6. Leases

Question 1

Options for the term of a lease

Answer 1

1. Fixed Term Lease
2. Periodic Tenancy
3. Tenancy At will

Question 2

Required Notice period to terminate a yearly periodic tenancy?

Answer 2

6 months notice

Question 3

When does a fixed term lease end

Answer 3

At the end of the term, no need to serve notice

Question 4

When does a tenancy at will end?

Answer 4

Can be terminated by either party at any time

Question 5

Three categories of leasehold covenant

Answer 5

1. Absolute Covenant
2. Qualified Covenant
3. Fully Qualified Covenant

Question 6

Benefit of having a ‘full repairing and insuring’ lease for landlords

Answer 6

FRI leases protect landlords from having to incur any expenditure which cannot be recovered from tenants

Question 7

If a tenant of business premises wants to carry out alterations contrary to an absolute covenant, what can they do?

Answer 7

1. serve notice on landlord to carry out improvements (LTA 1927)
2. landlord has 3 months to object and if they do, tenant can apply to court for permission
3. Landlord can offer to carry out improvements themselves for an increase in rent

Question 8

How are ‘improvements’ defined by s 3 LTA 1927, when is this definition applicable?

Answer 8

if they add to the letting value of the property, are reasonable and suitable to the character of the property and do not diminish the value of any other property of the landlord.
- relevant for business tenants dealing with absolute covenants

Question 9

If a tenant in a business premise wishes to carry out improvements but there isa qualified covenant against this, what does statute provide?

Answer 9

s 19(2) LTA 1927 implies term that in qualified covenants for improvements, landlord cannot UNREASONABLY withhold consent

Question 10

How are improvements defined in s 19(2) LTA 1927, when is this definition relevant?

Answer 10

Improvements: the works in question will increase the value or usefulness of the property to the tenant
- relevant for tenants in business premises dealing with qualified covenants

Question 11

If a tenant makes improvements (s 3 1927 LTA) which add value to the home, can they ever get compensation for this?

Answer 11

They can apply for s 1 LTA 1927 within statutory time limits for compensation from the landlord

Question 12

Meaning of Alienation

Answer 12

Essentially, creating an interest in the property for the benefit of a third party, including:
a. assignment
b. underletting
c. charging
d sharing occupation
e. parting with possession

Question 13

Three statutory provisions governing assignment covenants:

Answer 13

1. s 19(1)(a) LTA 1927: makes qualified covenant fully qualified
2. Section 19(1A) LTA 1927: landlord and tenant agree conditions where it would be unreasonable to withhold consent (ie. assignor will give AGA / guarantors)
3. Section 1 LTA 1988: where there is a qualified covenant, landlord must give consent / serve notice of its decisions on tenant and reasons WITHIN REASONABLE TIME

Question 14

Is an underlease an estate in land?

Answer 14

Yes, it is separate as a lease from the headlease