Structure and Content of a Lease Flashcards
Where L has imposed an absolute covenant against all types of alterations, what options are available for T of business premises?
S 3 LTA 1927 - enables tenants of business premises to carry out improvements, even where the lease contains an absolute prohibition.
T serves notice on L detailing proposals.
L has 3 months to object. If L does so, T can apply to the court to authorise the improvements if they:
- add to the letting value
- are reasonable and suitable to the property’s character
- don’t diminish the value of any other property belonging to L
Other options available to L instead of objecting or consenting to proposed works by T of business premises
L can offer to carry out works himself for a reasonable increase in rent.
T is not obligated to accept this and can withdraw his notice. If so, L has no right to carry out the works and increase rent.
However, if T rejects L’s offer, the court won’t give T the authority to do the works.
What is the effect of s 19(2) LTA1927 on “improvements”
Implies into a qualified covenant against making improvements that the L can’t unreasonably withhold consent (effectively turning it into a fully qualified covenant).
What are “improvements”
Works that increase the value or usefulness of the property to the T, disregarding the effect on the L’s value of reversionary interest.
How do alteration covenants compare to user and planning covenants?
Alteration covenants have a statutory implication that the L’s consent mustn’t be unreasonably withheld. This doesn’t apply to user covenants.
Additionally, the L can’t charge a fine or increased rent as a condition of giving consent to user covenants, but they can for alteration covenants.
Assignment - s 19(1)(a) LTA 1927
Converts qualified covenants into a fully qualified one, ie. that L’s consent mustn’t be unreasonably withheld.
Assignment - s 19(1A) LTA 1927
L and T pre-agree to conditions and circumstances that are deemed reasonable.
Conditions:
- assignor agrees to give AGA to the assignee
- assignee agrees to provide guarantors
Circumstances:
- assignor is up to date with rent
- assignor is of sufficient financial strength
Assignment - s 1 LTA 1988
Where T makes a written application for consent, L must within a reasonable time:
Give consent (unless reasonable not to)
Serve written notice on T of its decision specifying:
- if consent is subject to conditions, those conditions
- if consent is withheld, those reasons why
When is consent deemed to be unreasonably withheld by the L?
Where L refuses consent:
- in an attempt to obtain an advantage for himself
- due to minor breaches of repairing covenant
- and premises have been on the market for 18 months, the rent was significant, and the slight harm to the L would be outweighed by prejudice to the T.
What statutory provisions of the LTA 1927 and 1988 apply to underletting?
S 19(1)(a) 1927 Act
S 1 1988 Act
