Leasehold Covenants
We have seen already how the leasehold estate comprises what might be considered a ‘temporary’
ownership right over property. This might be for a relatively short period, or for many years (perhaps
well beyond a single lifetime). Having looked at the requirements for a lease, rather than a merely
personal right over property, the types of lease which can exist, and how they can be created,
terminated and protected, we now need to look at the basic structure for governing the leasehold
relationship.
Regulation of Tenancies:
You should note that it is only the basic structure of landlord and tenant relationships which we will
explore, in the main. Tenancies are the subject of a number of statutory controls, which include
‘security of tenure’ (allowing tenants to stay in a property) and ‘enfranchisement’ (whereby a
tenant, or group of tenants, may have rights to purchase the freehold from the landlord in certain
conditions). The details of the latter do not concern us in Property 1, but they are aspects of
Landlord and Tenant law which you should be aware of. An important example of the former is the
protection given to some tenants under the Housing Act 1988. Leases qualifying as “Assured
Shorthold” Tenancies limit the landlord’s grounds for obtaining possession (s. 7 and Sch. 2), as well
imposing some controls on the rent which can be demanded.
Leasehold covenants:
Our main concern is the nature of the agreements which govern landlord and tenant relationships.
You should already understand that a lease is a form of contract. Accordingly, the parties can agree
the ‘rules’ which they wish to have governing their relationship, subject to some regulation by the
law. These terms are referred to as ‘covenants’, which we have encountered in the context of
freehold land (though you must be very clear that these have very different rules in a number of
important respects). Some distinctions can be made between the covenants in a lease:
a) Express covenants v Implied covenants
b) Landlord’s covenants (which set out the obligations of the landlord) v Tenant’s covenants
(which set out the obligations of the tenant)
Express vs Implied Covenants:
Express covenants are those which are set out in the lease itself, whereas other terms, which are not
included in the lease, form part of the agreement because they are implied by the law. Leases often
include a large number of covenants dealing with a range of matters in great detail. Essentially the
Landlord will be concerned with matters such as receiving the income from the property, avoiding
any damage or unwanted permanent change to the property, and preventing liabilities or other
problems caused by the tenant’s occupation. Basic provisions which Landlords might want include
those relating to the payment of rent, restrictions on the purposes for which the property is used,
limitations (or prohibitions) on the tenant assigning (transferring) the lease to someone else, or sub-
letting (granting a further lease) to someone else. The reasons why Landlords desire provisions
regarding sub-letting and assignment are that they want to have control over who they have a
relationship with. If the lease is assigned, or there is a sub-letting (for 6 months of a 2 year lease, for
We have seen already how the leasehold estate comprises what might be considered a ‘temporary’
ownership right over property. This might be for a relatively short period, or for many years (perhaps
well beyond a single lifetime). Having looked at the requirements for a lease, rather than a merely
personal right over property, the types of lease which can exist, and how they can be created,
terminated and protected, we now need to look at the basic structure for governing the leasehold
relationship.
Regulation of Tenancies:
You should note that it is only the basic structure of landlord and tenant relationships which we will
explore, in the main. Tenancies are the subject of a number of statutory controls, which include
‘security of tenure’ (allowing tenants to stay in a property) and ‘enfranchisement’ (whereby a
tenant, or group of tenants, may have rights to purchase the freehold from the landlord in certain
conditions). The details of the latter do not concern us in Property 1, but they are aspects of
Landlord and Tenant law which you should be aware of. An important example of the former is the
protection given to some tenants under the Housing Act 1988. Leases qualifying as “Assured
Shorthold” Tenancies limit the landlord’s grounds for obtaining possession (s. 7 and Sch. 2), as well
imposing some controls on the rent which can be demanded.
Leasehold covenants:
Our main concern is the nature of the agreements which govern landlord and tenant relationships.
You should already understand that a lease is a form of contract. Accordingly, the parties can agree
the ‘rules’ which they wish to have governing their relationship, subject to some regulation by the
law. These terms are referred to as ‘covenants’, which we have encountered in the context of
freehold land (though you must be very clear that these have very different rules in a number of
important respects). Some distinctions can be made between the covenants in a lease:
a) Express covenants v Implied covenants
b) Landlord’s covenants (which set out the obligations of the landlord) v Tenant’s covenants
(which set out the obligations of the tenant)
Express vs Implied Covenants:
Express covenants are those which are set out in the lease itself, whereas other terms, which are not
included in the lease, form part of the agreement because they are implied by the law. Leases often
include a large number of covenants dealing with a range of matters in great detail. Essentially the
Landlord will be concerned with matters such as receiving the income from the property, avoiding
any damage or unwanted permanent change to the property, and preventing liabilities or other
problems caused by the tenant’s occupation. Basic provisions which Landlords might want include
those relating to the payment of rent, restrictions on the purposes for which the property is used,
limitations (or prohibitions) on the tenant assigning (transferring) the lease to someone else, or sub-
letting (granting a further lease) to someone else. The reasons why Landlords desire provisions
regarding sub-letting and assignment are that they want to have control over who they have a
relationship with. If the lease is assigned, or there is a sub-letting (for 6 months of a 2 year lease, for
