR 202);
- however, use of premises for immoral purposes may be irremediable (Rugby School v Tannahill [1935; 1 KB 87) - it will depend upon whether Jane was party to Sally’s activities (did she know what Sally was using or intending to use the premise for) and whether she took any action to bring the immoral use to an end (evicting Sally) - Glass v Kencakes Ltd  1 QB 611.
Recommend that Jane make every effort to remedy the breaches. Even if Keegan goes to court, she may still be able to obtain relief under section 146(2) of the LPA 1925.
1. Although the question does not specifically ask about remedies against Alan, a good answer will make brief reference to them. By doing so you show the examiner that you are aware of the wider issues raised by the question. More than a sentence would, however, be inappropriate.