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L & T (Covenants) Act 1995

This page contains information on
  • Assignment of the reversion - s8
  • Contracting out - s25 - the Avonridge case.
  • Guarantor's liability void under the Act - Good Harvest - K/S Victoria Street
  • Recovery from orginal tenants - s17 notices where there is an outstanding rent review - Raguz in the House of Lords

Assignment of reversion

Personal obligations of landlord

BHP Great Britain Petroleum Ltd v Chesterfield Properties Ltd
[2001] EWCA Civ 179
(HL refused leave to appeal: [2002] 1 WLR 1449)

Where a landlord assigns the reversion in premises he may apply to be released from the landlord covenants of the tenancy by serving a notice on the tenant under s8 of the 1995 Act. However, an obligation that is personal to the original landlord is not a landlord covenant.

In this case the original landlord agreed to refurbish a building. In the agreement there was a personal obligation to remedy defective works. The agreement also provided that following completion of the works a lease would be granted, which was what occurred. As the obligation to do the works was a personal one the original landlord could not escape liability by serving a s8 notice when it assigned the reversion.


Continuing liability of tenant to landlord where no s8 release

Wembley National Stadium Ltd v Wembley (London) Ltd [2007] EWHC 756 (Ch)

Facts

In 1999, the first defendant (as landlord) granted a lease of Wembley stadium to the tenant (claimant) for 125 years. The consideration included a premium and an obligation by the tenant to pay service charge.

In 2001, the 1st defendant transferred the freehold to the 2nd - 5th defendants ("Gideon"). The transfer of the freehold stated that Gideon held the freehold as nominee and trustee for the 1st defendant absolutely.

In 2006, the 1st defendant sought service charges in the sum of £660,831 from the tenant. The tenant argued that it was not liable to pay the monies on the basis that:
  • The freehold assignment transferred the benefit of the tenant's covenants to Gideon; alternatively
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