The Law of Property Act 1925 ("LPA 25") is one hundred years old this year. In this article we look at the provisions in the LPA 25 for the service of notices and whether they are fit for purpose for today's property transactions.
The chances are that if you have ever entered into a property contract (such as a lease) you will at some stage have to serve or receive a notice.
The LPA 25 makes provision for the service of notice on parties who have an interest in land. Section 196 contains provisions which dictate how such notices are to be served and when they are deemed received. It is typical for legal documents, such as leases and contracts for the sale of land, to incorporate the provisions of Section 196.
A lease or contract may typically state "The provisions of section 196 of the Law of Property Act 1925 will apply to notices served pursuant to this agreement". This is shorthand for stating:
- Notices must be in writing
- Notices served on a tenant or lender do not have to be addressed using the name of the recipient, but can be addressed to "the tenant", "the mortgagor" or "the persons interested"
- A notice served on a tenant or mortgagor is valid even if a person affected by it is absent, under a disability, unborn or unascertained
- Notices are sufficiently served by being
- left at the last known place of abode or business in the UK of the person to be served, or
- sent by post in a registered letter addressed to the person to be served at their last known place of abode or business in the UK, and
- Notices sent by post in a registered letter are deemed served at the time at which the registered letter would be delivered in the ordinary course of post (unless returned to the sender)
Serving notice under Section 196 may not always be straightforward, especially if the notice is time critical, such as in the case of a one-off break option. A number of questions can arise, such as:
- What is the last known place of abode or business, and what constitutes leaving the notice there?
- What if the party to be served has never been present in the UK?
- What is a registered letter?
- Is it safe to send a registered letter, given the risk it may be returned?
- What is the ordinary course of post?
- How is service evidenced, in the case of a dispute?
Section 196 is arguably outdated in many ways, having not anticipated how common non-UK resident parties would become or less surprisingly service by electronic means. Some leases and contracts have bespoke service provisions, and each document should be checked carefully before serving a notice. Some contracts may allow electronic service or provide a specific address for service in the UK for a non-resident party.
In the writer's view Section 196 needs statutory amendment. Whilst it may be tempting to simply incorporate Section 196 into your property contract, given the issues outlined above, some extra time dedicated to drafting bespoke service provisions could, in the long run, make things much easier when it comes to serving notice.
