FLK2 Land Flashcards

Question

What is an easement?

Answer 1

An easement is a right benefiting one piece of land (the "dominant" tenement) that is enjoyed over another landowner's land (the "servient" tenement). An easement is not an estate in land. An easement may be positive, in that it allows the owner of the dominant land to do something on the servient land, such as use a road. An easement could also be negative, in that it limits what the owner of the servient land may do on the servient land.

Answer 2

1. Dominant (land benefited by the easement) and servient (land burdened by the easement) tenements must exist. 2. The easement must accommodate the dominant tenement (i.e. benefit the dominant tenement by improving it or making its use more convenient in some way connected with the normal use of the property). The dominant and servient tenements must be sufficiently proximate (i.e. nearby, even if the properties are not direct neighbours). 3. Prior diversity of occupation (i.e. tenements must be owned by different people). Note that subsequent case law has cast doubt on how essential this requirement is: it is possible to create a "quasi-easement" benefiting one piece of land over another piece of land where both pieces of land are owned by the same person (this can include rights of way). 4. Capable of lying in grant, i.e. of being the subject matter of a deed. Grantor and grantee must own the dominant and servient tenements and be sui juris legal personalities. The right must be capable of reasonably exact description, e.g. it can be pointed to on a plan. Additional criteria to consider: - The grant must not require expenditure by the servient tenement owner. - The grant must not amount to exclusive possession. An easement to park your car will be allowed where there is a choice of parking spaces or where the servient owner is not deprived of possession and control over the spaces. Case law has determined that the right to store items in a cellar was not an easement. - The grant must not depend on permission by the servient tenement owner.

Answer 3

* Rights of way * Rights of light * Rights of support * Rights of storage * Rights of signage * Right to water in a defined channel * Right to air in a defined channel * Rights to use a range of leisure facilities The courts will not recognise new negative easements - the list is closed, but they may recognise new positive

Answer 4

1. Express acquisition 2. Implied acquisition 3. By prescription

Answer 5

If it was granted or reserved as an express acquisition, assess whether the right is legal or equitable.

Answer 6

Implied acquisition can occur in one of the following ways: 1) Necessity 2) Common intention 3) The rule in Wheeldon v Burrows

Answer 7

It must be completely impossible to use the land without the easement, not just more challenging, for this reason a right of way could be impliedly acquired by necessity, but a right to sewerage services could not.

Answer 8

Where both parties intend the property to be used in a specific way. If an easement is to arise by common intention in a reservation situation there must be no other possible interpretation of the facts.

Answer 9

(NOTE: this only applies to grants) Under the rule in Wheeldon v Burrows, the easement will be impliedly granted if, immediately prior to the sale of one of the tenements, there was a common owner-occupier of both tenements, and if it can be shown that it is: * Continuous and apparent, i.e. obvious (like a worn pathway); * Necessary to the reasonable enjoyment of the property - not as strict as necessity as in (1) above, but it must be more than simply beneficial; and * in use at the date of the transfer. Quasi-easements (easements where the two tenements are owned by the same person) can be converted on sale of one of the tenements into full easements. An easement will not be implied if, following a sale, land is to be used in a different way which represents a "radical change". The power to imply an easement can be expressly excluded. It is likely that prior diversity of ownership is not required.

Answer 10

If the easement has been in continuous use for 20 years without interruption or protest, then it will be impliedly acquired (Prescription Act 1832). The use must be known to the landowner. After twenty years of continuous use there is a judicial presumption of a lost modern grant - a fictitious common law construct allowing the court to enforce the easement as if it had in fact been granted.

Answer 11

If so, the user can be restricted to the extent that the right was used at the time that the easement was granted. For example, where a neighbour changed their farm into a caravan park; their right of way over neighbouring land was restricted - use by guests to access the caravan park was fundamentally different from use by a sole owner of land.

Answer 12

This is determined by the document in which it is included (e.g. a ten-year legal lease). If it has been expressly acquired, it will be legal only if it was: 1. Created for the duration of the freehold or leasehold; 2. Acquired by deed; and 3. Registered. If the above formalities are not fulfilled, or if it is a contract for the future grant of an easement, or if the grantor only has an equitable estate, it will instead be equitable. NOTE: if impliedly acquired formalities are not necessary.

Answer 13

**Question 1** - Has the ownership of the dominant land changed? No: The original grantee can still enforce as they retain the benefit. Yes: The successor-in-title will get the benefit, because the benefit will automatically pass to a successor-in-title of the dominant tenement. **Question 2** - Has the ownership of the servient land changed? No: The original grantee can still enforce as they retain the benefit. YES - Registered land - The burden passes if one of the following applies: * It is a legal and expressly acquired easement. * It is a legal easement acquired impliedly or by prescription, it is capable of being an overriding interest. It does not need to be registered, and will bind if it is known about, obvious on a reasonable inspection, or exercised within a year. YES - Unregistered land: The burden passes if it is legal and acquired in any way, as legal rights bind the world.

Answer 14

If it is an equitable easement, then it should be protected by a notice on the charges register of the servient tenement. Equitable easements must be registered either as an equitable easement D(iii) Land Charge at the Land Charges Department or as an estate contract C(iv) Land Charge in order to bind purchasers for value. If it was created pre-1926 and is still unregistered (which is unlikely) then consider the Doctrine of Notice.

Answer 15

1. Express agreement; or 2. Implied release where it has been abandoned (i.e. lack of use coupled with an act demonstrating intention to abandon).

Answer 16

A covenant is a promise made by one party (the "covenantor') for the benefit of another party (the "covenantee") which is (usually) contained in a deed. It can be a promise to do something (positive covenant) or to refrain from doing something (negative covenant). A freehold covenant is a covenant affecting freehold land.

Answer 17

The "benefitted" land is the land which benefits from the covenant. It is owned by the covenantee. The "burdened" land bears the burden of carrying out the covenant. It is owned by the covenantor - the landowner who made the promise of the covenant to the original owner.

Answer 18

The key issue is with freehold covenants is enforceability. The original parties to the covenant have privity of contract. This means that for as long as the original parties retain the benefited and burdened land, the covenant can be enforced directly. However, enforcement of freehold covenants by successor covenantees can present problems as the parties no longer enjoy privity of contract. As long as the benefit of the covenant has passed to the successor covenantee, they will be able to sue the original covenantor for damages at common law. However, as the original covenantor no longer owns the land, only the successor covenantor can be ordered to remedy the breach in equity. Successor covenantees will only be able to enforce performance of the covenant if the benefit enjoyed by the predecessor covenantee(s) has passed to them, and the burden agreed to by any predecessor covenantors has passed to the successor covenantor. Either both the benefit and burden must pass in equity, or both must pass at common law. You cannot mix and match. The successor covenantee may be able to choose who to sue: the original covenantor or the successor covenantor. The original covenantor can be sued for damages at common law, but only the successor covenantor can be ordered to remedy the breach in equity. It is preferable to sue the successor covenantor, and that in order to have this option, both the benefit and burden must pass in equity, or both must pass at common law. You cannot mix and match. In the above example, a covenant will only be enforceable between persons B and D in the above example if the benefit has passed to person B and if the burden has passed to person D. It is unlikely that the burden will have passed at common law, so always first consider whether the burden has passed in equity. NOTE: equitable remedies are preferable as injunctions are available to prevent or remedy a breach, whereas only damages are available at common law.

