Head 25: Leases Flashcards
What is a lease?
A lease is a contract[ It is a contract but it can confer real rights.] under which a person (the landlord) grants to another (the tenant) an exclusive right to occupy property[ Heritable property.] for a certain period, in exchange for which the tenant agrees to tender (rent) payment, in money or otherwise.
How was the law of leases created?
The law in this area was generally created by the common law, but there has been extensive statutory intervention for certain types of lease: residential tenancies, agricultural tenancies, tenancies of shops. All of these statutory interventions overlay the common law. The one area of leases which is not touched really by statute is commercial leases - there are no special statutory provisions here. The leasing of movable property is called hire (i.e. Car hire).
What are the new restrictions on leases?
No new lease can be longer than 175 years since 9 June 2000 (to stop feudal system being recreated by the back door).
Lease Terminology:
⁃ (a) Landlord/lessor;
⁃ (b) tenant/lessee;
⁃ (c) tenancy[ Means the same as lease.];
⁃ (d) tack[ Old Scots word for a lease.];
⁃ (e) subjects;
⁃ (f) rent/maills and duties[ All terms for ‘rent’.];
⁃ (g) grassum/premium[ Sometimes to get a lease you have to pay an upfront sum to the landlord.];
⁃ (h) casualty[ Additional sums of money - these have been prohibited by statute.];
⁃ (i) ish[ The date of termination of the lease.];
⁃ (j) term[ Can refer to a clause of the lease.
Can also refer to the duration of the lease.];
⁃ (k) renunciation;
⁃ (l) surrender[ is the tenant wants to give up a lease they can renunciate or surrender it.];
⁃ (m) Missives of let[ NB these are not the same as missives of sale. In lease law, the missives of let are often the lease itself. In other words, if parties exchange missives for a lease and the contract is concluded, then the result of this is in itself a lease.
In commercial contexts there are often much more formal leases.] - often there is a contract for lease which proceeds more formal Lease. Exchange of offer and acceptance. Sometimes the missives themselves may constitute the lease. The subsequent lease does not necessarily supersede all the terms of the prior missives: UPS Supply Chain Solutions v Glasgow Airport Ltd 2005 SCLR 67.
⁃ (n) Lease v licence: licence is “a contract falling short of a lease, whereby not the heritage itself but a right to use a particular part of it or to put a particular part of it to some use is granted” (Paton & Cameron, Law of Landlord and Tenant 12).
Joint Administrators of Rangers Football Club Plc, Noters 2012 SLT 599
A season ticket giving a football supporter the right to sit in a particular seat at matches cannot confer a lease as there is only intermittent possession.
What length must a lease be?
A lease is a contract so it can be any length.
What kind of document is a lease?
Since it is a contract, if in writing it must be signed by the landlord and the tenant.
A lease is a contract[ NB this must be distinguished from other types of contract over land. A contract for possession which falls short of a lease is often described as a ‘licence’ - this cannot be made real, whereas a lease can.
From the point of view of the tenant it is very important that the contract is a lease and not a licence since there are additional protections (e.g. to protect against change of ownership.)], which confers personal rights on the parties. As such, it will not bind a successor owner if the landlord sells the property. The tenant may acquire a real right in certain circumstances:
⁃ 1. Tenant takes possession, or
⁃ 2. Tenant registers the lease in the Land Register
Scottish Residential Estates Co v Henderson 1991
an example of an arrangement which did not constitute a lease where a person allowed someone to use property but wanted it back when the owner needed it; since the duration is not certain it could not be a lease: “you and your sons may have the use of the cottage until we require possession of it”. Held: no intention to create a lease. Co-owners cannot grant a lease to one co-owner.
What are the four cardinal elements in a lease?
There are four essential ‘cardinal[ If theses are not present then it is generally not a lease at all.]’ elements in a lease:
⁃ 1. Parties
⁃ There must be certainty as to who is making the contract. Landlord or tenant may be joint parties; may be natural or legal persons; may be trustee(s), for example for a partnership.
⁃ 2. Subjects
⁃ There must be certainty as to the property that is being leased. And if you have to register the lease to acquire the real right you must identify it in such a way that is sufficient for registration.
⁃ The lease must give the tenant the right to exclusive possession - if possession is shared then this is not a lease.
⁃ 3. Rent
⁃ No rent no lease. May be in money terms, or in kind, or services. May be ascertained by reference to a mechanism for calculation. May be a nominal sum[ E.g. 1 pence].
