If arrears of ground rent arise on a long tenancy, then a draconian remedy for L is to threaten forfeiture of the lease. But, L must first send T a prescribed notice. However, it is now suggested that the wording of that prescribed notice is misleading and may confuse Ts.

There are special provisions for forfeiture in relation to small amounts of rent over short periods of time. Section 167 of Commonhold and Leasehold Reform Act 2002 says that L ‘may not exercise a right of... forfeiture unless the underpaid rent (a) exceeds the prescribed sum [£350], or (b) consists of or includes an amount which has been payable for more than a prescribed period [three years]’. Thus, L cannot forfeit a lease unless either the rent due is in excess of £350, or has been payable for more than three years.

The complication is that the Landlord and Tenant (Notice of Rent) Regs 2004 say that a notice served under s167 of the 2002 Act must contain wording saying that those provisions ‘prevent your L from forfeiting your lease for non-payment of rent... if the amount owed is £350 or less, or none of the unpaid amount has been outstanding for more than three years’. But, that sentence conveys to T that L may not forfeit the lease if the rent due is below £350 or the rent has been payable for less than three years, so L may only forfeit if both the rent due is in excess of £350 and has been payable for more than three years. That, of course, is inconsistent with the wording of s167; eg if the rent outstanding is under £350, but has been outstanding for more than three years, then L can forfeit under s166 (even though the wording in the 2004 Regs says that L cannot forfeit because the amount outstanding is less than £350).

The end result is that L is required to serve a prescribed notice under the 2002 Act, which, in accordance with the requirements of the 2004 Regs, is misleading. But, such a notice will be valid in law although L would have made a potentially misleading statement to T. One can foresee a situation where T would be induced into a false sense of security if he relied totally on the wording under the 2004 Regs. On that basis, Ts could conceivably argue that negligent mis-statements were made to them by their Ls. Accordingly, an article in the SJ suggests that the prescribed wording should be used, but Ls should consider including a covering letter to T which properly explains the meaning of s167 of the 2002 Act. Source: Davis Blank Furniss Solicitors.