Answer 19

The four requirements are set out in Tulk v Moxhay: 1. The covenant is negative in substance Test: the covenant will be negative if it can be complied with by doing nothing (i.e. by not expending any money, time or effort - the "hand-in-pocket" test). If the result is unclear, it may be possible to sever it into two or more covenants, allowing just the negative part to pass the test. Alternatively, consider whether, as a whole, the covenant can be seen as mainly positive or negative. It may be negative with a positive condition attached (e.g. a covenant not to build without first informing the dominant owner), or vice-versa. If this is the case the covenant will be viewed as entirely positive or negative, despite the contrary minor condition. Equity will never enforce positive covenants against successors-in-title. 2. The covenant must accommodate the benefited tenement a. The original covenantee had an estate in the benefited tenement at the time the covenant was created, and the successor has an estate in the benefited tenement at the time of enforcement. b. The covenant touches and concerns the benefited land: "touch and concern" affects "the nature, quality, mode of use, or value of the covenantee's land", and is not expressed to be personal - i.e. it must only benefit the landowner for as long as they own the benefited land. This could include restrictions on business use, e.g. "no ironmongery". REMEMBER: the test is whether it benefits the land, not just the landowner. c. The benefited and burdened tenements are sufficiently proximate, i.e. neighbouring or at least closely adjacent. 3. The original parties must have intended the burden to pass This can be shown through the express words of the title deed. If it is not shown in the deed, it will be implied, unless it is expressly excluded. 4. Notice provisions As. 32 notice must have been entered on the charges register of the burdened freehold for registered land (or a class D(ii) Land Charge at the LCR for unregistered land) prior to the sale of the burdened land. If a notice is entered, the covenant will bind a successor purchaser. If not, only a volunteer successor (someone given the land as a gift or inheritance) will be bound.

Answer 20

This means that the benefit of the covenant is tied to the land at the time that the covenant is made. It becomes an incorporeal hereditament that passes automatically with the land. This may be achieved expressly, impliedly, or by statute. It does not matter how large the parcel of land is. Annexation means annexation to each and every part of the land. a. Express: clear language stating that the benefit is annexed to the land, not to persons. e.g. "to the vendor's assignees and heirs" is not express language as it refers to persons instead of land. For there to be annexation it is not essential for the Land Registry to have entered the burden on the charges register of the servient land. b. Implied: this is rare. c. Statutory: express language is not always necessary, as annexation will be assumed unless it is expressly excluded.

Answer 21

If not annexed on creation, the benefit can be assigned (transferred) to the successor expressly. Any assignment must be in writing and signed. The benefit must be assigned every time the property is transferred.

Answer 22

Only consider this where a property developer subdivides a large plot of land and creates covenants that bind all plots and are enforceable by and against all purchasers. Conditions for the benefit to pass are: 1. The benefited and burdened tenements must derive title from one seller. 2. The common seller is themselves bound by the scheme from the point it crystallises and cannot sell plots in the defined area other than on terms of the scheme. 3. All the plots are mutually burdened for the benefit of all the other plots. 4. The effect of the scheme is that it will bind all purchasers - potentially for ever. 5. The scheme of development must be clearly defined on a plan. 6. The limits of the defined area must be known to each of the purchasers.

Answer 23

General rule: The burden does not pass at common law. The only exception is the mutual benefit and burden rule (e.g. a covenant to maintain half of a shared conservatory in the above example - the benefit is the use of a conservatory, and the burden is the cost of its maintenance). The benefit and burden must be explicitly interlinked (i.e. it is not possible to take the benefit without also having to take the burden). The principle does not apply in reverse. There is no authority to suggest that "he who bears the burden" is entitled to the benefit. The benefit and burden must pass in the same transaction. The successor covenantor must also have a genuine choice to take both the benefit and burden, or to take neither - if there is no choice, then the burden will not pass (e.g. a covenant to maintain a road, which is the only means of access to the covenantor's land, would not pass - the covenantor has no real choice as they would need to maintain the road to get access to their own land). In the example at the start of this chapter, Person D can choose to: (i) use the conservatory and help maintain it; or (ii) not use it. Depending on the decision the burden could potentially pass.

Answer 24

1. Pursue the original covenantor. The original covenantor remains liable under common law for any breaches of the covenant, even if it is the successor that commits the breaches. However, the original covenantor can only pay damages - they are no longer in occupation so cannot remedy the breaches - so this is of limited use for the successor covenantee. 2. Indirectly pursue the successor covenantor by a chain of indemnity covenants. If the original covenantor ensured on sale of the estate that a successor provided indemnities against any breaches, the successor would have to reimburse the original covenantor for any losses arising from breaches. So, if the original covenantor were pursued successfully (see immediately above point 1), there would be a claim for damages back from the successor. Again, only damages are available, but the threat of damages might deter the successor covenantor from starting or continuing to breach a covenant. 3. The covenantee could place a s. 40 LRA 2002 restriction on the register of the servient land so that no transfer of the burdened land can take place without the covenantee's consent. What this means in practice is that the covenantee will ask for a new covenant directly from the potential successor covenantor (only allowing the land to be sold if it is given). This is a new covenant, so all issues of the burden passing are irrelevant - the burden will be taken by the successor covenantor.

Answer 25

The benefit may be expressly assigned: the original covenantee must do so in writing and give this to the successor covenantee. Written notice must also be given to the covenantor.

Answer 26

Alternatively, the benefit could be impliedly assigned. This requires that the covenant: 1. "Touches and concerns" the benefited tenement (see above). 2. Demonstrates the original parties' intention that the benefit should pass with the land If it is not expressly stated that the covenant is for the benefit of the land or for successors in title to the land, this intention will be implied, unless it has been expressly excluded. 3. At the time the convenant was created, the covenantee must have a legal estate in the benefited land. 4. At the time of enforcement, the successor-in-title must hold a legal estate in the benefited land, though it need not necessarily be the same estate.

Answer 27

Freehold covenants cannot be legal interests, only equitable interests, so they must be protected in order to bind a successor owner of the servient land. Otherwise, only volunteer successors (those receiving land as a gift) will be bound. This is done by notice (see Notice Provisions section above). Next, consider: * Have the covenants in the question been protected? * Is the successor covenantor a purchaser or a volunteer? REMEMBER: if the successor covenantor is a purchaser and no s. 32 notice (for registered land) or Dii) Land Charge (for unregistered land) has been entered, then the covenants will not bind the successor. Also consider if the covenants have been extinguished or modified? This is only possible in one of the following ways: An express agreement - Between the dominant and servient landowners. An implied agreement - For example, if the dominant landowner acquiesces to longstanding breaches by doing nothing over the years. A declaration by the court - Under LPA 1925. A declaration by the Lands Tribunal - Under LPA 1925 (NOTE: it is very difficult to obtain such release.) REMEMBER: if one of the parties in the question claims that the covenant is extinguished or modified, it will only be so if one of the above methods is strictly followed.

