Leaseholds Flashcards
what is a leasehold?
a leasehold is a type of ownership carved out of a freehold estate for a fixed duration
the FH and LH exist concurrently in the same parcel of land
what power does the leaseholder have over the lease?
they can sub-lease the lease, but only for a shorter duration than their original lease
why would might a lease be created?
o Obtain income
o Retain an interest that can be sold
o Enforce positive covenants against a successor in title to the original tenant
can a lease be a legal?
yes, s1(1)(b) LPA 1925 establishes that a term of years absolute, which is essentially a leasehold estate, is one of the two legal estates in land recognized in English law
term of use absolute means it must be for a certain duration of time, it cannot be forever (whereas a freehold is forever)
The lease must meet certain formalities depending on the length of the lease
when the FH owner grants a lease, of they retain a fee simple absolute in possession (i.e. the freehold)?
yes, because even though they are no psychically in possession of the property, possession includes being entitled to the “receipt of rents or profits.” So, even if the property is leased out and occupied by a tenant, the landlord is still considered “in possession” because they receive rent or other income from the property
what is a reversion?
also called a reversionary interest
This is the name of the landlord’s interest when a lease is granted.
The term “reversion” reflects that the landlord retains certain rights and the property will revert to them when the lease ends. This entitles the landlord to:
(a) Receive Rent or Profits:
The tenant pays rent (or provides other benefits like profits) to the landlord as agreed under the lease terms.
(b) Retake Possession:
Once the lease term ends, the tenant no longer has a legal right to occupy the property, and the landlord is entitled to regain full physical possession.
what are the formalities for a lease for more than 3 years to be legal?
A deed (which meets the requirements of s1 LPMPA) is required to create a legal lease
what are the formalities for a lease for 3 years or less to be legal?
if the lease meets the requirements to be a parol lease, there are no requirements:
o The lease must be for three years or less
o The lease must take effect in possession (i.e. the tenant must have an immediate right to possess and enjoy the land)
o The tenant must pay market rent (i.e. the best rent that can be reasonably obtained)
o The landlord must not charge a fine or premium
the lease could even be created orally
what are the requirements for a parol lease?
o The lease must be for three years or less
o The lease must take effect in possession (i.e. the tenant must have an immediate right to possess and enjoy the land)
o The tenant must pay market rent (i.e. the best rent that can be reasonably obtained)
o The landlord must not charge a fine or premium
when will an equitable lease arise?
equity can step in and recognise a lease in equity where either:
o a contract was used to create the lease (rather than a deed); or
o a deed was used but it was invalid
if there is a contract (which includes all the agreed terms) that is signed and in writing, the claimant has clean hands and the remedy of specific performance is available, the courts will recognise the lease in equity (Walsh v Lonsdale Doctrine)
what is not necessary for there to be a lease?
payment of rent, albeit this supports that parties intended to create a formal relationship of landlord and tenant
what are the three requirements of a lease?
o The estate must be for a duration permitted for a leasehold estate
o The grant must give exclusive possession
o The grant must have the correct formalities (i.e. by deed or be a parol lease)
why are the requirements of a lease important?
because if all three elements are present, a lease will exist, even if the agreement is called a ‘licence’
Conversely, if one of those elements is missing, then there will be a licence and not a lease.
what type of right does a lease give the tenant?
a proprietary right in the land that can bind the purchaser of the reversion
what type of right does a license give the licensee?
it only give a personal right, this does not bind the purchaser of a the reversion
what is the position in relation to assignment of a lease and licence?
a lease can be assigned to a new tenant and the lease will continue to exist
a licence cannot be assigned and a new licence is required if the identity of one of the parties changes
how are leaseholders and licence holders protected?
a leaseholder benefits from lots of statutory protections, a licenceholder doesn’t
re: requirements of a lease
explain ‘permitted duration’
- The lease must have a fixed ascertainable period (i.e. a definable beginning and end)
- The lease may be for a fixed term or periodic
- a break clause in a lease does not prevent the lease from being for a fixed period
re: requirements of a lease
what happens if someone tries to create a lease for life?
this creates a lease for a term of 90 years which ends on the death of the tenant (or otherwise provided for in an agreement)
re: requirements of a lease
give an example where the duration of a lease was held to be void
where the lease was ‘for the duration of WW2’. This was not for a fixed ascertainable period and so was void.
re: requirements of a lease
what is a break clause?
a contractual right to bring the lease to a premature end
re: requirements of a lease
what is meant by ‘exclusive possession’?
