Leases: covenants in leases MCQs Flashcards
10 years ago, a landlord granted a tenant a 15 year legal lease. The lease does not contain a covenant in respect of alterations.
The tenant would like to change the internal layout of the premises.
Which of the following options best explains if the tenant can undertake these alterations?
The tenant must obtain the landlord’s consent to the alterations, which cannot be unreasonably withheld
The tenant is not permitted to make the alteration
The tenant is permitted to make the alterations providing they do not devalue the premises
The tenant must obtain the landlord’s consent to the alterations
The tenant can undertake the alterations if it considers they are ‘improvements’
The tenant is permitted to make the alterations providing they do not devalue the premises
This is correct. Unless the lease stipulates otherwise, which it does not on the facts, the tenant is free to carry out any alterations to the premises. This is only subject to the legal doctrine of waste, which prevents alterations which would devalue the premises.
A landlord and tenant enter into a legal lease of 2 years. The lease contains the following covenant:
“The Tenant must not to alter the premises”.
The tenant would like to make some internal non-structural alterations.
Which of the following options best explains whether the landlord will have to consent to these works and the statutory duty (if any) it is under?
The landlord can refuse consent but if it does consent it cannot demand payment for it unless the change involves a change to the structure
The landlord cannot unreasonably withhold its consent if the tenant considers the change is an ‘improvement’
The landlord must respond to the request with written reasons within a reasonable time
The landlord can refuse consent or impose any condition on any consent in the circumstances
The landlord cannot unreasonably withhold or delay its consent
The landlord can refuse consent or impose any condition on any consent in the circumstances
This is correct. The covenant is an absolute covenant against alterations. This means the landlord has total discretion whether to consent to the works or not. Statute (LTA 1927, s 19(2) specifically) does not apply to this covenant.
You act for the tenant of a lease. The lease contains a covenant that the tenant will ‘keep the premises in a good state of repair and condition’.
Your client asks your to explain their repair obligation in respect of their premises. What is your advice?
The premises must be kept in the condition required by the landlord
The premises must be maintained in the condition they are at the start of the lease
The premises must be kept in the condition in which they would be kept by a reasonably minded owner
The premises must be renewed if required
The premises must be put into repair if they are not already and then kept in the condition in which they would be kept by a reasonably minded owner
The premises must be put into repair if they are not already and then kept in the condition in which they would be kept by a reasonably minded owner
This is correct. A covenant to ‘keep’ premises in repair can be very onerous if the premises are not in a good state of repair at the start of the lease, as a covenant to keep the premises in repair also entails an obligation to put them in repair first. Once in repair the Court of Appeal in Proudfoot v Hart (1890) made clear that the premises should be kept in the condition in which they would be kept by a reasonably minded owner, having regard to the character, type and age of the premises.
Six years ago, a landlord granted a 15 year legal lease to a tenant. In the lease, the landlord covenanted to paint the exterior of the property every 5 years. The landlord failed to paint the exterior last year. Last week, the landlord sold the reversion to a new owner.
Which of the following statements best explains the landlord’s liability regarding the breach of the covenant?
The landlord is liable for the breach of covenant because the breach occurred prior to the sale of the reversion.
The landlord is not liable for the breach of covenant if the lease contains a clause releasing the landlord from liability upon sale of the reversion.
The landlord is not liable for the breach of covenant because it was automatically released from liability upon sale of the reversion.
The landlord is not liable for the breach of covenant because the burden of the covenant passed to the new owner.
The landlord is liable for the breach of covenant because it remains liable for the landlord’s covenants for the entire term of the lease.
The landlord is liable for the breach of covenant because the breach occurred prior to the sale of the reversion.
This is a new lease and as per s 24(1) Landlord and Tenant (Covenants) Act 1995, a landlord is not released from liability for a breach of covenant occurring before the sale of the reversion. Even if the landlord had been released from liability in accordance with s 6 Landlord and Tenant (Covenants) Act 1995, s/he would not be released from liability in this case.
A lease contains a covenant in which the tenant covenants ‘not to assign the whole of the premises without the landlord’s consent’.
Two weeks ago he tenant made a written request to the landlord to assign the whole of the premises to a company. The company runs a business which competes with the business run by the landlord in adjoining premises.
Last week, the landlord called the tenant to refuse the application.
Which of the following options best explains if the landlord has breached any implied statutory duty to the tenant?
The landlord is under a duty to respond in a reasonable time, which it has not done in the circumstances.
The landlord is under a duty to act reasonably, which it has done in the circumstances.
The landlord is under no statutory duty, it has not breached any implied duty in the circumstances.
The landlord is under a duty to act reasonably, which it has not done in the circumstances.
The landlord is under a duty to give written consent / refusal, which it has not done in the circumstances.
The landlord is under a duty to give written consent / refusal, which it has not done in the circumstances.
This is correct. On the facts, the landlord is in breach of this statutory duty. Although it has responded within a reasonable time (within 28 days) and its refusal is arguably reasonable, it has not given written reasons.
The covenant is qualified. LTA 1927, s 19(1)(a) applies to this covenant, imposing an obligation on the landlord to act reasonably and not unreasonably withhold or delay its consent. The landlord has refused the request to assign on the basis that the assignee, the company, would compete with the Landlord’s business. This has been held to be a reasonable reason to refuse consent.
LTA 1988, s 1 also applies to this covenant (and generally all fully qualified covenants). It provides the landlord must give written consent within a reasonable time (unless it is reasonable to refuse) and written reasons must be provided.
