Smith & Anor v Jafton Properties Ltd [2011] EWCA Civ 1251 is a case to interest those whose practice area involves the statutory right to enfranchise under the Leasehold Reform Housing and Urban Development Act 1993.
However, the case also includes a detailed analysis by Lord Justice Lewison of the legal principles under-pinning tenant or, more to the point, assignee liability on an assignment of a lease in part. After a detailed consideration of the relevant authorities Lewison LJ concludes that “following a physical severance of the land comprised in a term of years, the tenant’s obligations are likewise severed; and are apportioned between the respective parts of the land.” Accordingly, if an assignee is the assignee of part only “then the rent and other obligations for which he is liable are those referable to the part of the leased property assigned to him; he is not liable for the rent or other obligations referable to the part of the leased property that has not been assigned to him. The rationale for these propositions is that the assignee only has privity of estate as regards the part of the leased property of which he is the assignee. He has no privity of estate as regards that part of the leased property that has not been assigned to him.” This does not stop the landlord from entering part to distrain to recover the whole of any unpaid rents.
What Lewison LJ says must be read in the light of the Landlord and Tenant (Covenants) Act 1995 which has its own regime for enforceability of covenants in relation to “new” (i.e. post-1995 Act) tenancies, and which introduces the concept of “non-attributable” covenants (e.g. covenants to pay rent) in respect of which the assigning tenant and the assignee are jointly and severally liable unless a binding apportionment is achieved under sections 9 and 10 LTCA 1995.