© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
Letter to Editor:
I was very surprised by the answer given by Eric Shapiro to the question raised over a defective forfeiture on bankruptcy clause. I have encountered this in practice and Eric`s answer is not correct. Section 57 ( 4) (c) provides that any new lease shall have excluded from its terms any provision which “ provides for the termination of the existing lease before its term date otherwise than in the event of a breach of its terms”. This wording will allow the removal of the defective forfeiture clause.
I therefore do hope that Eric`s advice is not followed on this occasion otherwise the tenant will be withdrawing without any need to do so.
Yours Sincerely
Martin Codd
Partner
Property Department
Penningtons Solicitors LLP
Answer:
In Issue 55 of News on the Block, a question was raised as to whether a bankruptcy clause in an existing lease could be retained by the Freeholder in a new lease granted under the Leasehold Reform, Housing and Urban Development Act 1993.
I said that I thought that it could be but Martin Codd of Penningtons disagrees by virtue of S.57 (4)(c). This section provides that “there should be excluded from the new lease any terms of the existing lease ......in so far as that term provides for the termination of the existing lease before its term date otherwise than in the event of a breach of its term”.
Mr Codd believes, and has been advised, that this section can be invoked so as to require the landlord to grant the new lease without the provision allowing forfeiture on insolvency. However I do not believe that this is beyond doubt.
My advice is to draw the landlord’s attention to this clause and if he will not agree then to test it in the Courts.
Eric Shapiro, Director Valuations, Chesterton Humberts