A landlord grants a 30 year legal lease to a law firm in 1993. The law firm legally assigns the lease to a bank in 1996. The bank legally assigns the lease to a design company in 2001. The design company has failed to pay the rent for the past 6 months. Both the law firm and the design company are experiencing financial difficulties.
Which of the following statements best explains bank’s liability regarding the unpaid rent?
The bank may be pursued by the landlord for the unpaid rent as there is privity of estate between them.
The bank may not be pursued by the landlord for the unpaid rent as the design company is the only party liable to pay the rent.
The bank may be pursued by the landlord for the unpaid rent if there is a direct covenant between them.
The bank may not be pursued by the landlord for the unpaid rent as it has been automatically released from liability.
The bank may be pursued by the landlord for the unpaid rent as there is privity of contract between them.
The bank may be pursued by the landlord for the unpaid rent if there is a direct covenant between them.
As the bank is an intermediate tenant, there is no privity of estate between the landlord and the bank as the bank is no longer the tenant. There is no privity of contract between the landlord and the bank unless they entered into a direct covenant, pursuant to which the landlord could sue the bank for a breach of covenant by the bank’s successor in title.
This is an old lease on the facts, so a direct covenant is in the only way in which the intermediate tenant could be liabile. If there is no direct covenant, the bank will not be liable.
A landlord granted a 20 year legal lease to a tenant 6 years ago. The landlord covenanted in the lease to keep the exterior of the property in good and substantial repair. The tenant legally assigned the lease to an assignee 4 years ago. The landlord sold the reversion to a new owner 2 years ago.
The roof of the property now needs urgent repairs but the new owner is refusing to carry out the repairs as it is experiencing financial difficulties.
Which of the following statements best explains who has the benefit and who has the burden of the landlord’s covenants?
The tenant and the assignee have the benefit of the covenants; the landlord and the new owner have the burden of the covenants.
The assignee only has the benefit of the covenants; the landlord and new owner have the burden of the covenants.
The assignee only has the benefit of the covenants; the new owner only has the burden of the covenants.
The assignee only has the benefit of the covenants; the landlord only has the burden of the covenants.
The tenant and the assignee have the benefit of the covenants; the new owner only has the burden of the covenants.
The assignee only has the benefit of the covenants; the landlord and new owner have the burden of the covenants.
The benefit of the covenants passes to the assignee under s 3 Landlord and Tenant (Covenants) Act 1995 and the tenant ceases to be entitled to the benefit under s 5(2)(b) Landlord and Tenant (Covenants) Act 1995.
The burden of the landlord’s covenants passes to the new owner under s 3 Landlord and Tenant (Covenants) Act 1995. The burden also remains with the landlord until it applies to be released from the burden of the landlord’s covenants as per s 6(2)(a) Landlord and Tenant (Covenants) Act 1995.
A landlord was the registered freehold owner of a shop. 7 years ago, the landlord granted a legal lease of the shop to a clothes retailer for 20 years. The clothes retailer covenanted to redecorate the property every year and not to assign the lease without the landlord’s consent. Four years ago the landlord sold the freehold of the shop to an investment company. Two years ago, the clothes retailer assigned the lease to a shoe shop without the investment company’s consent and without entering into an authorised guarantee agreement. Last year the shoe shop did not redecorate the shop as required under the terms of the lease.
Which statement best explains whether the investment company can sue the clothes retailer, the original tenant, for the breach of covenant by the shoes shop?
The investment company cannot sue the clothes retailer because it did not provide an authorised guarantee agreement.
The investment company can sue the clothes retailer because the clothes retailer is liable under original tenant liability
The investment company cannot sue the clothes retailer because it does not have the benefit of the redecoration covenant.
The investment company can sue the clothes retailer because it assigned the lease to the shoe shop without the investment company’s consent.
The investment company cannot sue the clothes retailer because the breach does not involve a fixed charge.
The investment company can sue the clothes retailer because it assigned the lease to the shoe shop without the investment company’s consent.
This is correct. There was an unauthorised assignment two years ago and the clothes shop would not have been automatically released from liability under s 5 LTCA 1995 (see s 11 LTCA 1995). The investment company can therefore still sue the clothes retailer for the shoe shop’s breach even though the clothes retailer did not provide an authorised guarantee agreement.
The other answers are incorrect because the clothes retailer is still liable for the shoe shop’s breach even though it did not provide an authorised guarantee agreement (see above) and the breach does not need to involve a fixed charge for the clothes retailer to be liable (see s 5 LTCA 1995 and s 11 LTCA 1995). It is incorrect to argue the investment company does not have the benefit of the redecoration covenant, because the benefit will have passed to it under s 3 LTCA 1995 as the covenant is not expressed to be personal. Also, original tenant liablity only applies to old leases and this is a new lease on the facts.
10 years ago, A granted B a 15 year legal lease. The lease does not contain a covenant in respect of alterations.
B would like to change the internal layout of the premises.
Which of the following options best explains if the tenant can undertake these alterations?
The tenant must obtain the landlord’s consent to the alterations
The tenant can undertake the alterations if it considers they are ‘improvements’
The tenant is not permitted to make the alterations
The tenant must obtain the landlord’s consent to the alterations, which cannot be unreasonably withheld
The tenant is permitted to make the alterations providing they do not devalue the premises
The tenant is permitted to make the alterations providing they do not devalue the premises
This is correct. Unless the lease stipulates otherwise, which it does not on the facts, the tenant is free to carry out any alterations to the premises. This is only subject to the legal doctrine of waste, which prevents alterations which would devalue the premises
