Real Estate Tip of the Week: Who can Serve a notice?

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Real Estate Tip of the Week: Who can Serve a notice?

Published 3 March 2021

The answer to this question will be of interest to landlords and tenants alike. A landlord may wish to exercise a right to terminate a lease in order to implement a redevelopment scheme. Conversely, a tenant may wish to exercise a break option, or an option to renew their lease. Often these notices will be served by a managing agent, solicitor or other third party.

The immediate landlord of a tenant is the entity entitled to serve notice upon a tenant. Usually a landlord’s interest will be sufficient to require registration at the land registry. Landlords who own the freehold of a property or a head lease of seven years or more must register their interest. There will inevitably be some delay between completion of the purchase of the reversion and registration of the Landlord as the legal owner. This is known as the registration gap. Although the incoming landlord will have beneficial entitlement to the property, during the registration gap, the incoming landlord cannot serve notice under a lease. If the relevant option can only be exercised on or before a certain date, then provisions should be built into the contract for sale in order to protect the incoming landlord, such as obliging the outgoing landlord to serve notice by a particular date, or irrevocably appointing the incoming landlord as the outgoing landlord’s agent.

In general, case law has established that notice may be given by a duly authorised agent on behalf of a party entitled to give a notice and this will usually cover a managing agent or solicitor retained by the landlord for that purpose. However, in the absence of express provisions, the Court will be slow to infer authority. For example, agency will not be inferred merely because a company which serves a notice is in the same group of companies as the legal owner. In summary, it is important to ensure the legal owner or an agent authorised by express written provisions serves a notice, or the notice may be invalid. Any notices received by landlords from their tenants should be scrutinised to ensure the correct party has served it.

Authors

Rosa-Maria Kane

Rosa-Maria Kane

London - Walbrook

+44(0)20 7894 6909

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