Landlord-Tenant : Remedies for Non-Payment of Rent

Article explores the Landlords remedies for non-payment of rent

In the situation where a tenant breaches his covenant to pay rent, the remedies
open to the landlord are:

1. an action for distress;

2. an action to sue for rent; and

3. forfeiture.

1. Distress

The action of distress involves the landlord going into the demised premises to
impound goods up to the value of the rents owed, so as to compel the tenant to
pay up. The tenant is then given a stated period of time to recover his goods by
paying up all arrears. If the tenant fails to repay within the time stipulated, the
landlord can sell the goods and reimburse himself for the rent owed, from the
proceeds. Any balance must be returned to the tenant.

In order for an action of distress to lie, three requirements must be satisfied:

1. there must be an existing tenancy;

2. the tenant has failed to pay rent; and

3. the landlord seeking to distrain must hold the reversion.

Procedure

The procedure is governed by the Distress Act (Cap 84) and is as follows:

1. The landlord applies to a judge or registrar for an order for a writ of

distress to be issued. This writ is limited only to the recovery of rent
for a period of up to 12 months immediately prior to the application.

2. The writ is addressed to the Sheriff and directs him to enter on the
premises and seize the goods to the value of the rents owed as
well as the costs of the proceedings including the Sheriffs fees and
expenses.

3. After seizure, the Sheriff will take an inventory of the property

seized and its approximate value, and give the tenant a notice of
seizure together with the inventory and valuation, informing him of
 the amount due under the writ and that the property seized will be
sold at a stated time and place (not less than 6 days from that date)
unless he pays the amount due within 5 days or obtains a court
order to restrain the sale. The tenant therefor has only 5 days from
the date of the notice of seizure to pay up the arrears or to obtain a
court order to restrain the sale.

4. The tenant may apply to the court to discharge or suspend the writ
or to release any property seized. Such an application must be
made by summons within 7 days of the seizure, supported by
affidavit stating the grounds on which the application is made. Any
costs incurred in any proceedings for the release of property
distrained may be added to the amount leviable under the writ, at
the discretion of the judge.

5. The property seized will be sold at the time and place stated in the
notice. The proceeds of sale will be applied first to pay the Sheriffs
costs and expenses; then to pay the landlord for the rent arrears
and his legal costs. Any balance thereafter will be returned to the
tenant.

6. As soon as the amount due under the distress has been realised by
the sale of any of the property seized, the balance of the property
seized will be released.

The right to distrain relates only to movable property and does not apply to
fixtures.

Further, certain properties cannot be seized; these include:

1. things in actual use in the hands of a person at the time of the

seizure;

2. tools and implements not in use (where other movable property in

the premises is sufficient to cover the amount owed and costs);

3. the tenants necessary clothing and bedding for himself and his
family;

4. goods that are in the possession of the tenant for the purpose of
being carried, wrought, worked up or otherwise dealt with in the
course of his trade or business;

5. goods belonging to guests at an inn; and

6. goods in the custody of the law.

2. Suing on the covenant to pay rent

Rent that is owed is a debt and is therefore recoverable by simply suing the
tenant on the contract. The claim will be a specific sum, i.e. the rent owed plus
interest as the court thinks fit. Legal proceedings are begun via a writ of
summons. The tenant must then enter appearance by filing a Memorandum of
Appearance within 8 days of the date of service of the writ. Otherwise, judgment
may be entered against him in default of appearance. Thereafter, the tenant will
have to file a Defence to the claim, if any, within 14 days. If he does not file a
Defence, or if he has no Defence under the law, the landlord may then apply for
judgment to be entered against him in default of Defence.

3. Forfeiture

The law generally leans against forfeiture of the tenancy for non-payment of rent.
The landlord is put to strict proof of his case and the tenant is usually allowed a
last chance to pay up the arrears. It is only when he fails to pay that the tenancy
can be forfeited.

It should be noted that the landlords right to forfeit arises only if the payment of
rent is made a condition of the lease or if the right of forfeiture for non-payment of
rent is expressly reserved in the lease. Technically, for the right of re-entry to
arise, a formal demand by the landlord must first be made unless the lease
specifically provides otherwise or unless the lease is a registered lease under the
Land Titles Act. In the case of premises under the Land Titles Act, the landlord
has an implied power to re-enter and thereby terminate the tenancy if rent is in
arrears for 30 days, even though no formal demand is made.

A landlord can obtain possession of the premises either by effecting a peaceable

entry or by process of law. The re-entry must be coupled with the intention on
the part of the landlord to exclude the tenant from possession, hence the
requirement for a formal demand. As it is unlikely that the tenant will calmly
submit, the usual practice in cases of forfeiture is not to attempt a peaceable
entry but to instruct a solicitor to issue a writ of summons for possession, as
discussed below.

Action for the recovery of land

The landlord may institute legal proceedings for taking possession. The action
should be brought before the District Court where the annual value of the
property does not exceed $250,000 or the rent payable by the tenant does not
exceed $250,000 a year or $20,800 a month. Otherwise, the action should be
brought in the High Court.
Proceedings are begun via a writ of summons. The tenant must then enter
appearance within 8 days of the date of service of the writ. Otherwise, judgment
may be entered against him in default of appearance. Thereafter, the tenant will
have to file a Defence to the claim, if any, within 14 days. If he does not file a
Defence, or if he has no Defence under the law, the landlord may then apply for
judgment to be entered against him in default of Defence.

Section 18A of the Conveyancing and Law of Property Act (Cap 61) (CLPA)
sets out the occasions where the tenant may, by proferring the rent owed and the
sums incurred in bringing the action, be relieved against forfeiture. Generally, the
tenant may, within the time given for acknowledging service of the writ (usually 8
days from the date of service of the writ), stave off the action by paying into court
all the rent in arrear and the costs of the action, in which case the tenant will hold
the land according to the lease. If this does not happen, then he may still hold on
to his lease if he pays up the amount due within 4 weeks (or such other period as
the court may allow) from the date of the courts order for possession. The court
may also extend this period at any time before possession of the land is
recovered.

In any event, upon a judgment or order for possession being given in favour of
the landlord, the landlord may then enforce such judgment by applying for leave
of Court to issue a writ of possession. Leave will not be granted unless it is
shown that every person in actual possession of the whole or any part of the
property has received such notice of the proceedings as appears to the Court
sufficient to enable him to apply to the Court for any relief to which he may be
entitled. An application for leave to issue a writ of possession may be made ex
parte by summons and must be supported by an affidavit. This may take about a
week or less to be processed by the court. Upon approval, a praecipe, which is a
request from the judgment creditor (landlord) to the registrar to issue the writ of
possession, must be filed. Thereafter, the writ of possession is issued. The writ of
possession directs the Sheriff to enter the premises and to cause the plaintiff
landlord to have possession of it. The entire process may take between 2 to 4
weeks and is subject to the discretion of the court and the availability of
resources.

The writ of possession is valid in the first instance for 12 months beginning with
the date of issue. There are provisions for extending the validity of the writ where
the writ has not been wholly executed. A writ of possession may include
provision for enforcing the payment of any money adjudged or ordered to be paid
by the judgment or order which is to be enforced by the writ. Such payment may
be for arrears of rent. Any claim for damages relating to the unexpired term of the
rental period is subject to the landlords duty to mitigate.