Property Law 8 - old 'n new Flashcards
Leasehold covenants - when were ‘old leases’ created?
before 1 January 1996 🏕️
Which action do you look at when considering whether a lease is an old or new lease?
It is the date of creation of the lease which is critical, not the date of any subsequent assignment, as to whether the old rules or the new rules apply to the lease.
Who is liable for breaches in old tennancies?
In old leases, the liability of the original landlord and the original tenant continues for the full duration of the lease term. This is the case even after an assignment of either the reversion (landlord’s interest) or the lease (tenant’s interest).
What changed between an old lease and a new lease?
LTCA 1995, s 3 provides for
- the automatic transmission of the benefit and burden of all landlord covenants to the new owner of the reversion, and
- of the benefit and burden of all tenant covenants to the assignee.
What is the exception to the rule for new leases?
The only exception to this rule in LTCA 1995, s 3(6) is for those covenants which are ‘expressed to be personal to any person’.
When might an old tenant be liable for a breach by the new tenant under a new tenancy
If the outgoing tenant has provided an authorised guarantee agreement (‘AGA’) under LTCA 1995, s 16 on assignment, the landlord could sue the FORMER tenant who is guaranteeing the obligations of their IMMEDIATE successor.
What is the remedy for the Landlord if he sues the previous tenant under an AGA?
Damages
If the previous tenant is sued under an AGA, what action may he have against the current tenant?
The former tenant may be able to recoup damages paid out on behalf of a defaulting assignee using an indemnity.
If the previous tenant is sued under an AGA, what action may he have against the current tenant if he doesn’t have an indemnity?
The rule in Moule v Garrett (1872) LR 7 Exch 101.
If one person is compelled to pay damages because of the legal default of another, the former is entitled to recover those damages from the defaulting party.
Can restrictive covenants in New Leases be enforced directly against sub-tenants?
Yes
Can positive covenants in New Leases be enforced directly against sub-tenants?
No
How can a Landlord enforce positive covenants in New Leases against sub-tenants?
- They can enforce against the tenant and so the tenant will have a clause where the sub-tenant covenants to observe and perform the covenants contained in the head lease.
- If the landlord forfeits the head lease, the sublease is also automatically terminated, subject to a claim for relief.
- Landlord will, as a condition of consent to the subletting, insist on any subtenant of the property entering into direct covenants with it to observe and perform the covenants in the lease.
