Enforcing Leasehold Covenants 2

Question 1 of 32

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Authorised guarantee agreements (AGAs)

Select one of the following:

  • Leases granted on or after 1st January 1996 (“new leases”)

  • Leases granted before 1st January 1996 (“old leases”)

Question 2 of 32

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Authorised guarantee agreements (AGAs)

Select one or more of the following:

  • AGA = agreement between L and assigning T under which assigning T guarantees that the assignee will perform the lease covenants

  • If assignee does not perform lease covenants then L can take action against assigning T

  • If assignee does not perform lease covenants then L cannot take action against assigning T

  • AGA = agreement between L and assigning T under which assigning T guarantees that the assignee will not perform the lease covenants

Question 3 of 32

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If AGA entered into by assigning tenant

Select one of the following:

  • When T1 assigns to T2 the lease covenants pass to T2 (section 3) and T1 is automatically released from any liability under the lease (section 5)

  • If T2 then defaults, L1 can bring an action against T2 due to section 3 or against T1 due to AGA

Question 4 of 32

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If T2 assigns to T3 the lease covenants pass to T3 (section 3) and T2 is automatically released from any liability under the lease (section 5)

Select one or more of the following:

  • T1’s AGA will no longer be enforceable

  • L might request AGA from T2 instead to guarantee T3’s performance

  • T1’s AGA will still be enforceable

Question 5 of 32

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enables L to require assigning T to enter AGA only in certain circumstances

Select one of the following:

  • Section 16 LT(C)A 1995

  • Section 15 LT(C)A 1995

  • Section 17 LT(C)A 1995

  • Section 18 LT(C)A 1995

Question 6 of 32

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Section 16 enables L to require assigning T to enter AGA only in certain circumstances:

Select one or more of the following:

  • Lease must contain covenant against assignment without consent of L

  • Must be reasonable to require assigning T to enter AGA

Question 7 of 32

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L and T can agree that L may grant consent to assignment subject to condition that assignor enters into an AGA on assignment

Select one of the following:

  • Note the effect of LTA 1927 section 19(1A)

  • Note the effect of LT(C)A 1995 section 19(1A)

Question 8 of 32

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LTA 1927 section 19(1A)

Select one or more of the following:

  • Will then be automatically reasonable for L to impose condition that assignor enters into an AGA on assignment

  • Remember that section 19(1A) only applies to leases of commercial premises granted on or after 1st January 1996 and it affects only assignments (not sublettings)

  • Remember that section 19(1A) does not apply to leases of commercial premises granted on or after 1st January 1996 and it affects only assignments (not sublettings)

Question 9 of 32

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Terms of the AGA

Select one or more of the following:

  • Can only require assignor to guarantee performance of the lease covenants by immediate assignee

  • Can make assignor liable as principal debtor

  • Cannot make assignor liable as principal debtor

  • Cannot require assignor to guarantee performance of the lease covenants by immediate assignee

Question 10 of 32

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Terms of the AGA

Select one or more of the following:

  • Can require assignor to enter new lease if assignee is declared bankrupt and lease is disclaimed by trustee in bankruptcy

  • New lease will be for remainder of term of disclaimed lease and covenants must be no more onerous than in disclaimed lease

  • Can't require assignor to enter new lease if assignee is declared bankrupt and lease is disclaimed by trustee in bankruptcy

Question 11 of 32

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The position of the landlord

Select one of the following:

  • When L assigns reversion there is no automatic release from liability under lease

  • When L assigns reversion there is automatic release from liability under lease

Question 12 of 32

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The position of the landlord steps

Select one or more of the following:

  • 1) L may apply to be released

  • 2) Must serve written notice on current T requesting release

  • 3) Must do so before or within 4 weeks after assignment

  • 2) Must do so before or within 4 weeks after assignment

  • 1) Must serve written notice on current T requesting release

  • 3) L may apply to be released

Question 13 of 32

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T can serve written notice of refusal on L within further 4 weeks

Select one or more of the following:

  • If T does not then L automatically released

  • If T does not then L is not automatically released

  • If T does so then L must apply to court

Question 14 of 32

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Former T who suffers loss due to liability under AGA for default of assignee may:

Select one or more of the following:

  • Bring action against defaulting assignee under general law of guarantees

  • Take action against his assignee on indemnity covenant
    (note that indemnity covenant will not be implied into a new lease)

  • Take no action against his assignee on indemnity covenant
    (note that indemnity covenant will not be implied into a new lease)

Question 15 of 32

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Sections 17, 18 and 19 Landlord and Tenant (Covenants) Act 1995

Select one or more of the following:

  • Apply to both old and new leases – retrospective

  • Improve position of former T who remains liable either due to privity of contract (if old lease) or due to having entered AGA (if new lease)

  • Do not improve position of former T who remains liable either due to privity of contract (if old lease) or due to having entered AGA (if new lease)

Question 16 of 32

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Only applies if original lease does not provide for variation which has taken place

Select one of the following:

  • Section 18

  • Section 17

  • Section 19

Question 17 of 32

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This section applies when a Landlord wishes to recover a fixed charge from a former tenant?

