6. Leases 2

Question 1

Which document allows assignment

Answer 1

licence to assign

Question 2

key issues to be checked when assigning a lease

Answer 2

• is consent required from landlord
• ## length of the residue of the term

Question 3

what might a landlord require

Answer 3

references on the prospective buyer,ensuring they are solvent and trustworthy

Question 4

sources of referees

Answer 4

current landlord
buyer’s bankers
buyers employer
professional person
person/company with whom the buyer regularly trades
3 years audited accounts in case of a co or self employed person

Question 5

what is a surety

Answer 5

a guarantor

Question 6

AGA

Answer 6

where buyer guarantees performance of tenant’s covenants by the buyer

Question 7

when may a landlord require a seller to enter into an AGA

Answer 7

prior to granting consent

Question 8

does landlord have to be reasonable in requesting an AGA

Answer 8

no- unless the lease did not provide for an AGA

Question 9

can a tenant impose incoming assignees obligations onto a surety

Answer 9

no good harvest partnership v centaur services

Question 10

alienation

Answer 10

assignment/parting with possession of the property

Question 11

what happens where there is an absolute covenant against alienation in the lease (the tenant shall not assign or part with possession of the property)

Answer 11

any assignment is a breach and can lead to forfeiture of the lease

Question 12

what restrictions are imposed on absolute covenants

Answer 12

not subject to any statutory restrictions, bar the Equality Act 2010

Question 13

what is a qualified covenant?

Answer 13

permits the tenant to assign, provided that the seller tenant obtains the prior consent of the landlord to the dealing

Question 14

s19 LTA 1927

Answer 14

non-excludable proviso that the landlord cannot unreasonably withhold consent

Question 15

procedure for qualified covenant

Answer 15

• L served written notice for consent (must give consent within erasonable time)
• L to serve written notice of their decision on the tenant, stating any conditions (if any)or if the consent is refused, stating reasons for withholding consent

Question 16

What happens if a landlord breaches his duty under the 1988 act to give written notice

Answer 16

breach of statutory duty, giving a remedy to tenant in damages

Question 17

when are landlords obligations under 1988 act triggered

Answer 17

upon proper service of the written application for consent

Question 18

EON UK v Gilesports

Answer 18

landlords statutory duties were not triggered, as application for consent was made via email- irrelevant that the landlord received service

Question 19

N01 West India Quay

Answer 19

tenants request to assign was not validly served, as it had been sent to an addressed provided by landlord in the sales pack, not to registered office as specified in notices clause

Question 20

what can the landlord demand in return for consent to assign

Answer 20

a premium

Question 21

what can the landlord demand of the tenant regarding preparation of the deed of consent

Answer 21

landlord solicitors reasonable charges

Question 22

SC 8.3 what should a seller do when applying for consent

Answer 22

Seller must apply for consent at their own expense and to use all reasonable efforts to obtain such consent

Question 23

up to which point may either party rescind the contract

Answer 23

if consent has not been given 3 working daysbefore completion date/or if by that time, consent has been given subject to a condition to which the buyer reasonably objects

Question 24

what does SCPC 11.3.3 require of the seller

Answer 24

seller must enter into an aga

Question 25

scpc 11.3.5

Answer 25

if consent has not been obtained by completion date, completion is postponed until 5 working days after seller notifies buyer that consent has been given

Question 26

what must the seller and landlord refer to in relation to disputes

Answer 26

protocol for applications for consent to assign or sublet

Question 27

SC 4.1.1; SCPC 7.1.2

Answer 27

seller must provide buyer with official copies of the register and title plan. a copy of the lease must also be provided, and buyer is treated as entering into the contract knowing and fully accepting the lease terms

Question 28

what happens if there is no deduction of reversionary title

Answer 28

lease may be unacceptable to the buyer and/or lender

Question 29

s44 LPA 1925 rule

Answer 29

buyer entitle to call for the lease or sublease which they are buying, but is not entitled to call for evidence of any superior title

Question 30

method of transferring legal title

Answer 30

by deed s52(1) LPA 1925

Question 31

which form of deed is used to transfer a lease

Answer 31

Form TR1

Question 32

what happens when a lease of over 7 years (in unregistered land) is transferred

Answer 32

triggers compulsory first registration

Question 33

what happens if seller is in breach of repair covenant

Answer 33

lack of repair could involve them in liability to the buyer under completion due to implied covenants in the transfer deed- in such a case, express modification is required in the transfer deed

Question 34

example of modification to the transfer deed

Answer 34

The covenants set out in section 4 of the LPMPA act 1994 will not extend to any breach of the tenant’s covenants in the lease relating to the physical state of the property

box 9 of TR 1

Question 35

what is implied in relation to assignment of leases granted prior to 1 jan 1996

Answer 35

indemnity covenant from buyer to seller, except in unreg land where value is not given by buyer (s77, LPA)

Question 36

are sellers automatically released for future liabilities on assignment for leases granted on/after 1 jan 1996

Answer 36

yes unless there is an AGA, following which an express indemnity covenant is to be included

Question 37

why is an official search to be carried out

Answer 37

to check for any new entries, and gain a priority period within which to register the transfer

Question 38

additional searches against freehold where it is unregistered

Answer 38

land charges department search against estate owners to check for any incumbrances on the freehold which may affect the leasehold interest

Question 39

why might apportionment of sums be relevant

Answer 39

seller likely to have paid rent in advance. buyer to reimburse seller for the period from completion until the next rent day

Question 40

what should seller supply buyer with

Answer 40

completion statement, showing amounts due and how they have been calculated + receipt copies

Question 41

what happens on completion

Answer 41

buyer pays seller balance of purchase price and other sums due

Question 42

is SDLT payable on assignment

Answer 42

only on any purchase price charged by the seller

Question 43

what must be done after completion

Answer 43

notice to be given to landlord of an assignment. recipient to be asked to sign and return the receipted copy to sender

Question 44

when should a lease be registered at land registry

Answer 44

the transfer within the priority period given by buyer’s pre-completion searches

Question 45

when does an unregistered lease need to be registered

Answer 45

within 2 months of assignment, or will be void

Question 46

are lease terms on assignment negotiable

Answer 46

no- the lease is already in existence, so the terms cannot be negotiated