Leases Flashcards
What is a break clause?
Allows landlord and tenant to terminate on a date without any notice.
What is a periodic tenancy?
Continues indefinitely from one period to another. Notice will usually be as long as the length of one period.
What is a tenancy at will?
Tenant occupies the property on the terms that it may be terminated by either party at any time.
Absolute covenant
Tenant cannot carry out the action. Landlord may allow one off consent but has total discretion on the matter.
Qualified covenant
Action may be taken but only with landlord consent.
Fully qualified covenant
Action may be taken but only with landlord consent but consent may not be unreasonably withheld.
What is the meaning of a covenant to repair
There must be disrepair first - deterioration from previous physical condition.
Property need not be kept in perfect repair - fit for the occupation of a reasonably minded tenant of the class likely to take it
Works of renewal or improvement go beyond repair
Does not require tenant to give back a property wholly different
Beware - to keep also means to put in repair
Is rent still payable if the property is rendered unusable?
Yes, unless there is an express term in the lease to the contrary
What happens if there is no insurance for particular damage?
The tenant will be liable to repair the property under the repairing covenant.
If a lease contains an absolute prohibition on all alterations, what can a tenant do?
A tenant of business may still be able to make “improvements” by serving a notice on the landlord detailing its proposals. The landlord has 3 months to reject and if it does the tenant can apply to the court for authorisation.
What if the lease contains covenants against alterations?
A term is implied that a landlord’s consent to “improvements” cannot reasonably withheld z
What constitutes an improvement?
The works increase the value or usefulness of the property.
When can a tenant claim compensation for improvements?
A tenant which has served a notice to the landlord in accordance with the statutory procedure can claim for compensation of the improvements at the end of the lease term that “add to the letting value of the holding”
Are there any implications for a landlord that unreasonably withholds consent to change in use of the property?
No, although if the landlord gives consent then they cannot charge a fine or increased rent as a condition or giving consent, providing no structural changes are made.
Assignment - qualified covenants
Implied that consent is not to be unreasonably withheld.
Landlord and tenant can agree conditions in which withheld consent would not be deemed unreasonable
S19(1)(A)
If there is a qualified covenant on assignment and the tenant makes a written application for consent, what must a landlord do?
Within reasonable time:
- give consent, except in a case where it is reasonable not to;
- serve a written notice of its decision specifying any conditions or if it is being withheld, the reason for that decision.
What are the guidelines that the court will consider when considering reasonableness and an application to assign?
A landlord is not entitled to refuse consent on grounds which are nothing to do with the landlord and tenant in regard to the subject matter of the lease
Landlord does not need to prove that conclusions were justified, if they were conclusions which might be reached by a reasonable person in the circumstances.
Detriment to to tenant must not be extreme and disproportionate to the benefit gained by landlord
What are the statutory provisions that apply to underletting
If there is a qualified covenant:
- it is deemed subject to the proviso that consent is not to be unreasonably withheld
- tenant can make a written application for consent and landlord must respond in a reasonable time setting out any conditions or reason for declining to consent
If lease is silent as to whether is payable in advance or arrears, when is it deemed payable?
In arrears.
A grant of a commercial lease is exempt supply, subject to the landlord’s option to tax
Types of rent review
Fixed increase
Index- linked - linked to RPI
Tenant receipts - linked to tenant turnover
Open market rent review
Common assumptions that the property is available to let on the open market
Willing landlord and willing tenant
With vacant possession
On the terms of this lease other than as to amount of the annual rent but including the provisions for review of the annual rent
For a term of X years - equal to the unexpired residue or the actual term with a minimum term to cover a lease which is close to expiration
The tenant has fully complied with their obligations in this lease
If the property has been destroyed or damaged, it has been fully restored
What is disregarded?
Tenant’s occupation
Any goodwill attached to the property as a result of any business carried out by the tenant
Any voluntary improvements carried out by tenant
When can a tenant call for the deduction of freehold title?
Where the lease is for a term of more than 7 years.
