Land Law and Tenant

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Question 1

This Problem concerns the enforceability and remedies of leasehold covenants between landlords and tenants, and their successors in title. The ground floor lease is granted before 1 January 1996 and so the covenants are governed by a mixture of statute and common law. The first and second floor leases were granted in 2001 after the coming into force of the Landlord and Tenant (Covenant) Act 1995 and are dealt with under this statutory regime.

Ground Floor

On the facts the original landlord, Larry and the Original tenant Tariq have assigned their leasehold estate. Clearly the original parties are bound to each other in contract to perform the covenants contained in the lease. Tariq liability continues throughout the whole term of the lease, and for any breach of covenant committed by his assignee Thursby v Plant (1690). Under s141 of the Law of Property Act (LPA) 1925, a landlord will not be able to sue the original tenant after he has parted with the land as that right is statutorily transferred to the new landlord, if the covenant has reference to the subject matter of the lease Re King 1963.

Of course for practical purposes, the landlord, Ron, will wish to enforce the leasehold covenant against the present tenant and, in this respect, the issue turns on whether the benefit of the covenant has passed to him and the burden of the covenant has passed to the new tenant. The rule under the Spencer case provides that two conditions must also be met (i) there must also be privity of estate between the parties and (ii) the covenants touch and concern the land.

The lease contains two covenants, one to pay rent and the other to use property as a ladies fashion business. The requirements for determining whether a covenant does touch and concern land have been re-stated by Swift Investments v Combined English Stores 1988. They are (i) covenant that benefits any estate as opposed to a particular original covenantee (ii) a covenant which affects the nature, quality, mode of use or value of land (iii) whether the covenant was expressed to be personal.

Both covenant prima facie touches and concern the land and fall within the Swift formula. Tariq has assigned his interest to Adam and Larry has assigned his interest to Ron. The relationship of Landlord and Tenant between Adam and Ron also appears to exist; a legal lease will establish privity of estate.

I would advise Ron that he is entitled to sue Adam He could seek forfeiture on the breach of the user covenant under s146 LPA 1925. He would need to serve a notice, which would have to specify the breach, and require the breach to be remedied, if it is capable of remedy he may also request, compensation. The breach is a continuous breach and the covenant is negative as such it might be capable of being remedied. Also under s146 (2) LPA 1925 the tenant could apply for relief against forfeiture. Ron could alternatively sue for an injunction and damages.

Ron may also forfeit the lease for non-payment of rent .The procedure here is entirely different from that of forfeiture for breach of any other covenant. It is not necessary to first serve a s146 notice.

Forfeiture for non-payment of rent is governed by s 210 Common Law Procedure Act 1852 unless the lease provides for otherwise. Ron must first make a formal demand for the rent unless (i) at least half a year’s rent is arrears and (ii) there are not enough goods available for distress on the premises to satisfy all the arrears.

The courts have the statutory right to stay proceedings s212 CLPA 1852 provided the tenant pays all the rent due and the landlords cost

Under s 210 CLPA 1852 and s 138 County Court Act 1984 Adam can obtain relief against forfeiture within six months of the Landlord’s re-entry pursuant to a court order if Adam (i) pays the rent due (ii) pays the landlords expenses and (iii) it is just and equitable to grant relief. The rational behind this generous provision is...
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