This is an extract of our Leases document, which we sell as part of our Property Law Notes collection written by the top tier of University Of Otago students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Property Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Lease - a recognised estate in the land i.e. a property right - because it transfers possession
The person who grants a lease is a lessor or landlord
The person who receives the lease is a lessee or tenant
When leasing, the landlord owns the reversion (the land which will revert back to the after the lease had ended - because L has the fee simple)
o The terms in the lease contract are called covenants
Anatomy of a Lease
- Transfers exclusive possession
- For a specified time (can be fixed or periodic)
- Usually the tenant pays rent
Terms and Conditions
- Rights and obligations - can be determined by law or by choice (either common practice or ad hoc)
- Remedies - can be reached by law or by choice
Leases vs Licences and Other Rights
Not all bargains between landowners and others allowing entry onto or possession of land are leases
Easement - a right of possession that is not a lease (but still a property right)
o License - a personal right to do something in relation to land (not a property right, so doesn't bind third parties and can't be given or sold)
Legal Consequences of a Lease
Tenant can sell or give the lease to another
They can mortgage it
They can do anything else that the property right enables them to do
Raises question - can the tenant, alter property, sub-lease, how do different rights interact?
o In law
- Landlord and tenant can enforce covenants upon one another (adheres to common sense)
- Often standard lease contracts are used (like one from the ADLS)
- If standard lease contract is not used, certain covenants are still implied through the Property Law Act 2007 e.g. tenants have right to quiet enjoyment, tenant must pay rent, can't alter buildings without consent,
must keep property in existing condition
Legally Binding Obligations of a Lease
The written lease agreement is a contract, so it bind the parties involved to it
But leases also carry property rights which bind third parties
Issue - what happened if the landlord transfers the reversion or the tenant transfers the tenancy - who owes obligations to whom?
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