Leases- FS

Question 1

What are the essential components needed to establish a landlord–tenant relationship in a lease?

Answer 1

Agreement by the landlord to let the property.

The tenant’s agreement to pay rent.

Compliance with specific terms including exclusive possession for a fixed term.

Question 2

What does a tenant’s right to “exclusive possession” mean in leasehold law?

Answer 2

It means the tenant has the legal right to exclude others, including the landlord, from the property during the lease term.

Question 3

Why must a lease term always be for a period less than the landlord’s own interest in the property?

Answer 3

Because a lease is a derivative interest; the landlord cannot lease more rights than they hold themselves.

Question 4

List four typical covenants a tenant agrees to in a lease agreement.

Answer 4

(1) Pay rent
(2) contribute to property insurance
(3) keep the property in good repair
(4) seek permission for major alterations.

Question 5

What are two standard covenants landlords typically make in a lease agreement?

Answer 5

1) Allow quiet enjoyment of the property

(2) ensure the property is properly insured.

Question 6

Who is responsible for registering a lease at the Land Registry, and is this a typical tenant covenant?

Answer 6

The tenant or their solicitor may handle it in practice, but it is not a standard leasehold covenant.

Question 7

What legal obligation does the covenant for “quiet enjoyment” impose on the landlord?

Answer 7

To refrain from interfering with the tenant’s lawful use and enjoyment of the leased property.

Question 8

What is the key legal characteristic that distinguishes a lease from a license?

Answer 8

Exclusive possession for a fixed or periodic term distinguishes a lease from a license.

Question 9

What legal interest does a lease create that a license does not?

Answer 9

A lease creates a legal interest in land; a license does not.

Question 10

Can a license be transferred or assigned to another party? Why or why not?

Answer 10

No, a license is a personal right and cannot be assigned; it is not a proprietary interest.

Question 11

In property law, what does exclusive possession mean?

Answer 11

The right to exclude others, including the landlord, from the premises during the term of the agreement.

Question 12

What was the legal issue in the case of Street v Mountford?

Answer 12

Whether an agreement labeled as a “license” was in substance a lease because it granted exclusive possession.

Question 13

What did Lord Templeman rule as the defining test for a lease in Street v Mountford?

Answer 13

Exclusive possession is the essential criterion for determining whether an agreement is a lease.

Question 14

Why is the label or title of an agreement not conclusive in determining whether it is a lease or license?

Answer 14

Courts look at the substance of the arrangement (e.g., exclusive possession), not just the terminology used.

Question 15

What is the key difference between assigning a lease and subletting?

Answer 15

Assignment transfers the tenant’s entire interest in the lease to another party, whereas subletting creates a new lease for part or all of the premises while the original tenant remains liable.

Question 16

Who is the “assignor” and who is the “assignee” in a lease assignment?

Answer 16

The assignor is the outgoing tenant transferring the lease; the assignee is the incoming tenant receiving it.

Question 17

What is an Authorised Guarantee Agreement (AGA) in lease assignment?

Answer 17

A contract where the outgoing tenant guarantees the incoming tenant’s performance of lease covenants, including rent and repairs, after assignment.

Question 18

Under the Landlord and Tenant (Covenants) Act 1995, can a tenant automatically be released from liability after assignment?

Answer 18

Yes, for leases granted on or after 1 January 1996—unless they enter into an AGA.

Question 19

What is the legal position for tenants under leases granted before 1 January 1996 regarding ongoing liability after assignment?

Answer 19

The tenant remains automatically liable for the entire lease term unless expressly released by the landlord.

Question 20

What must a landlord do post-1996 to ensure an outgoing tenant remains liable after lease assignment?

Answer 20

Require the tenant to enter into an Authorized Guarantee Agreement (AGA) at the time of assignment.

Question 21

If a tenant assigns a lease and an AGA is in place, what happens if the new tenant defaults?

Answer 21

The outgoing tenant must fulfill the lease obligations, including paying rent and performing repairs.

Question 22

In a lease assignment chain, who can the landlord recover rent from if only the latest assignor signed an AGA and the current tenant defaults?

Answer 22

Only the assignor who signed the most recent AGA, as others are not liable without a continuing guarantee.

Question 23

What is the purpose of an alienation covenant in a commercial lease?

Answer 23

To regulate whether, and under what conditions, a tenant can transfer their lease interest—such as by assignment, subletting, or sharing occupation—with third parties.

Question 24

What types of tenant actions are typically governed by an alienation covenant?

Answer 24

Assignment of the lease, underletting (subletting), and sharing occupation of the premises.

Question 25

What statutory duty is imposed on landlords under Section 19 of the Landlord and Tenant Act 1927 regarding consent to alienation?

Answer 25

If the lease requires landlord consent for alienation, the landlord must not unreasonably withhold or delay giving that consent.

Question 26

Can an alienation covenant in a lease entirely prohibit the tenant from assigning or underletting the premises?

Answer 26

Yes, the lease may entirely prohibit alienation or allow it only under certain conditions.

Question 27

If a lease includes a clause requiring landlord consent before the tenant can share occupation, what type of alienation is being controlled?

Answer 27

The tenant’s ability to share the property with a non-party to the lease.

Question 28

Why is it important for tenants to review alienation covenants before trying to exit or restructure their leasehold obligations?

Answer 28

Because these covenants may restrict or condition their ability to transfer, sublet, or share occupation of the property.

Question 29

What legal remedy may be available if a landlord unreasonably refuses consent under an alienation covenant?

Answer 29

The tenant may apply to court for a declaration that the refusal was unreasonable and that consent is deemed given.

