Termination of Tenancies for Tenant Default

Law Commission CP174

 

Supplemental Response – Derivative Interests

 

The Society has already submitted a response to the Consultation Paper.  This deals with a further point.

 

Who may apply for relief?

12.7 (4)  We seek the views of consultees as to whether other persons, in particular those holding an incorporeal hereditament (such an easement) or an option or a right of pre-emption should be included within the derivative class.

 

There is a case for permitting applications from owners of easements granted by the owners of certain long leases. 

 

            T is the leasehold owner of a country estate under a lease with 125 years yet to run. A, the owner of an adjoining property, constructs a cesspit in a corner of T’s land,  with the written permission of T but not that of T’s head landlord, who has never taken an interest in the management of the estate. Proceedings for a termination order are brought against T. Upon termination of the lease A will be at the mercy of the head landlord, who becomes entitled to demand a ‘ransom’.  Other similar examples include rights of way, and rights to lay pipes and cables. 

 

            L, the owner of Blackacre, granted to T a 199-year building lease to T on which a block of flats was then constructed.  The flats were sold on long subleases, and one such sublessee is S.  T granted rights of light and air to W, the owner of the adjoining plot Whiteacre, on which another block of flats was built, without consent being obtained from L.  Shortly afterwards proceedings for termination are brought against T, and S applies for relief by way of a new direct lease. S has always opposed the development of Whiteacre and wants to claim damages from W for loss of light and air.  W, if given the opportunity, would apply for provisions to be inserted in the new lease to preserve his entitlement to the right granted by L.

 

A feature of some such examples may be that the grantor’s interest, at the time of the grant of the easement, would be expected to outlast the usefulness of the grant, so that the lack of the head landlord’s consent is explained. Arguably it should be open to the court to order a fresh grant to an easement owner upon suitable terms.   A consideration for the court would be that a head landlord should not profit from a ‘windfall’ at the expense of a dominant owner who had every expectation that the servient leasehold owner’s interest was long enough for the purpose required.  One  solution could be to give dominant owners the right to apply if the servient leasehold interest  has more than (say) 50 years to run at the date of the grant.  But it may avoid uncertainties if the right to apply is conferred more widely.  Our preference would be that there should be no such restriction. It is stressed that the right to apply does not presuppose any entitlement to relief.

 

The law as to the easements where the servient land was leasehold at the time of creation is not straightforward.  It seems that if the easement is derived from a grant presumed by prescription it is normally good as against the reversioner (see, for example, Wheaton v Maple & Co [1893] 3 Ch 48).  But that is not so with an express grant – nemo dat quod non habet. (see Booth v Alcock (1873) 8 Ch App 663).   It may be difficult to predict whether the law would adequately protect a dominant owner.  We recommend that the legislation gives a right to apply, so that issues between former sublessees and adjoining owners could be identified and if necessary adjudicated on their merits.

 

Although the adjoining owner may be given the right to apply, it must be accepted that he may not often have the practical opportunity to do so.  It would be difficult to formulate any effective procedure for notifying him of the application. For many reasons an application of this kind would be rare.

 

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