Remedies for breach of covenant
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Transcript Remedies for breach of covenant
Jennifer Slade
Alterations (p.1)
User (p.4)
Insurance (p.7)
Rationale (p.1)
Structure of the clause
Structural/non-structural
▪ Demountable partitioning
Internal/external
Degrees of control
Absolute, Qualified, Fully qualified
Absolute
No s19 implication of consent/reasonableness
Statute can override
E.g.
▪ LTA 1927 Part I – “qualifying improvements”
▪ (See p.3)
▪ DDA 1995
Qualified covenants (pp.2-3)
L’s consent
s19(2) LTA 1927
Converts qualified alterations covenant to fully
qualified covenant
▪ L’s consent not to be unreasonably withheld
Alterations must be “improvements”
▪ Lambert v Woolworth
Reasonableness?
Remedies
Note (not on handout):
LTA 1988 does not apply to T.’s applications
for consent to alter.
T. should amend clause to provide that L.’s
consent is not unreasonably withheld or
delayed (consider in any event for
alienation)
Consequential matters, planning (p.2)
Signs
Compensation for T.’s “qualifying
improvements” under LTA 1927 Part I
See p.3
Rationale (p.4)
Wide/narrow
▪ Rent review – REMEMBER ALWAYS TO CHECK THE
USER COVENANT AGAINST RENT REVIEW
ASSUMPTIONS/DISREGARDS
Positive/negative drafting
▪ “… to use only for…”
▪ Keep open covenant?
▪ Argyll case – see Workshop 8
▪ “… not to use other than…”
Restrictive vs Wide vs Compromise
Use Classes Order 1987… amended by
(pp.4-5):
Use Classes (Amendment)(England) Order 2005
(21 April 2005) – some example changes:
▪ Internet café (A1)
▪ A3 =split into=> A3 (restaurants/cafes), A4 (drinking
establishments), A5 (hot food takeaways)
▪ Nightclub (sui generis)
Note – e.g. if user in 2004 lease is A3 (subject
to L’s consent), premises used as restaurant,
and T. seeks change to wine bar
If reference in user clause to UCO as enacted at
date of lease, then L’s consent not needed; BUT
If reference in user clause to UCO including
amendments,, then L’s consent needed since wine
bars now A4
UCO
Certainty?
Shopping centres?
▪ “open A1”
Drafting
▪ Freeze UCO use at date of lease?
Absolute and qualified covenants (p.5)
s19 LTA 1927 does not imply proviso that L must
be reasonable in w/holding consent to change of
use
s19(3) LTA 1927
L. cannot require fine, premium or increased rent
for giving consent
▪ Unless change of use involves structural alterations
L can require expenses
Reasonable sum if causes diminution in value
LTA 1988 does not apply to user covenants
Ancillary covenants (p.6)
Lease of part/whole (p.7)
“Insured risks”
Tenant noted on policy/joint names
Rent abatement if damaged/destroyed
Damage to property and access thereto
Loss of rent insurance and rent abatement
period
Full cost
Service of notices
See p.8
[NB – review LTA 1954 for next lecture]