6. Leases Flashcards
Head-lease
Takes effect under the freehold (the only superior title)
Grant
Birth of a new lease
Assignment
The transfer of a leasehold
Fixed term lease
Leases granted for a specific period of time
Periodic lease
Leases granted for a period which will renew from one period to the next, until determined by a notice to quit
Legal lease requirement
- Deed - s52(1) LPMPA 1989
- Unless it falls within s52(2) LPA 1925
- Lease taking effect in possession for a term not exceeding 3 years at best rent may be made merely IN WRITING/ORALLY
Legal leases for a term of more than 7 yrs
Have to be registered with separate title no. If reversion is registered, grant amounts to dealing with registered title & lease must be registered with its own title
Legal leases for 7 yrs or less
If lease granted out of a reversion with registered title, takes effect as an overriding interest (sch 3 LRA 2002) whether or not tenant is in actual occupation
Equitable lease requirement
- Leases that haven’t been created by deed & not covered within s54(2) LPA 1925 may take effect as an equitable lease:
- Must be for value
- Must satisfy requirements of LPMPA s2
Consequences of not registering equitable lease as Class C(iv) land charge
If unregistered- void against purchaser of legal estate for money/money’s worth
liability of covenants for leases granted on or after 1 jan 1996
- OG parties have the benefit of the others covenants and the burden of their own covenants while they remain as landlord and tenant
- Assignment by tenant releases them from future liability unless they have agreed to an AGA (authorised guarantee agreement)
Authorised Guarantee Agreement
Outgoing tenant guarantees performance of the lease covenants by their immediate successor in title.
When is a tenant obliged to provide an AGA?
- Leases on commercial property where it has been agreed that an AGA is to be provided on assignment
- Landlord lawfully requires AGA for assignment
Do assignees get the benefit of a covenant
Assignees get the benefit of landlord covenants upon assignment s3(2)(b)LTCA 1995
Assignee bound by all tenants covenants except those expressly stated to be “personal” to the OG tenant s3(2)(a) LTCA 1995
Is OG tenant bound by covenants in leases granted before 1 jan 1996
- OG tenant remains bound by covenants for the whole contractual term under privity of contract
- Bound for any breaches they commit, but also for those committed by their successors in title
What is an assignee liable for under leases post 1996
Any assignee is liable for breaches for covenants which ‘touch and concern’ the land
When can a landlord pursue a former tenant?
s17 LTCA 1995- landlord can only pursue former tenant if they serve a default notice
When must default notice be served
Default notice must be served within 6 months of the sum falling due
Methods of determining a lease
- Effluxion of time
- Notice to quit
- Surrender
- merger
Break clause
Effluxion of time
Where contractual term ends
Periodic tenancy notice
- If tenancy terms do not provide for a notice period, common law implies the following lengths:
- Yearly tenancy- half a years notice expiring at the end of a completed year of tenancy
- Other periodic tenancies- one full periods notice (one quarter, one month etc.) expiring at the end of a completed period of the tenancy
Surrender
- Tenant yields their lease to immediate landlord, who accepts the surrender.
- Lease merges in landlord’s reversion & is extinguished
- Surrender must be by deed
Merger
- Tenant acquires immediate reversion on their lease (acquires landlord’s estate in land)
- Automatic merge & is extinguished
Break clause
- Some leases contain the option to determine the lease part way through contractual term
- Need to agree on: who can operate the break, at what point in the term it can be operated, and how much notice must be given to exercise it