Exclusive possession is the ability of the tenant to exercise control over the land, this includes being able to exclude all (inc. the landlord) from the land
The tenant need not be in occupation of the land to have exclusive possession.
i.e. does the tenant have general control of the property?
re: requirements of a lease
what effect does a statement that exclusive possession is not given have?
this will not necessarily prevent a lease from being created if the reality of the matter is that they do have exclusive possession
re: requirements of a lease
does the landlord having a key negate exclusive possession?
No. The key question is whether the they have general control.
re: requirements of a lease
is the word ‘let’ or ‘licence’ featuring in the agreement conclusive of the type of agreement?
No. The key question is whether the they have general control.
re: requirements of a lease
what is a service occupancy? what is the effect of this?
when the employer allows the employee to live in the employer’s accommodation for the better performance of their duties e.g. caretakers, farm workers
This will create a licence which terminates at the end of the employment
re: requirements of a lease
will a flat sharing agreement be a licence or lease?
this will depend on the facts. You must look and see whether the agreement(s) contain the three requirements for a lease
e.g. in both instances, the agreement was labelled as a licence. The court found:
various parties do not have exclusive possession = agreements were licences
occupiers were a couple who intended to share the bedsit with one double bed. Intention they would have exclusive possession = agreements were leases
what are the types of lease?
fixed term
periodic
what is a fixed term lease?
a contract that gives the tenant the right to occupy for a certain, fixed period of time. This is usually in return for an undertaking to pay the landlord rent and to fulfil certain other obligations
what is a periodic lease (/tenancy)?
this runs from period to period until it is terminated by either party. It is automatically renewed each time a period expires. Each period relates to the payment of rent i.e. if rent is paid monthly, then it will be a monthly periodic tenancy
when can a legal fixed-term lease arise?
lease for over 3 years > by deed
lease for 3 years or less >
* parol lease - no requirements
* doesn’t meet requirements of parol lease - by deed
can a periodic lease be a legal lease? Explain.
Yes. A lease must be for a fixed ascertainable period (i.e. a definable beginning and end), the period relating to the rent payment is the fixed ascertainable duration. So long as the rent period meets the requirements of a parol lease, it can be legal.
therefore, if someone had a fixed-term lease which had expired, if the tenant was still living there and the landlord was accepting monthly rent, it could be argued a legal periodic tenancy was in existence
if parties intend to create a legal lease by deed and this fails, what may happen?
give an example
either:
* an equitable lease will arise (if the formalities of Walsh v Lonsdale are met); or
* it is possible for a legal periodic tenancy to arise if the lease amounts parol lease
re the latter: if the deed is invalid, but the tenant takes possession immediately and pays monthly rent at market rate with no fine or premium, a legal periodic tenancy will arise
re: periodic tenancies
what is it important to look out for in the SBAQ fact pattern?
there is a difference between the ‘period of occupation’ and ‘fixed ascertainable period’ for the purposes of a periodic lease
(assuming the fact pattern says there is no other agreement), if the fact pattern says they have been in occupation for 5 years and pay monthly rent, this is a periodic lease and will be legal if it meets the other requirements for a parol lease
what are the contractual terms in a lease called?
covenants
what are the main landlord covenants?
o Quiet enjoyment
o Insurance
what are the main tenant’s covenants?
o Rent
o Contribution to insurance
o Repair
o Alterations
o Alienation
what are the types of covenant?
o tenants
o landlord
o implied
what are implied covenants?
These are implied on the landlord in the absence of express obligation:
o Quiet enjoyment
o Obligations in terms of fitness of property
what is alienation?
This means disposal of an existing leasehold estate by the tenant
what was can a lease be disposed of? (i.e. alienation)
o Assignment
o Sub-lease
o Mortgage/charge
o Parting with possession/occupation
what is assignment?
a tenant passes all of their interest under the lease to a new tenant. No new lease is created, it simply changes hands
what is a sub-lease?
a lesser estate is carved out of a superior estate. A new lease is created.
when can a party dispose of a lease?
this will depend on the alienation covenant in the contract
re: alienation
explain the open contract position
the lease does not contain a covenant against alienation so the tenant can deal with the lease as they wish
what are the types of alienation covenant?
o Absolute prohibition
o Qualified covenant
o Fully qualified covenant
re: alienation
explain absolute prohibition
there is a covenant by the tenant not to deal with the lease.
re: alienation
explain qualified covenant
the covenant by the tenant is not to deal with the lease without the landlord’s consent
re: alienation
explain fully qualified covenant
the tenant covenants not to deal the lease without the landlord’s consent, this is not to be unreasonably withheld or delayed
re: alienation
what effect does s19 LTA have on qualified covenants?
