Why Section 48 Notices for Landlords Wanting to be Paid Rent Are So Important.

by | Oct 13, 2023 | Blog, Legal Updates

In Sunset Ltd and another v Al-Hindi [2023] EWHC 2443 (Ch), the High Court held that notice of a landlord’s address for service under section 48 of the Landlord and Tenant Act 1987 must be given to the tenant before a statutory demand can be served for unpaid rent.

The Landlord’s failure meant that, even though the debt was undisputed and the rent was unpaid, it could not make the tenant bankrupt.

The case revolves around Section 48 of the Landlord and Tenant Act 1987, which states states:

48. Notification by landlord of address for service of notices.

(1) A landlord of premises to which this Part applies shall by notice furnish the tenant with an address in England and Wales at which notices (including notices in proceedings) may be served on him by the tenant.

(2) Where a landlord of any such premises fails to comply with subsection (1), any rent service charge or administration charge otherwise due from the tenant to the landlord shall (subject to subsection (3)) be treated for all purposes as not being due from the tenant to the landlord at any time before the landlord does comply with that subsection.

(3) Any such rent service charge or administration charge shall not be so treated in relation to any time when, by virtue of an order of any court or tribunal, there is in force an appointment of a receiver or manager whose functions include the receiving of rent, service charges or (as the case may be) administration charges from the tenant.

Under section 267(2)(c) of the Insolvency Act 1986 (IA 1986), a creditor may petition for the bankruptcy of a debtor in respect of a debt that exceeds the bankruptcy level and which the debtor appears to be unable to pay. Section 268 of the IA 1986 provides that, for the purposes of section 267(2) of the IA 1986, a debtor appears to be unable to pay a debt if it is payable immediately and they have failed to pay it within three weeks after service of a statutory demand.

In this case, the landlord did not give the tenant a section 48 notice until after the petition was served, though before it was heard. Under section 48(2) of the LTA 1987, where a landlord has failed to provide a section 48 notice, any rent due from the tenant shall be treated as not being due until the landlord does so.

Dismissing the petition, the court held that the effect of section 48(2) of the LTA 1987 was that the debt claimed was not due at the time the statutory demand was served and the landlord was therefore unable to rely on the debtor’s non-compliance with it as a ground for presenting a bankruptcy petition.

The court further held that the giving of a valid section 48 notice after service of the petition could not cure the defect as the petitioning creditor had to show that the debt was due at the time the statutory demand was served, as well as at the time the petition was presented.

While here the landlord was given the option of simply serving a fresh statutory demand, a failure to check that a section 48 notice has been given can result in delay and wasted costs. It may not, however, be necessary for the landlord to have served a formal separate notice, as the requirement to provide an address for service may be met by including such an address in the tenancy agreement.

Source: Practical Law, used under licence.


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