Answer 28

The specific formalities will depend upon the length of the lease: UP TO BUT NOT EXCEEDING 3 YEARS Fixed term lease: by deed. Periodic term lease (a "parol lease"). It can be oral, provided the tenant: * Is in possession of the property; and * Pays the best rent (which means market rate), without paying a fine (i.e. without paying an up-front lump sum to the landlord). 3 - 7 YEARS By deed. Where both parties intend the property to be used in a specific way. If an easement is to arise by common intention in a reservation situation there must be no other possible interpretation of the facts. MORE THAN 7 YEARS * By deed and clear on the face of it that it is a deed; and * Registered as required by LRA 2002.

Answer 29

There are three key ways that an equitable lease may be created: 1. Out of an agreement to create a lease. 2. From a failed legal lease. 3. A lease granted over an equitable estate.

Answer 30

Regardless of the situation, an equitable lease must: * Be in writing; * Contain all the agreed terms; * Be signed by both parties; and * Be capable of specific performance. REMEMBER: if you identify both a legal lease and an equitable lease in the same situation, the equitable lease will prevail. The most common situation for this to happen is for leases of fewer than three years.

Answer 31

Must be: * Created by deed; and * Registered.

Answer 32

Must be: * In writing, contain all the agreed terms and signed by both parties.

Answer 33

Must be: * In writing and signed by the mortgagor.

Answer 34

Must be: * Created by deed; * For a duration equivalent to a legal estate; and * Registered.

Answer 35

No formalities are required, as this kind of easement is implied by necessity under the common law. The easement must be both: * Impliedly acquired for the duration of a legal estate; and * Implied into a deed.

Answer 36

Must be: * In writing, contain all the agreed terms and signed by both parties; and * Capable of specific performance.

Answer 37

Must be: * In writing; and * Signed by the covenantor.

Answer 38

This arises automatically, by virtue of being a spouse of the proprietor of the land.

Answer 39

Must be: * In writing, contain all the agreed terms and signed by both parties; and * Capable of specific performance.

Answer 40

Express trusts: must be evidenced in writing signed by the settlor. Implied trusts: arise without formalities, for example when one party contributes to the purchase price.

Answer 41

* Registered land: registration is required. Unregistered land: a legal interest can automatically be enforced against any purchaser of that land.

Answer 42

* Registered land: such a legal lease is an overriding interest and the purchaser will be bound. * Unregistered land: a legal interest can automatically be enforced against any purchaser of that land.

Answer 43

A notice on the Charges Register is required to bind all purchasers: * If no such notice exists, the purchaser will not be bound if they are a purchaser for valuable consideration, regardless of any notice they may have of the interest. This means that a volunteer / done (someone given the land as a gift or inheritance) will be bound, even if it is not registered. * However, the purchaser will be bound by the equitable lease if it constitutes an overriding interest, i.e. if the lessee (the person to whom the lease was granted) has an interest in land and is in actual occupation (see General Principles section below) of the land, unless: * the lessee did not disclose the lease to the purchaser following a reasonable enquiry; or o the lease would not have been obvious on a reasonable inspection and the purchaser did not have actual knowledge of the lease.

Answer 44

* Registration of the lease as a Class C(iv) land charge on the land register constitutes actual notice (Land Charges Act 1972 ("LCA")) and, consequently, will bind any purchasers. * If the land charge is not entered into the land register, the lease will bind anyone, except a purchaser of a legal estate for money, or money's worth.

Answer 45

* A legal mortgage must be entered on the charges register of the title in order to be protected against a purchaser for valuable consideration.

Answer 46

* A first legal mortgage will be evidenced by the mortgagee holding the title deeds and will bind the world. A puisne mortgage must be registered as a C(i) Land Charge at the Land Charges Department.

Answer 47

* An equitable mortgage must be entered on to the charges register.

Answer 48

* An equitable mortgage must be registered as a C(iii) Land Charge.

Answer 49

* A notice on the Charges Register is required to bind all purchasers. * If no such notice is inserted, the purchaser will not be bound if they are a purchaser for valuable, regardless of any notice they may have of the interest. This means that a volunteer/donee (someone given the land as a gift or inheritance) will be bound even if it is not registered.

Answer 50

* Covenants granted on or after 1 January 1926: * Registration of the restrictive covenant as a Class D(ii) land charge on the land register constitutes actual notice and consequently, will bind any purchasers. If the land charge is not entered into the land register, the freehold restrictive covenant will bind anyone, except a purchaser of a legal estate for money, or money's worth. * Covenants granted before 1 January 1926: these covenants will be binding on a purchaser, subject to the doctrine of notice.

Answer 51

* A notice on the Charges Register is required to bind all purchasers. * If no such notice is inserted, the purchaser will not be bound if they are a purchaser for valuable consideration. * But note the following: * A court can, if it decides that is appropriate to do so, make an order to end or alter a matrimonial home right, regardless of whether it has been registered. * Matrimonial home rights are not an interest in land and, consequently, can never be an overriding interest.

Answer 52

* Registration of the matrimonial home right as a Class F land charge on the land register constitutes actual notice and, consequently, will bind any purchasers. * If the land charge is not entered into the land register, the matrimonial home right will bind anyone, except a purchase for value of any interest in land.

Answer 53

* A notice on the Charges Register is required to bind all purchasers. * If no such notice is inserted, the purchaser will not be bound if they are a purchaser for valuable consideration, regardless of any notice they may have of the interest. This means that a volunteer/donee (someone given the land as a gift or inheritance) will be bound even if it is not registered. NOTE: estate contracts are interests in land from the time of their creation.

Answer 54

* Registration of the estate contract as a land charge on the land register constitutes notice and, consequently, will bind any purchasers. * If the land charge is not entered into the land register, the estate contract will bind anyone, except a purchaser of a legal estate for money, or money's worth. In unregistered land, an estate contract becomes an interest in land only at the point when it becomes exercisable (i.e. when the land is put up for sale).

Answer 55

* The BIUT must be entered as a restriction on the proprietorship register. * However, even if the restriction is entered on the register, the BIUT may be overreached by paying the purchase price to two or more trustees. By doing so, the BIUT becomes detached from the land and transferred to the money paid by the buyer, and the purchaser will obtain the property free from this type of interest. If a s. 40 LRA restriction is not entered, and the money is paid to only one trustee, the BIUT will bind the purchaser as an overriding interest if the person claiming the BIUT has an interest in land. NOTE: a BIUT is an interest in land for a person in actual occupation of the land, unless: * the beneficiary did not disclose the BIUT to the purchaser on a reasonable enquiry; or * the BIUT would not have been obvious on a reasonable inspection and the purchaser did not have actual knowledge of the BIUT.

