Leasehold

Question 1

Advantages

Answer 1

-any duration (flexibility)
-steady income for landlords while retaining an interest
-more easily able to enforce covenants (repairs, maintenance of common areas)

Question 2

Disadvantages

Answer 2

-lease will eventually expire
-covenants relating to repair, obligations to contribute towards the cost of maintaining the building and restriction on tenants ability to assign or otherwise deal with the property
-landlord can forfeit the lease
-landlord retains obligations in relation to matters such as repairs and insurance

Question 3

Essential characteristics

Answer 3

Interest in land that grants exclusive possession of a property for a fixed period of time.

Exclusive possession is the right to exclude all others, including landlords.

Question 4

Types of leases

Answer 4

Fixed term- granted for a specific period of time

Periodic leases- granted for a period which will then renew from one period to the next, until determined by what is known as a notice to quit

Question 5

Landlords remedies for breach of covenant

Answer 5

Debt action
Forfeiture
Commercial rent arrears recovery procedure
Collecting the rent from a sub-tenant
Pursue any guarantors

Question 6

Pre-contract package

Answer 6

Draft contract
Copy lease
Evidence of title
Any licence permitting assignment to the current and previous tenants
Any insurance policy
Receipts for last payment of rent and service charge on the property

Question 7

Pre-completion searches

Answer 7

Registered- official search of the registers against the freehold

Unregistered- land charges search against the estate owners should be obtained

Question 8

Drafting a lease

Answer 8

Parties, extent of the demised property, tenants covenants, landlords covenants and provisos.

Easements.

Who to insure.

Tenants alterations, user and alienation covenants drafted in a fair way