Question 30

In leasehold terms, what distinguishes sharing occupation from assignment or underletting?

Answer 30

Sharing occupation typically involves allowing third parties to use the premises without creating a new lease or transferring legal interest.

Question 31

What are five primary remedies available to a landlord when a tenant fails to pay rent under a commercial lease?

Answer 31

(1) Debt action (2) forfeiture (3) commercial rent arrears recovery (CRAR) (4) action against guarantors/former tenants (5) statutory demand and winding-up petition.

Question 32

What is required for a landlord to use forfeiture as a remedy for non-payment of rent?

Answer 32

A forfeiture clause in the lease and compliance with any conditions specified in that clause.

Question 33

What is the purpose of the CRAR (Commercial Rent Arrears Recovery) procedure, and when can it be used?

Answer 33

It allows a landlord to seize and sell tenant’s goods after rent has been unpaid for 7 days, provided 7 days’ notice is given.

Question 34

Under Section 17 of the Landlord and Tenant (Covenants) Act 1995, what must a landlord do to recover rent from a former tenant or guarantor?

Answer 34

Serve a default notice within 6 months of the unpaid sum falling due.

Question 35

What right does a former tenant have if they pay rent under an Authorized Guarantee Agreement (AGA)?

Answer 35

They may request an overriding lease, effectively becoming the defaulting tenant’s landlord. This then instals the former tenant as the current tenant landlord and gives the former tenant all former landlords rights to recover the money from the current tenant who defualted.

Question 36

When can a landlord serve a statutory demand and petition for winding-up under the Insolvency Act?

Answer 36

When the unpaid debt exceeds £750 and remains unpaid for 21 days following the demand.

Question 37

What equitable remedy may a landlord pursue for a breach of a repair covenant in the lease?

Answer 37

Specific performance, but only in exceptional cases, where damages would be inaporirate and there was no forfeiture clause as confirmed in Rainbow Estates Ltd v Tokenhold Ltd.

Question 38

What procedural step must precede a damages claim for disrepair?

Answer 38

Serving a Section 146 notice under the Law of Property Act 1925, outlining the breach and allowing time for a counter notice which is 28 days. If the tenant does not fix the repair then the landlord can apply to the court for a possession order

Question 39

What is a Jervis v Harris clause and how does it benefit the landlord?

Answer 39

It allows the landlord to enter, make repairs, and recover the cost as a debt—avoiding the need for a damages claim.

Question 40

When must a Section 146 notice include a statement of the tenant’s right to serve a counter-notice for damages of disrepair

Answer 40

When the lease is over 7 years and has at least 3 years left at the time of the breach.

Question 41

Why couldn’t a landlord immediately forfeit a lease where rent was unpaid for 10 days, despite a forfeiture clause?

Answer 41

Because the clause required 15 days of arrears and a formal demand before forfeiture could be pursued.

Question 42

What is the effect of the expiry of a fixed-term lease (effluxion of time) on the tenancy?

Answer 42

The lease ends automatically at the end of the fixed term with no notice required, as both parties are aware of the term length.

Question 43

What is a “notice to quit” and when is it used?

Answer 43

A formal notice by a landlord or tenant to end a periodic tenancy, requiring a minimum notice period based on the tenancy type.

Question 44

How much notice is required to terminate a yearly periodic tenancy?

Answer 44

At least half a year’s notice, expiring at the end of a completed year of the tenancy.

Question 45

How is notice calculated for monthly or quarterly periodic tenancies?

Answer 45

One full period’s notice, expiring at the end of a completed period of the tenancy (e.g., one month for a monthly tenancy).

Question 46

What legal form must a surrender of a lease take under Section 52 of the Law of Property Act 1925?

Answer 46

It must be made by deed, with mutual agreement between the tenant and immediate landlord.

Question 47

What is the legal effect of merger in leasehold law?

Answer 47

The lease is extinguished when the leasehold and freehold interests become vested in the same person, e.g., tenant buys the freehold.

Question 48

What is a break clause in a lease, and what does it allow?

Answer 48

It is a contractual provision allowing one or both parties to terminate the lease before the end of the fixed term.

Question 49

What elements must be agreed upon in a break clause for it to be enforceable?

Answer 49

Who can exercise the clause, when it can be exercised, and how much notice is required.

Question 50

In a monthly tenancy starting on the 1st of each month, what is the earliest valid termination date if a landlord serves notice on 14 August?

Answer 50

30 September—because the notice must last one full period and expire at the end of that period.

Question 51

Why is it important that notice to quit aligns with a completed period of the tenancy?

Answer 51

Because legally valid notice must expire at the end of a full tenancy period to be effective.

Question 52

What are the different ways a lease can be terminated.

Answer 52

1. Effluxion of time – automatic expiry at the end of a fixed term. 2. Notice to quit – formal notice given for periodic tenancies. 3. Surrender – mutual agreement between tenant and landlord, made by deed (per Section 52 LPA 1925). 4. Merger – when tenant acquires the freehold, merging lease and freehold interests. 5. Break clause – early termination option agreed within the lease terms.

Question 53

What special remedies are available to a landlord when a tenant breaches a repair covenant in a lease?

Answer 53

1. Specific Performance – Equitable remedy, granted in exceptional cases (e.g. Rainbow Estates Ltd v Token Hold Ltd). 2. Damages – Subject to service of a Section 146 LPA 1925 notice and potential counter notice by the tenant. 3. Self-Help (Jervis v Harris Clause) – Allows landlord to enter, repair, and recover costs as a debt, not damages. 4. Forfeiture – Requires a forfeiture clause in the lease and service of a Section 146 notice, allowing tenant time to remedy the breach.