The spectre of the exploitative ground landlord is again haunting leasehold housing estates.

The exploitative ground landlord is one who buys a batch of ground rents, usually from a builder who has developed a residential estate and has sold properties on long (99 or 999 year) leases, and then exploits the covenants and provisions in the leases in the hope of making a profit from the tenants.

The ground rents are the reversions on the leases which undoubtedly contain within them the right to enforce the tenants' covenants.

But what needs to be considered is the purposes for which, and the manner in which, those covenants are enforced and the way that the landlord's tactics can be countered.Many long residential leases are so elaborate that it is almost impossible for the tenant not to be in breach of covenant at some time or other.

This usually comes to light on a sale of the property in reply to a prospective purchaser's preliminary inquiries.

Some breaches may be comparatively trivial such as small arrears of ground rent or failure to give or register changes of ownership or other dealings with the landlord when the lease requires it.

Other breaches, such as failure to get the landlord's consent when required for alterations, can be more serious.

With reasonable landlords (and most are) the more trivial breaches can be put right quite simply: where there are arrears of ground rent either the seller pays them off or an allowance is made on completion and the arrears paid over to the landlord.

But all breaches, from tender of arrears of ground rent to retrospective consent to alterations, require some response from the landlord.It is at this point - often when the parties are under pressure to exchange contracts or simply short of money following their move - that the exploitative ground landlord strikes.

Sometimes the landlord may write directly to the tenant, by-passing the solicitors, alleging that the lease is forfeit, that considerable work has had to be undertaken because of the default (which may only be a few days delay in tendering ground rent) and that, as a result, administration fees or charges (which can be up to £200 for a ground rent of under £10 being in arrears for a few days) have been incurred.

(Usually an impressive looking invoice is enclosed).

The letter usually concludes with an invitation to the tenant to reques t the landlord to waive the right to forfeit.

The letter often includes the threat that the landlord will obtain office copy entries and notify the tenant's mortgage lender and add the costs to the so-called administration fees.All the above are calculated to cause the tenant anxiety and to procure payment of what are, more often than not, unwarranted charges.Forfeiture generallyBefore dealing with some examples of the situations which are exploited and because forfeiture, or threat of it, features prominently in the exploitative landlord's vocabulary, some general comments on the subject may be useful.First, forfeiture for non-payment of rent and for breach of any other covenant must be distinguished.

A landlord intending to forfeit (or to re-enter - the terms are synonymous) for breach of covenant other than for non-payment of rent (which includes a covenant to make a money payment, such as a fee for a dealing, not expressly reserved as a rent) must first serve a 'section 146 notice' ie, a notice pursuant to the Law of Property Act 1925 s.146 specifying the alleged breach and, if it is capable of remedy, requiring the tenant to remedy it and requiring the tenant to make compensation in money for the breach.

However, service of a section 146 notice is not a pre-requisite of forfeiture for non-payment of rent and other payments expressly reserved as rent (subs.146(11)) and if a landlord serves one he or she will not be entitled to recover his or her costs of preparing and serving it.Secondly, forfeiture is effected by either actual re-entry or by 'the service' (not the mere issue) of the writ or summons for possession (see Canas Property Co Ltd v KLTelevision Services Ltd [1970] 2 QB 433).

Until then the lease is voidable, or more precisely, forfeitable at the instance of the landlord and until proceedings have been issued and served it is misleading (and frightening to a non-lawyer) for the landlord to refer to the lease as forfeit.

Because the property will be a dwelling-house in which the tenant will be residing, re-entry can only be effected by proceedings for possession in the tenant's local County Court - Protection from Eviction Act 1977 s.2 and subs.9(1) - and Peachy Property Corporation v Robinson [1967] 2 QB 543); and by the County Courts Act 1984 subs.138(2), if the tenant pays the rent in arrear and the costs of the action either into court or to the landlord, the action ceases: relief is therefore automatic if s 138(2) of the 1984 Act is complied with.Thirdly, forfeiture for breach of covenant other than for non-payment of rent must be preceded by a s.146 notice and relief is at the discretion of the court which is unfettered.

