Can The Landlord Sue The Tenant?

Can The Landlord Sue The Tenant?

Can The Landlord Sue The Tenant?

The first question to ask is whether the landlord is entitled to sue the tenant via a subrogated claim using the landlord's name. In Mark Rowlands Ltd. v. Berni Inns Ltd. (1986) the Court of Appeal decided that the landlord had insured the premises for the joint benefit of himself and the tenant, even though the tenant was not named on the policy. He did, however, contribute to the premium, and the landlord's claim failed. The Court of Appeal held that the lease made it clear that it was the mutual intention of the parties that insurance would be for the benefit of both the landlord and the tenant, and the landlord was obliged to insure and use any monies received from insurers in rebuilding the premises. If, therefore, the tenant in our example contributed to the landlord's insurance policy, then the landlord's insurers will not be able to sue him. If he did not, then they will be able to sue him in contract under the lease. Let us assume that the landlord's insurers are not entitled to sue the tenant (because he is an insured party) but must pursue remedies against other parties. Of course, the tenant will be obliged to lend his name to the insurer to enable him to conduct any litigation, because he is effectively an insured party under the policy. The insurers, landlord and tenant will also have to agree the funding of the litigation, the allocation of any proceeds and how (and by whom) the litigation is to be pursued.

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