The University of Law REAL ESTATE LARGE GROUP 8 Student Guide Assignment of a Lease Alterations, Planning and Use Outcomes By the end of this Large Group you should be able to: 1. Explain the differences between a former tenant's liability for covenants in old and new leases. 2. Analyse the provisions relating to alienation contained in a typical commercial lease and apply the relevant statutory provisions. 3. Understand the procedure on assignment of a lease and how it differs from sale of a freehold. 4. Explain the provisions in a lease relating to alterations, planning and use 1 Who can the landlord pursue for breach of tenant's covenant? Old leases - Original tenant is no longer liable when they've assigned the lease to someone else - May make the first tenant enter an AGA. - Each time the lease is assigned, the landlord will have another AGA against the assignor to ensure they are liable for the assignor. - If the tenant gets the landlord's permission to do things, this ensures that the landlord knows what is going on. c37c3bd8b6027b8d5ca36e4e80d2a60b.docx 91 @ The University of Law Limited
The University Larw New leases - beyond 1996 is a new lease 2. Types of covenant Absolute Covenant - The tenant cannot do something such as the tenant not being able to assign the property. The landlord can decide to allow something absolute but it's to their discretion. Qualified Covenant - The tenant can do this but only with the landlord's consent such as the tenant cannot assign their property without the landlords consent. Fully Qualified Covenant - Where the tenant requires the landlord's permission but the landlord cannot hold the consent 3. Assignment - Form of alienation with subletting. Restrictions can be in place to have control over the new tenant if their covenant is not strong. @ The University of Law Limited 92 c37c3bd8b6027b8d5ca36e4e80d2a60b.docx
The University, Low 3.1 Statutory Provisions relating to assignment S19ti1)tia) Landlord and Tenant Act 1927 - Applies to qualified covenants - Implies into qualified covenant for assignment that the covenant is deemed to be subject to a proviso that the consent is not to be reasonably withheld. - Protects tenant S19ti1A) Landlord and Tenant Act 1927 - Allows landlord and tenant to agree the conditions and circumstances in which it is not going to be unreasonable for the landlord to refuse consent. · Conditions - Tenant agrees to enter an AGA - Rent is paid up to date · Circumstances S1 Landlord and Tenant Act 1988 - When the tenant makes a written application for consent the landlord must within a reasonable time either give consent unless reasonable not to or to serve on the tenant written notice of the decision whether or not to give consent. - If consent is given to any condition then they must specify the condition and if they are withholding consent their reason. Activity 1 1. Frank Jarvis Limited granted a 30 year lease to Jerusalem Pets Limited in 1998.