Structure and content of a lease-FS Flashcards
(10 cards)
What key balance does a commercial lease aim to strike?
A commercial lease balances the landlord’s investment objectives (e.g. rental income, control) and the tenant’s business requirements (e.g. use of premises, flexibility).
How does leasehold property benefit a landlord?
It generates rental income and preserves a saleable freehold interest, as the lease does not transfer the freehold title.
What is a core advantage of leasehold over freehold in terms of enforceability of positive covenants?
Positive covenants are enforceable against leasehold successors, unlike freehold successors, where such covenants do not run with the land.
What is the definition of the “grant of a lease”?
It is the legal creation of a lease by the freeholder to the leaseholder (tenant), constituting the first contractual lease document.
What does the term “assignment” refer to in leasehold property law?
It refers to the transfer of leasehold rights from one tenant to another (e.g. selling the lease to a new tenant).
What is a sub-lease, and who grants it?
A sub-lease is a lease granted by a tenant (the head tenant) to a sub-tenant, while the head lease remains in force.
What is the legal position of a sub-tenant if the head tenant surrenders their lease?
The sub-tenant becomes the immediate tenant of the landlord on the terms of the sub-lease.
Can a sub-lease survive the surrender of the head lease, and if so, why?
Yes, the sub-lease remains valid and must be honoured by the landlord, preserving the sub-tenant’s rights under the sub-lease.
Why is flexibility a benefit of leasehold arrangements in commercial contexts?
Because the term of the lease can be negotiated to suit the parties, ranging from short-term to long-term durations.
In the event of a head lease surrender, what determines the sub-tenant’s ongoing tenancy terms?
The terms of the original sub-lease govern the sub-tenant’s relationship with the landlord after the surrender.