Answer 56

* However, the BUT may be overreached by paying the purchase price to two or more trustees. * When the purchase price is paid to only one trustee, thus failing to overreach, the purchaser is subject to the doctrine of notice and will be bound unless they are Equity's Darling.

Answer 57

While you do not need to know case names for the SQE it remains important to be aware of broad definitions in case law, some of the decisions on specific facts set out below are useful: * A temporary absence will not necessarily prevent a person from being in actual occupation. * Having your belongings in a property may help to prove actual occupation, but it is not sufficient in itself to constitute actual occupation: * When a husband sold the house whilst his wife was away in hospital giving birth, it was held that she had been in actual occupation at the time of the transfer and therefore had a binding overriding interest (her belongings had been there throughout). * A person suffering from a mental illness was residing in a care home at the time that her own property was sold. The court held that she was in actual occupation of her own property, it was her furnished home to which she intended to return, and she continued to visit the property, and regularly paid the bills. * A foreign princess lived abroad but never visited her London house, she was held not to be in actual occupation, despite the fact that she had furnished the house and paid the bills. The property was not occupied to a sufficient extent. NOTE: in order to have an overriding interest the person must be in actual occupation "at the time of the transfer deed being executed".

Answer 58

This is determined by case law: * A live-in caretaker may be able to occupy on behalf of an employer. * However, an unpaid caretaker who only looked after land for a few days a week was not in occupation in the sense of creating an overriding interest. * The owner of the flat could not be in actual occupation through his stepdaughter's residence. She was occupying for her own purposes, rather than the owner's.

Answer 59

This is a bona fide purchaser for value of a legal estate without notice. Bona fide - The purchaser must act in good faith. Purchaser - Any person acquiring an interest in the land. Value - Money, or money's worth. Legal estate - A legal freehold or leasehold estate. NOTE: an equitable estate is sufficient. Without notice - Without one of three types of notice (see immediately below). a) Actual notice: The purchaser knows of the interest. b) Constructive notice: A purchaser will have constructive notice of all interests reasonably discoverable by inspection of the property. This includes a duty to enquire about potential interests. c) Imputed notice: This is notice received by the purchaser's agent (e.g. the solicitor assisting a land purchase). If the agent has actual or constructive notice, the purchaser will be held to have imputed knowledge. (If the purchaser or their agent finds evidence of someone's presence and fails to make enquiries knowledge will be imputed.)

Answer 60

The enforceability of certain equitable interests in unregistered land created before 1926 still depends upon the old doctrine of notice. If the purchaser is a bona fide purchaser of a legal estate for value without notice (see Equity's Darling and the three types of notice immediately above) then they will not be bound by that interest. However, if the purchaser is not Equity's Darling, then they will be bound by it. Only the following interests depend on the old doctrine of notice for their enforceability: 1. Beneficial Interests under a trust ("BIUT"). 2. Those expressly excluded from the LCA 1972: pre-1926 equitable easements and restrictive covenants. 3. Interests arising by estoppel.

Answer 61

Whenever land is co-owned, a trust is imposed by statute. Such a trust is known as a trust of land (Trusts of Land and Appointment of Trustees Act 1996 ("TLATA"), which separates legal and equitable title to the land between the trustees and the beneficiaries. In order to create an express trust the declaration must be evidenced in signed writing.

Answer 62

Legal title can only be held by way of a joint tenancy ("JT"). It cannot be severed to create a tenancy-in-common ("TiC"). The maximum number of legal owners is four. If more than four names are mentioned on the conveyance, the first four named (of age and sound mind) will hold the legal title as trustees. The trustees must be of full age, which is 18. They must also be of sound mind.

Answer 63

1. Four unities In order for there to be a JT the four unities must be present. These are unity of: a. Possession (no tenant can be excluded from any part of the land); b. Interest (each tenant has the same estate); c. Time (each tenant's interest vests at the same time); and d. Title (all tenants acquire title under the same document). NOTE: if the test for all four unities is not met but unity of possession is still present, it will instead be a tenancy-in-common ("TiC"). 2. Express declarations Consider any express declarations in the grant / conveyance / transfer. Express words prevail over any presumptions of JT or TiC. 3. Words of severance Where there are no express declarations, consider words of severance in the grant. Words such as "in equal shares" and "to be divided between" indicate a TiC. Commercial situations are presumed to be TiCs, unless rebutted by express words (see (2) & (3) immediately above). If any equitable presumption against a JT exists, because the purchase money is provided in unequal shares, the tenants are presumed to own as TiCs in proportion to their payments. In domestic cases there is a presumption of equal shares unless there is evidence to the contrary. A wide range of factors can be taken into account, financial contribution is just one of those. Joint tenancy: In a JT the tenants / co-owners constitute one legal owner. On the death of a joint tenant their ownership immediately passes to the other joint tenants by right of survivorship - and not by will, because wills operate after death. Tenancy in common: In a TiC each co-owner has a distinct but undivided share in the land, and shares can be unequal. No right of survivorship applies. It is possible to be a JT at common law and a TiC in equity.

Answer 64

A JT can never be severed at law, only a beneficial JT can be. Severance separates off the equitable interest of the JT, and only affects the severing tenant - the others are still joint tenants of the rest (unless there are just two JTs, in which case both become TiCs). The severing party becomes a TiC. In the absence of an express agreement, the shares arising from a JT are always equal (irrespective of initial contributions). For example, if there are five JTs and one severs, that one has a 20% TiC and the others hold the 80% as JTs, even if the one had contributed 75% of the purchase price. **Possible modes of severance** 1. Written notice Written notice given to all tenants stating an irrevocable intention to sever immediately. A divorce petition alone is not immediate enough. Notice must be served upon all the other JTs by being left at the tenants' last known home or business address. If it is posted, the severance occurs, even if the notice is not read by the other tenant(s). Once served, a notice cannot be revoked. 2. "An act operating on own share" "An act operating on own share", for example: * Total alienation, i.e. disposition of tenant's share to a 3rd party. * Partial alienation, such as taking out an equitable mortgage. * Involuntary alienation, i.e. bankruptcy. * Divorce proceedings that have become irrevocable. NOTE: sending Notice of Severance to the Land Registry is not a sufficient act. 3. "By mutual agreement or a course of conduct", i.e. a mutual intention to sever is inferred from actions. Inconclusive negotiations are not sufficient to sever, (e.g. where there is an agreement to sell but not an agreement on the price). No specifically performable contract is actually necessary, just evidence of intention, so depending on the facts, inconclusive negotiations may be sufficient to sever. Merely agreeing to put a jointly owned property up for sale is insufficient to constitute severance. You must look at what passes between the parties, paying little attention to what was simply in each of the parties' minds. Reaching an agreement to deal with a property in a way that involves severance is sufficient. Murder (or assisting a suicide) severs the tenancy under the Forfeiture Rule (it would be against public policy to allow the killer to benefit from the right of survivorship after murdering a co-joint tenant). BUT relief from forfeiture may be available where a suicide is assisted.

