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A2610 > Ch.24 Leasehold Interests > Flashcards

Ch.24 Leasehold Interests Flashcards

1
Q

Leasehold Interests

A

Arises when landowner grants possession of land to another for fixed period of time

Either expressed or implied contract

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2
Q

Lessor

A

landlord

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3
Q

Lessee

A

tenant

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4
Q

Lease

A

agreement that constitutes a grant of possession of property for a fixed term in return for the payment of rent

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5
Q

Tenancy

A

relationship between parties governed by a lease

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6
Q

Creation of tenancy creates two interests in land:

A
  1. Leasehold - tenant’s right to exclusive possession
  2. Reversion - return of the right to possession to the landlord at the end of the lease

At expiration of lease, the two interests (possession and title) merge

Anything attached to land is part of leasehold interest

Commercial leases:
- Negotiated and terms set forth in the contract

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7
Q

Creation of a Tenancy

Lease contract:

A

Made between landlord and tenant

Gives tenant exclusive possession of the property for a specified term

Not the same as a license
- Lease exclusive possession and interest in land
- License grants right to use property in common with others and no interest in land
- Test: one of intention

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8
Q

Express agreement (verbal or written) or implied from conduct of parties

A

Terms set out specific rights and duties of parties

Cannot override certain parts of legislation

Elements of contract required for validity:
- Offer and acceptance
- Consideration
- Legality of object
- Parties must have capacity to contract and intention to create legal relationship

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9
Q

Legislation in provinces:

A

Distinction between residential vs. commercial leases

Residential tenancies:
- Provide greater security for tenant
- Additional obligations on landlord

Commercial and other tenancies:
- Common Law rules for landlord and tenant
- Legislation pertaining to tenancy relationship

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10
Q

Characteristics of a Lease

A

Term certain
Periodic tenancy
Sub-tenancy

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11
Q

Term certain

A

fixed term of a lease

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12
Q

Periodic tenancy

A

lease that automatically renews at the end of each rent period until notice of termination

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13
Q

Sub-tenancy

A

lease of leased premises by a tenant-in-chief to another tenant for a shorter term than the original lease

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14
Q

Landlord and tenant specify rights and duties in lease agreement

A

Binding for duration of lease

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15
Q

Rent is the amount paid by the tenant

A

Form is up to the parties

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16
Q

Time for payment

A

Up to the parties

17
Q

Damage or Destruction

A

Common law - usually tenant liable for rent even if damage to buildings

18
Q

Quiet Possession

A

Possession undisturbed by persons claiming a right to the property through or under the landlord

Landlord has restrictions on entering the land

19
Q

Repairs

A

Usually set out in lease

Legislation requires landlord to make habitable and safe

20
Q

Sublet

A

lease of leased premises by a tenant-in-chief to another tenant for a shorter time than the original tenancy

Allowed unless specifically prohibited in lease
- Common law - tenant allows to assign lease
- Tenant still liable under express covenants in lease
- Normal practice is right to assign lease with consent of landlord

21
Q

In absence of express covenant, landlord obliged to cover municipal taxes and insurance

A

If tenant pays taxes, can deduct expenses from rent payable

Municipal charges for property improvements are responsibility of landlord

22
Q

Insurance may be express term in lease

A

Most tenants insure own chattels and provide liability insurance

Landlord insure buildings to protect from loss or damage

23
Q

Chattels brought onto premises by tenant usually can be taken at end of term of lease unless part of realty

A

Trade fixtures - chattels attached to leased premises by a commercial tenant that may be removed at the end of the tenancy by the tenant
- Minor damage in removal must be repaired

24
Q

Trade fixtures

A

chattels attached to leased premises by a commercial tenant that may be removed at the end

25
Q

Type of remedy of landlord depends on nature of breach committed by tenant

A

Most common breach is failure to pay rent
- Commercial lease - breach by landlord does not allow tenant to withhold rent
- Residential lease - certain beaches by landlord allows tenant to withhold rent

26
Q

Remedies for failure to pay rent:

A
  1. Action on the covenant - institute legal proceedings
  2. Distress/distrain
  3. Re-entry
27
Q

Second remedy for failure to pay rent:

A

Distress (to distrain) - act of a landlord to move into possession of leased property

  • Similar to claim of a lien
  • Can sell the goods to cover the rent and sue for any deficiency
  • Some provinces right of distress not allows in residential tenancies
28
Q

Distress (to distrain)

A

right of a landlord to seize and sell the chattels of a tenant if arrears of rent are not paid

29
Q

Third remedy for failure to pay rent:

A

Re-entry - act of a landlord to move into possession of leased property

  • Governed by legislation in most provinces
    Effect is to terminate the tenancy
  • An alternative to the right of distress
  • Landlord cannot re-enter and distrain against the goods at the same time (act of re-enter terminates tenancy and with it the right of distress
  • Landlord must distrian first, then later re-enter or choose between the two remedies
30
Q

In commercial tenancies, if tenant’s breach is for breaches except failure to pay rent, landlord may:

A

Give notice to tenant to correct breach

Failure to correct allows landlord to regain possession

Court allow relief against forfeiture

Court can order an injunction

31
Q

Eviction

A
  • court ordered removal of a tenant from leased premises
32
Q

If landlord fails to comply with covenants, tenant has three remedies:

A
  1. Action for damages
  2. Injunction
  3. Terminate the lease
33
Q

Lease may be terminated in different ways:

A

Fixed term - when the term ends
Surrender - agreement by parties to terminate lease
Parties replace existing lease with new lease
Tenant voluntarily gives up possession to new tenant; new tenant takes possession
Periodic tenancy - by giving proper notice to quit

34
Q

Surrender

A

agreement by parties to terminate lease

35
Q

Notice to terminate lease must be given properly

Commercial leases:

A

Notice given must be a full tenancy period

Must be given before the end of one tenancy period to be effective at the end of the next tenancy period

36
Q

Notice to terminate lease must be given properly

Residential leases:

A

Different notice requirements depending on province

Specific procedures for termination in lease

37
Q

Shopping Centre Leases

A

More complex form of commercial lease:

Provides for greater landlord involvement in tenant’s business

Landlords seek desirable mix of retailer tenants

Covers use of premises outside retailing area

Participation of landlord in profits

Designated hours of operation

Use and type of products clause

Also includes common commercial lease clauses

A2610 (31 decks)

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