6. Leases

Question 1

Leases for more than 3 years, formalities of creation:

Answer 1

1. A deed

Question 1

Is a lease capable of being a legal estate in land?

Answer 1

Yes

Question 2

Leases for 3 years or less, formalities for creation

Answer 2

1. None, if lease satisfies ‘parole lease’ exception it can be created orally
2. To be legal, must be for 3 years or less (period of periodic lease is for 3 years or less)
3. tenant must have immediate right to possess and enjoy the land
4. tenant must pay best rent which can be reasonably obtained (market rent)
5. No fine or premium

Question 3

When will equity intervene to recognise a lease which is not legal?

Answer 3

1. Contract to create or transfer the legal estate OR
2. Attempt to use a deed but deed is invalid

Question 4

Doctrine in Walsh v Lonsdale

Answer 4

Court will recognise equitable lease where there is a contract and availability of specific performance

Question 5

Aside from a contract / incomplete deed, what additional requirement must be satisfied to have a valid equitable lease?

Answer 5

CLEAN HANDS

Question 6

Essential characteristics of a lease

Answer 6

1. estate must be for a duration permitted for a leasehold estate
2. grant must give exclusive possession
3. grant must have correct formalities

Question 7

What is the permitted duration for a leasehold estate?

Answer 7

1. Must have a definable beginning and end (fixed and ascertainable period)
2. May be for a fixed term or periodic

Question 8

Definition of Alienation

Answer 8

Tenant disposes of the lease by:
1. Assignment
2. Sub-lease
3. mortgage/charge
4. parting with possession/occupation

Question 9

In assignment, is a new lease created?

Answer 9

No, the tenant just passes their existing lease to a new tenant

Question 10

‘Old leases’ and ‘New Leases’

Answer 10

Old: Before 1 January 1996
New: After 1 January 1996

Question 11

Lease dated 10 December 1990. When are successors to the original tenant liable to perform the tenant’s covenants?

Answer 11

There is privity of estate between the original landlord and the assignee
- all covenants which ‘touch and concern’ the land must be performed
- Obligations under these covenants are binding on original landlord and subsequent owners of the reversion

Question 12

Personal or ‘land related’ covenant test?

Answer 12

1. Covenant benefits only reversioner for the time being and if separated from the reversion ceases to be of benefit to the covenantee
2. the covenant affects the nature, quality, mode of user or value of the land of the reversioner;
3. The covenant is not expressed to be personal (that is to say neither being given only to a specific reversioner nor in respect of the obligations only of a specific tenant);
4. The fact that a covenant is to pay a sum of money will not prevent it from touching and concerning the land so long as the three foregoing conditions are satisfied and the covenant is connected with something to be done on to or inrelation to the land.

Question 13

Old Leases: What notice requirements must a landlord fulfil to successfully recover a fixed charge from a former tenant? Can the former tenant do anything about this?

Answer 13

before landlord can do this, they must serve a default notice on the former tenant within 6 calendar months beginning with the date when the fixed charge becomes due
- If former tenant has discharged another’s liability, may be entitled to indemnity covenant either express or IMPLIED by statute

Question 14

What is an overriding lease?

Answer 14

If a landlord pursues a former tenant for a fixed charge contained in a default notice IN FULL they can request an overriding lease from the landlord
- they regain an interest in the premises and can seek remedy against current tenant (forfeiture)

Question 15

New Leases: If lease is assigned from T to T1, who is liable to perform original tenant’s covenants?

Answer 15

When T assigns lease, T is released from tenant covenants and is not liable for breach committed by T1 AND will cease to have the benefit of the landlord’s covenants

Question 16

New Leases: If reversion is assigned from L to L1, who is liable to perform original landlord’s covenants?

Answer 16

The landlord must apply to the tenant for RELEASE from the covenants
- If L is released they lose all benefit of the tenant’s covenants

Question 17

Limitation Period for Action for Debt against a tenant

Answer 17

Landlord prevented from bringing a claim after 6 years from the date on which the arrears became due by s 19 of the Limitation Act 1980

Question 18

What ‘date’ is relevant when determining whether a lease is old or new?

Answer 18

The date the lease was GRANTED will determine this

Question 19

Old lease: when does a new landlord take the benefit / burden of the leasehold covenants?

Answer 19

When they are relevant to the subject matter of the lease (same as touch and concern) - covenants which relate to the land
- Set out in SWIFT