Answer 65

Unless the trust instrument prescribes a person to appoint new trustees, the existing trustees can appoint. This must be done by deed in order for the property to vest in the JTs. NOTE: if the beneficiaries are willing and sui juris, i.e. of full age and capacity and absolutely entitled, then the beneficiaries may give written directions for the appointment of new trustees. There is no obligation to appoint new trustees but remember that a minimum of two trustees is necessary to give a valid receipt and thus enable overreaching to operate. Trustee powers are set out in TLATA. Trustees can be overruled by the terms of the trust instrument. In some circumstances there are duties to consult and obtain consent from the beneficiaries. Trustees may delegate their duties. Beneficiaries have a right to occupy the land if that is the purpose of the trust.

Answer 66

When sold the proceeds of sale are split equally between the beneficiaries. A JT ends if there is union in the sole surviving tenant, or if one tenant acquires all the beneficial interests. If the land is sold where the sale was not ordered by the court, the trustees have the power of sale as if they were absolute owners, but the trustees must have regard to the rights of beneficiaries and consult them, so that they give effect to the wishes of the majority of the beneficiaries. Afterwards, if there is a dispute, then any interested party can apply for a court order under s. 14 TLATA. The court can make any order it sees fit but must have regard to the following factors: * Intention of the party (or parties) who originally created the trust; * Purpose for which the property subject to the trust is held; * Circumstances and wishes of each of the beneficiaries who are of full age and entitled to an interest in possession of the property; * The welfare of any secured creditors; and * The welfare of any minors who either live or may be expected to live in the property. There are several decided cases where young children have been resident in the property but nevertheless an order for sale has been made at the request of a secured creditor. NOTE: spouses or partners are not included in that mandatory list of factors for consideration. Under a trust for land the trustees have a power but no obligation to sell. The court could postpone sale to allow the other co-owners to buy one out of their share, or to sell the property themselves.

Answer 67

Bankruptcy follows different rules: bankruptcy severs a JT, giving the bankrupt person a TiC, which then vests in the trustee-in-bankruptcy. Although the bankrupt person remains on the legal title - the equitable interest vests in the trustee-in-bankruptcy. The trustee-in-bankruptcy will want to sell the and to realise assets, so must seek a s. 14 TLATA court order, assuming the others oppose a sale. In bankruptcy, the court will consider different factors: * The interests of the creditors, spouse, and children. (NOTE: not the debtor!) * After a year, the creditor's interests outweigh all others unless "exceptional circumstances" apply. (NOTE: "exceptional" does not include educational needs.) Examples of exceptional circumstances: * An elderly person was allowed to remain in occupation because of her poor health. * Postponing a sale: * In the interest of children involved where there was a lack of local affordable housing. * Where suitable support needed to be put in place for a schizophrenic resident. * Because the applicant's husband had terminal cancer (although note that the sale was postponed to help the applicant who was nursing him, not the bankrupt applicant).

Answer 68

If they are buying from two or more trustees, the buyer will overreach the beneficiaries' equitable interests and so take the land free of them. If buying from one surviving co-owner: Registered land - If as. 40 LRA 2002 restriction is entered on the proprietorship register, the buyer must overreach, or the interests of anyone in occupation are overriding. Unregistered land - Beneficial interests are not registrable at the Land Charges Department because they can be overreached. If they are not overreached, the purchaser will not be bound if they are Equity's Darling. Also note that spouses can enter a Class F restriction at the Land Charges Department for unregistered land, or a s. 32 notice for registered land. NOTE: a court ordered sale under s. 14 TLATA will always constitute an overreaching event, attaching the beneficial interests to the purchase monies.

Answer 69

**Tenancy for a term of years** A lease for a specified period of time, with a known start and end date. **Periodic tenancy** A lease which renews automatically at the end of a period of time, e.g. weekly, monthly or annually. **Tenancy at will** A lease for no fixed time or period, which either party may terminate at any time (i.e. at will), unless termination occurs by operation of law.

Answer 70

Must be created by a deed which is signed, witnessed, dated and headed a deed. Must be registered. If not registered, may still bind a purchaser as an overriding interest if known about by the purchaser or obvious on a reasonably careful inspection.

Answer 71

Must be created by a deed which is signed, witnessed, dated and headed a deed. There is no need for registration. However, a three to seven year lease can be protected by entry of a notice on the charges register of the freehold. This will bind a purchaser as an overriding interest if the lease is known about by the purchaser or obvious on a reasonably careful inspection.

Answer 72

For a lease for fewer up to but not exceeding three years there is no need for a deed, or even writing, so long as the following conditions are met: * It is at the best rent (the market rate). * It takes effect in possession. * No fine (ie Lump sum payment) is payable by the tenant to the landlord for the granting of the tenancy. No need for registration. Will bind a purchaser as an overriding interest if known about by the purchaser or obvious on a reasonably careful inspection.

Answer 73

An equitable lease will arise where the formalities necessary for the creation of a legal lease have not been complied with (no valid deed), but where there is a valid contract to create a legal interest (i.e. in writing, containing all the terms and signed by both parties). Should be entered as a notice on the register. If not, it may amount to an overriding interest.

Answer 74

Leases over unregistered land must also be created by deed. Must be registered at the Land Registry

Answer 75

Leases over unregistered land must also be created by deed. Does not need to be registered but will still be binding on a purchaser of the reversion as a properly created legal interest.

Answer 76

Where there is an equitable lease (i.e. no deed but an estate contract - see above) but the land is unregistered, it will not be possible to enter a notice on the register as above. Instead it should be registered at the Land Charges Department as a Land Charge.

Answer 77

Business tenants may remain ("hold over") beyond the contractual expiry date ("CED") of their lease - landlords can only end leases if a ground in the Landlord and Tenant Act 1954 ("LTA") applies. It only applies where: 1. There is a tenancy (see the Street v Mountford requirements above), whether fixed or periodic (so not a licence or a tenancy excluded by s. 43 LTA): * s. 43 excludes: tenancies at will, agricultural holdings, mining leases, service tenancies (caretakers etc.), a fixed term tenancy for fewer than six months (with no option to renew), and tenancies that have been contracted out of the LTA. * "Contracted out of means that there is wording in the lease to exclude security of tenure. To enter such a lease, the Landlord (which means the "competent landlord") must serve a warning notice on the Tenant at least 14 days before the start of the lease, and the tenant must then sign a declaration that it has received and understood it - or if time is short the tenant must make a statutory declaration before a solicitor that the tenant has received the warning and understands the consequences. 2. The tenant is in occupation (so has not sub-let). 3. The tenant carries on a business in the property - "business" is widely defined (includes sports clubs and charities, but not Sunday schools).

