Land Law: Leasehold Covenants (Exam Question)

Leasehold Covenants: Exam Style Question

Question: Alice lives on her own in Willow View, a large detached house with a separate annex.  In order to make some money, she decides to rent out the annex to Hubert and Nicola, a young couple.  Hubert and Nicola sign up to two identical, but separate, “Licence Agreements”, each of which lasts for one year.  Under the licence agreements, Hubert and Nicola are each required to pay £150 per month

The Licence Agreements state that they must vacate the rooms between 10am and 12pm each day, as well as containing a provision that they will share the annex with whomever Alice selects. 

Hubert and Nicola have recently discovered that the door and window frames are rotten.  They raised this with Alice but she said it was like that when they moved in so they would have to put up with it.

Last week, the shower started leaking badly – a plumber has advised that it needs replacing to solve the problem.  When Hubert and Nicola told Alice about this her response was that the leak must have been their fault so they will have to pay for it.  To make matters worse the recent warm weather has led to mould growing in various places within the annex.        

Advise Hubert and Nicola whether Alice is liable for the repairs and what steps (if any) they can take to resolve the problems

Answer: The first legal issue is to determine whether Hubert and Nicola have either a lease or a license to be in the property. This is because having a lease will imply covenants upon the landlord that mean he has an obligation to do certain things. This also implies obligations upon the tenant.

Lord Templeman gave 3 criteria to determine whether there is in fact a lease in the case of Street v Mountford. The three were to be in exclusive possession and for a certain term. Rent was considered as evidence towards their being a lease, but was not essential as Ashburn Anstalt v Arnold outlines.

The term of the lease must be known from the outset (S.149(3) LPA 1925), it must have either an immediate start date or one in the future, but this cannot exceed 21 years in the future. The question suggests that the lease length is known, which is for one year. This test has been satisfied for Hubert and Nicola.

Hubert and Nicola are also paying rent. Although this is not a determining factor as to whether a lease exists rather than a license it is evidence towards that effect per Ashburn Anstalt v Arnonld.

The next criteria is Excusive Possession. Street v Mountford’s significance is around exclusive possession. Lord Templeman said that someone in exclusive possession could exclude both the Landlord and strangers from the property. The case law after Street clarifies what exclusive possession looks like. A landlord cannot label a lease as a license because if it meets all the criteria of becoming a lease you cannot say it is a license. Lord Templeman related a pronged fork is a fork and not a spade, even if you call it a spade.

Aslan v Murphy is similar to Hubert and Nicola’s agreement because they were expected to vacate the property between certain times, and to share the room with whomever the licensor requested. This was also labelled as a license. Hubert and Nicola have been told to leave the property between 10AM and 12PM and share with whomever – Lord Templeman would label the clauses as sham devices. Hubert and Nicola would have a lease and Alice would have obligations because she is a landlord.

The next legal issue is whether there are any covenants that can benefit Hubert and Nicola. Covenants can be expressly contained within a lease, but if they are not the law also implies some into the agreement. There do not appear to have been any covenants expressly included in the lease, so I will look at those implied by law.

Common Law – Fitness for Human Habitation – If the property if let furnished, then the law implies a covenant that it is let in a state fit for human habitation, meaning that it is suitable to live in. This covenant only says that it must be fit for habitation at the beginning of the tenancy (Smith v Marrable (1843)). The covenant places no obligation on the landlord to maintain this: Sarson v Roberts. Alice has an obligation to ensure that the property is fit for human habitation. The windows and doors being rotten does not seem to make the house fit for human habitation, so she may be able to claim against Alice under this provision if they were like this at the beginning of the tenancy.

The landlord and Tenants Act 1985 S13(1) – Imposes repairing obligations on a landlord if the lease is for a dwelling house and was granted after 24th October 1961 for less than 7 Years. These are implied, so it doesn’t matter that Alice hasn’t included them in the lease.

S11 (a)to keep in repair the structure and exterior of the dwelling-house (including drains, gutters and external pipes). The rotten window frames and doors are part of the structure of the house, which will mean that Alice has an obligation to keep them maintained.

S11 (b) of The Landlord and Tenant Act –  to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for making use of the supply of water, gas or electricity), and. The leaky shower is something that could be considered a sanitary convenience, which means that Alice has an obligation to repair it.

In Quick v Taff Ely Borough Council severe condensation that causes mould but does not actually damage the walls will not give rise to a duty on behalf of the landlord to repair the property, however because it is being caused by a S11 repair issue they may be able to claim against Alice because she has failed to repair the shower, which caused the mould.

Alice is liable for all of the repairs because Hubert and Nicola have a lease, which imposes obligations on Alice. My advice to Hubert and Nicola is that they should continue to pay the rent, otherwise there may be grounds for eviction. There are remedies available to them. S.17 LTA 1985 says a court may order specific performance where a tenant alleges a landlord has failed to make repairs, which will force Alice to make the repairs.

If Hubert and Nicola decide to make the repairs themselves, they may be able to recoup the costs from future rent from the case of Lee-Parker v Izzet. In addition to these remedies, they may also be able to claim damages for breaching the covenants, but these will be done to put Hubert and Nicola into the same position that they would have been in. I recommend that they seek specific performance to ensure that the repairs are done and because the lease is so short, it isn’t wise to make the repairs if you’ll continue litigating after the tenancy has ended.

They will likely be able to claim for the plumber who recommended that the shower is replaced because there is an obligation on Alice to repair the shower.

 

 

 

 

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