Lease Structure & Content Flashcards
(36 cards)
Who is responsible for repairs in a commercial lease?
Usually the tenant is responsible, depending on whether it is a lease of whole or part. The lease’s definition of “Premises” is crucial to determine the scope.
What is the tenant’s repair responsibility in a lease of whole?
The tenant is responsible for all interior, exterior, and structural repairs.
What is the tenant’s repair responsibility in a lease of part?
Tenant is responsible for interior only; landlord repairs structural and common parts, recovering cost via service charge.
What are common parts and who maintains them?
Shared areas (e.g., staircases, lifts, parking) maintained by the landlord and charged to tenants through service charge.
How does an FRI lease deal with service charge recovery?
It contains detailed clauses on services provided by the landlord and how tenants contribute to the cost proportionally.
What is a full repairing obligation?
A tenant covenant “to keep the Premises in good repair”, which includes putting them into repair if they are not at the lease start.
What should a tenant do before accepting a full repairing obligation?
Obtain a survey to identify any existing defects or repair issues.
What is a qualified repairing obligation?
A tenant agrees to keep the premises in the same condition as at lease commencement, supported by a schedule of condition.
Is a qualified repairing covenant compatible with FRI leases?
No—FRI leases require full repairing obligations. Qualified obligations are only accepted in limited circumstances (e.g., short lets).
Can a tenant choose to repair or replace an item?
Yes, unless the lease states otherwise. Tenant may choose repair unless item is beyond economic repair.
What is the difference between repair and renewal?
Repair = fixing an item. Renewal = complete replacement or rebuilding. Renewal is not covered by a basic repair obligation.
What does it mean if a lease refers to “repair and condition”?
This is more onerous. It includes issues like condensation, even if there is no disrepair.
What are inherent or structural defects and who should be liable?
Flaws in construction/design (e.g., cracks from structural error). Tenant should not be liable—these should be excluded from repair covenants and service charge.
Who usually insures the property in commercial leases?
The landlord, who then recovers the premium from the tenant as “insurance rent”.
How is insurance handled in leases of whole versus part?
- Lease of whole: tenant reimburses entire premium
- Lease of part: tenant reimburses proportionate premium
When might a tenant still be liable for insured damage?
If the tenant’s negligence voids the insurance or prevents payout.
What are alterations in leasehold premises?
Physical changes to the premises (e.g., internal walls, mezzanine floor, new windows).
What happens if a lease is silent on alterations?
The tenant may carry out alterations, subject only to the doctrine of waste (must not reduce value).
Why do landlords restrict alterations?
Clauses may define:
- Permitted types (e.g., internal only)
- Need for consent
- Reinstatement at lease end
What is an absolute covenant regarding alterations?
Alterations are not permitted at all. Landlord has no obligation to consider requests.
What is a qualified covenant regarding alterations?
Alterations are allowed with landlord’s consent. Landlord can refuse for any reason.
What is a fully qualified covenant regarding alterations?
Alterations allowed with landlord’s consent, which must not be unreasonably withheld.
Can a lease contain different covenants for different types of alterations?
Yes. E.g., absolute for structural, qualified for internal, none for partitioning.
How does s19(2) LTA 1927 affect alteration covenants?
Converts a qualified covenant into a fully qualified covenant where alterations are improvements from the tenant’s perspective.