- Usually payable on a monthly basis in residential cases and quarterly in commercial ones.
- Must be periodical payment.
- A grassum on its own at the start of a lease is insufficient.
⁃ 4. A definite duration
⁃ There is a huge amount of variety concerning the length of a lease. Residential leases are often quite short. The only requirement at common law is that there is a duration. A lease for “as long as the grass groweth up and the water runneth down” is valid —>
⁃ The duration may be in perpetuity (Carruthers v Irvine (1717)) or for 999 years (Welwood v Husband (1874)).[ This is the general principle, however see below for the statutory provisions.]
⁃ There is a very big difference between Scotland and England. In England, it is very common to have long leases (these are essentially ‘quasi-ownership’ from a functional point of view). Why do they do this? The answer is that under the lease you are able to impose ‘positive covenants[ In Scotland you can do this by real burdens in relation to ownership - in English law it is not possible to do this in relation to ownership; positive covenants can only be imposed in relation to leases in England.]’ (e.g. obligations to upkeep the building).
⁃ Since 2004 (Abolition of Feudal Tenure Act 2000) it has not been possible in Scotland to grant leases of 175 years (to avoid the English practice of granting extremely long leases).
⁃ Moreover, the Long Leases (S) Act 2012 will automatically convert ultra-long leases (>175 years) to ownership from the 20th September 2015.
⁃ Leases in relation to residential property cannot be granted for more than 20 years. NB this is slightly misleading: the contract of lease cannot allow leases >20 years, but even when a lease comes to the end the tenant often has security of tenure. So although the contractual lease doesn’t allow >20 years, the statutes provide that a tenant cannot actually be kicked out unless they breach the terms of the lease.
What happens if one of the last two essential elements is missed? I.e. the duration is not fixed or the rent is not fixed?
Although officially all four are required the courts have shown some flexibility where the tenant has taken possession.
⁃ If the parties have agreed everything except duration and the tenant is in possession and occupying the property then the law will imply a duration of 1 year [Gray v Edinburgh University 1962]
Gray v Edinburgh University 1962
In this case they hadn’t agreed rent or duration. the court held there was no lease on the facts. BUT it said that if they had agreed the rent and the tenants had moved in then the courts will imply a lease of one year. Must look at all the circumstances because it could be a license rather than a lease.
⁃ If the parties have agreed everything except the rent and the tenant is in possession the law is slightly unsettled[ In some cases option 1 is favoured, in other cases option 2 is favoured.]. The practical problem is that if someone is possessing then they ought to pay something, otherwise they would be getting the land for nothing.
⁃ 1) In some cases[ If the court goes down this line then the court is accepting there is a lease.] the courts imply a market rent as if the tenancy were a yearly tenancy. (Glen v Roy (1882))
⁃ 2) The other approach is where the court holds there to be no lease but nonetheless the person in possession must pay. Under this approach the recovery of the payment is on the basis of U/E (GTW Holdings v Toet 1994)
But cf Wallace v Simmers 1960 SC 255:
Wallace v Simmers 1960 SC 255
They secured a lease for so long as occupancy is required. The son sold the farm and the daughter tried to enforce the agreement against the new owner. Held: she merely had a personal right. “For as long as you desire” is not a usual duration.
Scottish Residential Estates Co v Henderson 1991 SLT 490.
A lady was given the right to stay in a cottage. The owner said: “You and your sons may have use of the cottage until we require possession of it”. Held: license rather than a lease since there was no finite duration.
What happens if all four essential elements are satisfied?
If all the four essential elements are satisfied then there is a lease; if not then there is a license.
Joint Administrators of Rangers Football Club Plc, Noters 2012
season ticket holders hold a license because there right of possession is not exclusive.
NB: The court probably does not have the power to settle outstanding points. There will be implied rules.
What are the additional protections in a lease (as opposed to a licence)?
Possibility of creating a real right in a lease.
In certain types of leases there is legislation which is primarily designed to protect the tenant.
What is the required form a lease must take?
Insofar as we are talking about leases as an ordinary contract there are no requirements of form.
However if the lease is to be upgraded to a real right then writing is required (under RW(S)A 1995).
⁃ In practical terms this means that if there has been no change of ownership then it doesn’t matter whether writing is used since a personal or real right is equivalent; but if there is a change in ownership then it does matter whether writing has been used.
