Weeks 6+7- Terms of lease Flashcards
In an FRI lease for a whole, who is generally responsible for interior and exterior repairs?
The tenant
In an FRI lease for a part, who is normally responsible for repairs?
- Tenant responsible for interior repairs to his part (the “demise”)
- Landlord responsible for** common areas.** Recovers cost from tenants via service charge.
What type of repairing obligation is imposed in an FRI lease?
Full repairing obligation.
Qualified repairing obligation only likely to be accepted by an institutional lender in exceptional circumstances
clue is in the name “FRI”
What is required under a full repairing obligation?
Positive obligation on tenant to keep the premises in good repair. So if items are not in good repair, tenant must put them into good repair (even if not his fault, though this ofc will depend on the terms of the lease).
Give an example of a common qualified repairing obligation?
“The Tenant must keep the Premises in good repair but is not required to put the Premises in any better state of repair than it was in at the date of this lease as evidenced by the Schedule of Condition”
If an item is in disrepair, can th tenant just choose to replace it with a new one?
Yes - unless the lease states otherwise, the tenant may generally choose whether to repair or replace an item of disrepair.
If premises are damaged beyond repair, who is responsible for remedying this?
The landlord.
The tenant is not responsible here as this is renewali.e. not (generally) falling under repairing obligation
A lease contains a clause that the tenant must “keep the premises in good repair and condition”. What is the effect of this clause?
It is more onerous as things like condensation come under ‘condition’, though they wouldnt fall under ‘repair’.
What should a tenant do when taking out a lease of a newly constructed/rebuilt property?
Ensure that inherent and structural defects are excluded from the tenant’s repairing obligation and service charge contributions.
This is just in case something is defective in the structural work.
Whose responsibility is it insure the property and who pays for it?
Landlord’s responsibility. Cost recovered from tenant(s) under insurance rent.
What is the main reason why institutional landlords want a full repairing obligation?
Clear income stream: The rent they receive is full profit; they dont have to pay any maintenance of the property out of it.
Where does the law stand if the lease is silent about alterations?
The tenant is free to carry out alterations. The only restriction imposed by law is the doctrine of “waste” which means that the tenant cannot carry out alterations which reduce the value of the premises.
Explain the difference between absolute, qualified, and fully-qualified covenants?
- Absolute (“shall” “must”): No alterations permitted
- Qualified: Only permitted w/landlord’s consent
- Fully-qualified: Landlord must act reasonably in refusing/granting consent.
