Option to Purchase Reversion and Abatement Clause

This set of flashcards covers the legal concepts of the 'option to purchase reversion' and 'abatement of rent' as discussed in the lecture notes, including key definitions, legal requirements, and relevant case law.

What is the definition of an 'option to purchase reversion'?

It is an offer by the landlord to the tenant for the sale of the premises upon fulfillment of certain conditions.

What are examples of conditions that must be fulfilled for an 'option to purchase reversion'?

Payments of rent and compliance with other covenants.

When does a tenant acquire equitable interest in a property under an option to purchase reversion?

The tenant acquires equitable interest once the option to purchase reversion has been agreed upon by the parties.

Can a landlord unilaterally sell the premises to a third party once an option to purchase reversion is in place?

No, the landlord cannot unilaterally sell the premises to a third party.

Is the right regarding the 'option to purchase reversion' assignable?

Yes, this right is assignable.

According to the case of RE Button's lease, how may a tenant enforce an option to purchase reversion?

The tenant may enforce the option by action for specific performance and may even sue to set aside the sale of the property to another person.

Which case is cited alongside RE Button's lease regarding the option to purchase reversion?

Owosho versus Dada.

What is the primary purpose of an 'abatement of rent' provision?

To prevent rent paid from running in cases where the property is destroyed or the premises is unable to be put to use.

Why is it necessary to explicitly provide for an abatement of rent clause in a lease?

Because generally frustration is inapplicable in leases, meaning rent continues to run even if the premises are destroyed.

What are examples of events that might trigger an abatement of rent provision?

Storm, earthquake, flood, and other 'acts of God'.

What happens if a premises is destroyed but no abatement clause exists?

The rent will run until it expires and the tenant will be exhausted even if they could not use the premises.

How is a typical abatement clause drafted from the lessor to the lessee?

The lessor covenants with the lessee that the rent shall not continue to run in the case of an act of God where the demise premise is destroyed or anything happens preventing the use of the premises.