There is one exception to the requirement of writing: leases for one year of less[ NB in practice it would be very unusual not to have writing.]. Those that exceed this period must be subscribed by both parties (s1(2)(b)).
There must be an external act.
A lease begins as an ordinary contract which confers rights and obligations on both parties. If you cannot have a lease as a contract then it will not be capable of conferring a real right. The landlord has the right to receive rent from the tenant; the tenant has the right to occupy the property.
What happens when a lease becomes a real right?
When it is said that a lease can become a real right, it is not the case that the entire contract becomes a real right; it is the tenant’s right of occupation which becomes a real right[ The reason being to protect the tenant from a change in ownership.].
How can you obtain a real right under a lease?
To obtain a real right under a lease, one of the following routes must be followed[ Normally the creation of real rights takes place on registration, but historically leases could not be registered.
How can you obtain a real right under a lease?
To obtain a real right under a lease, one of the following routes must be followed[ Normally the creation of real rights takes place on registration, but historically leases could not be registered.
See methods on short leases and long leases below
How can you obtain a real right under short leases?
⁃ 1) Short leases
⁃ Short leases ( in Carruthers v Irvine could not confer a real right.]: thus a long lease for, say, 999 years is covered assuming this was granted before 175 year restriction came in. This means a finite period is required.
⁃ 4) *Tenant must have entered into possession[ Most important requirement.] of the subjects: possession may be natural or civil (e.g. via an employee to sub-tenant).
So you get a real right under the 1449 Act if you as a tenant are under possession of the land.
⁃ Millar v McRobbie 1949
Millar v McRobbie 1949
lease was negotiated and the prospective tenant was allowed to start using the property before the lease actually started. At around this time, the landlord sold this land and the buyer refused to recognise the lease since it was not yet a real right. The court upheld this view, that the lease was not yet a real right and thus wasn’t binding on the buyer. Despite the possession, since the lease had not actually started yet it could not be a real right and the buyer did not have to recognise the lease.
⁃ [The offside goals rule was not applied (even though one would expect it to since a lease can be made into a real right.)]
- The tenant was allowed to enter in early for some preliminary agricultural preparations including preparing the ground, sowing crops etc. While they were sowing, the landlord sold the land.
- The tenant claimed that he had a real right against the new owner. The court held that the limited agricultural acts did not amount to exclusive possession. Even if it had been significant enough, there was a fatal flaw (he took possession before the lease started). So the possession was irrelevant.
How can you obtain a real right under long leases?
⁃ Long leases (> 20 years) must be registered in the Land Register[ Even if the land itself is held on a Sasine title.
NB historically registration of long leases in the Sasine Register was possible but not compulsory. However this is no longer competent because of the Scotland wide application of the Land Register.] under the 1857 Act[ Registration of Leases (S) Act 1857] which remains in force today. In order to make a long lease a real right it must be registered. This registration will create a separate title sheet[ So if land has been leased on a long lease, the land will have two title sheets.].
- Registration in the Land Register is now the ONLY way of obtaining a real right. So LA 1449 today applies only to short leases. If a long lease is not registered it is not a real right!! (So if you move in that is not enough).
What if the new owner knows there is a lease which has not yet been recorded/registered? Can the offside goals rule apply?
In the case of Millar v McRobbie 1949 it was held that the offside goals rule did not apply since they did not have the relevant possession. It is unclear whether a case with similar facts would be decided differently today.
- The tenant may seek to invoke the offside goals rule if the new owner knew about the grant. The balance of the authority is against the applicability of the rule here. But the law cannot be regarded as certain.
What are pro indiviso shares in land?
A lease of land can include a pro indiviso share in other land: Gyle Shopping General Partners Ltd v Marks and Spencers plc [2014] CSOH 59.
Gyle Shopping General Partners Ltd v Marks and Spencers plc [2014] CSOH 59
This was a lease of one of the shops plus a third share in the parking area. He held it did not. It is competent to lease subjects plus a share in other subjects. [Look this up*].
What if the tenant wants to transfer the lease?
⁃ Since the tenant’s lease is a right, it can be transferred by assignation[ NB some leases cannot be assigned - there are often restrictions on assignation.].
⁃ If there is a new landlord and a new tenant, are these new parties bound by the terms of the lease?
⁃ If A grants a lease to B and B obtains a real right. A then sells to C, C is bound by the lease.
What is the effect of real right on singular successors? Do the terms of the lease bind successors?
