Academic law > Land - leases > Flashcards

Land - leases Flashcards

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1
Q

Two key characteristics of leasehold estate?

A
  • Of a certain or fixed duration
  • Carved out of a freehold estate
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2
Q

Relationship between the freehold estate and the leasehold estate on a piece of land

A

They exist concurrently in the same parcel of land

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3
Q

Meaning of ‘possession’ under LPA extends to what?

A

Being in receipt of rent or profits

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4
Q

What is ‘the reversion’?

A

Retained rights of the landlord

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5
Q

Reversion entitles the landlord to? (2)

A
  • receive the payment of rent (or profits); and
  • retake physical possession once lease ends
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6
Q

Do leases require formalities to be legal? (2)

A
  • If for more than three years, yes
  • if for three years or less, possibly not
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7
Q

Formalities

Requirements to create a legal lease of more than three years?

A

Must be created by deed

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8
Q

Formalities

Requirements to create a legal lease of three years or less?

A

Can be created by deed, but doesn’t need to be, if it falls within the parol lease exception.

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9
Q

Can a parol lease be created orally?

A

Yes

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10
Q

Criteria for a parol lease

A

a) must be for three years or less
b) lease must take effect in possession
c) tenant must pay market rent
d) landlord must not charge a fine or a premium

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11
Q

Parol leases

Does the parol lease exception apply to periodic leases? Requirements?

A

Yes, where the period of the lease is for three years or less

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12
Q

Parol leases

Meaning of ‘take effect in possession’?

A

Tenant must have the immediate right to possess and enjoy the land

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13
Q

Formalities

Circumstances in which equity may intervene to find a lease

A
  1. where there is a contract (made deliberately, or arising out of an incorrectly executed deed);
  2. the contract complies with s 2 LP(MP)A
  3. clean hands
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14
Q

Three essential requirements for a lease

A
  1. Be for a duration permitted for a leasehold estate
  2. Grant must give exclusive possession
  3. Grant must have the correct formalities
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15
Q

Does something need to be called a lease to be one?

A

No - courts considers the substance, not just the form

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16
Q

Does a lease bind a purchaser of the freehold estate?
Can a lease be assigned to a new tenant?

A
  1. Yes
  2. Yes
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17
Q

Does a license bind a purchaser of the freehold estate?
Can a license be assigned?
Statutory protection of licensees?

A
  1. No
  2. No
  3. No
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18
Q

What is the ‘permitted duration’ of a lease?

A

Must be for a ‘fixed ascertainable period’

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19
Q

Case law
1. was a lease ‘for the duration’ (of the Second World War) valid?
2. was a lease stated to continue until the land was required by the council for road widening a valid fixed-term lease?

A
  1. No - not fixed
  2. No
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20
Q

Does a lease with a break clause comply with the fixed ascertainable period requirement?

A

Yes

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21
Q

Effect of attempting to create a ‘lease for life’?

A

Will create a lease for a term of 90 years, ending on the death of the tenant

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22
Q

If there is a statement which says there is not exclusive possession, but exclusive possession is the practical arragement - could that be a lease?

A

Yes, statement that exclusive possession is not given does not prevent there being a lease if that is the true effect

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23
Q

What if a lease is granted but there is not exclusive possession?

A

Creates a license

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24
Q

Meaning of exclusive possession? (3)

A

Ability of the tenant to exercise control over the land.
* Tenant can exclude everyone (including the landlord) from the land
* Extends beyond exclusive occupation - tenant does not need to be in occupation to have exclusive possession

