Leasehold covenants Flashcards
Positive covenant
One that requires a person to carry out work or spend money
Negative covenant
One which places restrictions on what a person may do.
Enforceability of covenants in ‘old’ leases - Which this applies to
Leases made before 1st Jan 1996
Enforceability of covenants in ‘old’ leases - Liability of the original parties to the lease
Privity of contract which lasts for the duration of the lease. Means original tenant and landlord will remain liable throughout.
Enforceability of covenants in ‘old’ leases - Liability of successors to the original parties - Spencer’s case
Only applies to tenants. Only applies to covenants which touch and concern the land. Privity of estate. All tenants will have the benefit of covenants and the burden. Although the original parties to the lease will, in the case of an old tenancy, remain liable throughout the term, their successors in title are only liable for breaches committed whilst the lease or reversion is vested in them. They can sue the landlord.
Enforceability of covenants in ‘old’ leases - Liability of successors to the original parties - Spencer’s case - Touches and concerns
The covenant affects the nature, quality, mode of user or value of the land.
- T’s covenant to pay rent
- T’s covenant to only use the demised premises as a public house
- T’s covenant to repair
Enforceability of covenants in ‘old’ leases - Liability of successors to the original parties - S. 142 and S. 142
Applies only to landlords. Transfer the benefit of the right to sue old tenant or new tenant. They can also be sued by old and new tenant.
Enforceability of covenant’s in ‘new’ leases - Liability of the original parties
Privity of contract.
Enforceability of covenant’s in ‘new’ leases - Liability of the original parties following assignment and liability of their successors - Tenants
Where the lease is assigned the old tenant is released from obligations. Unless the landlord makes them sign an AGA. This will make then guarantee the liability of their immediate successor.
Enforceability of covenant’s in ‘new’ leases - Liability of the original parties following assignment and liability of their successors - Landlords
No automatic release for the old landlord, they remain liable. They will have to apply for one.
Remedies for tenant’s breach of covenant to pay rent - Action for debt
The landlord may sue the tenant for debt. Has to be within 6 years from the date on which the arrears became due.
Remedies for tenant’s breach of covenant to pay rent - Commercial rent arrears recovery
Only for commercial leases. Landlord will serve notice on tenant and then go to property or bailiffs will and obtain and sell goods worth the same amount as rent arrears
Remedies for tenant’s breach of covenant to pay rent - Forfeiture
Means the lease will be brought to a premature end. Right to forfeit must be expressly reserved by the lease. Landlord must not waive it. They can either forfeit by peaceful re-entry or by suing for and obtaining a possession order
Remedies for any other breaches by the tenant - Damages
Damages are limited to:
- such as may fairly and reasonably be considered either arising naturally, ie according to the usual course of things, from such breach of contract itself; or
- such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it.
Remedies for any other breaches by the tenant - Specific performance
Where the court orders the other party to perform their obligations. Will only be granted where damages are not considered to be adequate.