The difficulty is that you generally cannot assign obligations; however under the law of leases you can! So when there is a change of personnel, the incoming landlord/tenant receives all the rights under the lease and also all the obligations. So the new tenant must pay the rent and the new landlord is under the various landlord obligations.
Is it true that every single term of the lease will bind successors?
⁃ The courts have answered this question by saying that there may be some terms which are not binding on a new landlord. The successor will be bound by the lease, but not by all of its terms. The main test is whether the obligations are inter naturalia of the lease (natural/essential parts of the lease) - i.e. are these the sort of terms you would expect to find in a lease of this kind (duty to let tenant occupy). If the answer is yes then they can bind a successor landlord. If a particular term is an unusual one then it will be regarded as personal and it will not transmit to a subsequent landlord.
Turner v Nicholson (1835)
landlord made an agreement to compensate the tenant for improvements made to the land. Landlord sold to someone else. It was held the agreement was personal (not inter naturalia of the lease) so the new owner was not bound. So held: this does not bind the successor. It was a personal agreement by the outgoing landlord.
Ross v Duchess of Sutherland (1838)
lease where the rent was £12 a year. The tenant was to be allowed a £5 deduction provided he acted as the ‘ground officer’ of the estate. The land was sold and the new landlord didn’t want the tenant to work for him so discontinued the arrangement that the tenant was acting as a ground officer. It was held by the court that this term was only personal to the original landlord and was not found generally in leases - thus it did not bind the incoming landlord.
- So a provision for a reduction in rent in return for services performed by the tenant will not bind a successor landlord.
*Bisset v Magistrates of Aberdeen (1898)
option to buy in a 999 year lease. Land was sold. Held the option did not bind the new landlord/successor. It was not fundamental to such a long lease to have such an option.
Davidson v Zani 1992
In contrast to Bisset: Davidson v Zani 1992 - Sheriff Principle case - an option to buy a shop at the end of a lease was enforced against the new landlord under the offside goals rule. It was argued that the new landlord was bound because they knew about it in bad faith.
⁃ [Yet for the offside goals rule to apply there must be some form of breach and it was argued that the offside goals rule shouldn’t have applied since there was no such breach. This was was the position taken in Advice Centre for Mortgages Ltd v McNicoll [2006] - Outer House case in which the offside goals rule was not applied in similar facts to Davidson. This was because there was no breach of a previous obligation — the selling of the shop was not in itself a previous breach. NB an Outer House decision cannot overrule a Sheriff Principle so Davidson is still a valid decision. From tutorial see Gibson v RBS for options to purchase - the offside goals rule was applied to an option to purchase
Optical Express (Gyle) Ltd v M&S 2000
This concerned exclusivity agreements. The Gyle shopping centre was owned by Edinburgh City Council who entered into a series of leases with different shops. One of the units was leased to Optical Express and there was a separate letter which provided that the council would not lease any other shop in the Gyle to a rival opticians - an exclusivity agreement. The City Council sold the Gyle to a consortium (of which M&S were one of the parties). The consortium leased one of the units to another optician. Optical Express sued. The defence raised was that the agreement did not bind the new landlords. The court upheld this defence since the agreement was not inter naturalia of the lease since it was not about the property that was being leased, it was about other properties, so it did not bind successors.
- So an exclusivity clause providing that the tenant was to be the only optician in a shopping centre was not inter naturalia.
- NB in this case this agreement was not in the lease but there was a separate document “back letter” which said they were to be the only opticians in the centre. The landlord then sold the centre and the question was whether the exclusivity agreement bound the successors. The court said no.
⁃ NB in the earlier case of Davie v Stark (1876) - an exclusivity agreement was enforced against a successor landlord but it was not challenged, it was accepted in this case (not a strong authority as the point was not specifically pled).
What is the effect of a real right on heritable creditors[ Typically standard security holders.]?
Since it is a real right, in principle it will bind subsequent creditors, but not prior creditors under they consent.
Trade Development Bank v Warriner & Mason 1980
there was a standard security over land and one of the conditions of a standard security is that you cannot lease the land without the creditors agreement. The owner leased the property without the agreement of the creditors. It was held that the creditors could set the lease aside.
*Trade Development Bank v Crittal Windows 1983
an agreement to assign a lease and then the lessee (the tenant - the person agreeing to assign) granted a standard security over the lease prior to the assignation. This would mean the standard security was in place before the new tenant takes the lease by assignation and the new tenant is bound by it (the standard security). However, the standard security holder knew about the agreement to assign and therefore the offside goals rule was applied and the standard security was set aside.
