You will all no doubt be familiar with demands for Ground Rent on residential units that you manage and that, since 2005, there has been a requirement to use the prescribed form as set out by section 166 Commonhold and Leasehold Reform Act 2002 (“s.166 Notice”).  Indeed, in the absence of a demand in the prescribed form and correctly completed, a leaseholder is not obliged to pay rent.   

Despite this now well established requirement, we still receive from agents and landlords alike a large number of rent demands which are either not in the prescribed form or, where the right form has been used but it has been completed incorrectly.  Whether you send the s.166 notice on its own or appended to a statement or other form of demand, it is important to complete it correctly.  Even a minor error will invalidate the demand and the effect of that is that the tenant is not (yet) liable to pay the rent that would otherwise be due. 

In this Legal Update we address the requirements of the s.166 notice which we hope will prove useful as a means of checking and if necessary, correcting your approach to these notices.

We have reproduced with this update the prescribed form which we have annotated with letters A to H to tally with the notes below, with appropriate guidance for completing each of the relevant sections.

The guidance

A

There is no provision for insertion of a date or reference on the prescribed form.  Where your Notice is accompanied by a letter which will include this information, then this need not be completed.  We take the view that having a date on the notice is wise in any other circumstances.

B

Here the requirement is to input the leaseholder’s name(s).  If there is any doubt as to the name(s) of the leaseholder then either obtain a copy of the leasehold title from HM Land Registry, or simply address the notice to “The Leaseholder(s)”.

C

This requires the full address of the Flat to which the demand relates and not any other address that you may have or use for the leaseholder.  

D

(i)     This if for the sum of the rent to which this demand relates.  If the rent is, say, £100 per annum but payable in two equal instalments of £50 on 25 March and 25 September then the figure here is just £50, being the rent for the period to which this notice relates and not any other sum (see comments below advising against demands for multiple rents).

(ii)   Here you need to fill in the date on which this notice requires the rent to be paid.  There are two important notes to make in this regard as this is the area in which most mistakes are made:-

1. The date must not be one prior to 30 days nor more than 60 days after the date that the notice is sent.  Our advice is to opt for 35 days (or slightly longer) to allow for postal service delays. 

2. The date quoted here must not be prior to the due date of the rent under the lease. 

Using the above example, and assuming that you were to be demanding the rent due on 25 March, this section would be for £50 and would require payment of the rent on a date on or after 25 March.  If your demand was being sent on, say, 1 March it must not require payment before 25 March in any event (as that would be prior to the payment date in the lease). As 30 days minimum must be given, it must require payment no sooner than 1 April but no later than 29 April (being 60 days after the demand is sent). 

It is worth saying here that many of the incorrectly completed demands fall short on this section because the landlord/agent has confused this date with the date that payment is due under the lease. The date required here bears no relation to the dates in the lease, save that it cannot seek payment before the due date.  If the due date has passed then you need merely concern yourself with picking a date not less than 30 days, but not more than 60 days, beyond the date on which you send the demand.  

E

Unlike the above, which is the date on which payment must be made, this section and F below relate to what the lease states.  The section requires you to confirm the rental period in question. So, using the above example again and assuming that you wish to demand here the rent due on 25 March, the information required here would be “commencing 25 March 2019” or “25 March 2019 to 28 September 2019”.  Either will suffice.

F

(i)     Once again this is what the lease sets out and nothing else.  So, using the above example and assuming you are demanding rent due on 25 March, this section should state £50.

(ii)   The date here then would be 25 March 2019 based upon the above example and irrespective of when you are sending this demand.

G

Insert here the name and address of the landlord or, if payment is to be made to the landlord’s agent, then the name and address of the agent.

H

It is most important that the landlord’s name and correct address is completed here. Note that the address used here should not be “care of” the agent’s office address unless the landlord’s registered address is the same address as the agent or it is the landlord’s place of business.  The landlord’s actual address should be used, be that the registered office if the landlord is a company or his home or place of business if an individual.  An incorrect address here will invalidate the notice.

Multiple demands

The prescribed form is not designed for, nor does it lend itself to, demanding rent for more than one period of rent. It simply does not fit and it is very unwise to try to make a prescribed form fit something it was not intended to be used for.  Accordingly, if you wish to demand rental for more than one period then you will need, and are advised, to use a new form for each period of rental due.  

Please see copy of the prescribed form with annotations.

The prescribed form

COMMONHOLD AND LEASEHOLD REFORM ACT 2002, SECTION 166

NOTICE TO LONG LEASEHOLDERS OF RENT DUE

A [date of notice]

To :  B …………………………………………………………………………………………………..………………………………………....  (note 1)

This notice is given in respect of  C ……………………………………………………………………………………………………………

It requires you to pay rent of £  ...........D(i) ......….....   on D(ii) ……………………..……………………………………….(note 2)

This rent is payable in respect of the period E …………………………………………………………………………………………….

In accordance with the terms of your lease the amount of £........F(i)..... is/was due on …………… F(ii) (note 3)

Payment should be made to  G ……………………………………………………. at ………………………………………………………..

This notice is given by H ………………………………………………………………………………………………………………………………

NOTES FOR LEASEHOLDERS

Read this notice carefully. It sets out the amount of rent due from you and the date by which you must pay it. You are advised to seek help immediately, if you cannot pay, or dispute the amount. Those who can help you include a citizens’ advice bureau, a housing advice centre, a law centre and a solicitor.  Show this notice and a copy of your lease to whoever helps you.

The landlord may be able to claim additional sums from you if you do not pay by the date specified in this notice. You have the right to challenge the reasonableness of any additional sums at a tribunal.

Section 167 of the Commonhold and Leasehold Reform Act 2002 and regulations made under it prevent your landlord from forfeiting your lease for non-payment of rent, service charges or administration charges (or a combination of them) unless the unpaid amount is more than £350 or consists of, or includes an amount that has been outstanding for more than three years.

NOTES FOR LANDLORDS

1.             If you send this notice by post, address it to the leaseholder at the dwelling in respect of which the payment is due, unless he has notified you in writing of a different address in England and Wales at which he wishes to be given notices under section 166 of the Commonhold and Leasehold Reform Act 2002.

2.             This date must not be either less than 30 days or more than 60 days after the day on which this notice is given or before that on which the leaseholder would have been liable to make the payment in accordance with the lease.

3.             Include this statement only if the date for payment is not the same as the date determined in accordance with the lease.

Disclaimer

This legal update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole. 

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