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FLK 2: Land Law > Topic 7 - Lease Covenants and Requirements > Flashcards

Topic 7 - Lease Covenants and Requirements Flashcards

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1
Q

What is a lease?

A

A lease is created when a Landlord grants the temporary right to a Tenant to use and enjoy land exclusively for a specified duration.

The lease can be in a residential or commercial context.

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2
Q

What is a ‘term of years absolute’?

A

A ‘term of years absolute’ is the technical name for a lease as defined in LPA 1925, s 205 (1)(xxvii).

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3
Q

What terminology can describe a lease?

A
  • Tenancy
  • Leasehold
  • Sublease
  • Underlease
  • Lessor (for landlord)
  • Lessee (for tenant)

These terms help clarify the type of lease agreement.

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4
Q

How is a lease different from a licence?

A

A lease is a proprietary right to land, whereas a licence is personal permission to be on someone’s land.

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5
Q

What are the key differences between leases and licences?

A
  • Lease is enforceable against third parties
  • Licence is enforceable only against the grantor
  • Tenant can sue for nuisance or trespass, whereas a licensee cannot
  • Lease confers security of tenure; licence does not
  • Lease is enforceable in rem; licence is enforceable in personam
  • Tenants have statutory protection; licensees do not.
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6
Q

What was the significance of Street v Mountford [1985] AC 809?

A

The court ruled that the substance of an agreement determines if it is a lease or licence, not the label given by the parties.

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7
Q

What are the essential requirements for a lease to exist?

A
  • Certainty of term
  • Exclusive possession
  • Correct formalities used to create the lease.
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8
Q

What does ‘certainty of term’ mean?

A

It means the tenancy must be granted for a certain duration, allowing the arrangement’s end date to be known.

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9
Q

What is a fixed term lease?

A

A fixed term lease has a maximum duration known from the outset, and neither party can end it early unless a break clause is present.

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10
Q

What is a periodic tenancy?

A

A periodic tenancy is a lease for one period (weekly, monthly, quarterly, or yearly) that automatically extends until notice to terminate is given.

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11
Q

What is exclusive possession?

A

Exclusive possession means the right to exclude all others from the property, including the landlord.

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12
Q

What factors may indicate a lack of exclusive possession?

A
  • Landlord retains a key
  • Landlord provides services
  • Sharing clause.
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13
Q

How does retaining a key affect exclusive possession?

A

It depends on the purpose of retaining the key; if used only in emergencies, exclusive possession may still exist.

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14
Q

What happens if a landlord provides services?

A

If the landlord provides services, it may indicate a licence rather than a tenancy.

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15
Q

What is the significance of sharing clauses in determining exclusive possession?

A

If a landlord reserves the right to introduce others, it may indicate a lack of exclusive possession, depending on the circumstances.

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16
Q

What is a key case that addresses exclusivity in leases?

A

A G Securities v Vaughan highlights how sharing arrangements can affect exclusive possession.

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17
Q

What did the House of Lords conclude in Antoniades v Villiers about exclusive possession?

A

The court ruled that the clauses in the agreements were sham and did not genuinely intend to defeat exclusive possession.

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18
Q

What factors determine if a sharing clause is genuine or a sham?

A
  • The size and nature of the accommodation
  • The relationship between the occupiers
  • The wording of the clause
  • Whether the clause has ever been exercised

Consideration of these factors helps in assessing the legitimacy of sharing clauses in tenancy agreements.

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19
Q

What must a business tenant show to establish tenancy rather than a license?

A
  • A certain term
  • Exclusive possession of the premises

Establishing these criteria is crucial for security of tenure under the Landlord and Tenant Act 1954.

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20
Q

What is the significance of the case Street v Mountford [1985] AC 809?

A

It applies to both residential and non-residential tenancies regarding exclusive possession.

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21
Q

In the business context, how do courts assess the arrangement between landlord and tenant?

A

By construing the document as a whole to determine if the landlord retains control over the property.

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22
Q

What was the outcome of Esso Petroleum Co Ltd v Fumegrange Ltd [1994] 2 EGLR 90 regarding exclusive possession?

A

The court held that Esso’s control over the premises was inconsistent with exclusive possession being vested in Fumegrange.

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23
Q

If an occupation agreement allows the landlord to relocate the tenant, what does this imply?

A

It will not be considered a lease.

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24
Q

What is required for multiple occupiers to have a lease rather than a license?

A

They must have exclusive possession and meet the essential requirements of a lease.