S19 LTA 1927 translates a qualified covenant (NB: not absolute prohibition covenants) into a fully qualified covenant so that the landlord cannot unreasonably withhold consent or delay consent
re: alienation
if the tenant wants to exercise the a qualified alienation covenant, what must they do?
make a written application to the landlord
re: alienation
where the landlord receives a written application in regard to a qualified / fully qualified covenant, what are they obliged to do?
o Give consent (unless it is reasonable to refuse)
o Give written notice of their decision including any conditions; and
o Provide written reasons if consent is refused
re: alienation
what does s19 allow in relation to new non-residential leases?
at the point of drafting the lease, the original landlord and original tenant can agree in advance:
o The circumstances where the landlord may withhold consent; and
o Conditions attached to the consent (i.e. the original tenant must provide an AGA before a lease can be assigned)
the circumstances and conditions are not subject to the reasonableness test
new lease = granted (not assigned) after 1 Jan 1996
explain the implied quiet enjoyment covenant
the tenant’s lawful possession of the land will not be substantially interfered with by acts of the landlord
A residential tenant is also protected by the Protection from Eviction Act 1977
o This prevents a landlord from unlawfully depriving the tenant of their occupation
o Any acts that are likely to interfere with the resident’s peace of comfort that are done with the intention of unlawfully depriving the tenant of their occupation are a breach of PEA
explain the Protection from Eviction Act 1977
A residential tenant is also protected by the Protection from Eviction Act 1977
o This prevents a landlord from unlawfully depriving the tenant of their occupation
o Any acts that are likely to interfere with the resident’s peace of comfort that are done with the intention of unlawfully depriving the tenant of their occupation are a breach of PEA
explain the implied covenant of obligation of fitness to the property
In relation to a dwelling house, a landlord is obliged to (s11 LTA 1985):
o Keep in repair the structure and exterior of the house
o Keep in repair and proper working order the installations for the supply of gas, water, electricity and sanitation; and
o Keep in repair and working order the installations for space heating and water heating
The landlord is only liable once there is disrepair and once they have been informed of this
what is an old lease?
created before 1 Jan 1996
what is a new lease?
o created after 1 Jan 1996 (NB: created, not assigned)
what is the liability of the original tenant in relation to an old lease?
If the original tenant (T1) assigns the lease to T2, T1 remains subject to the burden of the covenants in the lease but they do not benefit from them (either by express covenant or implied by s79 LPA). T1’s contractual liability lasts for the duration of the lease.
This is due to privity of contract between the original LL and T1
what is the liability of the assignee to an old lease?
the assignee is liable for all breaches of real positive and negative covenants. The test to determine if it is a real covenant is the P&A Swift Investment case.
this is because privity of estate exists between the LL and assignee.
the covenant must relate to the property and cannot be a purely personal obligation by T1 i.e. to buy the LL a red rose each month
despite privity of contract, what can the landlord do for extra security in relation to an old lease?
it is common for a landlord to insist each assignee covenants directly to them to perform the covenants in the lease, this creates a relationship of privity of contract between the landlord and T2
when does privity of estate exist?
Privity of estate exists when two or more parties hold an interest in the same real property
re: old leases
if T2 fails to comply with an obligation, what options does the landlord have?
If T2 defaults the landlord can either:
o Sue T1 via privity of contract;
o Sue T2 via privity of estate; or
o Both.
re: old leases
if T1 is sued for a breach under an old lease which they didn’t commit, what options do they have?
o Take action at common law against the tenant in possession at the time
o Rely on an express indemnity covenant (if there is one contained in the deed of assignment, which there usually is); or
o Implied indemnity covenant – this is implied by statute into any assignment
re: old leases
when the original LL sells the freehold reversion, what action can the new owner take where there has been a breach of an assigned lease?
they can either sue the original tenant by privity of contract, or the assignee by privity of estate
what is the position of the tenant to a new lease?
- The tenant (inc. the original tenant) are only bound by the covenants of the lease whilst the lease is vested in them
- All covenants pass on assignment unless they are expressed to be personal
- The covenants do not need to touch and concern the land
- The assigning tenant is automatically released from any liability under the lease
- If the assignee breaches a covenant in the lease, the landlord can only pursue the assignee
what is the position of the landlord to a new lease?