Select one of the following:

  • Section 17

  • Section 18

  • Section 19

Question 18 of 32

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Section 17

Select one of the following:

  • To recover fixed charge from former T, L must serve default notice on former T within 6 months of charge becoming due

  • To recover fixed charge from T, L must serve default notice on T within 4 months of charge becoming due

Question 19 of 32

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Fixed charges are sums capable of definition or ascertainment in the lease for example:

Select one or more of the following:

  • annual rent

  • service charge

  • damages for the tenant’s failure to keep the property in repair

Question 20 of 32

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Section 17

Select one or more of the following:

  • Default notice must state that the sum is due and that L intends to proceed against former T to recover it

  • If L fails to serve default notice then cannot recover fixed charge from former T

Question 21 of 32

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Former T will not be liable to extent that covenants have been made more onerous by variation

Select one of the following:

  • Section 17

  • Section 18

  • Section 19

Question 22 of 32

Medal-premium 1

Former T will not be liable to extent that covenants have been made more onerous by variation

Select one of the following:

  • Section 18

  • Section 17

  • Section 19

Question 23 of 32

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Overriding lease = lease which slots in above lease to defaulting assignee

Select one of the following:

  • Section 17

  • Section 18

  • Section 19

Question 24 of 32

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Section 19 results in two leases

Select one or more of the following:

  • Overriding lease between L and former T (T1)

  • Original lease between former T (T1) and defaulting assignee (T2)

Question 25 of 32

Medal-premium 1

Section 19 results in two leases

Select one or more of the following:

  • Overriding lease between L and former T (T1)

  • Original lease between former T (T1) and defaulting assignee (T2)

Question 26 of 32

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Section 19

Select one or more of the following:

  • Duration of overriding lease = 3 days longer than term of lease being overridden

  • Duration of overriding lease = 4 days longer than term of lease being overridden

  • Other terms = different terms to lease being overridden

  • Other terms = same as terms of lease being overridden

  • Former T becomes immediate landlord of defaulting assignee which gives former T more control over defaulting assignee

Question 27 of 32

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Subleases

Select one or more of the following:

  • Privity of contract between L1 and T1 and between T1 and S1

  • Privity of estate between L1 and T1 and between T1 and S1

  • No privity of contract or privity of estate between L1 and S1
    (no contract and no direct landlord and tenant relationship)

  • L1 cannot therefore enforce covenants in headlease or in sublease against S1

  • L1 therefore can enforce covenants in headlease or in sublease against S1

Question 28 of 32

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Likely that headlease and sublease will be on same terms so if S1 is in breach of sublease then T1 will also be in breach of headlease

Select one or more of the following:

  • L1 then has right of action against T1 (headlease)

  • L1 then has right of action against S1 (headlease)

  • T1 has a right of action against S1 (sublease)

Question 29 of 32

Medal-premium 1

Subleases

Select one of the following:

  • Still no privity of contract or privity of estate between L1 and S1
    (no contract not in direct landlord and tenant relationship)

  • Privity of contract or privity of estate between L1 and S1

Question 30 of 32

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The restrictive covenant exception

Select one or more of the following:

  • Restrictive covenant = covenant which is negative in substance and which prevents occupier from doing something on land

  • Restrictive covenant = covenant which is negative in substance and which does not prevent occupier from doing something on land

Question 31 of 32

Medal-premium 1

If dealing with unregistered title:

Select one of the following:

  • Restrictive covenant directly enforceable against subtenant if he has notice of it

  • Restrictive covenant automatically directly enforceable against subtenant

Question 32 of 32

Medal-premium 1

If dealing with registered title

Select one of the following:

  • Restrictive covenant automatically directly enforceable against subtenant

  • Restrictive covenant directly enforceable against subtenant if he has notice of it

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Enforcing Leasehold Covenants 2

nathan_hutchings
Quiz by , created over 3 years ago

Landlord and Tenant Law Quiz on Enforcing Leasehold Covenants 2, created by nathan_hutchings on 09/05/2013.

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