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SQE 1 FLK 2 > Land Lease Covenants > Flashcards

Land Lease Covenants Flashcards

1
Q

What is a covenant?

A

Promise to do or not to do something
- imposed by lease on landlord and tenant

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2
Q

Main convenants contained in leases?

A
  1. Term
  2. Payment of Rent
    - can include services charges and interest on late payment
  3. Quiet Enjoyment
    - landlord must not interfere with tenants enjoyment of property not allow other tenants to do so
  4. Repair
    - who is responsible for repairing what
    - all parts of building must be properly defined if it is split
  5. Use of premises
    - what tenant can use premise for
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3
Q

When is a tenant prevented from doing something?

A

Basic rule that tenants can do all things that an owner of estate can do unless the lease prohibits such actions

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4
Q

What are general standards for repair covenant?

A

Can be specified by generally to keep premises in condition in which they would be kept by a reasonably minded owner having regard to:
- age of property at time of grant
- character of property at time of grant
- locality of property at time of grant

Limit
- renewal of property: eg would cost almost as much as premises itself
- tenant not required to put premise in better than at beginning of tenancy (should take photos as evidence)

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5
Q

When is party liable for breach of repair covenant?

A

Tenant
- as soon as property falls into disrepair

Landlord
- once notice is given of disrepair (as no access to property)

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6
Q

What are the different types of restrictive covenants on tenant?

A

Absolute
- completely prohibited from doing somethign

Qualified
- The tenant shall not do without landlords’ consent

Fully Qualified
- Tenant shall not so without the Landlords consent such consent not to be unreasonably withheld or delayed
- Landlord must be reasonable if they withhold consent

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7
Q

For which types of covenants will statute effect qualified covenants?

A

Alteration covenant
- Qualified covenant is transformed into fully qualified if it is to do with improvements

Alienation
- qualified covenant is transformed into fully qualified

Use
- Qualified covenants
- Landlord cannot demand payment for granting consent, unless changes involve changes to structure of building (in which case can increase rent or charge lump sum)

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8
Q

What to consider for alteration covenant?

A
  1. Would alteration require planning permission / listed building consent
  2. Will require building regulation certificate
    - enforcement action in 12 months
    - injection to bring up to standard at any time
  3. Is it for improvement
    - then qualified covenant treat as fully qualified
  4. Landlord can impose conditions
    - payment to loss in value/cost of reversion
    - reinstate premises at end of lease (if reasonable)
    - indemnify landlord for cost of giving consent
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9
Q

What to consider for change of use covenant?

A
  1. Is planning permission still required / listed building consent
    - subdividing or reverse
    - change residential to comercial
    - change between use classes in commercial building
  2. Is it qualified covenant
    - landlord cannot demand payment unless involves structural changes
  3. If structural changes
    - landlord can demand payment /increased rent
    - planning permission/listed building consent
    - building regulation certificate
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10
Q

What to consider for alienation covenant?

A
  1. is it a qualified covenant
    - treat as fully qualified
  2. Reasonable grounds to refuse:
    - Unsatisfactory tenant’s reference
    - The proposed assignee’s use would damage the landlord’s own commercial interests as the assignee proposed to run a rival business next door.
    - Where the existing tenant is already in breach of covenant - the landlord can insist upon the breach being remedied before giving consent unless it is clear that the assignee can remedy the breach
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11
Q

Remedies for breach of rent covenant?

A
  1. Commercial Rent Arrears Recovery
    - commercial leases
  2. forfeiture
  3. action for debt
    - for up-to past 6 years
    - unhelpful in practice
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12
Q

Remedies for breach of repair covenant?

A
  1. Damages
    - as right under contract
  2. specific performance
  3. self help
    - do repair yourself and claim cost from other party
    - claimed as debt
  4. forfeiture
    - if granted for 7+ years and 3+ left to run
    - must inform tenant of Rights to serve counter notice
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13
Q

When is forfeiture available?

