4): Landlord and Tenant

Question 1

What is a lease and how is it distinguished from a licence?

Answer 1

1. Lease = interest in land with exclusive possession for a fixed/periodic term.
2. Licence = personal right, no exclusive possession, revocable at will.
3. Licence does not bind third parties, cannot be assigned.

Question 2

What makes a lease a legal lease?

Answer 2

1. Must comply with s.1(1)(b) LPA 1925.
2. 3+ years: by deed (s.52(1), LPA 1925).
3. ≤3 years: no deed needed if s.54(2) satisfied (immediate possession, market rent, no fine).
4. 7+ years: must be registered at HM Land Registry.
5. ≤7 years: operates as an overriding interest.

Question 3

What is an equitable lease?

Answer 3

Arises if legal formalities unmet but there is:
- A valid written contract (s.2 LP(MP)A 1989).
- For value and specifically enforceable.

Question 4

What are the 3 essential characteristics of a lease (vs licence)?

Answer 4

• Certainty of term: fixed start/end dates.
• Exclusive possession: tenant can exclude others.
• Rent: not essential, but relevant indicator.

Question 5

What covenants usually exist between landlord and tenant?

Answer 5

• Tenant covenants: pay rent, insure, repair, quiet enjoyment, obey alienation clause.
• Express or implied depending on lease terms.

Question 6

What is alienation and what types exist?

Answer 6

Tenant disposes of lease by:
- Assignment (whole lease transferred).
- Sub-lease (part of lease re-let).
- Mortgage/charge or parting with possession.

Question 7

What is an Authorised Guarantee Agreement (AGA)?

Answer 7

• Post-1995 lease may require assignor to guarantee assignee’s obligations.
• Ends when assignee ceases to hold lease.

Question 8

What are the types of covenants restricting alienation?

Answer 8

• Absolute: no alienation; breach leads to forfeiture.
• Qualified: needs landlord’s written consent (s.19, LTA 1927).
• Under LTA 1988, landlord must respond reasonably and in writing.

Question 9

What is the pre-1996 position on privity of contract and estate?

Answer 9

• Privity of contract: original tenant liable after assignment.
• Privity of estate: liability if in possession; applies to covenants that touch and concern land.

Question 10

What changed under the Landlord and Tenant (Covenants) Act 1995?

Answer 10

On assignment:
- All covenants pass to assignee.
- Assignor automatically released.
- Landlord released only if statutory conditions met (ss.6–8, 1995 Act).

Question 11

What are the landlord’s remedies for non-payment of rent?

Answer 11

• Sue for rent (current/former tenant or under AGA).
• Commercial Rent Arrears Recovery (CRAR): enter premises and sell goods.
• Forfeiture.

Question 12

What are the requirements for forfeiture?

Answer 12

• Lease must contain express forfeiture clause.

Non-payment of rent:
- Formal demand
- Peaceable re-entry or court order
- Tenant must be in possession

Other breaches:
- Serve section 146 notice
- Allow time to remedy
- Compensation may be required

Question 13

How can a tenant recover losses from another tenant?

Answer 13

Rely on:
- Express indemnity in deed of assignment.
- Implied indemnity under s.77 LPA 1925 (for pre-1996 leases).

Question 14

How can leases be terminated?

Answer 14

• Expiry of fixed term
• Notice to quit (periodic tenancies) served by landlord or tenant
• Surrender: mutual agreement (express or implied)
• Break clause: early termination option
• Disclaimer: by trustee in bankruptcy/liquidation
• Frustration: rare; lease ends if performance impossible
• Repudiatory breach: serious breach justifies termination
• Merger: tenant acquires reversion