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25
What defines a joint tenancy among multiple occupiers?
All co-owners/tenants are deemed as one single entity and must hold the four unities: possession, interest, time, and title.
26
What does unity of possession mean?
All must be entitled to occupy the whole premises without exclusive use of any part.
27
What is the implication of unity of interest in a lease?
All occupiers must have a leasehold interest for the same term and be jointly liable for the rent.
28
What does unity of time require in a joint tenancy?
All occupiers' interests must start at the same time.
29
What does unity of title entail?
All occupiers' interests must derive from the same document or interdependent documents.
30
What was the court's decision in AG Securities v Vaughan [1990] AC 417?
The court found no joint tenancy due to lack of unity of title, interest, and time among occupiers.
31
What does the case Antoniades v Villiers [1990] 1 AC 417 illustrate about joint tenancies?
The court held that separate agreements did not defeat the unity of interest or title due to the circumstances of the case.
32
What are the essential requirements for a lease to exist?
* Certain term * Exclusive possession * Correct formalities ## Footnote These criteria must be met for a lease to be valid.
33
What circumstances can defeat an agreement from being a lease?
* Lack of intention to create legal relations * Service occupancy ## Footnote These factors may indicate that the arrangement is merely a license.
34
What did Denning LJ state regarding family arrangements in Facchini v Bryson?
A lack of intention to create legal relations can be presumed in family arrangements or acts of friendship.
35
What is a service occupancy?
An occupancy arising from an employer/employee relationship where the occupier must live on the premises for job performance.
36
In what scenario did the court rule a lease existed in Royal Philanthropic v Country (1985)?
Because the teacher's occupation was not for better job performance, it was a lease.
37
What are the formalities required to create a legal lease?
* A deed must be used * Registration is required for leases over 7 years ## Footnote The specifics depend on the length of the lease term.
38
What are the conditions for short leases under LPA 1925, s 54 (2)?
* Takes effect in possession * Granted at best rent * Not subject to a fine or premium ## Footnote These conditions allow short leases to exist without formal requirements.
39
What is an equitable lease?
A lease recognized by the court when a valid agreement exists but formal requirements for a legal lease are not met.
40
What principle does Walsh v Lonsdale (1882) illustrate?
Where there is conflict between common law and equity, equity will prevail.
41
What is the traditional structure of a lease commonly referred to as?
The anatomy of a lease.
42
What are the basic components of the anatomy of a lease?
* Parties * Date * Definitions * Interpretation provisions ## Footnote These components provide clarity and structure to the lease agreement.
43
What are the traditional basic elements of a lease?
Parties, date, definitions, interpretation provisions, demise and rents, tenant covenants, landlord covenants, guarantor’s covenants, provisos, agreements and declarations, rights granted, rights excepted and reserved, other provisions, execution, prescribed lease clauses, covenants in leases ## Footnote These elements guide the structure and content of a lease.
44
What does the 'demise' provision in a lease refer to?
The landlord demises or grants the lease of the premises to the tenant for a specified term in consideration of the rent paid ## Footnote This is a fundamental aspect of lease agreements.
45
In what manner are leases typically drafted regarding tenant actions?
Leases are drafted in a prohibitory or negative manner, setting out what the tenant cannot do ## Footnote This ensures clarity on tenant restrictions.
46
What is the landlord's covenant for quiet enjoyment?
A landlord’s covenant not to interfere with the tenant’s possession or enjoyment of the property during the term of the lease ## Footnote This is a common covenant found in leases.
47
What is 'forfeiture' in the context of leases?
The right of the landlord to bring the lease to an early end in the event of tenant breach ## Footnote This is a significant legal right for landlords.
48
What is a 'service charge' in a lease?
A sum of money charged by the landlord to tenants to cover costs of services within a property ## Footnote It typically includes maintenance and repairs of common areas.
49
What is required for a lease to be legal?
A lease must be granted by deed unless it falls within the exception for short leases of 3 years or less ## Footnote This is in accordance with LPA 1925, s 52.
50
What are 'Prescribed Lease Clauses'?
A list of clauses that must be included in registrable leases, focusing on key areas such as date of lease, landlord’s title number, parties, term, easements granted and reserved ## Footnote This was introduced by the Land Registration Act 2002.
51
Define 'leasehold covenant'.
A promise contained in a lease given by a landlord or a tenant ## Footnote This includes obligations related to repair, alterations, user, and alienation.
52
What does a tenant's repair covenant generally entail?
The tenant must keep the premises in the condition they would be kept by a reasonably minded owner, considering age and character ## Footnote This obligation can be significant if the premises are in disrepair.
53
What distinguishes 'repair' from 'renewal' in lease covenants?
'Repair' involves restoration of subsidiary parts, while 'renewal' involves reconstruction of the entirety ## Footnote This distinction can affect the tenant's obligations.
54
What is an 'alienation covenant'?