In the case of less serious breaches, relief can be expected as of course on terms that the tenant makes good the breaches, compensates the landlord for the damage suffered (if any) and pays the landlord's costs.

A disproportionate difference between the landlord's possible loss from the breach and the windfall the landlord might get if allowed to forfeit will be an important consideration (see Van Haarlam v Kasner (1992) 64 P & CR 214).

In the case of a long lease of a dwelling house at a nominal or small ground rent for which the tenant has paid the market price, there are probably few breaches of covenant that might be so serious that the court would refuse relief and give the landlord such a substantial windfall.Service of a s.146 notice initiates the forfeiture process and the tenant can take the initiative and apply to the court immediately for relief which usually catches the landlord off balance.

Although it is usual for the tenant to have to bear the costs of a forfeiture action and the application for relief, the court nevertheless has a discretion.

Where the forfeiture is technically justified but the landlord acts unreasonably or fails in some part of the claim he or she will be deprived of all or part of the costs or ordered to pay all or part of the tenant's costs (see House Property v James Walker [1947] 2AllER 262).Moreover, where a landlord opposes a tenant's application for relief unsuccessfully he or she may be ordered to pay the costs insofar as they have been increased by the opposition.

It follows that in most cases, the exploitative landlord's threats of forfeiture have so little substance that all that is required of the tenant and solicitors is a strong nerve and a robust response.With this in mind, some of the more typical situations exploited by ground landlords will be considered.

It must be borne in mind, however, that it is only possible, in the space available, to deal with situations where the lease is in customary form.

Much will depend upon the precise wording of the covenant in question and it cannot be stressed enough that the first step in countering the tactics of the exploitative landlord is to become thoroughly familiar with all the relevant provisions of the lease.Arrears of ground rentArrears of ground rent or failure to pay within the time fixed in the proviso for forfeiture admittedly entitle the landlord to forfeit but only by issuing and serving proceedings (for possession) in the tenant's local county court.

And if non-payment is the only breach, relief will be automatic if the tenant pays the rent and the costs of the action into court, or to the landlord under subs 138(2) of the 1984 Act.

Until proceedings are served the lease is not forfeit (and rent that has fallen due has fallen due contractually - as rent and not as mesne profits).As the rents will be nominal or of relatively small amounts and costs will be fixed, it will rarely be worthwhile for the landlord to issue and serve proceedings, so that the threat of forfeiture is illusory.Notice or registration of dealings with the landlordMost long leases of residential property contain a covenant by the tenant to give to or to register with the landlord notice of any assignment, transfer mortgage or other disposition of the property usually within a specified period and to pay a fixed fee (If the covenant does not fix a period within which the notice must be given, it should be given within a reasonable time which is probably at some time before the next rent due date).

Often, after completion, when the notice is properly served on behalf of the purchaser together with the stipulated fee, both are returned and an 'administration fee' demanded in addition.

This is a 'try on' and should be resisted: if the lease stipulates a fixed fee (albeit one of small amount fixed many years ago) that is all the landlord is entitled to.Sometimes, however, the notice is served late and/or there are other breaches of covenant such as arrears of rent (if often happens, for example, that the notice is accompanied by a cheque which includes not only the fee but also an amount for arrears of ground rent allowed to the purchaser on completion).This situation is ideal for exploitation by the landlord and the response is usually in the terms described above, accompanied by the statement that because notice has not been served, or served in time, or has not been accompanied by the fees demanded, the purchaser has no title to the property, citing as authority Richards v De Freitas (1974) 29 P&CR 1.

Such a statement is wrong in law and is made for no other reason than to frighten the tenant into paying unwarranted charges.