What can the common law imply about the rights and obligations of a lease?
Governed by the express terms of the lease. In the absence of specific terms the common law implies certain things. Lease is a ‘nominate contract’ so comes with its own set of implied-in-law terms.
Starting point: (1) What obligations have the parties set out in the lease.
What if there a no specific terms or silent on a particular issue?
⁃ The common law applies.
- However typically for residential and agricultural leases there are detailed statutory frameworks and the common law rarely applies.
⁃ For commercial leases, in the absence of specific terms (which is unusual) the common law implies certain obligations upon landlord and tenant.
⁃ If the parties wish to exclude common law implied terms then the lease must make this clear (as in Mars Pension Trustees Ltd v County Properties & Developments Ltd 2000).
What are the implied conditions of common law?
?
What are the obligations of the landlord with regards to possession?
The landlord is obliged to put the tenant in natural possession of the subjects and to maintain him in possession through the term of lease.
⁃ The landlord must give the tenant possession of all the subjects of let[ So if they’ve agreed to let 10 fields, they must let the tenant into the 10 fields.].
⁃ The landlord may not encroach (interfere) upon the tenant’s possession and must prevent his total or partial eviction[ I.e. if someone else tries to move in the landlord must take action to protect the tenant’s rights.].
What are the obligations of the tenant with regards to possession?
The tenant is obliged to enter into possession, and to occupy and use the subjects.
⁃ If the tenant fails to enter into possession then he is in material breach.
⁃ *Graham & Black v Stevenson (1792)
⁃ Blair Trust Co v Gilbert 1940
*Graham & Black v Stevenson (1792)
- a hotelier took the tenancy of another nearby hotel with the intention to close it to wipe out the competition. The court held that he couldn’t do this since he had to occupy it rather than simply close it down.
⁃ This is implied by law but often it will also often be written into the lease.
Blair Trust Co v Gilbert 1940
- in this case the lease provided that the said tenant binds and obliges himself and his ??? to reside on the said land. However the court held that reasonable periods of short absence would not breach this. In this case the tenant was in prison and had been absent for a year, so here the tenant was held to be in material breach so the landlord could bring the lease to an end.
- In this case, the absence of the tenant due to detention in Saughton Prison for culpable homicide for more than a year meant the landlord could bring the lease to an end on the ground of material breach.
Mickel v McCoard 1913
A tenant who breaches the obligation to be in possession will be liable for damage sustained to the property due to non-occupation
What is the requirement for the tenant to plenish the subjects?
The tenant is bound to plenish or stock the subjects - this applies where the landlord’s hypothetic applies[ Where the landlord? is allowed to enforce the rent by selling the tenant’s assets.
Since 2007 the landlord’s hypothec only applies in commercial leases.].
When does the landlord’s hypothetic apply?
Since 2007 the landlord’s hypothetic only applies in commercial leases so this duty of the tenant (probably[ But the amendment to the landlord’s hypothec was not done very well so it is not entirely clear.]) only applies in commercial leases.
Co-operative Insurance Society Ltd v Halfords 1998
If the tenant does displenish the stock then the landlord can obtain interdict to prevent this.
When is the tenant required to pay rent?
The tenant is obliged to pay the rent when it falls due.
How do you know when rent is due?
The lease will normally state payment date when the rent is due (often in advance). If there is no payment date specified, the tenant will be obliged to pay at a legal term date (this depends on the types of lease in question) - there are “horrible” rules on this.
What is a rent review?
Because of inflation, leases for more than about 5 years usually provide for review of the rent at the end of a certain period, for example, after every give years in a 25-year lease. If they cannot agree the lease says that a third party will set it in line with market rates (rent review clauses).
What is the landlord obliged to provide under the lease?
The landlord is obliged to provide subjects reasonably fit for the purposes of the let
⁃ This obligation only applies at the outset of the tenancy (so if the tenant takes possession and finds that the subjects are not reasonably fit he can rescind the contract. In contrast, if the subjects become unfit later on, it is usually a question of the landlords duty to carry out repairs - below.
What is the standard of subjects required?
The standard is only “reasonably fit” - thus it is not one of perfection. See North British Storage Co v Steele’s Trustees 1920
North British Storage Co v Steele’s Trustees 1920
it was held that while a drainage system could have been upgraded to a higher standard, this was not actually required since it was reasonably fit for the purposes of the let.
