F106 LAW Leasehold Covenants

							F106LAW Leasehold Covenants

A Leasehold covenant are a legal obligation of a contractural nature contained in a lease.

they are interpreted as a presumed intention of the parties at commencement of the contract

they can be created as an express covenant, specifically mentioned in the lease or

Implied by common law or statute

and may be real (touch and concerns land) or

Personal (collateral to the property demised)

they will be postive (obligation to do something) or

Negative (complied woth by doing nothing at all)

Absolute (not subject to any qualification) landlord can give permission, upon payment if
required, can also be waived by the landlord

Restrictive and qualified (with the landlords consent (which may not be unreasonably
withheld))

The usual implied covenants are owed by either the landlord or tenants depending on the
relationship.

LANDLORD

Quiet possession/enjoyment

Owen v. Gadd (1956) protection against the lawful or unlawful interference of property.
scaffolding erected to obstruct tenants entrance.

Mira v. Aylmer Square (1990) damages for loss of rental income--interference from work
being carried out by landlord

Non derogation from grant (landlord may not do anything that will frustrate the purpose for
which the tenancy was granted)

Aldin v. Latimar Clark (1894) preventing premises from being used for the purpose for which
they were let in this case it was preventing the free passage of air to a wood yard

Chartered Trust v.Davies (1994) a landlord can derogate from grant by not taking action
against another tenant who is causing a nuisance, the premises had become less fit for
purpose from when they were let by the actions of the pawnbrokers
in contrast

Petra investments v. Jeffrey Rogers plc (2000) was not considered derogation from grant,
sales had been diappointing further declined by the arrival of the record store. commercial
decisions that didnt turn out as successfully as hoped are not considered derogation from
grant

TENANT

to pay rent

to pay rates and taxes (unless expressly apportioned in some other way)

to insure

to permit the lessor to enter and view; needs to be expressly entered as there is no common
right to do so.

implied obligation to maintnance and repair

the premises are used in a tenant like and proper manner

not commit waste (voluntarily (damaging or improving)or permissivly through neglect) all
tenants are liable for voluntary waste but weekly tenants not for permissive waste

obligation to use in a tenant like manner lord denning in Warren v. Keen (1954) 'the tenant
must take proper care of the place and in addition he must not damage the house wilfully or
neglectfully.

REMEDY AVAILABLE TO LANDLORD OR TENANT

Available to both

Damages

Specific performance (court order to carry out the obligation)

Injuction (to stop the breach from being carried out)

Available to landlord

Entry to do repairs (and reclaim cost)

forfieture (termination on tenant default)

Distress

Available to tenant
set-off (where a land lord should have completed a task, rent may be witheld until the job is
completed)

Appointment of receiver or manager

Subletting where the original tenant becomes a landlord to a new tenant by virtue of a chain

      new lease must be shorter than the existing

Assignment the tenant transfers his lease to another party

      terms and conditions remain as is

Covenant not to assign or sublet (restraining alienation)

can be expressly written either absolute or qualified (care taken on the wording)

If Qualified the statute applies

s.144 LPA 1925 landlord can only charge if lease provides for this

s.19(1)a Landlord and tenant act 1927 consent not to be unreasonably withheld

s.19(1A) LTA 1927 L&T can enter into an agreement specifying in advance circumstances
where consent could be withheld or conditions imposed. only applies to assignments and non
residential leases

s.1(3) LTA 1988 duty to do the following within a reasonable time no statute refer to case
law 3 months was considered too long

      give consent- unless reasonable no to do so
      serve written notice of the decision inc. conditions imposed or reasons for refusal

REASONABLE GROUNDS FOR REFUSAL

Balcombe J International Drilling Fluids v. Louisville Investments (Uxbridge) Ltd (1986)

      Protection from undesireable occupiers
      Refusal must relate to L&T relationship and subject matter of lease (not personal)
      Would a reasonable man given refusal
      What is the proposed purpose of the lease
      consequenses to T for refusal
      all the circumstances of the case

Whiteminster Estates Ltd v. Hodges Menswear (1974) reasonable to refuse assignment to one
of his trade competitors

Re Olympia & York Canary Wharf Ltd (1994) on future intentions assign bact to original
tenants to effect a break clause in the lease.
Remedy for tenant

go ahead with assignment using unreasonable withholding of consent as a defence

apply to court for a declaration to that a affect

pursue a claim for damages

LEASEHOLD COVENANTS:REPAIRS

CHECKLIST (to be used to distinguish between improvement and repair)

               in there covenant (express, implied, statute) given by landlord or tenant
               What does it cover (scope of wording)
               what work is needed- repair or renewal- is it parts that need replacement of
                renewal -FACT & DEGREE in each case.
                    o Tests Ravenseft v. Davstone the principle derived from this case is that
                        'repair is a matter of fact,degree and reasonablness in the particular
                        circumstances of each case. replacement of wall cladding which was
                        previously installed without expansion joints(standard practice at the
                        time) was wholly the same thing
                    o McDougall v. Easington Discritc council major structural work was
                        not repairs(houses handed over were substainially different) not liable
                        for the redecoration costs
                    o Quick v. Taff Ely there must be disrepair for repair to do remedy
                        design fault when doing a repair. landlord not liable to damage caused
                        by condensation to tenants furniture

               where landlord is liable has notice been given
               what standard of repair must be met --conditions length and type of lease--
                proudfoot v. hart that a tenant is liable to do such repairs as would be
                sufficient to satisffy a reasonably minded tenant of the class likely to take the
                house (short term). calthorpe v. mcOscar conditions which prevailed when
                the tennancy was first granted (long term)

Repair is to make good damage, renewal of subsidary parts, to restore to a good condition

TERMINATION AT COMMON LAW

a tenant has a Right to tenure; a right to renew lease and security of tenure

Expiry of term (fixed term only, periodic require notice to quit) many types of tenancy are
protected by statute i.e business tennancies are protected by the LTA 1954 part II

Break clause (tenants normally ) right to terminate the lease may contain an option and must
be served as per the terms of the lease orchard v. reuters

Disclaimer: the trustee in a bankruptcy case may terminate (disclaim) the onerous lease
which ends the tenants liability
merger: a sub tenant acquires the lease in which the subtenancy was granted

frustration(Krell in theory, unlikely in practice): as with any contract something happens
outside the control of either party

repudiation where a landlord or tenant clearly shows that he has no intention of being bound
by it

Forfeiture-landlords remedy for repossession in the event of tenant default