THE CONTRACTUAL OBLIGATIONS BETWEEN LANDLORD & TENANT
The Covenants are the terms of the contract between the landlord and tenant, and in the broad sense refer to the obligations implied in the lease .In the majority of cases the wording will be standard phrases, but it is important to check carefully, there are three different types of covenants
ABSOLUTE AND QUALIFIED COVENANTS
| (1) | An absolute covenant is a complete prohibition against the doing of whatever has been forbidden; |
| (2a) | A qualified covenant states that the act is not to be done ' without the consent of the landlord '. |
| (2b) | A fully qualified covenant states that ' the landlord's consent is not to be unreasonably withheld '. |
THE EXPRESS AGREEMENT
The landlord will require the tenant to agree to certain express covenants ( A contract or agreement expressed in words, or by signs which custom or usage has made equivalent to words ) from the way they are expressed in the agreement note whether the landlord will consider giving consent or if they are forbidden .
The landlord may desires to make it a condition of the continuation of the tenancy, the consequences of a breach will be severe .
e.g. Express covenants - landlord
| (1) | A covenant for quiet enjoyment ; |
| (2) | A covenant to repair ; |
| (3) | A covenant to insure ; |
| (4) | A covenant to renew or purchase the landlords interest ; |
e.g. Express covenants - tenant :
| (1) | A covenant Not to assign or underrate without the landlord's consent ( the consent must not be unreasonably withheld: Landlord and Tenant Act 1927, s.19 ) ; |
| (2a) | A covenant To repair : |
| (2b) | long leases - the tenant usually covenants to repair outside and inside; |
| (2c) | short leases - the landlord covenants to repair outside and tenant inside; |
| (3) | A covenant To insure against fire |
| (4) | A covenant To pay rent |
If there are difficulties of interpretation the court will try to ascertain the mutual intention of the parties, other covenants or words used may help to clarify the matter. If the parties intentions are not clear from the words used the court may take into account any factual background at the time the lease was created.
If a landlord wishes to include a clause that limits a tenant's common law right, it is incumbent on him to do it in clear, unambiguous language; When dealing with a lease where the underlying purpose was unclear the covenant will be construed against the landlord .
COVENANTS IMPLIED BY THE COMMON LAW
The Landlord and tenant agreement is obviously a reciprocal arrangement, the only implied condition imposed upon the landlord is one of fitness for human habitation at the commencement of a tenancy, the common law implies certain basic obligations. If the parties have reached an express agreement which is in conflict with the implied common law covenant , the general rule is that the express agreement will prevail. In the case of covenants implied by statute the situation is somewhat different; the aim of the statute is often to prevent the exploitation of one party by the general rule is that it is the express agreement .When there is an inequality of bargaining power, most statutory provisions provide that the parties cannot contract out of the statute by express agreement to ensure a minimum level of protection.These are the covenants which although not expressly set out in the tenancy agreement will be implied by the common law .
Common Law covenants - landlord :
(1)
A covenant for quiet enjoyment
- i.e. that the tenant's
possession will not be directly interfered with by the landlord or persons under him;
(2)
A covenant not to derogate from the grant -
i.e. that the landlord
will not interfere with the tenant's enjoyment by using adjoining premises in a manner inconsistent with the purpose
of the lease;
(3a)
A covenant for the fitness for habitation -
this is only implied
in furnished lettings; or
(3b)
Unfurnished lettings at low rents.
Common Law covenants - tenant :
| (1) | A covenant to pay the rent : |
| (2) | A covenant to pay rates and taxes : except those which are the landlord's obligation; |
| (3) | A covenant to Not to commit waste : i.e. not to neglect or unreasonably damage the property |
| (4) | A covenant to repair : This obligation is primarily the landlord's and a tenant needs merely to let the landlord enter and view to see what repairs are necessary, but if the lease is agreed subject to ' the usual covenants ', the obligation to repair is transferred to the tenant |
| (5) | A covenant not to deny the landlord's title : |
| (6) | A covenant to use the premises in a tenant like manner |
Tortious obligations can arise either at common law in the law of negligence
or nuisance, or for breach of a statutory duty. Where the parties to a contract to a lease fail to specify what
terms the actual lease should contain, a term will be implied into the contract for a lease that the actual lease,
when it is granted, will contain '
the usual covenants '. ( Hampshire
v Wickens (1878) 7 ch d 555 and Property v Parker (1832) 3 My & K 280 ) .The usual covenants to be implied
into the agreement will vary according to prevailing custom and conveyancing practice .However, in Hampshire v Wickens (1878) 7 ch d 555 Lord Jessel MR indicated that the following
covenants and conditions are always '
usual '
On the part of the landlord
| (1) | A covenant for quiet enjoyment in the usual qualified form ; |
On the part of the tenant
| (1) | A covenant to pay rent |
| (2) | A covenant to pay rates and taxes |
| (3) | A covenant to keep the premises in repair and deliver them up in repair at the end of the term ; |
| (4) | A covenant to permit the landlord to enter and view the state and condition of the premises |
| (1) | A condition of re-entry for non-payment of rent but not for breach of any other covenant |
ALTERATIONS
As well as legal constraints relating
to planning building regulations and so forth , the landlord will want to ensure that the character and value of
his premises are maintained and will require any material alteration to be subject to his approval.
If you have a short term lease, control over alterations will be very strict. Greater flexibility will generally
be permitted in a longer term arrangement.
As a prospective long term tenant, you will need to consider: whether there is sufficient flexibility for immediate
and longer term business needs; the likely needs of an assignee; and whether alterations will justify a higher
rent demand by the landlord at the time of a rent review.
The restraints against alterations may be absolute or alternatively the lease may require you first to obtain the
landlord's consent. If the alteration can be considered an improvement, refusal may well be deemed to be unreasonable
giving you the right to proceed regardless.
If your landlord refuses his consent, the only thing you can do is to apply to the local County Court. The court may grant you a certificate that the improvement is a proper one, but only if they think the improvement is likely to improve the letting value of the property at the end of the tenancy, and that it is reasonable and suitable to the character of the premises, and that it will not diminish the value of any other property belonging to the landlord.
Even if the certificate is granted, the landlord can still say that he will do the improvements himself and charge
you an increased rent you are taking a house for any considerable period of time it is quite possible that for
some reason or other you may have to leave it before your tenancy expires.
Generally, making alterations to leased premises without the landlord's consent can be risky and professional advice should be taken before embarking on such action.
The landlord may also insert clauses requiring you, as the tenant:
| 1. | To remove alterations and reinstate the premises (if required) at the end of the tenancy; |
| 2. | Not to tamper with the services applicable to common parts; |
| 3. | Not to apply for planning permission without the landlord's consent; and |
| 4. | Not to place signs or hoardings on the premises. |
