between three and seven years may be registrable as a notice on the landlord’s title. In cases where the landlord’s title is registered, unregistered leases will almost always count as overriding interests, not least due to the likely actual occupation of the tenant (Sch. 1(1), 1(2), 3(1), 3(2) LRA 2002). Leasehold covenants Almost all leases will contain covenants that obligate one party and grant a benefit to the other. E.g. the tenant must pay rent to the landlord; the landlord must repair the property. The application of covenants involves a combination of property law and contract law, which raises questions of enforceability if the tenants assigns their lease to a new tenant, or the landlord assigns their ‘reversion’ to a new landlord. The old approach, governed by Spencer’s Case (1583) 5 Co Rep 16a, held that covenants can be enforced between assignees as long as they ‘touch and concern’ the land. Whilst there is no privity of contract, they are enforceable via privity of estate. However, the original 2
tenant/landlord would not be released from their contractual obligations. For example, the assignor of a lease could still be pursued for rent where the assignee defaults. The Landlord and Tenant (Covenants) Act 1995 has reformed the rules in this area, and makes a crucial distinction between pre- and post- 1996 tenancies. In pre-1996 leases, Spencer’s Case method still governs enforceability between assignees but with exceptions. Most notably, s.17 holds that a landlord can only pursue covenants for fixed charges (e.g. rent) against an assignor by serving notice within 6 months. The assignor with notice is reinserted into the property relationship as the assignee’s landlord, and may pursue them for the default.
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- Spring '18