Transcript Remedies for breach of covenant

Jennifer Slade

Alienation provisions
 T’s disposal of the lease

What is alienation? (p.1)

Why would a landlord wish to restrict it?

Part vs whole
 L may place greater restrictions on dealings of
part

Forms of covenant/restriction – prohibitions come in
different “strengths”
 Absolute
 Qualified
 Fully qualified

Absolute
 “you must not…” – i.e. T needs waiver/variation of lease to
dispose
 Effect at rent review? – will depress rent at review

Qualified (p.2)
 “you must not…. without my
consent/approval/licence”
 In writing
▪ Note Aubergine

Licences to assign/sublet
 All parties execute
 Direct covenants?
▪ Since no privity between L and sub-T, L will want direct
covenant between them

Fully qualified – weakest form of prohibition
 “you must not…. without my
consent/approval/licence, which is not to be
unreasonably withheld”

Alienation clauses can provide different
restrictions for part/whole
 e.g. fully qualified for dealings with whole,
absolute for dealings with part
L’s consent (not to be unreasonably withheld)
needed for assigning/subletting whole
A “Permitted
Part” may be
disposed of
under certain
stricter
conditions

Effect of s19(1)(a) LTA 1927 (pp.2-3)
 Converts qualified covenants to fully qualified covenants
▪ Implies “such consent not to be unreasonably withheld” into
alienation covenants where landlord’s consent required
 All leases and all forms of alienation subject to this
provision

Note also s144 LPA – no premium can be charged
for consent, but L’s reasonable costs can be required

Meaning of “reasonable” (p.3)
 When is it reasonable for a landlord to withhold
consent (assignment/underletting)?

Leading case - International Drilling
 To be reasonable, refusal must be referable to L-T
relationship
 Case law/examples (p.4)
▪ Straudley Investments
▪ Moss Bros
▪ Ashworth Frazer
} c.f. Newgate Centre
} exercise

New tenancies: LT(C)A 1995
 s19(1A) LTA 1927 (pp.5-6)
 Applies to assignments only
 Commercial leases only (s19(1E))

s19(1A) provides some certainty for when L’s
refusal of consent will be reasonable:
 Circumstances and conditions when L’s refusal will
not be unreasonable can be agreed (in the lease)
(p.7)
If a condition or circumstance involves L’s discretion,
then L to act reasonably or T to be able to refer to
3rd party
 Circumstances

 e.g. unsatisfactory references/poor financial standing,
compliance with covenants

Conditions
 e.g. provision of an AGA, surety

Where circumstances and conditions do not
determine whether L reasonable, use International
Drilling to fill “gaps”
Billies Cookies question:
Do the alienation provisions set out
circumstances and conditions?
Billies Cookies question:
Do the alienation provisions set out
circumstances and conditions?
4.10.3 – conditions
4.10.4 - circumstances
(p.14-15)
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Further Tenant protection (p.7)
 s1 LTA 1988 – stops L’s solicitor “sitting on” T’s applications for
consent

L’s duty to give consent unless reasonable not to, and if
refused provide written reasons
 Onus
 Breach – tortious damages

Reasonable time
 No statutory guidance
 Cases (1 Month?)
▪ Dong Bang Minerva
▪ Go West
▪ Blockbuster



LPA 1925 s144
[LTA 1927 s19(1)(b)]
Offers to surrender
 Allnatt