Land Law: Leasehold Covenants

Leasehold Covenants

Leasehold Covenants – A clause in a lease specifying certain obligations on the part of either party.

Express Covenants – Terms that are expressly stated in a lease

Implied Covenants – Terms that are implied into a lease by the lae

Landlord’s Covenants – Clauses in a lease specifying the obligations of the landlord under the lease

Tenant’s Covenants – Clauses in a lease specifying the obligations of the tenant under the lease.

The Landlord’s Covenants

A landlord has certain obligations imposed onto him when he leases a property to somebody. These covenants are usually implied into a tenancy, if the tenancy agreement remains silent on the issues. The reason for this is to protect tenants, and ensure that their rights and entitlements are upheld.

Quiet Enjoyment The lease agreement will usually contain this clause, if it does not then one is implied into the agreement by law. This covenant implies that the landlord should allow the tenant to enjoy the occupation of the premises, without the interference of the landlord.

Sanderson v Berwick Upton Tweed Corporation (1884) 13 QBD 547

Lavender v Betts [1942] 2 All ER 72 – Removing doors and windows breached covenant of quiet enjoyment

Kenny v Preen [1963] 1 QB 499 – Threatening behaviour and intimidation towards a tenant can also breach this covenant.

Eviction Act 1977 S1(3) – Statutory protection against using threatening or intimidating behaviour towards eviction.

Southwark Borough Council v Mills [1999] 4 All ER 449 – Covenants are prospective, which means that it will only take effect from the date of the tenancy. The covenant does not apply to things done before the tenancy, even if there are continuing consequences to the tenant. In this case there were neighbours making a normal amount of noise, due to there being no soundproofing when the buildings were built noise seemed louder.

Non – Derogation from grantHaving granted the tenancy, the landlord cannot then undermine it in anyway. This is implied into the lease agreement.

Harmer v Jumbil (Nigeria) Tin Areas Ltd [1920] All ER 113 – Landlord granted a lease to T1 to store explosives on his land. He had to obtain a license to do this under the Explosives Act 1875, which imposed restrictions on what could be built on the land. The landlord was aware of this and retained property on the land. The terms of the license said that if buildings were erected a certain distance to the tenants property, then the license would be withdrawn. The Landlord then leased out the retained land, and started to build on it in the distance that the license would be withdrawn. The COA agreed that the tenant had breached his covenant.

Robinson v Kilvert (1889) 41 Ch 88 – The Landlord must have known at the time of granting the lease, what the tenants intentions were for using the land.

When a tenant establishes that there has been a breach, they can obtain an injunction, which will stop the landlord from continuing with the breach. They can also claim for damages to compensate the tenant for any loss suffered because of the breach.

Covenant to RepairThe obligation to maintain the leased premises. Common law and statute imply a number of covenants of repair into a lease.

Common Law – Fitness for Human HabitationIf 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 [1895] 2 QB 395. Only applies to furnished properties.

Maintenance of means of AccessIf a landlord owned a building that had been divided into several individual units, like a block of flats. In this situation the Landlord has an obligation to take reasonable steps to keep the common parts of the building in good repair (Liverpool City Council v Irwin [1977] AC 239). The law will imply this covenant into a lease. The common parts of a building refer to shared facilities such as the stairs, corridors and landings between units.

Correlative ObligationsImposing a duty on the landlord to correlate to one that the landlord has imposed on a tenant. For example if the landlord said the tenant must repair the inside of a premises as part of the lease, but doesn’t mention who must maintain the outside of the premises (Barrett v Lounova [1989])

Under Statute – The landlord and Tenants Act 1985 S8 imposes a statutory duty upon a landlord to keep the property fit for human habitation during the tenancy. This will only apply to properties where the tenancy is granted after 6th July 1957 and the rent does not exceed £80 in London or £57 per annum elsewhere. Very small scope as almost no tenancy agreements charge this little rent per annum.

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.

S11The landlord must keep the structure and exterior of the building in repair, as well as the installations that provide the tenant with gas, electric and water. The court will also take into account the age of the property S11(3)

If a Landlord breaches any repair covenants, then the tenant may be able to use specific performance to ensure that the landlord is compelled to fulfil the repairs. If the tenant was in desperation and done the repairs himself, he may be able to offset the costs of those repairs against future rent repayments. He may also be able to recover damages.

Edwards v Kumarasamy [2015] EWCA Civ 20 – COA had to consider liability of the landlord for a defect outside the rented premises. Kumarasamy held a long lease from freeholder. Kum granted a shorthold tenancy to his own tenant Edward. Edwards tripped on a paving stone that was broken leading to some communal bins. Edwards sued Kum for damages on the grounds that Kum hadn’t kept the building in good repair, as per the covenant of maintenance of means of access. Paving’s aren’t included as a possible of ordinary klanguage to describe the car park as an exterior of the hall.

The tenants Covenants

RentThere is no requirement for a tenant to pay rent, however there is usually an express term that requires rent to be paid. When the rent agreement states £350 in advance of and you move in on the 1st October, then the rent is due on the 1st of October. If rent is due monthly in arrears it is due at the end of the month, so the 31st of October.

RepairTenants do not have an implied obligation to repair the leased  premises. The lease will normally contain a clause stating that it must be kept in good tenable repair or something to that end. The court will interpret the tenants repair obligation in the context of the property (Brew Brothers ltd v Snax (Ross) Ltd [1970] 1 QB 612.)

WasteLeases can contain a clause that prohibits a tenant from committing waste. An obligation is also implied into the agreement. Waste in this context refers to any permanent alteration of tenanted property that is caused by the tenants actions or neglect.

Voluntary WasteWaste that is caused by a voluntary action of the tenant

Permissive WasteWaste that is caused by the tenants neglect. This can include failing to clear out a ditch, which has let to the foundations of the property rotting (Powys v Belgrave (1854))

A tenant is under an implied obligation to use the premise as a tenant would. Lord Denning said they must “do all the little jobs about the place that a reasonable tenant would” in Warren v keen [1953] 2 All ER 1118

Assignment and Subletting – Assignment happens if the tenant transfers the whole of his tenancy, so the remaining interest to another person. Subletting is where a sublease is granted by someone who is himself a tenant for a period that is shorter than his or her own lease.

Breach of the tenants Covenants

If a tenant breaches a covenant of a lease, there are various remedies available against him.

  • Landlord can forfeit the lease – this must be expressly stated in the lease, it is never implied. This is controlled by statute.
  • Damages for the breach, Specific Performance. S17 of LTA
  • Distress – allows landlord to enter premises and seize the tenants goods up to the value owed.
  • The Courts, tribunals and Enforcement Act 2007 have created a statutory recovery scheme called commercial rent arrears recovery, which came into force in 2014. This only applies to commercial properties, not those let as dwellings, so houses.

 

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