Enforceability of leasehold covenants

• What does the element of enforceability of leasehold covenants explore?

  The legal issues of enforceability of leasehold covenants and the rules governing their running in new leases
• What happens when leases are granted between landlords and tenants?

  Both parties enter into covenants agreeing to do or not do certain things
• What is the main question regarding covenants when original parties leave the land?

  Whether the covenants made by the original parties can be enforced by or against new parties
• How does the law differ for the running of leasehold covenants compared to freehold covenants?

  The law governing leasehold covenants is different from that of freehold covenants
• What does privity denote in the context of leasehold covenants?

  The legal relationship between two or more parties to a contract
• What exists between a landlord and tenant when a lease is granted?

  Privity of contract exists between them
• What can be enforced by the original landlord against the original tenant in a lease?

  All the terms of the lease
• What is privity of estate in the context of leasehold covenants?

  It exists when the landlord and tenant are each owners of a legal estate in the same property
• What happens to privity of estate upon assignment of the lease or reversionary interest?

  Privity of estate ceases between the original landlord and tenant
• What occurs when a tenant assigns its interest to a successor in title?

  There is no contractual relationship between the landlord and the new tenant
• What is the consequence of a landlord selling its reversionary interest?

  There is no contractual relationship between the successor in title and the tenant
• What would happen if covenants were unenforceable due to lack of a contractual relationship?

  Covenants would have a very limited lifespan, ending when original parties leave
• What is the potential issue if every covenant binds successors in title?

  Successors could be bound to perform strange promises, making land less attractive
• What are the two sets of rules determining the enforceability of leasehold covenants?

  • Old system for leases granted before 1 January 1996
  • New system for leases granted on or after 1 January 1996
• What governs all leases created before 1 January 1996?

  The old system of rules
• What is the liability of the original landlord and tenant in old leases?

  It continues for the full duration of the lease term
• What absurdities arose from the continuing liability of original parties in old leases?

  Original tenants were held liable for rent or repair costs long after assignment
• What does privity of contract mean for original landlords and tenants?

  They are liable for breaches of covenant by their successors for the entire lease duration
• What does privity of estate allow in old leases?

  It allows tenant covenants that 'touch and concern' the land to be enforceable by successors
• What significant change did the LTCA 1995 introduce regarding privity of contract?

  It abolished privity of contract for all new leases
• What happens to a tenant's liability upon assignment of a new lease?

  The tenant generally obtains an automatic release from covenants upon assignment
• What must a landlord do to obtain a release from their obligations upon assignment of a new lease?

  The landlord must apply for such a release from the tenant
• What is the consequence of an 'excluded assignment' under LTCA 1995?

  There is no automatic release of the landlord upon assignment
• What does LTCA 1995, s 3 provide regarding the assignment of covenants?

  It provides for the automatic transmission of the benefit and burden of all landlord and tenant covenants
• What is the exception to the rule in LTCA 1995, s 3 regarding covenants?

  Covenants expressed to be personal to any person do not pass to a third party
• What does LTCA 1995, s 23(1) state about liability for breaches?

  The parties remain liable for breaches occurring during their period of occupation
• When does an assignee of the lease become liable for covenants?

  From the date of assignment for all covenants in the lease
• What is the significance of the LTCA 1995 in relation to leasehold covenants?

  It made fundamental changes to the running of leasehold covenants on assignment
• What is the effect of the LTCA 1995 on the original landlord and tenant's liability?

  They are no longer liable for the covenants for the full duration of the lease term
• What is the critical date for determining whether old or new rules apply to a lease?

  The date of creation of the lease
• What happens to a tenant's liability for breaches of covenants after assigning a new lease?

  The tenant's liability for breaches ceases when it assigns the lease
• What is the landlord's position regarding liability upon assignment of a new lease?

  The landlord must apply for a release from the tenant
• What is the significance of the retrospective provisions introduced by the LTCA 1995?

  They apply to all leases, both old and new
• What does LTCA 1995, s 11 state about excluded assignments?

  There is no automatic release if the assignment is in breach of the alienation covenant
• What happens when a tenant assigns a lease?

  The assignee acquires the benefit and burden of all the covenants in the lease.
• What does a landlord acquire when assigning the reversionary interest?

  The incoming landlord acquires the benefit and burden of the covenants.
• What is the exception to the rule regarding covenants in LTCA 1995, s 3(6)?

  Covenants expressed to be personal to any person do not pass to a third party.
• How is 'expressed to be personal' interpreted in the context of LTCA 1995?

  It means the covenant is expressly stated to be between two named parties to the lease.
• What does LTCA 1995, s 23(1) state about parties' liability?

  The parties remain liable for breaches that occur during their period of occupation.
• When does an assignee of the lease become liable for covenants?

  An assignee becomes liable from the date of assignment for all covenants in the lease.