Agent’s Acceptance Binds Landlord

20 June 2011

A tenant that served a break notice on its lease to the wrong person had a lucky escape recently when the court ruled that the notice was valid because the landlord’s agent had accepted it and this had the effect of waiving the defects in serving it.

The tenant wished to terminate its lease. During the period of tenancy, the landlord had changed and the tenant mistakenly served the notice on its former landlord. The former landlord advised the tenant of its mistake and the tenant then emailed the notice to the new landlord, which forwarded it to the managing agent.

The managing agent responded to the tenant, indicating that the termination of the lease was acceptable and asking that the notice be readdressed to the current landlord.

The landlord claimed the notice was invalid because it had been sent by email (the lease specified it had to be served by hand, by post or by special delivery) and that it was addressed to the wrong person.

The tenant argued that the managing agent’s acceptance of the notice bound the landlord.

The court agreed that sending the notice to the landlord was sufficient to inform it of the tenant’s intention to break the lease, despite it being addressed to the wrong person, and that a reasonable person would accept that it was a notice to break the lease. Although it was not a valid notice under the lease, it was validated by the response from the managing agent.

On the second point, the court agreed that the managing agent’s acceptance of the notice received was sufficient for the tenant to rely on and acted to prevent the landlord from challenging the notice. A mere acknowledgement of receipt of the notice might not have had the same effect.

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