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Running of Leasehold Covenants (Tenant's Covenants (Burden (Pre 1996…
Running of Leasehold Covenants
Tenant's Covenants
Burden
Pre 1996
Burden passes to assignee (
Spencer's Case
)
Privity of estate
Legal lease
Legally assigned
Old tenant still liable
s. 79 LPA 1925
Walker's Case
Arlesford Trading v Servansingh
Must be served s 17 notice by new landlord
Can claim common law or express or implied indemnity from assignee
Can claim s. 19 overriding lease over new tenant
Subtenant liable to head landlord (
Hemmingway Securities Ltd v Dunraven Ltd
)
Subject to
Tulk v Moxhay
Covenant negative
Covenant touches and concerns land
P & A Swift v Combined English Stores
test
Original parties intended burden to run
Sub-tenant has notice
Post 1996
Old tenant released from burden (s.5 LT(C)A 1995)
Except if signed an AGA
Burden passes to new tenant s. 3 LT(C)A 1995
Unless covenant is personal
s. 3(5) LT(C)A 1995 allows for sub tenant to be held directly liable to head landlord
Sub tenant bound by covenants in head lease
Benefit
Post 1996
Passes to new landlord (s. 3(3)(b) LT(C)A 1995)
Pre 1996
s. 141 LPA 1925 passes to new landlord
If touches and concerns the land
Re King
New landlord can sue for prior rent (confirmed in
Arlesford Trading Company Lrd v Servansingh
)
Re King
Old landlord cannot sue for previous rent
Landlord's Covenants
Benefit
Post 1996
Passes to new tenant (s. 3(2)(b) LT(C)A 1995)
Pre 1996
Benefit passes to new tenant (
Spencer's Case
)
Burden
Pre 1996
Burden passes to new landlord (s. 142 LPA 1925) if covenant has reference to subject matter of the lease
Post 1996
No automatic release of burden (s. 6 LT(C)A 1995
Must apply according to s. 8 LT(C)A 1995
If granted loses benefit of tenant covenants as well
New landlord takes burden (s. 3 LT(C)A 1995)
Unless covenant is personal (s. 3(6) LT(C)A 1995)