Land: Leases - Covenants Flashcards
What is a covenant?
Promise to do or not to do something
- imposed by lease on landlord and tenant
What are prescribed clauses?
Leases granted on/after 19 June 2006 to contain set of standard clauses containing:
- summary of key provisions of the lease
EXCLUDED Leases
- pre 19 June 2006
- lease made by court order
- lease made under statute
Main convenants contained in leases?
- Term
- Payment of Rent
- can include services charges and interest on late payment - Quiet Enjoyment
- landlord must not interfere with tenants enjoyment of property not allow other tenants to do so - Repair
- who is responsible for repairing what
- all parts of building must be properly defined if it is split - Use of premises
- what tenant can use premise for
When is a tenant prevented from doing something?
Basic rule that tenants can do all things that an owner of estate can do unless the lease prohibits such actions
What are general standards for repair covenant?
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
- tenant not required to put premise in better than at beginning of tenancy (should take photos as evidence)
When is party liable for breach of repair covenant?
Tenant
- as soon as property falls into disrepair
Landlord
- once notice is given of disrepair (as no access to property)
What might be a limit of obligation under repair covenant?
Covenant to repair does not require renewal of the whole of substantially the whole of the property
- for example would cost almost same as premises itself then renewal
What are the different types of restrictive covenants on tenant?
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
For which types of covenants will statute effect qualified covenants?
Alteration covenant
- Qualified covenant is transformed into fully qualified if it is to do with improvements
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)
Alienation
- qualified covenant is transformed into fully qualified
What is the effect of a qualified alteration covenant?
Transforms qualified alterations covenants into fully qualified alteration covenants – if they have to do with improvements
Landlord can impose conditions
- Payment of compensation for loss in value to the reversion caused by the alternation
- Reinstalment of the prem if reasonable (at end of lease)
- Payment of the landlords’ expenses in giving consent
What is the effect of a qualified Use covenant?
- Applies to qualified user covenants
- Prevents landlord demanding payment for consent to change of use, unless this also involves a change in structure
- If it does involve a change in structure landlord can demand increased rent or charge lump sum
What is the effect of a qualified alienation covenant?
Transformed into full qualified covenant
- consent cannot be unreasonably withhold
Reasonable 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
Implied Terms of Lease
- Landlord to keep structure and exterior in repair
- everything but decorations
- standard in accordance with age, character etc.
- must repair within reasonable time after being notified - Landlord to keep in working order, electricity, water, gas, heating etc.
