Leases 4 - Leasehold Obligations PDF

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Dr Helen Carr leases lecture notes 2020/21...

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Leasehold Obligations Leasehold Covenants  Covenants in leases are enforceable commitments between the parties, to do or not to do things…  Remember… The relationship between the freeholder and the leaseholder is governed by the lease, with rights and obligations for each party. In the most basic terms ‘rights’ are the things you are entitled to receive, whereas ‘obligations’ are the things you are required to do  In many leases there will be obligations placed on both the landlord and the leaseholder that you may be unaware of but which, if breached, can have severe implications  There are also obligations imposed by statute What sort of covenants might be in leases?  Imagine you are a landlord what obligations might you put in the lease  How might the covenants be different if you were a landlord in the private rented sector, a landlord of a long residential flat, a commercial landlord?  Would you expect the covenants imposed upon tenants of a 999-year leasehold house to be different from a 99-year lease of a flat?  What sort of covenants might you as a tenant want to see in a lease?  Who has the greater power to determine what covenants are in a lease?  What might be done about this? Landlord covenants - express obligations in the lease that the landlord must perform  Usually landlord has responsibilities for repair, insurance and maintenance of the common parts  In long leases tenant pays via service charges (subject to statutory requirements that charges are payable under the lease and reasonable)  In short leases the costs are covered by the rent  What are the landlord obligations in the Willow Court lease?  Clause 4 of the lease Obligations in connection with repair  Condition of property of critical importance  Minimal implied common law obligations in connection with repair  Contractual autonomy  ‘Fraud apart, there is no law against letting a tumble-down house’ - 1863  Some common law inroads o Smith v Marrable 1843 è Entitled to repudiate a residential tenancy if it is not fit for human habitation

Statutory interventions  Implied statutory obligations in connection with repair  Landlord and Tenant Act 1985 as amended by the Homes (Fitness for Human Habitation) Act 2018  s8 o Safe healthy and free from things that could cause serious harm  s11 o To keep in repair the structure and exterior of the dwelling-house and; o To keep in repair and ‘proper working order’ installations for water, gas and electricity, facilities for sanitation, and installations for space heating and heating water è Only applies to leases of less than 7 years è Narrowly constructed and location dependant New statutory obligation to be imposed in long residential leases  As a result of the Grenfell tragedy and the widespread problem of defective cladding the government has introduced the Building Safety Bill  Introduces new obligations into leases to carry out work inspection required for building safety  Applies to high risk buildings defined as 18m or 6 storeys high  Works will be paid by leaseholders Tenant’s obligations  Express obligations on tenants  Generally extensive o Range from obligation to pay rent to restrictions on ability to assign the tenancy or to sublet the whole part  Implied obligation on tenant  Warren v Keen 1954 o Behave in a tenant-like manner è ‘do the little jobs about the place which a reasonable tenant would do’ Landlord’s remedies for tenant default  Eviction  No fault eviction  Eviction on grounds  Problems of fixed term leases  Forfeiture of lease  Complex  Potentially rewarding o Costs o Property returned  Distress for unpaid rent  Action for arrears of rent  Damages for breach of covenant  Injunction for specific performance

What is a forfeiture of lease?  ‘A right to determine a lease by landlord is a right of forfeiture if (a) when exercised, it operates to bring the lease to an end earlier than it would ‘naturally’ terminate; and (b) it is exercisable in the event of some default by the tenant’  Clays Land Co-Operative LTD v Patrick  Right of re-entry and forfeiture must be express term  Find it in the Willow Court lease  Clause 5(2)  Primarily a lever to enforce compliance with the covenants of the lease  An option to be exercised by the landlord Summary of podcast  Covenants in leases - who does what and an exercise of power  Statutory obligations - the state intervening in the market  Freeholder power and contractual remedies  How easy are they to access?  Introduction to forfeiture - potentially a powerful landlord remedy...