PRE 1996 LEASEHOLD COVENANTS

LIABILITY BETWEEN THE ORIGINAL PARTIES

•  Stuart v Joy

  • Binded by burdens and benefts based on Privity of Contract.

    • Only refers to the contract and lease agreement.

    • If there was a breach of contract -> can sue.

ORIGINAL PARTIES: Original parties are liable throughout the term of lease for any breach of covenant

• .Allied Landon Investment v Hambro Life Assurance

ORIGINAL PARTIES: Each party is liable to the other on all covenants of the lease irrespective whether the covenants touch and concern the land.

• City Of London Corporation v Fell

ORIGINAL PARTIES: Even if original tenant has assigned his lease he is still liable throughout the entire term of the lease.

• Estates Gazette Ltd v Venjamin Restaurants Ltd

ORIGINAL PARTIES: Landlord successfully sued original tenant for rent increased by a deed of variation made between landlord and assignee.

• Centrovincial Estates v Bulk Storage

ORIGINAL PARTIES: No such clause; T1 will only be liable for what he had agreed to, not any variation of rent. No mention of any variation.

•  Friends Provident Life Office v British Railways Board

LIABILITY BETWEEN T2 AND L1: TOUCH AND CONCEREN LAND

• Spencer’s case

1. Privity of estate

2. Whether covenant touched and concerned the land

   1. P&A Swift Investments v Combined English Stores Group

      1. Can the covenant benefit any owner of an estate in the land as opposed to the particular original tenant?

      2. Does the covenant affect the nature, quality, mode of user and value of the land?

      3. Is the covenant expressed to be personal? (cannot be).

LIABILITY BETWEEN L2 AND T1: Apply 3 prompt test to see if covenants have reference to subject matter of lease.

• Hua Chiao Comm Bank v Chiaphua Investment Corp

LIABILITY BETWEEN L2 AND T1:Original landlord will not be able to sue (loses right).

• London and County (A and D) Ltd v Wilfred Sportsman

• Landlord covenants (promises made by the landlord in a lease) automatically pass to a new landlord if the landlord sells or transfers their interest in the property

• S.142 LPA

LIABILITY BETWEEN T1 AND T2

Spencer’s case: burdens and benefit of any covenant which touch and concern land passes form T1 to T2.

LIABILITY OF SUB TENANT: No privity of estate

• Pennel v Payne

  • Landlord has at his disposal the remedy of forfeiture against his own tenant.

• Original tenant remains liable even after assignment, guarantor is equally liable in the event that the subsequent tenant breaches the tenant covenants.

• Hindcastle Ltd v Barbara Attenborough Associates

  • Landlord may enforce the contractual guarantee provided by guarantor.