Answer 78

Leasehold covenants are the promises made by landlord and tenant in the context of a lease. Remedies available to either landlord or tenant on breach by the other party of these covenants will depend on the terms of the covenant and the remedies available, as set out in this chapter. Express covenant: A promise made by one party for the benefit of another party which is (usually) contained in a deed. Express covenants are explicitly agreed between the landlord and tenant and the benefit can be for either the landlord or the tenant. Implied covenant: Implied covenants may apply in law even if the landlord and tenant have not agreed to them between themselves REMEMBER: not everything agreed between landlord and tenant will be allowed to be an express covenant.

Answer 79

It is possible for a landlord to agree to the following. If there has been agreement, then the landlord must be prepared to abide by those covenants for the benefit of tenants: **Quiet enjoyment** A landlord's covenant to leave the tenant in peace, and to refrain from interference with the tenant's possession of the property during the lease. Examples of breach includes the erection of scaffolding which hindered access to the property, and persistent intimidation of the tenant in an effort to persuade her to leave. Failing to soundproof a flat adequately is not a breach of the landlord's covenant of quiet enjoyment - "quiet enjoyment" only relates to the landlord's person, not to sounds from neighbouring properties. The Protection from Eviction Act 1977 makes harassment and unlawful eviction of residential tenants a criminal offence. **To insure** If a lease contains a term allowing the landlord to recover insurance premiums from their tenant, there is a reciprocal covenant on the landlord to insure the property. **To enforce other covenants** The landlord will promise to enforce covenants in other leases of the same building as there is no privity of contract between the individual tenants (e.g. the residents in a block of flats). This is a guarantee that no tenants will be allowed to breach a covenant that affects the other tenants (e.g. being in arrears on payments to maintain services such as a shared lift).

Answer 80

A tenant must uphold any such covenants that they have made with their landlord. It is possible for a tenant to agree to the following. 1. Rent "Rent" includes payments such as insurance premiums and service charges. The landlord can use the particular remedies for rent recovery to recover those payments as well. Unless stated otherwise, a written covenant to pay rent is construed to require the payment in arrears. In practice, commercial leases require rent to be paid in advance. Rent is payable even if the premises are unusable - it can never be frustrated except in "exceptional circumstances" (see the Frustration section in the separate Contract Law chapter). There is no implied right for the landlord to review the rent during the lease term. This must be expressly stated in the lease for a rent increase to be allowed. 2. Repair There should be an express clause in the lease stipulating who bears the obligation of repairing parts of the premises. There are a number of statutory provisions which relate to repair. Even if the leaseholder covenants to repair the premises, such an agreement cannot be an express covenant - it is the landlord's responsibility to repair: a. The structure and exterior of a dwelling house; b. The installations in a dwelling house for the supply of water, gas, electricity and sanitation; and c. The installations for heating water and space in the dwelling. Under a repairing covenant, the tenant is expected to keep the premises in the same condition as a reasonable owner. The character of the premises at the beginning of the lease, the age of the premises and the words of the covenant are all relevant considerations. However, a covenant to repair does not require renewal: Renewal = (i.e. reconstruction of the whole or substantially the whole of the property) is the landlord's responsibility; Repair = is the tenant's responsibility. There can be a blurred line between repair and renewal - it will be a question of fact and degree in each case, some important decisions have clarified the position: * The tenant covenanted to "sufficiently and substantially repair, uphold, sustain, maintain, amend and keep" the demised premises. The tenant was not liable for rebuilding the premises where the timber foundation was rotting, and this flaw necessitated the building's demolition: "a covenant to repair... is not a covenant to give back a different thing from that which the tenant took when they entered into the covenant." * Even if there is an express clause in the lease exempting the tenant from liability for wear and tear, the tenant must nevertheless do such repairs as are required to prevent consequential damage flowing originally from wear and tear. * If the property has condensation, but there is no actual damage to the fabric of the building, there is no liability under a repairing covenant. 3. Notice of assignment, subletting etc The tenant may covenant to give notice to the landlord of any assignment, sub-letting, mortgage or charge within a specified period after the transaction. Without this clause, there is no obligation upon the tenant to give notice of such transactions. 4. Alterations Landlords usually impose a restriction on all structural alterations to require tenants to get permission. But remember that a proviso that the landlord's consent is not to be unreasonably withheld in the case of improvements will be automatically implied into a qualified covenant. 5. Use The tenant can use the land for any lawful purpose. However, the landlord may restrict the use to residential use, office use, industrial use or whatever use is appropriate. If there is a qualified covenant against change of use (requiring the landlord's consent), there is no need for the landlord to act reasonably in refusing consent. However, the landlord cannot charge a fine for breach of the covenant.

Answer 81

A qualified covenant requires the landlord's consent for assignment or sub-letting. Consent shall not be unreasonably withheld. Contracting out of this provision is not permitted. The landlord cannot demand payment for this but can claim reasonable legal expenses which are incurred by providing consent.

Answer 82

The tenant might: 1. Assign anyway (this risks the tenant being held in breach of covenant of the court later finds that the landlord was being reasonable); 2. Apply to court for a declaration that the landlord is acting unreasonably; or 3. Sue the landlord for damages, which imposes a statutory duty on the landlord not to refuse consent unreasonably. The landlord carries the burden of proving their refusal is reasonable. They cannot delay a tenant's request for consent.

Answer 83

The Court of Appeal established the following guidelines go through these: A reasonable refusal may only be made on two grounds: 1. The unsatisfactory character of the proposed assignee; or 2. The proposed use of the premises by that assignee. A landlord cannot refuse consent on any other grounds unrelated to the landlord-tenant relationship. Refusal must not be for an ulterior motive. * It is possible to refuse consent on the grounds of the purpose for which the assignee wishes to use the property, even though that purpose is not forbidden in the lease. * The landlord's refusal must be objectively reasonable (i.e. one to which a reasonable person in all the circumstances would have come). * It may be unreasonable if refusal would lead to a disproportionately large detriment for the tenant, whereas the landlord would gain little benefit (e.g. someone subletting in order to avoid bankruptcy, where the landlord receives the same rent from an equally well-behaved tenant). Examples of reasonable refusal: * If the proposed assignee would damage the landlord's commercial interests by running a rival business there. * If proposed sub-letting was at a rent far below the open market value. * If the existing tenant is already in breach of a covenant. * Unsatisfactory character reference about the proposed assignee. Examples of unreasonable refusal: * Discrimination on grounds of colour, race, ethnicity, disability, religion, sex, sexual orientation, or other arbitrary reasons. * Landlord simply wanting to bring the tenancy to an end.

Answer 84

Quiet enjoyment - Even if not present as an express covenant, this is always implied into the lease. Derogation from grant - Means that the landlord must not let any adjoining premises for a use that may adversely affect the purpose for which the property is let. Derogation from grant can overlap with quiet enjoyment.

