Under Section 168 of the Commonhold and Leasehold Reform Act 2002, a landlord under a long lease may not serve a notice of forfeiture on a tenant in respect of a breach of covenant unless the tenant has admitted, or the appropriate court or tribunal has determined, that a breach has occurred. A recent case, in which the Upper Tribunal (UT) set aside a determination that a tenant was in breach of covenant, indicates the wisdom of carefully considering whether applying for such a determination is the best course of action.

The tenant lived in a flat in a block of 18 flats. His lease required him to furnish all floors, except those in the kitchen and bathroom, with sufficient carpet and underfelt to minimise the induction of sound from the flat to any other part of the block. He had carried out alterations to his flat, including installing new flooring. After the landlord inspected the flat, it asserted that he was in breach of covenant by failing to lay underfelt and carpet, and threatened proceedings if the breach was not remedied within 21 days. More than 18 months later, the landlord applied to the First-tier Tribunal (FTT) for a determination that a breach of covenant had occurred. By that time, the tenant had laid wall-to-wall carpet in the entrance lobby, hallway and dining room.

The FTT decided that there had been a breach, finding that the obligation to carpet with underfelt did not depend on whether a particular level of sound attenuation was achieved, and that the carpets had to cover the entire surface area of the rooms. The FTT’s decision indicated that, in its view, the breach was continuing. The tenant appealed to the UT.

The UT considered that, in order to determine whether a breach had occurred, it was necessary to ask two questions: whether the tenant had furnished the floors with carpets and underfelt, and whether they were sufficient to minimise sound induction. The first element would be satisfied as long as there was some carpet on the floors. If sound induction had already been minimised by other measures, the covenant would be satisfied by a single rug laid in the middle of the room.

In the UT’s view, the trickiest question was whether carpets alone, without underfelt, were capable of complying with the obligation. It seemed unlikely that the parties had intended to be more prescriptive about the tenant’s choice of home furnishings than was strictly necessary. It would be inconsistent with the express purpose of the covenant to read it as requiring both carpets and underfelt if carpets alone would minimise sound induction. The UT therefore interpreted it as requiring only so much carpet or underfelt as was needed to achieve that aim.

There was no evidence that sound induction would have been reduced by the addition of any more carpet or underfelt than the tenant had already installed. On the evidence, the breach had been remedied when the new carpet was laid and there was no continuing breach after that. The FTT’s determination was too broad and imprecise and was set aside.