Lease Structure and Content Flashcards
(16 cards)
What can a tenant do if a lease is silent on alterations?
A tenant is free to carry out alterations
Why would a commercial landlord want to include many things as a breach of rent covenant?
Because the remedies for breach of rent covenant are more extensive
What is the doctrine of waste?
Idea that a tenant cannot carry out any alterations which would reduce the value of the premises
What kind of provisions regarding alterations are common in an FRI lease?
Type of alterations permitted
If an alteration is permitted, is consent needed?
Does the premises need to be returned to its original state at the end of the lease term?
What is an absolute covenant?
Something that is prohibited completely - if a tenant asks, landlord has no obligation to even consider the request
What is a qualified covenant?
Something which is only permitted with the landlord’s consent
What is a fully qualified covenant?
Something which is only permitted with the landlord’s consent, who, if they decide to withhold consent, must act reasonably
How does statute affect a qualified covenant against alterations?
Upgrade effect - becomes fully qualified
If a landlord consents to alterations, where should this be documented?
Licence for alterations
* Details of works consented to
* Time limits
* Covenants: compliance with requirements, pay landlord’s costs, obtain all necessary permissions
What can a tenant do if a lease has an absolute covenant against alterations?
Tenant can circumvent this via a statutory notice - can serve a notice under S3 LTA of an intention to carry out improvements
If a tenant has served a S3 notice of intention to carry out improvements and the landlord objects, what can the tenant do?
Apply to court for permission to carry out the improvements
If a tenant applies to the court for permission to make alterations under S3, what will the court consider when granting the permission? What is the time limit within which the landlord can object?
- Does it add to the letting value of the property?
- Are the improvements reasonable and suitable to the character of the property?
- Does it diminish the value of any other property belonging to the landlord?
If the landlord does not object to the court’s permission within 3 months - can go ahead and carry out improvements
What can a tenant do if a lease is silent on user covenants?
Tenant can use the premises in whatever way it would like
Are user covenants subject to statutory upgrade effect?
No - does not apply
What can a landlord NOT do if they do give consent to a change of use?
They cannot charge a lump sum or increase the rent, unless the change of use requires structural alterations
What does the Code for Lease Business Premises on alterations / change of use?
Lease should only restrict on both, insofar as it is necessary to protect the value of the premises and any adjoining neighbouring premises
If alterations must be reinstated by the end of the lease - should be made clear in the heads of terms
