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Land Law

Land Law. Large Group 10 Leasehold Covenants. What we’ll do today:. terminology reminder typical leasehold covenants enforcement of covenants against successors in title remedies for breach of covenants. Stage 1. landlord/lessor/reversioner. grant of lease. tenant/lessee. Stage 2.

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Land Law

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  1. Land Law Large Group 10 Leasehold Covenants

  2. What we’ll do today: • terminology reminder • typical leasehold covenants • enforcement of covenants against successors in title • remedies for breach of covenants

  3. Stage 1 landlord/lessor/reversioner grant of lease tenant/lessee

  4. Stage 2 superior landlord/lessor/reversioner grant of headlease headtenant/lessee grant of sublease/ underlease Subtenant/Sublessee/Undertenant/Underlessee

  5. Stage 3 superior landlord grant of headlease headtenant assignor HT2 assignee assignment grant of sublease/underlease subtenant assignor ST2 assignee assignment

  6. Covenants/Provisions in the RICS lease 1 • Covenant to pay rent • Covenant to pay business rates • And utility bills • Covenant not to invalidate the insurance policy

  7. Covenants/Provisions in the RICS lease 2 • Controls on assignment and underletting • Controls on the use of the premises • Covenants to repair and decorate • Covenant to remove the shop fittings at the end of the term

  8. Where the property has changed hands… • Will the burden of the tenant’s covenants pass to a new tenant? • Will the benefit of the tenant’s covenants pass to a new landlord? • Or, who is liable and who can sue?

  9. Original tenant’s liability 1.4.1995 2000 2009

  10. Liability under new leases:Tenant’s position 1.4.2000 2003 2010

  11. Liability under new leases:Landlord’s position 2004 2012 1.4.2000

  12. Liability under new leases 2004 2012 1.4.2000 2003 2010

  13. Mitigating provisions for landlords of commercial leases • Circumstances and conditions that must apply on assignment • Authorised guarantee agreements (AGAs) by the outgoing tenant

  14. Authorised Guarantee Agreements AGA 2003 2010

  15. Mitigating provisions for former tenants of old and new leases • Claim back from the defaulting tenant under the assignment contract • Take an overriding lease of the premises • Landlord has to give notice within 6m of the rent becoming due (s17 LT(C)A 1995)

  16. Landlord’s remedies AGA 1.4.2000 2003 2010

  17. Failure to pay rent on 24 June and 29 September 2014 • Sue T3 for debt under the lease • Sue T2 for debt under the AGA (must give s.17 notice) • Seize the tenant’s goods • Forfeit the lease, by peaceable re-entry or court order

  18. Breach of other covenants • Claim damages for breach of covenant from T3 or T2 • Specific performance/injunction? • Right of re-entry in the lease • Forfeit the lease

  19. Analysing problems on enforcement of leasehold covenants • Is it an old lease or a new lease? • Which covenants have been breached? • Does the wronged party have the benefit of those covenants? Give authority. • Who has the burden of those covenants? Give authority • What remedies would be possible/appropriate in these circumstances?

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