Lease Structures

Question 1

Essential characteristics of a lease

Answer 1

Certain term + exclusive possession + correct formalities

Question 2

Is payment of rent a necessary condition for a lease?

Answer 2

No

Question 3

For how long can a periodic tenancy run?

Answer 3

The tenancy runs from period to period until either party serve a notice to quit

Question 4

Method for ending a periodic tenancy

Answer 4

serve a notice to quit

Question 5

Implied periodic tenancy

Answer 5

A periodic tenancy can arise impliedly where a tenant moves into premises and starts paying a rent on a periodic basis; the term relates to the rent instalments e.g. annual or monthly etc.

Question 6

exclusive possession

Answer 6

right to exclude all others from the premises, including the landlord

Question 7

Multiple occupiers need to show that they have a

Answer 7

joint tenancy (the 4 unities)

Question 8

the 4 unities

Answer 8

possession, title, time, interest (PITT - Put In The Trash)

Question 9

Formalities for lease of over 7 years

Answer 9

must be granted by deed and registered at the Land Registry

Question 10

Formalities for lease of 7 years or less

Answer 10

must be granted by deed, no registration

Question 11

When will the court recognise an equitable lease?

Answer 11

if the correct formalities are not complied with, equity may recognise the arrangement as an equitable lease, if the document is:
in writing, contains all the terms and is signed by both parties

Question 11

Short term lease exception

Answer 11

Lease of 3 years or less does not need to be in writing and no formalities required (unless there is an upfront premium payable)

Question 12

Is a legal lease of 7 years or less binding on a new owner?

Answer 12

Yes, it does not need to be registered when created and will be binding as an overriding interest

Question 13

How should an equitable lease be protected?

Answer 13

an equitable lease should be protected by the entry of a notice in the charges register of the burdened land or it will not bind a purchaser for value

Question 14

Search against registered lease of whole

Answer 14

OS1 search

Question 15

Search against registered lease of part

Answer 15

OS2 search

Question 16

Lease registration form for registered land

Answer 16

AP1 form

Question 17

Lease registration form for unregistered land

Answer 17

FR1 form

Question 18

If the landlord’s freehold title is charged, what else is needed to grant the lease?

Answer 18

a letter of consent from the lender

Question 19

Benefit of being an “anchor tenant”

Answer 19

stronger negotiating position than other tenants to negotiate their lease (eg John Lewis in a shopping centre = anchor tenant)

Question 20

If the tenant’s covenant strength is not sufficient, what additional safeguards may the landlord be willing to accept?

Answer 20

a rent deposit and/or guarantor

Question 21

Doctrine of waste

Answer 21

The tenant cannot carry out alterations which reduce the value of the premises.

Question 22

If the tenant wants to make an alteration covered by an absolute covenant, they can ask the landlord, but the landlord

Answer 22

has no obligation to even consider it

Question 23

If the landlord consents to alterations under a qualified covenant, then the consent will usually be documented in a

Answer 23

licence for alterations

Question 24

How could restricting the User backfire on the landlord?

Answer 24

limits the appeal of the premises, could limit the market rent on rent review

Question 25

The Code for Leasing Business Premises requires a landlord to give which permissions to the tenant?

Answer 25

a fully qualified covenant for internal non-structural alterations in a lease of part, and the ability to carry out internal non-structural alterations without consent in a lease of whole

Question 26

the demise

Answer 26

the extent of the property that is being let

Question 27

When are latent and inherent defects a bigger concern?

Answer 27

new build properties