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25
Effect of landowner retaining control? Examples?
* Means that there is no exclusive possession * Landlord holding a key doesn't defeat exclusive possession * e.g. being able to enter at any time, being required to share a room, it being permitted to move you to a different part of the property at any time
26
Service occupancies - lease or license?
If allowed to live in employer's accommodation **because essential for better performance of duties, will create a license, not a lease**
27
# Lease or license Flat sharing - AG Securities v Vaughan?
* Agreements entered into by the occupiers were independent and did not confer a right of exclusive occupation on any one party * Agreements had different dates/ referred to different rents * Bedrooms occupied on a rolling basis by incoming occupiers * Parties did not enjoy exclusive possession of the flat jointly
28
# Lease or license Flat sharing - Antoniades v Villiers
* Couple sharing a bedsit - each given individual license agreements * Agreement identical terms/ signed on same day * Intention was for them to acquire joiny and exclusive occupation * Held to have created a lease
29
Payment of rent - essential for something to be a lease?
No, but will support an argument that the parties intended a formal relationship
30
When does a periodic lease come to an end? Effect of expiry of the fixed period?
When either party **terminates by notice**. Term automatically renewed
31
Periodic leases capble of being parol leases?
Yes
32
Name for the terms in a lease?
Covenants
33
Covenants implied into a lease? From who to who?
Tenant has the benefit. * quiet enjoyment * obligations in respect of fitness of the property
34
Meaning of quiet enjoyment? Example of possible breach?
Tenant's lawful possession of the land will not be substantially interfered with by acts of the landlord. Regular excessive noise may amount to substantial interference.
35
Tenant's rights under the Protection from Eviction Act?
* Landlord cannot unlawfully deprive tenant of their occupation * Any acts likely to interfere with residential tenant's peace or comfort that are done **with the intention of causing them to give up occupation** are an offence under PEA
36
When does a landlord become liable in respect of fitness of the property?
When there is a) disrepair; and b) disrepair has been notified to them
37
Landlord's obligations re. fitness of property
* structure and exterior * installations for water/ gas/ electricity/ sanitation * installations for space heating and water heating
38
What is alienation? Methods?
Disposal of the existing (and remaining) leasehold estate by the tenant. 1. assignment 2. sublease 3. mortgage/ charge 4. parting with possession/ occupation
39
What is a) assignment b) sublease. requirement for sublease?
a) tenants passes all their interest to a new tenant, i.e. lease changes hands b) lesser estate carved out of superior one. **Must be for a shorter duration than the head lease**
40
Difference between a qualified covenant and a fully qualified covenant?
Qualifed AND fully qualified: tenant covenants not to assign (or otherwise deal with) lease without the landlord's consent ... Fully qualified: .... such consent not to be unreasonably withheld
41
# Alienation covenants Effect of s 19 of the Landlord and Tenant Act?
Automatically translates any qualified convenant (i.e. against assignment, underletting, charging, or parting with possession) into a fully qualified covenant so that landland can't unreasonably withold consent.
42
# Alienation covenants Obligations on landlord under section 1 LTA 1988?
In relation to a qualified covenant **on assignment**. Where a landlord has received **a written application, is obliged to**: a) give consent (unless reasonable not to) b) give written notice of decision, including any conditions; and c) give written reasons in the event of refusal
43
# Alienation covenants Effect of s 19 (1A) Landlord and Tenant Act? Subject to the reasonableness test in the LTA? Most common types?
1. Original landlord and original tenant of **a non-residential lease** to agree **at the point the lease is drafted** on the circumstances in which the landlord may withold consent/ any conditions of any consent 2. Not subject to the reasonableness test 3. Former tenant provides an authorised guarantee agreement
44
# Alienation covenants Applicability of s 19 (1)(A)
Applies to non-residential leases granted after 1 January 1996
45
Can a landlord insert a contract into the lease placing an absolute prohibition on alienation?
Yes
46
# Enforcement of covenants in leases Difference between old leases and new leases? Relevant occurence?
Old leases granted before 1 January 1996 New leases granted on or after 1 January 1996 Relevant date is when the lease was created, not when it was assigned
47
# OLD LEASES Liability of the original tenant
* Continuing obligations implied under the LPA * If T1 assigns lease to T2, T1 remains subject to the burden of the covenants in the lease * T1's contractual liability lasts for the duration of the lease
48
# OLD LEASES Liability of an assignee - privity
* Creates a relationship of privity of estate between landlord and T2 for the duration that the lease is vested in them * Tenant entitled to exclusive possession, liable to pay rent, and is the party in whom lease currently vested | (T2 is the tenant who was assigned the lease by a former tenant)
