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Enforcing Leasehold Covenants 2

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Landlord and Tenant Law Quiz on Enforcing Leasehold Covenants 2, created by nathan_hutchings on 09/05/2013.
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Quiz by nathan_hutchings, updated more than 1 year ago
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Created by nathan_hutchings almost 11 years ago
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Resource summary

Question 1

Question
Authorised guarantee agreements (AGAs)
Answer
  • Leases granted on or after 1st January 1996 (“new leases”)
  • Leases granted before 1st January 1996 (“old leases”)

Question 2

Question
Authorised guarantee agreements (AGAs)
Answer
  • 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

Question
If AGA entered into by assigning tenant
Answer
  • 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

Question
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)
Answer
  • 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

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

Question
Section 16 enables L to require assigning T to enter AGA only in certain circumstances:
Answer
  • Lease must contain covenant against assignment without consent of L
  • Must be reasonable to require assigning T to enter AGA

Question 7

Question
L and T can agree that L may grant consent to assignment subject to condition that assignor enters into an AGA on assignment
Answer
  • Note the effect of LTA 1927 section 19(1A)
  • Note the effect of LT(C)A 1995 section 19(1A)

Question 8

Question
LTA 1927 section 19(1A)
Answer
  • 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

Question
Terms of the AGA
Answer
  • 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

Question
Terms of the AGA
Answer
  • 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

Question
The position of the landlord
Answer
  • 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

Question
The position of the landlord steps
Answer
  • 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

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

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

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

Question
Only applies if original lease does not provide for variation which has taken place
Answer
  • Section 18
  • Section 17
  • Section 19

Question 17

Question
This section applies when a Landlord wishes to recover a fixed charge from a former tenant?
Answer
  • Section 17
  • Section 18
  • Section 19

Question 18

Question
Section 17
Answer
  • 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

Question
Fixed charges are sums capable of definition or ascertainment in the lease for example:
Answer
  • annual rent
  • service charge
  • damages for the tenant’s failure to keep the property in repair

Question 20

Question
Section 17
Answer
  • 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

Question
Former T will not be liable to extent that covenants have been made more onerous by variation
Answer
  • Section 17
  • Section 18
  • Section 19

Question 22

Question
Former T will not be liable to extent that covenants have been made more onerous by variation
Answer
  • Section 18
  • Section 17
  • Section 19

Question 23

Question
Overriding lease = lease which slots in above lease to defaulting assignee
Answer
  • Section 17
  • Section 18
  • Section 19

Question 24

Question
Section 19 results in two leases
Answer
  • Overriding lease between L and former T (T1)
  • Original lease between former T (T1) and defaulting assignee (T2)

Question 25

Question
Section 19 results in two leases
Answer
  • Overriding lease between L and former T (T1)
  • Original lease between former T (T1) and defaulting assignee (T2)

Question 26

Question
Section 19
Answer
  • 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

Question
Subleases
Answer
  • 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

Question
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
Answer
  • 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

Question
Subleases
Answer
  • 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

Question
The restrictive covenant exception
Answer
  • 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

Question
If dealing with unregistered title:
Answer
  • Restrictive covenant directly enforceable against subtenant if he has notice of it
  • Restrictive covenant automatically directly enforceable against subtenant

Question 32

Question
If dealing with registered title
Answer
  • Restrictive covenant automatically directly enforceable against subtenant
  • Restrictive covenant directly enforceable against subtenant if he has notice of it
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