Leasehold Covenants - 1 Flashcards
Basic understanding of a leasehold covenant
Terminology
Lease = leasehold estate = term of years absolute
Tenancy = lease
Landlord = lessor (someone who grants something)
Tenant = lessee (benefits from the grant)
Grant / creation of a lease
A lease is ‘carved out’ of an owner’s estate
It is an estate in land granted for a set period of time
Once a lease is granted
Landlord owns a freehold reversion
While the tenant owns a lease
E.G.
> Jan (lessor) grants Pip (lessee) a leasehold estate
> freehold reversion - Jan has still got a freehold estate which is subject to the lease –> the estate will revert back to Jan after Pip’s leasehold ends
Assignment of a lease
= the sale / transfer of a lease
E.G.
> if Pip (T1) assigns the rest of her lease to Bob (T2), this would be an assignment of a lease
–> they step into the original tenants shoes
Documentation on an assignment
The transfer document must be a deed when assigning a lease –> stems for s.52 LRA 2002
Exception to s.52 which is s.54 (short lease) can still be a legal lease but doesn’t need a deed
S.54(2) only applies to creation and NOT transfer –> therefore if you were trying to assign it has to be done by deed
The assignment of a freehold reversion
L2 steps into the shoes of L1
The assignment of a freehold reversion = the sale of the property from the owner to someonelse
Grant of a sublease
A sub-lease is an entirely new leasehold estate
It must be for a shorter term than the lease out of which it is granted
There is not relationship between the head landlord (Jan) and the sub-tenant (Ted)
Jan = Landlord
Pip = Tenant 1
Ted = sub-tenant
Once a sub-lease is granted –> you have two entirely different leases
Documentation on grant of a sub-lease
Need two different deeds as they are separate leases
So need a deed for the original lease between L and T
AND need another deed for the original sub-lease between SL and ST
Main types of lease
Fixed term lease
> granted for a pr-fixed period of time
Periodic Tenancy
> Granted for a period of time which
> automatically reoccurs until L or T
> give notice to end the tenancy
Periodic Tenancy : CREATION
>Express
> Implied – may be implied where a person is in occupation with the owner’s consent and pays rent on a periodic basis
What are leasehold covenants?
Leasehold covenants are those terms agreed in a lease that relate to the parties’ obligations to each other in their capacity as Landlord and Tenant
Covenants can be:
> Express.
> Implied –> (common law or statute)
Common express covenants - Tenants
TENANT
> TO PAY THE RENT
> NOT TO ASSIGN OR SUBLET [WITHOUT THE CONSENT OF THE LANDLORD]
—> Absolute covenant (absolutely not allowed)
—> Qualified covenant ( not do anything without consent from landlord)
> PERMITTED USE OF THE PREMISES
Common covenants - Landlord / Tenant
Landlord:
> to allow tenant quiet enjoyment –> Owen v Gadd 1956
> Not to derogate from his/her grant –> Aldin v Latimer Clerk, Muirhead & Co. 1894
Landlord or Tenant:
> To repair
> To insure
