Enforceability of leasehold covenant Flashcards
What is the significance of the lease contract?
A lease is not just a contract
Provided formalities are complied with it gives the tenant a legal estate in the land
Where landlord and tenant are owners of a legal estate in land there is a privity of estate between them
Privity of estate lasts only for the period while the lease is vested in the tenant
What happens to privity of estate upon assignment of the lease of the reversionary interest?
Privity of contract will remain between the original landlord and the tenant but there will no longer be privity of estate between them
This is because the leasehold estate would have passed upon assignment from original contracting party to their successor in title
private estate will now eixst between whomever is the current landlord and tenant
What is the problem with the enforceability of covenants arising from privity of estate and contract?
If all covenants were unenforceable because of a lack of contractual relationship between parties in the current position of landlord and tenant then all covenants made would have very limited lifespans - would only be enforceable while original parties remained landlord and tenant and would otherwise expire if they disposed of the interest in the land
BUT ALSO if every covenant entered into was to bind successors then irrespective of an absence of a contractual relationship successors could find themselves bound to perform all kinds of promises and could make the land less attractive to buy
So what is the purpose of rules on enforcability?
To strike a balance between the covenants potentially having a short lifespan and the covenants binding all successors in title and potentially making land less attractive to purchase
What are the two sets of rules which determine enforceability of leasehold covenants?
The old system - relates to old leases granted before 1 January 1996
The new systems - relates to new leases granted on or after 1 January 1996
