Christmas is fast approaching and a new year is almost upon us, but have you remembered the all-important deadline for serving a Section 17 Notice? If not, this is a timely reminder that you should place this task at the top of your to-do list before signing off for a well-deserved break. Failure to do so could have serious consequences in being able to pursue any June quarter arrears from a former tenant or guarantor.
A Section 17 Notice is a statutory tool governed by Section 17 of the Landlord and Tenant (Covenants) Act 1995 which allows a commercial landlord to pursue arrears relating to rent, service charges or other applicable charges that are levied under the lease from a former tenant or guarantor. It can be a useful tool if the current tenant is unwilling or unable to pay lease sums.
In order to be valid, the notice must be personally served on the former tenant or guarantor, left at the last known address, or sent via registered post to the last known address. Given the current issues with Royal Mail, the most likely option to take would be to arrange personal service and therefore the time for arranging this needs to be taken into account.
Does this apply to me?
In order for Section 17 to apply to you, you must meet the following conditions:
- The current tenant is not the original tenant under the lease;
- There is an Authorised Guarantee Agreement in place, which is an agreement where the outgoing tenant guarantees the performance of the covenants contained within the lease by the incoming tenant/s;
- The lease was granted on or before 1 January 1996.
Six months after the tenant’s lease liabilities become due.
With the typical lease containing provisions for payment of rent, service charges and other applicable charges on a quarter date, which usually falls on 24 June for the spring quarter, the time to act is quickly running out and will expire on 23 December 2022.
If the quarter date under the lease differs, the time will expire six months from that date and it is, therefore, critical that you review the lease provisions carefully.
The 23 December is the day many businesses will close for the festive period, with some not re-opening until the new year. Therefore, there are only 10 days left for you to serve a Section 17 notice so, if you require a Section 17 notice to be prepared and served before the deadline, please contact us at email@example.com.