Q1. (a) Set out and explain each of the elements of the leasehold estate. In other words, define the nature of a ‘lease’ and explain that definition.
(Do not write about the ways in which a lease may be created)
(50% of the marks for this question)
(b) How have the courts distinguished between leases and licences? Explain using relevant case law.
(50% of the marks for this question)
Q2. Peter owns the freehold of a house, Dunroamin. He agrees to grant Hilda a ten-year lease of Dunroamin for £7000 per annum commencing on Christmas Day, and says he will instruct his solicitor to draw up a lease. Hilda demands some evidence of Peter’s genuineness, so Peter finds some paper, and writes: “I, Peter Bloggs, have agreed to grant a lease of Dunroamin to Hilda Mugg, starting at Christmas 2013.”
Peter signs it and hands it to Hilda. Hilda keeps the paper.
Subsequently Peter demands a deposit of £5000 before entering into a formal lease. Hilda claims that Peter is bound by the agreement and must grant her possession of Dunroamin at Christmas on the agreed terms, whether a formal lease is drawn up or not. Peter says that there is no valid lease nor any binding agreement for a lease.
What is the legal position?
Q3. (a) Explain the law of forfeiture using relevant case law.
(60% of the marks for this question)
(b) Sally has recently taken a lease of a shop. The lease provides that the exterior of the property must be painted with white paint every three years. Sally has used green paint because she says it is more in keeping with her business as a florist. Two months ago she received a section 146 notice from the landlord requiring her to paint the property white within two months of the date of the notice. She did not comply with the requirement because she thought it was fussy and unnecessary.
She now comes to you for advice because whilst she was away from the shop the landlord took possession, changed the locks and is claiming that the lease has been forfeited. The landlord has also returned the last rent payment that Sally made. Sally’s business is also losing money.
What is the legal position and what course of action, if any, should Sally take?
(40% of the marks for this question)
Q4. (a) Explain surrender. How may surrender be carried out?
(b) Zak took a lease of shop premises from Dave. Zak served a break notice to take effect on March 25th. (The notice was validly served.) Zak’s right to break is conditional on compliance with the covenants in the lease. Zak has not paid interest on some late rent payments (as required by the rent covenant) but there has been no demand for these sums.
A week before the break date Dave’s property manager, Mr Blunt, examined the premises in the company of Zak. Mr Blunt stated that he was satisfied that the premises complied with the repairing obligations and that “everything is satisfactory”. Zak handed over the keys and gave up possession to Mr Blunt. Mr Blunt secured the premises.
In April Dave claimed that the break is ineffective because of the outstanding interest payments.
What is the legal position?
Q5. Antony has leased a unit on an industrial estate to Julia. Julia pays a service charge which includes a sum for management of the estate and Antony has covenanted to enforce the covenants of the other tenants including a covenant not to cause nuisance or annoyance to other tenants.
Julia complained to Antony that another tenant on the estate, Ferdinand, is causing a nuisance by parking on spaces that are allocated for Julia’s use. Antony failed to take action against Ferdinand, so Julia informed Antony that she would withhold rent until such time as Antony took effective action against Ferdinand. Antony threatens to sue Julia for rent arrears but Julia refuses to pay.
With reference to relevant case law, examine the legal position in this case. What difference would it make if Antony had not covenanted to enforce other tenants’ covenants?
Q6. Moneybags Bank plc is a tenant of a substantial office building leased from the landlord, Graspland Ltd. The lease allows the tenant to assign or sublet the whole of the premises with the consent of the landlord. Moneybags write to Graspland seeking consent to sublet the office to Newco, a company which has only been in existence for two years. Graspland refuse to consent on the basis that Newco is a weak covenant. Moneybags say that as they will remain as head tenant until the end of the lease, it will not make any difference whether Newco is a weaker covenant or not.
With reference to the cases and relevant statutes, what is the legal position?
Q7. At the end of a lease of an old Victorian mill the landlord serves a schedule of dilapidations showing the full cost of repair is £100,000. There are no structural works – much of the schedule is concerned with the condition of doors, gates, stairways and access. The schedule is accompanied by a claim for £100,000 by way of damages. The tenant states that none of the disrepair will affect the income earning potential of the mill, and therefore that there is no diminution in value and damages should be zero.
What is the legal position? How can the landlord justify his claim in law?
Q8. With reference to relevant cases explain the meaning of ‘repair’ and distinguish it from improvement, rebuilding, and renewal. What standard of repair must be achieved under an ordinary repairing covenant?