- Upon sale of the reversion, the new landlord takes the burden of the landlord covenants and acquires the benefits of the tenant covenants, provided they were not expressed to be personal
- The covenants do not need to touch and concern the land
- The outgoing landlord is not automatically released following an assignment of the reversion, they must satisfy criteria in s6 & 8 LT9CA 1995 to be released from the landlord covenants
what happens if the landlord does not satisfy the s6 & 8 criteria upon sale of reversion of a freehold (new lease)?
the tenant can sue the current or outgoing landlord or both
to which leases do AGAs apply?
new leases only
how can a landlord to a new lease protect themselves?
- the landlord can limit their liability by stating in the lease that their liability ends once they have disposed of the reversion
- A landlord could ask the outgoing tenant to enter into an AGA
why would a landlord seek an AGA?
because the effect of s5 LT9(C)A 1995 on new leases is that the outgoing tenant is released on assignment. If the LL seeks an AGA, this strengthens their recovery position if the new tenant defaults
what is an AGA?
An AGA is an agreement that means the outgoing tenant guarantees the assignee will perform lease covenants. The landlord would then be able to take action against the outgoing tenant.
what type of obligation is an AGA? what does this mean in effect?
A primary one. This means that the landlord does not need to take any action against the assignee, they can go straight for the landlord
when will the AGA cease to have effect?
If the assignee goes onto assign the lease to someone else, the AGA ceases to be of effect
how many AGAs can exist at one time?
Only one former tenant can be liable under an AGA at any one time
if the assignee is declared bankrupt and there is an AGA in place, what can the LL insist on?
The landlord can require the former tenant to enter into a new lease if the assignee is declared bankrupt and the lease is disclaimed by the trustee in bankruptcy
when can a LL seek an AGA?
The landlord can only seek an AGA where:
o The lease contains a covenant against alienation without the landlord’s consent; and
o It is either reasonable to do so or, in the case of a commercial lease, it is a condition of the landlord giving its consent
what action can a former tenant who has suffered loss under an AGA due to the assignee take?
o Recover from the assignee under common law (i.e. Moule v Garrett principle)
o Rely on an express indemnity given by the assignee (NB: there is no implied covenants for new leases)
what leases do s17, 18 and 19 TL(C)A 1995 apply to and what is their purpose?
- S17, 18 and 19 apply to old and new leases
- The aim is to improve the position of a former tenant who remains liable either due to privity of contract in an old lease or the terms of an AGA in a new lease
explain s17 TL(C)A 1995
This relates to the recovery of a fixed charge (i.e. rent)
Before a landlord can pursue a former tenant for the payment of rent they must serve a default notice on the former tenant within 6 months of the fixed charge falling due
o If the landlord fails to do this they cannot recover the fixed charge
o If the former tenant pays in full, they can request an overriding lease from the landlord
The former tenant must have provided an AGA to the landlord
explain s18 TL(C)A 1995
This applies where the assignee agrees to a variation of the terms of the lease which was not contemplated in the original lease
explain s19 TL(C)A 1995
if the former tenant pays the demanded sum in accordance with a s17 notice, they can request an overriding lease.
This is a lease for the same duration as the original lease but less three days, that is on the same terms as the original lease and is granted by the landlord to the former tenant
what governs old leases?
rules of privity of estate and privity of contract
what is the effect of an overriding lease?
The former tenant then becomes the landlord to the assignee, however they are obliged to pay rent to the landlord and must comply with the tenant covenants in the same way as the original lease
what options does a landlord have for non-payment of rent?
o Debt action
o Commercial rent arrears recovery
o Forfeiture
what effect does a debt action have on a lease?
it does not bring the lease to an end
Pursuing this action acknowledges the existence of the lease and has the potential to waive the right for the landlord to forfeit
who can the landlord pursue under a debt action?
o The current tenant
o Former tenant (via privity of contact or an AGA)
In this instance the landlord would need to serve a default notice (as above under section 17)
o Or both
what is the limitation period for a debt action?
