Leases

• What is the term used for a landlord in a lease agreement?

  Lessor
• What is the term used for a tenant in a lease agreement?

  Lessee
• What type of interest does a landlord have in the land?

  Reversionary interest
• What do leases contain in terms of obligations?

  • Covenants (promises) made by the landlord and tenant
  • Privity of contract referred to as 'head lease'
• What does assignment in a lease entail?


  The tenant disposes of their entire remaining interest in the lease
• What must an assignee sign to create a privity of contract with the landlord?

  A licence to assign
• What is a sublease or underlease?

  A lease where the tenant disposes of less than their entire remaining interest in the property
• What is the implication of not having privity with the landlord in a sublease?

  The landlord cannot hold the sub-tenant liable for breaches
• What are the types of leases mentioned?

  1. Fixed term tenancies
  2. Reversionary leases
  3. Periodic tenancies
  4. Tenancy at will
• How can rent in a long lease be increased?

  It cannot be increased unless the lease provides a rent review clause
• What defines a periodic tenancy?

  It is defined by a period of time such as 'yearly tenancy'
• What happens to a periodic tenancy if no notice is given?

  It automatically renews until one party gives notice
• What is a tenancy at will?

  A personal arrangement between landowner and another party that is not an estate in land
• What is required for a lease over 7 years?

  A deed and registration
• What is required for a lease of 3 to 7 years?

  A deed
• How are leases of 3 years or less created?

  Informally without a deed if the tenant takes possession for the best rent obtainable
• What happens if a lease does not state a clear start or end date?

  It is considered void
• What is an equitable lease?

  It must be a contract signed by the parties and registered via a notice
• What is a licence in relation to land?

  A personal right to use land that does not include statutory protections that attach to leases
• What are the key characteristics of a lease?

  • Right of the tenant to exclusively possess the land
  • For fixed or periodic term certain
  • Given in exchange for consideration
  • If called a licence but has characteristics of a lease, it is a lease
• What are typical covenants in a lease granted after 19.06.2006?

  • To pay rent
  • Quiet enjoyment
  • Duties to repair
  • Specify uses of the premises
  • Restricting alterations
• What does a qualified alterations covenant prohibit?

  Making non-structural alterations without the landlord's consent
• What does an absolute bar on alterations entail?

  It prohibits the tenant from making non-structural alterations
• What is required for the assignment of a lease?

  It must be made by deed even if the original lease was oral
• What is an absolute covenant against assignment?

  The tenant may not assign the lease but can ask the landlord to amend the covenant
• What happens if assignment is permitted?

  The agreement is formalized by a deed of variations
• What is a qualified covenant regarding assignment?

  The landlord may not unreasonably withhold consent
• What are the rules regarding passing benefit and burden of leasehold covenants after assignment?

  • Assignment of lease made after 1st January 1996: tenants are automatically released from their covenant upon assignment
  • Tenant is not liable for a subsequent tenant’s breach of covenant after the assignment
• What are the conditions for commercial leases regarding assignment consent?

  • Landlord can require outgoing tenant to enter into a written obligation known as an Authorised Guarantee Agreement (AGA)
• What are the rules for leases before 1996 regarding liability?

  • Original landlord and tenant remain liable for the entire lease period unless one expressly releases the other
  • May be enforceable with the new owner under Privity of Estate
• What must be provided to establish privity of contract between the landlord and assignee?

  A licence to assign
• What remedies are available for breach of obligation in a commercial lease?

  • Landlord can take control of tenant's goods and sell them (with 7 days notice)
  • Sue the tenant for up to 6 years of rent
  • Forfeiture: right to end the lease early and re-enter the premises
• What must be included in a lease for forfeiture to be available?

  It must expressly include a forfeiture clause
• What must the landlord do if a forfeiture clause is included in the lease?

  Serve a notice on the tenant specifying the breach and require it to be remedied
• What should the notice served by the landlord include?

  It must specify the breach and set out any compensation payable to the landlord
• When must a landlord serve a default notice for rent recovery against a former tenant for unpaid rent?


  must be served within 6 months of rent becoming due
• what is an overriding lease option?


  if a former tenant pays the amount demanded in the default notice -they can request an overriding lease from the landlord-becoming the landlord of the defaulting asignee