Leasehold Covenants

Question 1

What are independent covenants?

Answer 1

covenants were its performance is not a pre-condition for a performance for another AND non-performance is not an excuse for non-performance of another.

Question 2

What are dependent covenants?

Answer 2

covenants were its performance is a legal quid pro quo for another

Question 3

A complete prohibition of doing something is a (blank) covenant

Answer 3

absolute

Question 4

A covenant that cannot be done without the consent of the landlord is a (blank) covenant

Answer 4

qualified

Question 5

What is a condition?

Answer 5

it define the scope of the lease. A violation of a condition = termination of lease
(a breach fundamentally alters the intended scope or nature of the tenancy)

Question 6

What is a collateral contract? Support your answer with a case law example.

Answer 6

Collateral contract - any agreement made between a landlord and tenant outside the lease. Such contracts occurred prior to a lease

De Lasalle v Guildford - tenant sought damages for relying on the assurance that the drains of the property were in good repair before the start of the tenancy

Question 7

For old leases (pre-1996): what is the flowchart in determining whether a covenant is enforceable or not?

Answer 7

1. legal or equitable
2. privity of contract: who is the old landlord and tenant?
3. privity of estate: who is the current landlord and tenant?
4. touch and concerns principle - only proprietary covenants pass on assignment

Question 8

Use a case law example to illustrate the touch and concerns principle

Answer 8

Swift Investments v Combined English stores

if the covenant is said to ‘touch and concern’ the land, then it is a proprietary covenant that runs with the lease. A covenant is proprietary if:
- ANY owner of an estate in the land could benefit from it
- if it affects the nature, quality, mode of use or value of the land
- if expressed to be personal = personal
- presence of guarantors = proprietary

Question 9

What the LTCA 1996 keep?

Answer 9

original landlord liability

Question 10

What the LTCA 1996 change?

Answer 10

covenants automatically transfer on assignment of lease / reversion = tenants / landlords are automatically released from their burdens
= removal of touch and concerns principle, privity of estate

applies to both legal and equitable leases

Question 11

What the LTCA 1996 abolish?

Answer 11

original tenant liability (only for leases granted on or after 1 January 1996)

touch and concern principle

Question 12

What does K/S Victoria v House of Fraser highlight about AGAs?

Answer 12

with the creation of AGAs, the guarantor of the assignor tenant’s obligations cannot be required to guarantee the assignee’s obligations.

Question 13

What does EMI Group v Prudential Assurance highlight about GAGAs?

Answer 13

the original guarantors are STILL LIABLE under a GAGA

showing how the law is detached from commercial reality; the judge was forced to adopt the idea of the Act (GAGA creations from AGAs) which is against commercial logic.

Question 14

What is an Avonridge Clause?

Answer 14

A clause where a landlord is able to contractually limit their liability to when they are in possession, bypassing original landlord liability