leases (covenants)

Question 1

what are the 3 things needed for a lease to be created?

Answer 1

1. certainty of term
2. exclusive possession
3. the correct formalities used to create the lease

Question 2

what is a covenant for quiet enjoyment?

Answer 2

covenant on the landlord to not interfere with the tenant’s possession or enjoyment of the property during the term of the lease.

Question 3

what is forfeiture?

Answer 3

the right of the landlord to bring the lease to an early end in the event of a tenant breach

Question 4

what is security of tenure?

Answer 4

right for the tenant to remain in the premises at the end of the lease term and to request the grant of a new lease

Question 5

what are prescribed lease clauses?

Answer 5

a list of set clauses at the front of a lease which help to speed up registration of registrable leases at the land registry

Question 6

what is a leasehold covenant?

Answer 6

promise contained in a lease given by a landlord or a tenant

Question 7

what is the general rule for repair? (who has the covenant to do it)

Answer 7

tenant tends to have to repair by keeping the premises in the condition in which they would be kept by a reasonably minded owner, having regard to:
- character and type of premises at the beginning of the lease. the obligation is neither diminished nor increased by a change in the character of the neighbourhood
- age of premises
- express words in the covenant

Question 8

what is alienation?

Answer 8

the method for a tenant disposing of the whole, or part, of their interest in a leasehold property

Question 9

what are the formalities required to transfer the lease?

Answer 9

LPA 1925 requires a deed to transfer legal essay
land registry TR1 form often used

and registration (if lease registered need to register that assignment has taken place)

Question 10

who does privity of estate exist between?

Answer 10

any current landlord and current tenant of the property and lasts only for the period while the lease is vested in the tenant

Question 11

what is the liability in an old lease when alienation happens? (in terms of privity of contract and privity of estate)

Answer 11

liability of the original landlord and the original tenant continues for full duration of the lease term even if alienation has happened

Question 12

what is the effect of the LTCA 1995?

Answer 12

it effectively abolishes privity of contract for all new leases (abolishing original party liability). therefore, original landlord and original tenant no longer liable for the covenants for the full duration of the lease term if alienation happens.

Question 13

what is an authorised guarantee agreement (AGA)?

Answer 13

the guarantee by the outgoing tenant of the obligation of the incoming assignee. it can be required by the landlord as a condition of giving its consent to an assignment of a new lease.

Question 14

what is an indemnity?

Answer 14

it is a contractual obligation given by one party (assignee) to compensate for loss which is incurred by another party (former tenant) which is caused by the first party (assignee)

Question 15

upon assignment of a new lease - does the LTCA 1995 allow for automatic transition of the benefit and burden to the new owner?

Answer 15

yes it does allow for automatic transition but the exception is that if it is expressed that it is personal then it will not pass to a 3rd party

Question 16

what 3 provisions in the LTCA 1995 apply to all leases (both old and new leases)?

Answer 16

1. s17 tenant default notice
2. s18 liability for variations
3. s19 overriding leases

Question 17

what does tenant default notice mean?

Answer 17

when a landlord wants to pursue a former tenant who remains liable under the terms of the lease for a fixed charge, the landlord must serve notice of the potential claim on such tenants within 6 months of the charge becoming due

Question 18

what is a fixed charge?

Answer 18

arrears of rent, service charge or insurance premiums but not unascertained liabilities or damages which become ascertained only after a court order has been obtained

Question 19

what is liability for variations?

Answer 19

former tenants and guarantors are not liable to pay any additional amounts owing in respect of variations which have been made to the lease subsequent to assignment which they could not have anticipated at the time when the lease was entered into.

Question 20

when can a former tenant request from a landlord an overriding lease?

Answer 20

if a former tenant pays rent or other fixed charges as a result of a tenant default notice

Question 21

what is an overriding lease?

Answer 21

Granted for a term equal to the remaining term of the lease plus 3 days. contains same covenants as the lease in question.

Question 22

if a former tenant is liable for the new tenant in a new lease (via an AGA) - If there is a rent review and increase after the assignment - is the former tenant liable?

Answer 22

yes as the variation was anticipated at the time when the lease was entered into