S19 Limitation Act 1980 prevents the landlord from bringing a claim after 6 years from the date on which the arrears became due
what is the effect of commercial rent arrears recovery?
it does not bring the lease to an end
It allows the tenant to enter the premises and seize the tenant’s goods in order to sell them
Pursuing this action acknowledges the existence of the lease and has the potential to waive the right for the landlord to forfeit
who can commercial rent arrears recovery be used against?
it is any available against a tenant in possession
is a court order required for commercial rent arrears recovery?
no
what is the procedure for commercial rent arrears recovery?
o Applies to leased commercial property only
o It can only be used to recover normal rent (i.e. not service charges or insurance premiums – even if the lease states that these are reserved as rent)
o The rent must exceed a minimum of 7 days’ rent
o The landlord must give the tenant a minimum of 7 days’ notice of their intention to take control of the goods
o Notice must be given by an enforcement agent
o The goods are bound at the date of the notice
o The tenant may challenge the warning notice in court
o An enforcement agent may only take control of a tenant’s goods
what is another name for forfeiture?
the right to re-enter
who can forfeiture be exercised against?
- This can only be exercised against a tenant in possession (not a former tenant)
give an example of a standard forfeiture clause
o PROVIDED ALWAYS and it is hereby agreed that if the said rent or any part thereof shall be unpaid for 21 days after becoming duly payable (whether or not the same shall have been formally demanded) or if the Tenant shall fail to perform her covenants or obligations hereunder then in any of the said cases it shall be lawful for the Landlord or any person duly authorised by the Landlord in that behalf to re-enter the Premises or any part thereof in the name of the whole and thereupon this demise shall absolutely determine but without prejudice to any right of action of the Landlord in respect of any breach of the Tenant’s covenants herein contained.
what right does forfeiture give the landlord?
- This is the right of the landlord to retake physical possession of the premises thereby prematurely terminating the lease
when can forfeiture be used?
- There must be a forfeiture clause in the lease (this allows the right to forfeit)
explain waiving and forfeiture
A landlord can waive their right to forfeit once it has arisen in respect of that particular breach if they are deemed to have waived it. This can be expressed or implied
explain implied waiver of right to forfeit
this is an an unequivocal act showing recognition of the continued existence of the lease and in full knowledge of the facts giving them the right to forfeit i.e. exercising CRAR, demanding future rent
conduct which shows the LL no longer regards the lease as subsisting will not waiver the tight i.e. commencing possession proceedings would not imply a waiver
how is forfeiture (re: failure to pay rent) be actioned?
- The landlord must make a formal demand for rent due by presenting themselves at the premises on the due date for payment between sunrise and sunset unless the lease expressly exempts the landlord from this requirement
- The landlord may forfeit by either:
o Peacefully re-entering the premises; or
o Suing for and obtaining a possession order in the courts - Remember: s6 CLA 1977 makes it a criminal offence to repossess property using force
- If the property is used wholly or in part for residential purposes then the landlord must obtain a court order
re: forfeiture
what relief is available to the tenant?
The tenant may apply for a relief against forfeiture. The tenant may seek the following relief:
* Possession proceedings - if the landlord sues for possession and the tenant pays all of the arrears of rent and costs before the trial, the court must generally grant relief
* Apply for a court order - the tenant can apply for relief within 6 months of the landlord’s re-entry pursuant to the court order (this is an discretion of the court)
* where the landlord has forfeited without a court order (i.e. a non-res lease by re-entry), the 6 month time limit does not apply and the court can exercise its inherent equitable jurisdiction to grant relief
what is the effect if relief from forfeiture is granted?
the tenant may retake the premises on the terms of the original lease as though there had been no forfeiture
what remedies are available to the landlord where there has been a breach of other covenants?
o Damages
o Specific performance
o Forfeiture
o Self-help remedy
what effect does damages have on a lease?
it does not bring the lease to an end
how are damages measured?
- The normal contractual rules relating to the measure of damages applies, i.e. they will be limited to:
o Such as may fairly and reasonably be considered arising naturally from the breach of contract itself; or
o Such as may reasonably supposed to have been in contemplation of both parties at the time they made the contract, as the probable result of the breach
who can damages be claimed against?
- Damages may be claimed against:
o The tenant in possession
o Former tenant who remains liable (i.e. by privity of contract or AGA); or
o Both
does a claimant seeking damages need to serve a default notice?
no, unless the LL is claiming for damages for disrepair which has reduced the value of their revisionary interest.
If the LL is claiming this, then if the lease has three or more years unexpired, the landlord must first serve on the tenant a s146 LPA 1925 notice
explain the notice element when a LL is seeking damages for disrepair
o This notice must include a statement that states the tenant is entitled to serve a counter notice claiming the benefit of the Leasehold Property (Repairs) Act 1938
o The tenant has 28 days to serve a counter notice
o If served, the landlord cannot take further action without leave of the court
how is a claim for damages for disrepair limited?