A

Book says forfeiture clause must be in lease

Breach of Rent Covenant
- legal lease needs to be express
- equitable lease is implied

Breach of non-rent covenant
- always needs to be express

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14
Q

How can forfeiture be done in commercial vs residential premises?

A

Commercial
- can forfeit by peaceful entry

Residential (and mixed)
- must obtain court order

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15
Q

Process of forfeiture for breach of rent covenant?

A
  1. Has there been a breach
  2. Is there a forfeiture clause
  3. Has there been a waiver
  4. Formal demand
    - unless 6 months of arrears; or
    - expressly waived in lease
  5. Exercise the right
  6. Relief
    - tenant can apply
    - court discretion to allow lease to continue
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16
Q

When might landlord waive right to forfeiture?

A

If waived the right to forfeit than cannot do it

Is aware of breach:
- and accepts payment
- and demands payment
- and serves notice requiring repairs to be done
- if above is done by agent who does not know of breach (but landlord knows of breach)

17
Q

When is waiver of forfeiture permanent vs continuing?

A

Continuing breach: waiver only lasts until next day the breach is continued
- failure to repair
- failure to ensure
- prohibited use

Once and for all (non-continuing)
- rent arrears (for each payment separately)
- alienation
- alteration

18
Q

Process of forfeiture for non-rent covenant breach.

A
  1. Has there been a breach
  2. Is there a forfeiture clause
  3. Has there been a waiver
  4. s. 146 Notice
  5. exercise the right
  6. Relief
19
Q

What must be included in s. 146 notice?

A

Must be served on tenant. It must:
1. Specify the breach

  1. If capable of remedy
    - require it to be remedied within reasonable time (around 3 months)
  2. if not capable of remedy
    - need give 14 days before forfeiture
  • CAN require the tenant to make compensation in money for the breach if the landlord desires
20
Q

Process for Self Help for breach of repair covenant

A

If ‘Self Help’ clause is expressly included in lease

  1. landlord to serve notice specifying breach of covenant and requiring them to do it
  2. if tenant fails then landlord can enter to carry out work
  3. can recover costs from defaulting party as DEBT
21
Q

When is a lease a new lease vs an old lease?

A

New Lease
- been granted after from end of 1995

Old Lease
- granted before start of 1996

22
Q

What are the rules liability for breached covenants of old leases?

A

Original landlord and tenant remain liable to each other for entire lease period
- even if lease is assigned

23
Q

Rules of liability for breached covenants new leases

A

Post 1995

Tenants
- automatically released
- may be required to enter AGA as condition of landlord giving consent to an assignment (more likely if commercial)

Landlords
- not automatically released
- can be released by tenant or apply to courts for release

24
Q

Under new leases if a subsequent tenant is in default who can the landlord sue?

A
  1. No AGA
    - subsequent tenant only
  2. OG tenants has AGA
    - original or subsequent tenants
    - if sue original then only get damages as not in possession of land
25
Q

Under old least if subsequent tenant is in default who can landlord sue?

A

Either
- subsequent tenant - privity of estate
- original tenant - privity of contract

26
Q

Can landlord enforce convent on subtenants?

A

No (no privity of estate or contract)

But tenant usually liable of their sub-tenant
- so will likely incorporate same covenants into sublease

27
Q

What happens if tenant assigned lease but landlord refuses consent?

A

If they think it was withheld unreasonably should seek declaration from the court to that end

If court does not agree they will be in breach of covenant

28
Q

What happens to the sublease if the headless is assigned?

A
  • sublease will remain
  • incoming tenant of headless will be bound by covenants in headless
29
Q

How can a lease be terminated?

A

Expired of fixed period

Termination by notice
- for periodic tenancy
- if joint landlords/tenants either one can give notice

Surrender
- mutual agreement that tenant gives up possession to landlord
- must be by deed

Merger
- mutual agreement hat landlord will transfer reversion to tenant
- must be by deed

Forfeiture

Frustration

30
Q

What happens to sublease if headless is terminated

A

If by expiry, notice or forfeiture
- sublease ends

Surrender or Merger
- continues on same terms

SQE 1 FLK 2 (91 decks)

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