Lease Structure and Content Flashcards
What would commercial tenant be responsible in commercial lease for a lease of whole and lease of part?
- Lease of whole: interior, exterior, structural
- 5th floor: floor and ceiling, but not structure or exterior
What is a full repairing obligation?
Tenant must maintain / restore premises – so if poor condition at start, tenant must improve them
What is qualified repairing obligation?
Tenant must maintain premises but not restore beyond original condition
How would a full repairing obligation (FRI lease) be worded?
“To keep the premises in good repair”
How would a qualified repairing obligation be worded?
“To keep the premises in good repair but not improve them beyond their initial condition.”
What is the difference between repair and renewal?
If a building is so damaged that it needs rebuilding, this is renewal, not repair.
Are tenants responsible for inherent / structural defects?
They are not under a standard repairing obligation
How should a tenant protect against structural and inherent defects?
Ensure that they are excluded from repairing obligations and service charge liability
What is the doctrine of waste?
Tenant cannot carry out alterations which reduce value of the premises
What are the different types of covenants a landlord can have in providing permission for alterations?
1) Absolute covenant
2) Qualified covenant
3) Fully qualified covenant
What is an absolute covenant against alterations?
Alterations are not permitted – landlord has no obligation to even consider a request (although they can allow it if they wish)
What is a qualified covenant against alterations?
Alterations are only permitted with landlord’s consent. The landlord does not need to give consent.
What is a fully qualified covenant?
The landlord must act reasonably in deciding to withhold consent
What happens if the tenant’s proposed alterations are improvements from the point of view of the tenant in a qualified covenant?
S19(2) converts the proposal to a fully qualified covenant
What happens if landlord consents to alterations under a qualified covenant?
The consent will be documented in a license for alterations
What will a license for alterations cover?
1) Landlord’s requirements
2) Pay the landlord’s costs
3) Obtain all necessary consents
4) Reinstate the premises at end of lease term?
Can a tenant make improvements if there is an absolute lease restriction against alterations?
Yes, sometimes, this can override the lease restriction
What is the process in a tenant making improvements in light of an absolute lease restriction?
1) Tenant must serve notice on landlord about proposed improvements
2) If landlord object, tenant can apply to court for permission
3) If landlord does not object within three months, the tenant can proceed
4) Landlord can offer to do works instead, but tenant does not have to agree
When will court grant permission if there are improvements in light of an absolute covenant?
1) Increase in property’s letting value
2) Reasonable and suitable for property
3) Do not reduce value of other landlord-owned properties
Can a landlord charge a lump sum or increase rent for alterations?
Yes, it can, unless tenant exercises statutory right.
Would a condition of improvements be a lump sum / increasing rent? Why?
Yes, to reflect the new value of the property
Refers to what the lease allows tenant to use the premises for
What happens if a lease is silent on user?
The tenant is free to use the premises for anything they like
Limits appeal on premises and could limit market rent on rent review
