Leasehold

Question 1

Registration of Leases

Answer 1

Leases three years or less do not need to be made by deed or registered. They will be an overriding interest anyway.
Leases for a term of three to seven years need to be made by deed but do not need to be registered to be an overriding interest.
Leases for more than seven need to be by deed and registered. Failure to do so would create an equitable lease, rather than a legal lease.

Question 2

Essential characteristics

Answer 2

• Exclusive possession
• A fixed duration
• Comply with formalities to be legal

Question 3

Exclusive possession

Answer 3

Tenant has right to control the use of the property. They can control who goes into the property and can exclude others from it, even the landlord.

Question 4

Lease or licence?

Answer 4

A licence the occupier permission to stay in the property and does not grant them legal or proprietary interest. If occupier has exclusive possession then they will have a lease - it doesn’t matter whether the document is labelled a licence.

Question 5

Fixed duration

Answer 5

Term must not exceed landlord’s duration

Question 6

Periodic tenancy

Answer 6

Agreement likely to continue on a month by month basis until either landlord or tenant gives notice.

Question 7

Express Covenants

Answer 7

Promises to do something between landlord and tenant which are written into the lease.

Question 8

Implied Covenants

Answer 8

These will be implied into the lease unless the lease specifically states that they do not apply.

Question 9

Landlord implied covenants

Answer 9

• Quiet enjoyment
• Non-derogation from grant - if tenancy is granted for a specific purpose, landlord cannot do anything to undermine that during the lease
• repair

Question 10

Tenant implied covenants

Answer 10

• to pay rent and taxes
• repairing - everyday wear and tear should be expected but tenant should not do anything that could significantly reduce the value of the landlord’s land
• not committing waste - not to anything which would permanently change the landlord’s land

Question 11

Privity of contract

Answer 11

Only those who are parties to the contract can sue or be sued of the clauses in the contract.

Question 12

Privity of estate

Answer 12

Rights and duties that apply between the current owners of the different legal estates in the same piece of land.

Question 13

Successors in title of the freehold - pre 1996

Answer 13

Only bound by covenants which touch and concern the land.

Question 14

Successors in title of the freehold - post 1996

Answer 14

Original landlord may write to tenant asking to be released from the liability. If tenant agrees or does not reply in four weeks, the landlord will be released from that on-going obligation.

Question 15

Successors in title in leasehold estate - pre 1996

Answer 15

Privity of estate is between current landlord and tenant. Privity of contract still applies to original parties of the lease.

Question 16

Successors in title in the leasehold estate - post 1996

Answer 16

Tenant automatically released from liability, unless it has been excluded in the assignment.

Question 17

Alienation Covenants

Answer 17

A clause in the lease preventing the assignment or sublet of a property. If breached, landlord can seek a remedy to rectify the breach.

Question 18

Remedies for landlord

Answer 18

• action for debt/ damages
• injunction - stopping tenant from continuing the breach
• specific performance - require tenant to carry out something they would not have done I.e repairs
• forfeiture - allows landlord to terminate the lease and take control of leasehold estate

Question 19

Forfeiture for non-payment of rent

Answer 19

Landlord must:
- make a formal demand for payment, unless there is express exemption of this in lease or the rent is in arrears for six months or more
- ensure there is a forfeiture clause in the lease
If these are satisfied, landlord can either renter the property forcefully or apply to the county court for possession proceedings.

A tenant may be given relief from forfeiture if they can pay the outstanding rent within 5 days of the hearing

Question 20

Forfeiture for any other breach of covenant

Answer 20

There must be a forfeiture clause in the lease and the landlord must consider whether the breach is remediable. If it is remediable. Landlord must serve a notice specifying this and wait 14 days before making an application to court for forfeiture.
A tenant may be given relief from forfeiture if:
- they can show the court that they remedied the breach or
- they can persuade the court the lease can continue even though there has been a breach

Question 21

Damages available to tenant

Answer 21

• Damages
• Injunction
• Specific performance
• Recoup the cost of repairs from future rent - tenant must give notice on the landlord specifying the repairs. Ensure this is carried out as otherwise landlord may be able to claim forfeiture for non- payment.

Question 22

Ending a lease

Answer 22

• Expiration
• Forfeiture
• Surrender
• Merger - apply to purchase the freehold in reversion to merge the freehold and leasehold legal titles.