A method for the tenant disposing of the whole, or part, of their interest in a leasehold property ## Footnote This includes assignment, underletting, and parting with possession.
55
What is required for the assignment of a lease under LPA 1925?
A deed must be used to transfer a legal estate, with no short lease exception ## Footnote This applies even for leases that fall under the short lease exception.
56
What is the purpose of an Authorised Guarantee Agreement (AGA)?
To ensure the outgoing tenant guarantees the incoming assignee’s obligations under the lease in case of default ## Footnote This is common in commercial lease assignments.
57
What is the difference between subletting and assignment of a lease?
Subletting involves granting a lease out of the tenant's lease, while assignment transfers the remainder of the lease to another party ## Footnote Subletting keeps the original tenant responsible for the lease.
58
What are the types of covenants in leases?
* Absolute * Qualified * Fully qualified ## Footnote These terms define the level of restriction on the tenant's actions.
59
What is the significance of 'reasonableness' in fully qualified covenants?
Landlords must be reasonable if withholding consent for tenant actions, such as alterations or assignments ## Footnote This principle has been clarified in various court cases.
60
What legal issues arise concerning the enforceability of leasehold covenants?
The ability to enforce covenants after the original parties have left and sold their interests ## Footnote This can complicate the running of leasehold covenants.
61
What does enforceability of leasehold covenants explore?
The legal issues of enforceability of leasehold covenants and the rules governing the running of leasehold covenants in new leases.
62
What is privity of contract?
The legal relationship between two or more parties to a contract.
63
What happens to privity of estate upon assignment of a lease or reversionary interest?
Privity of estate exists between the current landlord and tenant but not between original parties after assignment.
64
True or False: Privity of contract remains after the assignment of leasehold interests.
True.
65
What is the significance of the Landlord and Tenant (Covenants) Act 1995 (LTCA 1995)?
It reformed the rules on the running of covenants in leases, particularly for new leases created after 1 January 1996.
66
What is the impact of LTCA 1995 on privity of contract for new leases?
It abolishes privity of contract for all new leases.
67
What does LTCA 1995, s 3 provide?
It provides for the automatic transmission of the benefit and burden of all landlord and tenant covenants to the new owner of the reversion or the assignee.
68
Fill in the blank: A tenant with a new lease will obtain an automatic release from the tenant's covenants upon _______.
assignment.
69
What is an Authorized Guarantee Agreement (AGA)?
The guarantee by an outgoing tenant of the obligations of the incoming assignee.
70
What is the purpose of an indemnity in the context of leasehold covenants?
To compensate for loss incurred by another party due to the indemnifier's actions.
71
How does the LTCA 1995 allow landlords to enforce covenants against subtenants?
Restrictive covenants can be enforced against any owner or occupier of the premises, but positive covenants cannot.
72
What sections of the LTCA 1995 apply retrospectively to both old and new leases?
* s 17, Tenant Default Notice * s 18, Liability for Variations * s 19, Overriding Leases
73
What is the requirement for a landlord wishing to pursue a former tenant under LTCA 1995, s 17?
The landlord must serve notice of the potential claim within six months of the charge becoming due.
74
What is a fixed charge as defined in LTCA 1995, s 17?
Includes arrears of rent, service charge, or insurance premiums but not unascertained liabilities.
75
What must a landlord do within six months of a fixed charge becoming due?
Serve notice of the potential claim on former tenants ## Footnote A fixed charge includes arrears of rent, service charge, or insurance premiums, as defined in the LTCA 1995, s 17.
76
What happens if the landlord does not notify the former tenant within six months?
The landlord will be precluded from making a claim against the former tenant
77
What is defined as a fixed charge under the LTCA 1995, s 17?
Arrears of rent, service charge, or insurance premiums ## Footnote Not including unascertained liabilities or damages ascertained only after a court order.
78
Who is not liable to pay additional amounts for lease variations post-assignment?
Former tenants and guarantors ## Footnote This applies to variations they could not have anticipated at the time of lease entry.
79
What is an example of a variation that a former tenant would still be liable for?
Rent reviewed after assignment pursuant to the rent review clause ## Footnote Such a variation was anticipated at the time when the lease was entered into.
80
What does the LTCA 1995, s 19 provide for?
The creation of an overriding lease in certain circumstances
81
What can a former tenant request when called upon to pay rent from an assignee?
An overriding lease
82
What does an overriding lease allow the former tenant to do?
Become the immediate landlord of the defaulting party
83
What is the term of an overriding lease?
Equal to the remaining term of the lease plus three days
84
What covenants does an overriding lease contain?
The same covenants as the original lease, excluding personal covenants
85
What is the landlord's obligation when a former tenant requests an overriding lease?
To grant it within a reasonable time
86
What can a former tenant do with an overriding lease?
Ensure compliance, terminate assignee's lease, or assign to a more reliable tenant
87
True or False: An overriding lease under the LTCA 1995 is the same as an overriding interest under the LRA 2002.
False

FLK 2: Land Law (8 decks)

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