- This is limited to the amount by which the reversionary interest has diminished as a consequence of the disrepair
what is the effect of specific performance?
- This does not bring the lease to an end
who can specific performance be used against?
a tenant in possession
what must the landlord do where they are seeking to exercise a forfeiture clause in relation to a breach of a covenant (not inc. rent)?
The landlord must serve a s146 LPA 1925 notice on the tenant which:
o Specifies the breach;
o Requires a timeframe for it to be remedied (if remedy is capable); and
i.e. breach of covenant against alienation is not capable of remedy so a timeframe does not need to be included on the remedy
if the tenant remedies the breach in the timeframe, there can be no forfeit
o Require compensation if desired
what happens if the head lease is forfeited?
If a head lease is forfeited, then any sublease ceases to exist
A subtenant can apply for relief against a headlease, even if the tenant cannot obtain relief
when can a tenant apply for relief from forfeiture?
- A tenant can apply for relief against forfeiture either as part of possession proceedings or in response to peaceably re-entering
when will the court grant relief from forfeiture (re: other covenants)
on terms as it thinks fit but the tenant must have clean hands
what is the self-help remedy?
Jervis v Harris > self-help remedy in relation to breach of tenant’s covenant to repair
The lease must contain provision that the landlord is allowed to:
o Enter and inspect the property
o Give the tenant notice that repair is required and a time period for the tenant to undertake the repairs
o If the tenant does not complete the work the landlord can enter the property and do the work
o The landlord can recover the work as a debt due from the tenant (this avoids provisions of s18 LTA 1927 and the Leasehold Property (Repairs) Act 1938)
what remedies are available to the tenant where the landlord has breached a covenant?
o Specific performance/injunction
o Damages
o Self-help
explains self-help where the landlord has breached the covenant
- A tenant cannot withhold rent for a failure to perform an obligation
- However, if the tenant notifies the landlord of a repair and they fail to do it, if the tenant then carries out the repairs then the tenant may withhold the rent until the cost of the repair has been repaid (this is common law set off)
what may happen if the tenant withholds rent where the landlord has breached a covenant?
- the LL may sue T for the rent
- equity may allow T to have their unliquidated claim set off against the liability for rent. This will only occur where the connection between the two claims is sufficiently direct so that it would be manifestly unjust not to allow set off. The tenant’s claim must, therefore, be one that arises directly from the relationship of landlord and tenant created by the lease. This is equitable set off.
what is determination of a lease?
bringing the lease to an end
how can a lease be brought to an end?
o Effluxion of time
o Notice to quit
o Break clause
o Surrender
o Disclaimer
o Frustration
o Repudiatory breach
o Merger
o Forfeiture
explain effluxion of time
- i.e. a fixed term lease will come to an end when the term comes to an end
explain notice to quit
- In relation to a periodic tenancy, this will continue indefinitely from one period to the next until one party serves a notice to quit
- The general rule is that one full period’s notice is required
what is the exception to the general position re: notice to quit
o A yearly tenancy requires not less than half a year’s notice
o If the premises are wholly or partly let as a dwelling house and the tenant is in occupation, not less than four weeks’ notice must be given
explain a break clause
- If there is such a clause in the lease, then it can be exercised by the tenant or the landlord
- This can be a fixed date or on a rolling basis
- A party must give notice of their intention to exercise the clause
explain surrender
- The tenant and landlord must mutually agree for the tenant’s estate to be yielded up to the landlord
- The lease is then merged into the revisionary estate and extinguished
- An express surrender must be contained in a deed
- This only terminates the lease agreed to be surrendered i.e. it does not terminate the interest of any sub-tenant
explain disclaimer
- This arises upon bankruptcy or liquidation of the tenant
- This trustee in bankruptcy or liquidator can disclaim contracts which give rise a liability to pay money or perform onerous acts
- This releases the tenant but not a sub-tenant
- The sub-tenant may seek an order to vest the disclaimed property in themselves
explain frustration
- Where something unexpected through no fault of either party occurs making performance of the contract impossible
- In theory this is applicable to leases (i.e. if the property is destroyed) but there are no reported cases
explain repudiatory breach
- i.e. if one party were to commit a breach which goes to the root of the contract
- There is limited case law to support this
explain merger
- The tenant purchases the freehold reversion and holds both interests at the same time
- Provided that there is nothing to the alternative, the lease merges into the reversionary title and is then extinguished
