Landlord and tenant law - Relationship between landlord and tenant

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Overview

The landlord-tenant relationship is a vital aspect of property law and important for the SQE1 FLK2 exam. This area covers the creation and termination of leases, the enforcement of covenants, and the balance of rights and duties between parties. A solid understanding is essential for aspiring solicitors involved in property transactions and disputes. This article offers a detailed look at key concepts, legal principles, and practical applications, tailored to the SQE1 FLK2 examination standards.

Creating Leases

Leases vs. Licenses

The difference between leases and licenses is key to understanding the rights and protections for property occupiers:

  • Lease: Provides exclusive possession for a set period with substantial legal rights.
  • License: Allows property use without exclusive possession, with limited protection.

Key features of a lease:

  1. Exclusive possession
  2. Fixed or periodic term
  3. Rent (not always required)

In Street v Mountford [1985] AC 809, the agreement's substance determines if it’s a lease or license.

Formalities in Lease Creation

The Law of Property Act 1925 outlines the necessary steps for valid leases:

  • Leases up to three years can be created orally if they start immediately and at the best obtainable rent.
  • Leases longer than three years require a deed per Section 52 of the Act.

Understanding legal vs. equitable leases:

  • Legal leases: Meet all statutory requirements.
  • Equitable leases: Based on enforceable agreements even if formalities aren't met.

Walsh v Lonsdale (1882) established that equity enforces equitable leases if legal steps are not completed.

Covenants in Leases

Covenants are promises defining landlord and tenant responsibilities. They are legally binding and affect leasehold interest value and enjoyment.

Types of Covenants

  1. Express Covenants: Stated in the lease.
  2. Implied Covenants: By law or custom.

Tenant Covenants

  • Rent payment
  • Repair and maintenance
  • Use restrictions (e.g., illegal activities)
  • No subletting without consent

Landlord Covenants

  • Quiet enjoyment
  • Non-derogation from grant
  • Repairs (in shared properties)

Southwark LBC v Mills [2001] 1 AC 1 highlights the limits of quiet enjoyment concerning property defects.

Covenant Enforcement and Remedies

The Landlord and Tenant (Covenants) Act 1995 changed covenant enforcement for "new" leases (post-1 January 1996):

  • Original tenants are released upon assignment for new leases.
  • Old leases (pre-1996) keep original tenants liable.

Remedies for covenant breaches:

  • Damages
  • Specific performance
  • Forfeiture (for tenant defaults)

Lease Termination

Understanding how leases can end is important:

Effluxion of Time

A fixed-term lease ends naturally, requiring no notice, but may include break clauses for early termination.

Surrender

Can be expressed by deed or implied through actions, as illustrated in Artworld Financial v Safaryan [2009] EWCA Civ 303.

Forfeiture

Allows landlords to end a lease due to tenant default if:

  1. A forfeiture clause exists
  2. The breach is serious
  3. No waiver by the landlord

Tenants can seek court relief from forfeiture, as shown in Freifeld v West Kensington Court Ltd [2015] EWCA Civ 806.

Frustration

Rarely applied in leases, but confirmed possible in National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 with stringent criteria.

Notice to Quit

For periodic tenancies, termination requires notice, complying with statutory rules.

Ongoing Obligations

Key concepts in leasehold agreements:

Privity of Contract

Binds original lease parties throughout the term. The 1995 Act revised this for new leases.

Privity of Estate

Connects current landlords and tenants, enforcing land-related covenants.

P & A Swift Investments v Combined English Stores Group Plc [1989] AC 632 explains these principles in assigned leases.

Examples

  1. Complex Forfeiture Scenario: A restaurant tenant breaches planning laws. The landlord seeks forfeiture but previously accepted rent, implying waiver. The tenant seeks relief.

  2. Assignment and Covenants: A pre-1995 lease gets reassigned multiple times. The current tenant breaches a repair covenant, and the landlord pursues both current and original tenants.

Conclusion

A solid understanding of landlord-tenant law is essential for SQE1 FLK2 exam success and legal practice. Key takeaways include:

  • Understanding leases and licenses
  • Required formalities for leases
  • Covenant enforcement
  • Lease termination methods
  • Privity of contract and estate principles

Knowing these concepts aids in managing property transactions, resolving disputes, and advising clients on lease issues. As legal practices change, especially in covenant enforcement and forfeiture relief, a sound understanding remains important for future solicitors.