49
# OLD LEASES Liability of an assignee - covenants
* T2 is liable for breaches of all real covenants * Real covenants 'touch and concern the land' and include both positive and restrictive | (T2 is the tenant who was assigned the lease by a former tenant)
50
# OLD LEASES Privity of contract between landlord and T2 (i.e. the assignee)
Not by default - will be privty of estate only (unless landlord insists that the assignee covenants with them directly)
51
# OLD LEASES What are the landlord's options if T2 (i.e. the assignee) defaults on an obligation? (3)
Can pursue 1. T1 under privity of contract 2. T2 under privity of estate 3. both of them
52
# OLD LEASES Original tenant's options if they are sued as a result of a breach which they did not commit
Can take action: a) at common law, against the tenant in possession (Moule v Garrett) b) on an indemnity covenant c) if no express indemnity covenant, will be implied into any assignment for value by the LPA (unregistered title) or Land Registration Act (registered title)
53
# OLD LEASES - assignment of the tenancy Original tenant's option to take action at common law against current tenant?
Where one person discharges the liability of another, that person may seek to recover the amount they have paid from the person whose liability they have discharged
54
# OLD LEASES Effect of sale (or assignment) of the reversion? Landlord's options for breach?
* Benefits and burdens of landlord's covenants which touch and concern the land are transmitted to the new landlord. * Can sue either the original tenant (privity of contract) or current tenant (privity of estate)
55
Legislation relevant to new leases?
Landlord and Tenanct (Covenants) Act 1996
56
Rules around privity of estate/ privity of contract apply to which types of leases?
OLD: i.e. pre-1996
57
# NEW LEASES Position of the tenant
* **tenants are bound by the covenants of the lease only while it's vested in them** * all covenants pass on assignment unless expressed to be personal * assignees take the benefit and the burden of the existing covenants * assigning tenants automatically released from any liability under the lease
58
# NEW LEASES Position of the landlord who buys the reversion
Upon sale of reversion, new landlord takes burden/ benefit of the existing covenants, **provided they weren't expressed to be personal**
59
# NEW LEASES Position of the landlord who sells the reversion. Implications for tenant?
* **Outgoing landlord not automatically released following an assignment** * Outgoing landlord has to follow the criteria in ss 6 and 8 LT(C)A to obtain a release from covenants * If release not obtained, outgoing landlord remains liable A tenant can choose to sue either the current or the former landlord.
60
# NEW LEASES Alternative option for landlords (re. limiting liability?) Decision in Avonridge v Mashru
Landlord can limit their liability by stating in the lease that their liability ends once they have disposed of the reversion.
61
# Authorised Guarantee Agreements What is an AGA? Effect?
Agreement between landlord and outgoing (former) tenant under which outgoing tenant guarantees that assignee will perform the lease covenants. Means that landlord can take action aginst former tenant if assignee is in breach.
62
Origins of the AGA?
LT(C)A 1995 - when a former tenant ceased to be liable under the terms of the lease
63
Terms of the AGA
* Landlord can pursue former tenant without taking action against assignee * Only applies to the former tenant's immediate assignee, so if T enters into an AGA having assigned the lease to X, and X then assigns to Y, T no longer has liability * **Only one former tenant can be liable under an AGA at any one time**
64
# AGA What if assignee is declared bankrupt and lease is disclaimed by trustee in bankruptcy?
Landlord can require the former tenant to enter a new lease
65
When can a landlord require an AGA?
Only where: * lease contains a covenant permitting alienation only with landlord's consent * it is either a) reasonable to do so, or, b) (in the case of a commercial lease), it is a condition of the landlord giving their consent
66
# AGAs Options for a former tenant who suffers loss due to liability under an AGA?
1. recover from the assignee on common law principles (Moule v Garrett) 2. on the basis of an express indemnity given by immediate assignee
67
# NEW LEASES Are indemnity convenants implied on assignment of a lease?
No - assignments should include express indeminity clauses
68
Does any part of the Landlord and Tenant (Covenants) Act apply retrospectively?
**Sections 17, 18, and 19 apply to both old and new leases.** Effects former tenants who remain liable either due to a) privity of contract in an old lease; or b) the terms of an AGA, if a new lease
69
# LT(C)A 1995 To what does section 17 relate?
Recovery of a fixed charge from a former tenant by a landlord.
70
# LT(C)A Under s 17, what must a landlord do before pursuing a former tenant for payment of rent under s 17?
Serve a **defaut notice** on the former tenant, **within six calendar months of the fixed charge falling due**
71