The authority cited is not material, it being a case where the rent was tendered not by the tenant but by a third party and failure to notify or register dispositions, although it may be a breach of covenant, in no way affects the purchaser's title which is acquired by the assignment or transfer and subsequent registration of the purchaser as proprietor at HM Land Registry.

Service of the notice whether or not in time and whether or not accompanied by the proper fee is sufficient to notify the landlord that the purchaser is the assignee and the person liable to pay the rent (Re House and Property Investment Company [1954] CH 596).

There are two other points.First, failure to give notice or to give it in time will be an ordinary breach of covenant to which s.146 of the 1925 Act does apply so that the landlord is not entitled to forfeit the lease until he has served a s.146 notice.

But upon application by the tenant, provided there are no other breaches of covenant, relief would be granted as of course because the landlord has suffered no damage or prejudice.Secondly, the invitation to request the landlord to waive its right to forfeit is a trap: subs 146(3) of the 1925 Act entitles a landlord to recover as a debt the costs of employing a solicitor and a surveyor when, inter alia, a right of re-entry for forfeiture is waived in writing at the request of the tenant.

Consequently, acceptance of the invitation by formally requesting a waiver enables the landlord to recover summarily costs and expenses which he or she might otherwise have difficulty compelling the tenant to pay.The landlord also has obligations to the tenant under part VI of the Landlord and Tenant Act 1987 which provides in relation to tenancies of dwellinghouses:a) any written demand given to the tenant must contain the name and address of the landlord (s.47)b) the landlord must furnish the tenant with an address in England and Wales at which notices may be served on him and if he fails to do so rent or service charge are treated as not being due (subs 48(1) and (2)).Refusal by landlord to accept rent or notice of dealingsA tenant cannot compel the landlord to accept arrears of rent or notice of dealings.

If they are returned the tenant must await whatever action the landlord takes.

Because of the small amount in issue and the effect of that on costs, the landlord is unlikely to make a purely money claim and there is stalemate.The proper course then is to send copies of the notice and correspondence to the tenant's mortgage lender pointing out that the rent and notice have been tendered and to file the returned cheque and notice with the correspondence for future use as evidence of tender.If, perhaps because a dealing of some kind is contemplated, it is essential for the issue to be concluded and the landlord persists in the claim that the lease is forfeit, the tenant can take the initiative and commence proceedings for relief, while at the same time seeking declarations that the necessary notice of change of ownership has been served, that rent has been properly tendered and that he or she s not liable for the landlord's expenses and charges.A court is likely to be sympathetic to the tenant on costs.

If the landlord commences an action for possession (ie, for forfeiture) and for recovery its expenses, the tenant can either raise the defence of tender in respect of the rent claim and defend generally in respect of the money claims or pay rent and costs into court under s.138 of the 1984 Act, filing a defence alleging tender and generally, in respect of the money claims, and counterclaiming for the return of the costs.

If the tenant is otherwise eligible for legal aid he or she should be granted a certificate either to defend or to commence such proceedings.Landlords' charges and expensesIn general, all that a landlord is entitled to extract from a tenant is what the lease expressly provides, which will usually be the rent reserved and certain charges such as those for registering dealings or the costs of employing a solicitor and/or surveyor when consent to alterations is sought.

This is a matter of contract and by demanding other or greater payments than those stipulated, the landlord will be attempting to vary the lease unilaterally.

Unless the lease provides for service charges and/or management fees the landlord is not entitled to charge them.

Thus, although a landlord may refuse consent in certain circumstances in the interest of good estate management he or she is not, unless the lease so provides, entitled to foist on the tenant a scheme of estate management that is to be paid for at the tenant's expense.

If, for example, a landlord wishes to employ agents to collect rents and attend to other matters the landlord must bear the costs.It must be stressed however that this general rule is subject to any express provision in the lease which may allow the landlord to recover reasonable charges or a fixed fee and/or charges, reasonable or otherwise.

There may also be a 'catch-all' covenant by the tenant.

Each situation arising under such provisions will have to be dealt with as it arises.