Answer 85

The landlord must have notice or knowledge of the defect before they are liable to repair. There is no statutory duty on a landlord to inspect. *For furnished residential homes:* There is always an implied covenant that a furnished house is fit for human habitation at the commencement of the tenancy. From March 2019 this became enshrined in statute. Homes (Fitness for Human Habitation) Act 2018 H(FHH)A amends LTA 1985 to imply a covenant that the home is fit for human habitation at the point when the lease is granted and that it will remain so throughout the term. Where only part of the building is demised the covenant applies to common parts. There is a corresponding covenant to allow landlord inspection. This applies to leases granted for terms of less than seven years and to assured, secured and introductory tenancies for more than seven years entered into after 20th March 2019. *For residential leases of fewer than seven years:* There is an obligation on the landlord to repair the structure and exterior. Contracting out of this obligation is not possible - this implied covenant will override any contrary provision in the lease. *What is included in the "structure"?* Generally, the "structure" is defined as "those elements of the overall dwelling-house which give it its essential appearance, stability and shape... a particular element must be a material or significant element in the overall construction." The details of this will depend on the specifics. Generally: * Plaster, doors, furniture, and the gates will not constitute part of the house's structure. * Windows and roof are usually deemed to be structural. * Steps, pathways and paved / concrete areas will only form part of the exterior if they are the only means of access to the premises itself; they will not form part of the exterior if there are multiple ways to access the property.

Answer 86

To pay rent - At an expressly agreed rate. To pay taxes - e.g. council tax. The landlord does not pay this. To treat the property in a tenant like manner - This means taking proper care of the demised property in doing "the little jobs about the place which a reasonable tenant would do". Acting in a tenant-like manner involves a common-sense approach to looking after a property. Not to commit waste - "Waste" is an act or omission which alters the state of the demised land. Includes "improvements" as well as allowing garbage to build up or the property to deteriorate. To allow the landlord to enter and view the property - So that the landlord can carry out their implied or express obligation to repair properly, but not just for the landlord's convenience.

Answer 87

1. Debt action The tenant is sued on their covenant to pay rent. The landlord can only recover six years' worth of arrears. If attempting to sue a former tenant, the landlord must serve notice within six months of the breach occurring. A former tenant who has paid the full amount due may then claim an overriding lease from the landlord. This is where the former tenant becomes the current tenant's immediate landlord, so the former tenant can forfeit the lease. 2. Taking possession of goods The landlord's bailiffs may effect peaceable re-entry in order to seize and sell the tenant's goods, thereby recovering money owed. This is only available against the tenant in possession, for non-commercial property. Only arrears of rent can be recovered (not service charges etc.) and rent due must exceed seven days' worth. Landlord must utilise an authorised enforcement agent to give the tenant seven days' notice and to subsequently take control over the goods. 3. Forfeiture Brings the lease to an end (see 4. Deduction from the Tenant's deposit

Answer 88

1. Injunction To prevent a breach such as sub-letting (Hemingway Securities v Dunraven). 2. Specific performance To remedy a breach such as disrepair. Unlikely to be awarded against a tenant. However, this is an area where courts would look at the specific facts. An order for specific performance is only available in rare cases because it is something that can be used to harass tenants unnecessarily. 3. Damages Damages should not exceed the cost of the breach. No repairing damages may be recovered if the building is about to be demolished or altered. 4. Forfeiture Brings the lease to an end (see termination of a lease). REMEMBER: A landlord must serve a s. 146 LPA 1925 notice for breaches of other covenants.

Answer 89

1. Injunction To prevent a breach of a negative covenant. 2. Specific performance A court can order the specific performance of a repairing covenant. The equitable rules are dispensed with, thereby enhancing the tenant's protection. 3. Repudiation A repudiatory breach can bring a lease to an end. 4. Set-off The tenant must give the landlord notice of their failure to carry out their repairing covenant, and if ignored, the tenant has the right to carry out the repairs themself and deduct the cost in set-off against any rent due. However, such a remedy can be expressly excluded in the lease.

Answer 90

Forfeiture is a way for a landlord to terminate a lease, in the event of default by the tenant of its obligations under the lease or on the occurrence of certain events specified in the lease.

Answer 91

The landlord will only have the remedy of forfeiture if: 1. There is a provision in the lease allowing the landlord the right of re-entry; or 2. The tenant's obligation is termed a condition in the lease — the right of forfeiture then arises automatically if the condition is breached. Some breaches may be continuing (e.g. breach of a repair covenant), meaning that if the breach continues so does the right to forfeit.

Answer 92

The landlord must not have waived the breach expressly or impliedly. The most common waiver is the accepting of rent from a tenant after the landlord has learnt of a breach. This can arise where a landlord's clerk sends out a rent demand. NOTE: a waiver can also occur where a service charge is demanded.

Answer 93

1. Landlord must make a formal demand for the rent due (i.e. demand the sum, at the property, on the day rent is due, between sunrise and sunset), unless this requirement is excluded in the lease, or the rent is at least seven months in arrears. 2. Then, if rent is still not paid, landlord may seek a court order for possession. 3. If dealing with commercial property, the landlord may also effect forfeiture by peaceable re-entry. Note that the Criminal Law Act 1977 makes it an offence to use or threaten violence to secure re-entry, so this is risky.

Answer 94

After a right of re-entry has arisen as a result of a breach of covenant, the landlord can serve a s. 146 LPA 1925 notice specifying the breach, requiring a remedy if possible (within a reasonable time period) and requiring compensation if desired. Whether a remedy is possible will depend upon the type of breach: * Most breaches of covenant are considered remediable. * "Stigma" breaches (where property is used for immoral purposes) are usually not remediable. If the tenant fails to remedy the breach, the landlord may then seek a court order for possession or attempt peaceable re-entry (only for commercial properties) as outlined above.

Answer 95

**Non-payment of rent** If all arrears and landlord's costs are paid, the tenant is usually entitled to keep the lease. **Breaches of other covenants** * The tenant may apply for a court order for relief any time before the landlord re-enters the property. Relief is not available unless the breach has been remedied. * If the landlord attempts peaceable re-entry without a court order, the tenant can still seek a court order for relief after this has occurred. Sub-tenants may apply for relief where a head-lease is forfeited. The sub-tenant then becomes the immediate tenant of the head-landlord for the period of the sub-lease.

Answer 96

Should relief not be granted, the lease and any sub-leases will be brought to an end by forfeiture.

Answer 97

**Expiry of term** A fixed-term lease will automatically expire when: * The specified term comes to an end; * There is a clause making the lease subject to termination upon the occurrence of a specific event, and that event happens; or A break clause is exercised. This allows parties to terminate on notice before the term ends.

Answer 98

The common law rules of privity of contract and privity of estate apply to "old leases". NOTE: it is the date of creation that is crucial, not the date of any subsequent assignments.