# LT(C)A Under s 17, what's the time frame for a landlord serving a default notice on a former tenant for recovery of a charge? What if they fail to serve the notice?
Must be served within six calendar months of the fixed charge falling due. **If they fail to serve notice, they cannot recover the fixed charge from the former tenant**.
72
# LC(T)A What is the benefit of s 17 to the former tenant?
Acts as an early warning and ensures that landlords can't allow arrears of rent to accumulate before taking action against them.
73
# LC(T)A When does s 18 apply?
Where an assignee agrees to a variation of the terms of the lease which was not contemplate in the original lease
74
# LC(T)A What benefits does a former tenant have under s 19?
* If they pay the sum demanded in accordance with a s 17 default, in full, they can request an overriding lease from the landlord. * **Former tenant then becomes the landlord of the defaulting assignee** * Former tenant is obliged to pay rent to the original landlord, and comply with the covenants in same way as the original lease
75
# LC(T)A s 19 - what are the terms of the overriding lease?
* it's the same duration as the original lease, **less three days** * it's on the same terms as the original lease * it's granted by the landlord to the former tenant
76
# Landlord's remedies Landlord's three remedies for non-payment of rent
* debt action * forfeiture * commercial rent arrears recovery
77
In the absence of an express obligation to pay rent (e.g. in the case of a parol lease?)
Implied
78
# Landlord's remedies Nature of suing the tenant for debt?
Not a damage claim. **Doesn't bring the lease to an end.**
79
# Landlord's remedies Limitation period for landlord bringing a claim for debt?
**Six years** from the date on which the arrears became due.
80
# Landlord's remedies 1. What is commercial rent arrears recovery? 2. Against whom is it available? 3. Court order required?
1. Landlord enters premises to seize tenant's goods and sell them 2. Only available against the tenant in possesssion 3. No
81
# Landlord's remedies 1. To which types of lease does CRAR apply? 2. To which types of payment does it apply? 3. Does CRAR bring a lease to an end?
1. Commercial only 2. Normal rent only (i.e. not things like a service charge) 3. No
82
# Landlord's remedies Who can take possession of property under CRAR?
Only an enforecement agent
83
# Landlord's remedies Time-related conditions of CRAR?
* rent due must exceed a minimum of **seven days'** rent * landlord must give tenant a minimum of **seven days' notice** of intention to take control of tenant's goods
84
# Landlord's remedies Notice under CRAR?
* minimum of seven days * **must be given by an enforcement agent** * tenant's goods 'bound' (i.e. controlled by landlord) at date of notice * tenant can challenge landlord's warning notice in court
85
# Landlord's remedies Effects of CRAR and debt action on landlord's other remedies?
Acknowledges the lease - may therefore waive landlord's right to forefeit
86
Meaning of forfeiture? | (non-payment of rent)
* Exercised against tenant in possesssion only * **Right for landlord to retake physical possession of the premises, thereby prematurely terminating the lease**
87
Requirement for forfeiture? | (non-payment of rent)
Right must be expressly reserved in the lease
88
Waiver of forfeiture? | (non-payment of rent)
* once the right has arisen, landlord may lose right to forfeit in respect of that breach, **if by their conduct they are deemed to have waived it** * can be express or implied
89
# Landlord's remedies When will a waiver of forfeiture be implied? | (non-payment of rent)
If landlord does an unequivocal act showing recognition of continued existence of the lease, when in full knowledge of the right to forfeit, **e.g. exercising CRAR/ suing for or accepting rent;** **Unless landlord has already commenced possession proceedings**
90
# Landlord's remedies Method of forfeiture | (non-payment of rent)
* Must make a 'formal demand' by presenting themselves at the premises on the due date 'between sunrise and sunset' (unless expressly exempted in the lease) * **Can either peacefully re-enter the premises, or sue for and obtain a possession order in the courts**
91
Requirements of forefeiture if property is a dwelling and occupier continues to reside there? | (non-payment of rent)
Landlord must obtain a court order
92
Effect of tenant successfully seeking relief against forfeiture? | (non-payment of rent)
Tenant may retake premises on terms of original lease as though foreiture has not taken place
93
How can tenant seek relief from forfeiture? | (non-payment of rent)
* **pay all arrears and costs before trial - court must generally grant relief** * apply to the court for relief **within six months of landlord's re-entry** pursuant to a court order (at discretion of court)
94
Tenant's relief from forfeiture - special conditions for a non-residential lease? | (non-payment of rent)
If the landlord forfeits a non-residential lease by re-entry without court proceedings, six-month time limit does not apply, and **court can exercise its jurisdiction to grant relief**
95
# Landlord's remedies Remedies for breach of non-rent covenants? (4)
1. Damages 2. Specific performance 3. Forfeiture 4. Self-help remedy
96
