Leases Flashcards
What is a lease known as in Section 1 of the LPA 1925?
‘A term of years absolute’
What makes leases ‘proprietorial in nature’?
- Enables transactions - A lease can be transferred to someone else and subleases can be created
- Statutory rights such as Right to Buy and statutory enfranchisement position the lease as a ‘gateway’ to freehold ownership
- Lease enables shared ownership
What makes leases ‘contractual’ in nature?
The lease sets out the contractual relationship between the landlord and tenant
Bruton v London Quadrant Housing Association [2000] is evidence of increasing contractualisation
What formalities must be satisfied in order to create a lease?
- Must be created by deed if it’s for a term of 3+ years
- New lease of more than 7 years must be registered
- All registrable dispositions of registered leasehold estates must be registered
Leases of land that don’t have to be registered are what?
Overriding interests (Sch 1 para 1 & Sch 3 para 1 LRA 2002) meaning most leases granted for term of 7 years or less
What are the characteristics of lease?
- Common Law definition (a term of years absolute)
- HoL decision in Street v Mountford [2985] = Exclusive possession, for a term, at a rent
Why does the lease/licence distinction matter?
- Marks the border between property and contract
- The residential lease attacks a range of statutory protections and imposes obligations upon the landlord
- Incentive for shams
What would a lessee want to know before signing a lease?
- What are they buying?
- How much is it going to cost them?
- What are their obligations under the lease?
- How can they ensure that the freeholder will carry out its obligations?
What is the main principle of reading/constructing a lease?
Words are taken at their literal meaning - If there is ambiguity then = contra preferentum rule
What was the main issue in the case of Arnold v Britton [2015]?
Issue on this appeal was whether the respondent’s interpretation of clause 3(2) in those 25 leases, where the increase is to be every year, is correct
Appellants argument is that the actual costs of maintain ace should be paid, up to the permitted level.
In enforcing covenants in leases, what are the landlord’s express obligations?
- Usually, responsibilities for repair, insurance, maintenance
- In long leases, tenant pays via service charges
- In short leases, the costs are covered by rent
What are the implied obligations of a landlord?
- Covenant for quiet enjoyment
- Covenant against derogation from grant
What tenant obligations exist?
Express: Generally intensive ranging from obligation yo pay rent to restrictions on ability to assign the tenancy or to sublet whole or part
Implied: Warren v Keen 1954, behave in a Tennant like manner
What 3 things help enforce landlord’s obligations?
- No straightforward entitlement to withhold rent
- Possible damages for breach of covenant
- For long leases, possibility of appointment of a manager under CALRA 2002
What remedies are available to the landlord for tenant default?
- Forfeiture of lease
- Distress for unpaid rent
- Action for arrears of rent
- Damages for breach of covenant
- Injunction and specific performance
What is ‘forfeiture of a lease’?
What is its purpose?
A right to determine a lease by a landlord is a right of forfeiture if: when exercised it operated to bring the lease to an end earlier than it would “naturally terminate”, and, it is exercisable int he event of some default by the tenant”
Primarily a lever to enforce compliance with the covenants of the lease
What is a ‘waiver’ in this context?
Where breach is a one-off event, the landlord may waive the breach
Knowledge by landlord of the relevant breach/event + unequivocal acts by LL, which are only consistent with the lease continuing + communication of the recognition that the lease is continuing to the tenant = waiver of right to forfeit
Give 3 restrictions on forfeiture?
- Repossessing residential tenant’s property without a court order is a crime
- Doesn’t apply to commercial property
- there are also legal obstacles to exercising the right of re-entry and forfeiture
What is the process of forfeiture for non-payment of rent?
- Formal demand required
- Long residential leases:
- Landlord must have served a note specifying a date for payment between 30 and 60 days following the notice
What is s.168 CALRA?
What must the s.146 notice do?
Prior to service of s.146 notice the landlord must apply to residential tribunal for a determination that there has been a breach of the terms of the tenancy
- Burden of proof on landlord
- Requirement to specify term and breach
- Mortgagee must be informed
Must:
- Specify the particular breach
- Require tenant to remedy breach - if it’s capable of remedy, and
- Require tenant to pay compensation
What kind of breach is ‘capable of remedy’?
breach is capable of remedy only if landlord can be restored within a reasonable time to the position he would have been in, breaches of positive covenants almost always remediable
e.g. Expert Clothing Services v Hillgate House [1986]
What does a breach of a negative covenant involve?
Doing something you have consented NOT to do
Generally remediable ‘if mischief caused by breach can be removed’
What did the case of Scala House v Forbes [1973] establish?
A breach of covenant not to assign the term is incapable of remedy
What was the outcome of the Savva v Hussein [1997] case?
Landlords claim for forfeiture was disallowed and their appeal denied = mischief caused by tenant’s breaches could be removed. Because breaches were capable of remedy the section 146 notice should’ve required them to be remedied.
What two cases provide precedent for instances regarding irremediability when land is tainted, and what did they establish?
Rugby School v Tannahill [1935] - Running a brothel leaves an irremovable stigma
Van Haarlam v Kasner [1992] - Conviction for offences under the Official Secrets Act
What different kinds of relief against forfeiture are there?
- Equity intervenes to protect tenants from disproportionate consequences of the exercise of the right
- Court takes into account damage caused by breach
- Conduct of tenant may be relevant
- Position of landlord must not have been irrevocably damaged
What are the effects of forfeiture?
- Tenant becomes trespasser
- Subleases are destroyed
- Mortgage destroyed, but a legal mortgage is generally able to claim relief against forfeiture
- Squatters unable to apply for relief