What is the common law duty required by the landlord?
The common law duty:
⁃ Urban subjects[ E.g. buildings. NB there are specific provisions for houses so this only applies under the common law where the housing provisions do not apply.] must be wind and watertight.
- See Wolfson v Forrester 1910
Wolfson v Forrester 1910
there was water from a choked down pipe which leaked through a hole into the premises causing flooding. The hole in the wall of the premises was to allow a gas pipe to enter. The court held the premises were wind and watertight - the hole in the wall would only cause problems in extraordinary circumstances whereas wind and watertight means under ordinary conditions. Furthermore, one of the judges added that the tenant could see the hole when he moved in anyway so if he wasn’t happy he should have raised the issue at that point.
- Held: the premises were wind and water tight
- The LP said the hole in the wall would only cause problems in extraordinary circumstances e.g. Leakage in the pipe.
- Wind and water tight is under ordinary conditions not in extraordinary circumstances.
What does the standard assume of use by the tenant?
The standard also assumes reasonable use by the tenant:
*Glebe Sugar Refining Co v Paterson (1900)
*Glebe Sugar Refining Co v Paterson (1900)
held that the landlord only required to provide a building of sufficient strength for weight that would be put on it by ordinary trade use. The tenant was obliged not to overload it and he did, therefore he was liable in damages.
What is the tenant obliged to use the property for?
The tenant is obliged to use the property only for the purposes of the let. In commercial leases there will typically be a “(permitted) use clause”. A breach is often known as “inverting the possession”.
Mercer v Esk Valley Railway Co (1867)
The subjects were let for use as a paper mill. However the tenant brought a railway onto the subjects. This was held to have inverted the possession. It thus was unlawful.
British Linen Bank v Purdie (1905)
tenant affixed displays to the outside wall of the shop which he wasn’t permitted to do and this was held to constitute inversion of the lease.
Nb if the tenant wants to change use the landlord will demand money for that.
Unauthorised alteration may also count as inversion.
What is the state of the subjects?
This is similar to ‘purposes of the let’ above, but instead this is about the state of the subjects during the lease.
What obligation does the landlord have in relation to the state of the subjects?
The landlord is obliged to carry out repairs. In urban leases the landlord must maintain the subject in a tenantable or habitable condition during the term of the lease, making such repairs as are necessary to keep this obligation. This includes (but is not restricted to) keeping the property wind and watertight.
The obligation is to carry out appropriate repairs once the matter is highlighted by the tenant.
Gunn v NCB 1982
the landlord failed to deal with rising damp and was held to be in breach of his obligation. Held: liable to the tenant in damages.
What is the landlord NOT required to effect repairs in respect of?
The landlord is not required to effect repairs in respect of damage caused by:
⁃ i) damnum fatale (acts of god)
⁃ ii) the action of a third party
⁃ iii) the negligence of the tenant (damage by the tenant would constitute a breach by the tenant of the corresponding duty to take reasonable care of the property. e.g. Glebe
*Wolfson v Forrester 1910
court held that even if the premises were no longer wind and watertight because of the hole, the landlord’s obligation was only breached if the tenant drew the matter to the landlord’s attention and they failed to do anything about it.
⁃ This means the landlord’s obligation is not a warranty - there is no obligation to keep the subjects in a habitable condition permanently - the obligation is, if the tenant draws things to your attention to the effect that the obligation has not been met then the landlord must rectify it, it not then this is a breach. So if premises cease to be in a tenantable position and the tenant suffers a loss as a result, the tenant cannot successfully sue the landlord for breach unless they have previously drawn it to the attention of the landlord.
⁃ If the tenant does bring it to the landlord’s attention then the landlord must repair within a reasonable time. It is not a warranty as such because the landlord is only liable if no action is taken within a reasonable time following notification.
What are FRI leases?
- Commercial leases are often called FRI (full repairing and insuring). So tenant is responsible for repairs and insurance.
⁃ Commercial leases normally include express provisions about this. The landlords obligation to repair is normally expressly excluded and repair obligations are imposed on the tenant.
⁃ A property burdened by a commercial lease without such full repairing obligations would be almost impossible to sell.
What obligation is on the tenant in relation to the care of the property?
The tenant is obliged to take reasonable care of the property. Where the tenant is liable, as well as being in breach of this obligation, the landlord is not liable.