# Landlord's remedies Damages - basic principles (3)
* ordinary contractual rules apply * does not bring the lease to an end * can be claimed against tenant in possession, or former tenant
97
# Landlord's remedies Requirement for default notice under LT(C)A before claiming damages against a former tenant?
**No** - damages not included within definition of fixed charge
98
# Landlord's remedies Limit on amount of damages for disrepair?
**Limited to the amount by which the reversionary interest has diminished in value** as a consequence of the disrepair
99
# Landlord's remedies Requirement to give notice prior to claiming damages?
* If lease has three or more years remaining, s 146 notice * Must include statement that tenant is entitled to serve a counter notice claiming benefit of Leasehold Property (Repairs) Act * Tenant has 28 days to serve a counter notice - if served, landlord cannot take further action without leave of the court
100
# Landlord's remedies Specific performance?
Rarely used, because damages will usually be an adequate remedy. Available only against tenant in possession.
101
# Landlord's remedies Action a landlord must take before they can forfeit? | (for breach of covenants other than rent)
Serve a notice under s 146 LPA a) specifying the breach b) requiring it to be remedied within a reasonable time, if capable of remedy; and c) requiring compensation, if desired
102
# Landlord's remedies Forfeiture - if tenant remedies breach within the time specified? | (for breach of covenants other than rent)
There can be no forfeiture
103
# Landlord's remedies Forfeiture - breach of a covenant against alienation?
Not capable of remedy, so landlord doesn't have to include a reasonable time within which to remedy the s 46 notice.
104
# Landlord's remedies Forfeiture - effect on sub leases? Relief?
* if head lease is forfeited, any sublease comes to an end * **subtenant can apply for relief against forfeiture of the head lease, even where tenant may not be able to obtain relief** * court would vest head lease in the sub-lessee on such terms as it sees fit
105
# Landlord's remedies Tenants can apply for relief against forfeiture in which two ways?
* either as part of landlord's possession proceedings, or in response to landlord peacably re-entering premises * need for clean hands
106
# Landlord's remedies Self-help is relevant to what kind of breach? Requirement?
Breach of tenant's covenant to repair Must be provision in the lease allowing landlord to: * enter and inspect * give tenant notice that repair required, and a time frame * enter property and do the work if tenant doesn't complete on time * recover cost of such work as a debt
107
# Tenant's remedies Three remedies available for tenants
1. specific performance/ injunction 2. damages 3. self-help
108
# Tenant's remedies 1. Specific performance/ injunction? 2. Damages?
1. Equitable, therefore discretionary. Rare, as damages usually adequate 2. Ordinary contractual principles apply
109
# Tenant's remedies Entitled to withold rent in response to landlord's breach of covenant?
No
110
# Tenant's remedies Self-help - common law 'set off'?
* T notifies L of need for repairs, and that T will carry out the repair if landlord fails to do so * If L does not carry out the repairs, T can do the repairs and withold rent until cost has been repiad.
111
# Tenant's remedies Self help - equitable 'set off' Only occurs where?
* T witholds rent * **L sues for damages**: equity may allow tenant to have unliquidated claim set off against liability for rent * Only where the connection between the two claims is sufficiently direct that it would be manifestly unjust not to allow it
112
# Tenant's remedies Self help in commercial leases?
**Well drafted commercial leases will usually exclude the effect of common law and equitable set off**
113
# Determination of a lease Nine methods of bringing lease to an end?
1. end of fixed term (effluxion) 2. notice to quit 3. break clause 4. surrender 5. disclaimer 6. frustration 7. repudiatory breach 8. merger 9. forfeiture
114
# Determination of a lease Notice to quit 1. Type of tenancy? 2. T in occupation as a dwelling house?
1. Periodic 2. Usually, one full period's notice required. If yearly, requires minimum six months' notice 3. **Tenant in occupation of a dwelling house must be given minimum four weeks**
114
# Determination of a lease Break clause. Available to both parties?
* Yes * Can be a fixed date, or on a rolling basis
115
# Determination of a lease Surrender? Formalities? Subleases?
* requires landlord and tenant to mutually agree for T's estate to be yielded up to the landlord * **lease merged into the reversionary estate and extinguished** * **must be contained in a deed** * only terminates the lease agreed to be surrendered
116
# Determination of a lease Disclaimer. Sub-tenants?
* Arises on bankruptcy/ liquidation * **Trustee in bankruptcy 'disclaims' contracts giving rise to liability** * Doesn't end a sub-tenancy: **sub-tenant can seek an order to vest disclaimed property in themselves**
117
# Termination of a lease Merger?
* Tenant acquires immediate reversion to the lease, (i.e. acquires landlord's estate in land); or * A third party acquires both the lease and the reversion
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