We all know that the rules on the liability of former Ts were changed by the Landlord and Tenant (Covenants) Act 1995. A former T of an ‘old’ lease (pre-1996) will usually remain liable under privity of contract, even after the lease has been assigned. On the other hand, a former T under a ‘new’ lease (post-1995) will not be bound by privity of contract and T’s liability will have ceased on assignment, unless T entered into an Authorised Guaranteed Agreement.

Despite the fundamental difference between ‘new’ and ‘old’ leases, it is worth remembering that some provisions of the 1995 Act also apply to ‘old’ leases. In particular, s17, which says that if L wants to recover a fixed charge (eg rent or service charge) from a former T, then L must serve notice on that T within six months of the charge becoming due. After that six-month period, L’s right to recover the money is lost. The procedural requirement is for L to serve a formal notice on the former T, informing it that the money is due and stating that L intends to recover such amount as is specified in the notice. In effect, therefore, L cannot allow arrears to accumulate over a long period of time without the former T being aware of the breach by the current T.

Note that this only applies to ‘fixed charges’ (ie sums that are capable of definition or ascertainment in the lease – typically annual rent, service charge and insurance rent). The important point to appreciate is that a former T under an ‘old’ lease gets the benefit of s17 – which means that a notice must be served within six months. Failure to do so will mean that any ‘fixed charge’ is irrecoverable from the former T, irrespective of whether it is an ‘old’ or ‘new’ lease. Needless to say, it is important to always check the amounts demanded under a notice. A single notice may cover a variety of sums due under the terms of the lease and each item needs to be checked to make sure that it has been demanded within the six-month time limit (eg while the yearly rent and service charge may be payable on quarter days, insurance rents are often payable on demand annually, once L has paid the premium). See note in [2009] IHL October 56.