Answer 99

Exists between the original parties to a contract. Under the doctrine of privity of contract: * The landlord and tenant will remain liable for the burden of any covenant for the duration of the lease regardless of whether they have disposed of their interest in the property unless a contrary intention is expressed. * The landlord can only enforce the benefit whilst they retain the reversion. Similarly, the tenant can only enforce the benefit whilst retaining the lease. * In the diagram overleaf, privity of contract exists between the Landlord and First Tenant, so they each hold the burden of any landlord or tenant covenants for the whole term of the lease. Even when the First Tenant assigns the lease to the Second Tenant, and the Landlord assigns the reversion to the purchaser of the reversion ("R"), the Landlord and First Tenant will still be liable for the burden of any covenants. However, the Landlord ceases to hold the benefit once they have assigned the reversion to R, and likewise for the First Tenant assigning to the Second Tenant.

Answer 100

Arises where a relationship of tenure exists between the parties to a lease. Look for a relationship of landlord / tenant between any current assignees of the lease and/or the reversion (the right the party to whom the interest will revert at the expiry of the lease). Privity of contract will not affect any assignees because they are not original parties to the lease. For rights and obligations to be transmitted, two requirements must be met (Spencer's Case): 1. There must be privity of estate between the parties (relationship of tenure); and 2. The covenants must "touch and concern the land". The test for this is if: a. Covenant ceases to be a benefit if separated from the reversion; b. Covenant affects the nature / quality / mode of use / value of land of the reversioner; and c. Covenant is not personal to the covenantor / covenantee.

Answer 101

Liability of the original landlord and tenant can be somewhat limited by either of the following: 1. Statute provides that the liability of a former tenant is restricted where the tenancy is varied after an assignment of the lease; or 2. A chain of indemnity covenants enabling the original covenantor (whether tenant or landlord) to recoup their losses - see below. How is a chain of indemnity covenants formed? - Where a tenant assigns the lease, statute implies a covenant where the assignee will indemnify the assignor for any breach of a covenant in the lease (this applies to both unregistered and registered land). * However, where a landlord assigns the reversion, there is no statutory provision implying an indemnity covenant so an express covenant of indemnity would be necessary in the conveyance. * In the diagram overleaf, the First Tenant has assigned the lease to the Second Tenant, who has agreed to indemnify the First Tenant for any losses that may occur during their tenancy. The Second Tenant then assigns to the Third Tenant, who agrees to indemnify the Second Tenant, and so on. * The Landlord may sue the First Tenant for the Third Tenant's breach of covenant. The First Tenant may then bring proceedings against the Second Tenant to recoup their losses (and so on). The First Tenant may also then proceed directly against the Third Tenant under common law (the current assignee who caused the breach is obliged to indemnify the person who paid for their breach).

Answer 102

* The current assignee takes the benefit and is subject to the burden of real covenants in the lease, under privity of estate. * The current assignee is only liable for breaches committed whilst the lease is vested in them. * Liability for such breaches is continuing even if the lease is assigned again. * The current assignee is also liable for breaches continuing from when the lease was vested the First Tenant. NOTE: this means that in some situations the Landlord will have two causes of action (although the landlord cannot recover the same losses twice): 1. One against the current assignee under privity of estate. 2. One against the First Tenant under privity of contract. If the reversion is then sold by the Landlord, privity of estate will exist between the Second Tenant and the purchaser of the reversion, R. The benefit and burden of real covenants runs with the land. The position of the assignee of the reversion: * R is now liable for the burden of covenants in the lease and can also enforce the benefit. R may sue the assignee for breaches even if the breach was committed before the assignment of the reversion. R is liable to the assignee for breaches committed whilst R holds the reversion. R is not liable for breaches committed before R was assigned the reversion.

Answer 103

A sub-lease is a new lease. There is therefore no privity of contract or estate between the landlord of the head-lease and the sub-tenant. Covenants in the head-lease cannot usually be directly enforced against a sub-lessee.

Answer 104

The Third Tenant has privity of estate with the Landlord in respect of the head-lease, and the Sub-Assignee in respect of the sub-lease. However, there is no privity of estate between the Landlord and the Sub-Assignee as they are not party to the same lease. The Landlord cannot usually enforce the burden of a covenant against the Sub-Assignee (except for restrictive covenants in accordance with common law rules).

Answer 105

POSITION OF THE TENANT The original tenant is automatically released from the benefit and burden of tenant covenants upon assignment. The continuing liability of former tenants does not apply to new tenancies. Similarly, indemnity covenants are not implied in new tenancies. However, the original tenant will remain liable if we are dealing with an "excluded assignment". This is where: 1. The tenant has assigned in breach of a covenant in the tenancy; 2. An assignment occurs by operation of law (e.g. upon death / bankruptcy). Landlords are allowed to require the tenant to enter into an authorised guarantee agreement ("AGA"), but only where it is reasonable to do so. The outgoing tenant agrees, as a condition of their release, to guarantee the performance of covenants by their assignee. The outgoing tenant will then be liable for any breaches by the first assignee until there is a subsequent assignment of the lease (e.g. from the 2'd tenant to the 3'a tenant in the diagrams above). If the lease is varied, the former tenant's liability is restricted.

Answer 106

The landlord is not automatically released from the burden or benefit of covenants under the lease upon assignment of the reversion. Landlords may obtain release by: 1. Giving notice to the tenant of the proposed or actual assignment; or 2. Requesting the tenant's consent that the landlord be released from covenants. Release is then automatic, unless the tenant serves a counter-notice objecting. Should the tenant successfully oppose the landlord's application, the landlord can apply for a release upon a future assignment. A landlord will not lose the right to sue for a breach of covenant which arose prior to assignment of the reversion. As above, if the tenant has signed an AGA, the landlord will still be able to bring a claim against them when the lease is assigned. This is illustrated below - in this situation the Third Tenant was assigned the lease, and breaches a term of it, so is liable to the Landlord. The Second Tenant (who was assigned the lease by the First Tenant and then assigned it to the Third) will also be liable under an AGA.

Answer 107

POSITION OF THE ASSIGNEE OF THE LEASE The benefit and burden of tenant covenants will pass automatically to the assignee of the lease. Personal covenants are excluded from this. POSITION OF THE ASSIGNEE OF THE REVERSION * The benefit and burden of landlord covenants will pass automatically to the assignee of the reversion. * Again, personal covenants are excluded from this. * A new landlord cannot sue for breaches that occurred before they were assigned the reversion. * The right of re-entry passes upon assignment of the reversion. POSITION OF SUB-TENANTS A landlord can bring a claim against a sub-tenant (or any occupier of the property) where a restrictive covenant has been breached. Any sub-tenant will therefore be liable for the burden of restrictive covenants.

Answer 108

Non-payment of rent 1. Debt action 2. Taking possession of goods 3. Forfeiture 4. Deduction from the Tenant's deposit. Other breaches 1. Injunction 2. Specific performance 3. Forfeiture 4. Damages

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