Questions/Areas of difficulty

Question 1

What is required to enforce a leasehold covenant against a new tenant in a pre-1996 lease (old lease)?

Answer 1

The original tenant must have legally assigned the lease, the covenant must touch and concern the land and there must be privity of estate (which there is for an existing landlord and assignee)

This means a new owner can enforce a covenant against an assignee under an old lease as there is privity of estate and the covenant touches and concerns the land

Question 2

What is the main thing to check when considering if the burden of a covenant has passed in equity?

Answer 2

Whether the covenant has been registered at the land registry

If a covenant is registered (notice), the burden has passed

Question 3

What is required for an equitable mortgage to be binding against a third party purchaser?

Answer 3

The equitable mortgage must be registered by notice against the property

Question 4

What happens if an equitable mortgage (defective legal mortgage or equitable mortgage) is not registered by notice?

Answer 4

It is not binding on third party purchaser

Question 5

When does an implied periodic tenancy arise?

Answer 5

Where the tenant moves in and starts paying rent on a periodic basis. It requires no formalities or registration and will be automatically binding on a third-party purchaser in both registered and unregistered land

Question 6

What events trigger first registration?

Answer 6

1. Transfer of freehold estate by sale, gift or court order
2. Grant of a lease for a term of more than 7 years
3. First legal mortgage of a freehold

Question 7

What happens if there is a first legal mortgage granted over unregistered land?

Answer 7

This will trigger first registration. The land must be registered and the mortgage must be registered on the land’s Charges Register

Question 8

What happens to benefits / burden of covenants for new leases for the landlord?

Answer 8

The new landlord takes on a benefit and burden of the covenants. However, the original landlord is not automatically released from liability; they must to the tenant to be released from the covenants before assignment or within 4 weeks of it

Question 9

Is a positive covenant binding on a successor in title?

Answer 9

No, it is not binding and it is not registrable

A restriction can be entered on proprietorship register to indicate that there is a positive covenant - which would signal the requirement to enter into an indemnity covenant

Question 10

What is required for s62 LPA 1925 to apply for easements?

Answer 10

There must be a deed

Question 11

Why is the contractual date of redemption of a mortgage early on in the mortgage term?

Answer 11

1. The equitable right to redeem is only triggered after the contractual date of redemption has passed (cannot have contractual date of redemption late in mortgage)
2. Only once the contractual date of redemption has passed does the power of sale arise, so the lender wants that early on in case the borrower defaults

Question 12

When is the contractual date of redemption usually?

Answer 12

3 months into the mortgage term

Question 13

What is the difference between conditions imposed on assignment and conditions imposed for subletting?

Answer 13

A landlord can impose any condition they like for assignment (s19(1)(A)) but conditions to subletting in a lease must be reasonable

Question 14

What must an easement benefit?

Answer 14

It must benefit the dominant land in and of itself; not the individual

Question 15

What can a tenant claim if the landlord is in breach of their obligations under a lease?

Answer 15

A lease is a contract, meaning if a landlord has failed to comply with their obligations under a lease and a condition has been breached, a tenant can claim repudiatory breach, terminate the contract and claim damages

Question 16

Is a negative easement recognised as valid?

Answer 16

NO - a negative easement which prevents the servient tenement owner from doing something, is not a valid easement.

Question 17

When does the power of sale on a mortgage arise?

Answer 17

It arises as soon as the mortgage money becomes due - when the contractual date of redemption has passed

Question 18

When does the power of sale for a mortgage become exercisable?

Answer 18

• the borrower has failed to repay capital for 3 months after notice
• at least two months of interest instalments have failed to be paid
• the borrower has breached some other term of the mortgage deed

Question 19

If an item (chattel or possession) is found on land, if the original owner cannot be found, who owns the item?

Answer 19

• the landowner will have title to the item if they have an intention to exercise control over the land in which the item was found
• otherwise, the person who finds the item has ownership

Question 20

Can separate agreements to a lease be enforced against assignees after assignment?

Answer 20

No separate agreements to a lease form separate contracts. They are not covenants within the lease so the rules on passing the benefit and burden of a leasehold covenant do not apply.

It is not possible to assign the burden of a covenant

Question 21

What is a duty of the lender when exercising a power of sale?

Answer 21

It has a duty to take reasonable care to obtain a proper market price for the property.

If it fails to do so, the mortgagor can make a claim for equitable compensation for undervaluing the property