Leasehold Transactions Flashcards
When does a lease need to be registered?
Before 13 October 2003: only if the lease is for more than 21 years
After 13 October 2003: only if the lease is for more than 7 years
What does the investigation of title involve for the assignment of a lease?
The documentation relating to the landlord’s freehold title, AND documentation relating to the lease.
If the lease is registered, this includes the Official Copies of the lease plus the original lease.
What is privity of contract?
Exists between parties who have signed the same document.
It allows one party to sue the other for breaches of the contract.
What is privity of estate?
Exists between parties who are related by virtue of being ‘involved’ in the same interest in land.
Allows a party to sue the other for non-observance of covenants which touch and concern the land.
What is a qualified covenant?
A covenant that requires the landlord’s consent.
When can the landlord bring an action against an assignee?
When a licence to assign has been granted.
When will SDLT be paid on assignment of a lease?
Which type of lease does this normal relate to?
When any premium is paid by the assignee to the tenant.
A premium will always be paid on the purchase of a long leasehold residential flat.
Less likely to apply to a commercial lease.
When must an assignment be registered?
- Where the lease is unregistered and has more than 7 years left to run
- Where the lease was previously registered
Why is the LTCA 1995 relevant to assignments?
It distinguishes between old and new leases (before/after Jan 1996).
Under new leases, the original tenant is not liable for the covenants once assignment has happened.
S.16 also allows a landlord of a new commercial lease to enter into an AGA with the original tenant and assignee.
Why is the LTA 1927 relevant to assignments?
S.19(1)(a) - qualified covenants are upgraded to fully qualified covenants (landlord cannot unreasonably withhold consent).
Reasonabless test established in International Drilling Fluids.
Applies to all leases for any form of alienation (including subletting).
S.19(1A) - a landlord of a new commercial lease can agree with the tenant circumstances in which consent to assignment can be withheld. Can also specify conditions to be met.
What is the relationship between landlord and sub tenant when a licence to sublet has been given?
Privity of contract
How long can the sublease be?
Must always be less than that of the superior lease, otherwise it will be an assignment (Milmo v Carreras)
What is a reversionary lease?
A lease that is granted now but does not start until a future date.
What is the reversionary interest?
The interest of the landlord
I.e the right to receive the rent under the existing leases, and to have the property returned to them on the expiry of those leases
How can a lease be varied?
By entering into a deed of variation.
However if the variation extends the term, the effect will generally be an implied surrender of the old lease and the grant of a new one.
