The nature of lease Flashcards
(42 cards)
What happens in a lease?
Landlord is the legal title holder.
Lessee owns contractual rights to the property. Full ownership of the property reverts back to the landlord once the tenancy ends: this is called reversion.
A lease creates an estate in land… what does this mean?
It means that the tenant has an interest in the land.
Difference between a lease and a license?
A lease is stronger than a license. It offers more protection to the lessee.
A license does not offer security of tenure - this is something that a lease does offer though (means lessee is entitled to occupy the whole duration of the tenancy, and maybe even after).
A license does not give exclusive possession and control over the property (they cannot make a nuisance claim etc) - this is something that a lease can offer though.
Lease can also bind 3rd parties, such as purchasers of the freehold - so that they are also bound by the lease.
What should a lease include?
- The term of the tenancy - fixed, periodic or tenancy at will etc.
- Exclusive possession and the intention to create legal relations
- What the rent will be
When will a lease trigger first registration?
When the lease term is more than 7 years
Does a lease that is 3 years or less need to be registered?
No. Will count as an overriding interest.
Can be orally made or written down.
What is an implied periodic lease?
When tenant has moved in and is paying rent… it will be assumed that there is a tenancy here even though there is no formal lease.
When a lease is more than 7 years, it must be…
registered. Also there must be a deed.
When a lease is 3-7 years, there must be a …
deed. Does not need to be registered.
When is an equitable lease created?
When the legal lease fails (aka after the 3 years tenancy and there is no deed).
But also equitable lease can fail if there is an impied periodic lease … this is a legal lease.
What are the types of covenants that exist between landlord and tenant?
Express agreed covenants.
And
Implied by statute.
Some implied covenants override express covenants.
Is the tenant subject to a repair covenant?
Only if included in express covenants.
Is an alienation covenant (aka the right to sublet and assign etc) an express or implied covenant?
Express.
The landlord cannot withhold consent unreasonably and must respond to such a request by tenant in a timely manner.
If landlord refuses to allow assignation of tenancy etc, do they need to give a reason as to why?
Yes. And this must be in writing. Should state why and this must not be unreasonable - reasonable is landlord not being certain if the new tenant that the current tenant wants to assign to will be able to pay the rent etc.
Unreasonable reasons = using the landlords personal reasons or opinions, discrimination or not like the tenant etc.
When can landlords discriminate and not need to have a reasonable reason for declining an ASSIGNMENT?
Commercial leases entered on or after 1 Jan 1996.
Usually, landlord will also use an AGA to keep original tenant on the hook for the misbehaviours of assignee.
What were things like pre-1996 for assignment and who is liable for the performance of covenants?
Landlord could easily sue original tenant for the non-compliance of the assignee.
Assignee only liable for the covenants that touch and concern the land.
To make assignee also bound to fulfill the covenants, landlord would have asked for a license to assign.
Nowadays (aka post-1996) how are leasehold covenants fulfilled on assignation?
Original tenant no longer liable for the leasehold covenants.
Assignee liable for all the covenants.
Landlord may want protection that these covenants will be respected and will want an AGA usually. Authorised Guarantee Agreement. With original tenant.
What is an ‘old lease’?
Made before 1996
How are leasehold covenants upheld and maintained in sub-lettings?
The same for ‘old leases’ and ‘new leases’.
Only RESTRICTIVE COVENANTS can be enforced against the sub-tenant.
For all other covenants:
(1) L can sue T. T can create an indemnity contract between the subtenant and them.
(2) L can make the subtenant liable by contracting a license to sublet with the subtenant.
What remedies are available to a tenant who’s landlord is an asshole?
Specific performance - making L do the repairs for example
Injunction - to prevent L from breaching a covenant
Damages - can claim for any breaches of covenants, taking into consideration any loss in value of the lease.
Repudiate: T can repudiate the lease, terminate it and claim for damages.
Set off: T can do what L was suppsoed to do in the lease and then set off the costs against the rent. But, this is something the landlord can exclude and prevent T from doing by removing it from the lease.
How can the landlord forfeit the lease upon tenant’s non-payment?
MUST HAVE AN EXPRESS RIGHT TO TERMINATE ON FORFEITURE IN THE LEASE.
For the failure of payment, there is NO NEED FOR NOTICE to be served to tenant.
(1) L must make formal request of payment
(2) Automatic right to entry when tenant is 6 months behind on arrears.
How can the landlord forfeit the lease for the failure to follow any other covenant, other than the payment one?
MUST HAVE AN EXPRESS RIGHT TO TERMINATE ON FORFEITURE IN THE LEASE.
MUST SERVE s146 NOTICE.
Must issue proceedings in the court.
What is a s146 notice?
Served by landlord to a tenant that has breached a covenant that is not about payment of rent.
It states what the breach is.
And if it can be remedied.
Requires T to pay compensation.
However, if lease was for more than 7 years and there is at least 3 months left in the lease, a SPECIAL s146 NOTICE must be served. This one allows T to counter-notice within 28 days. HOWEVER, on long tenancies, only if T accepts that there has been a breach or there is evidential proof that there has been a breach, can a s 146 notice be effective.
Once a s146 notice has been served and the landlord specifies how the issue can be remedied, how long does T have before the landlord can forfeit the lease?
14 days
