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The Law Society - Conveyancing

15

Nov

2018

Covenants in Leases

At Parkes Wilshire Johnson Solicitors, every client who is purchasing a property will be provided with a detailed Purchase Report which will enable them to make an informed decision before they commit to the purchase.  This is especially important when buying a Leasehold property where a buyer is committing themselves to a long Lease which contains covenants.

These days it is very common for property owners to rent their property if for example, they move abroad temporarily due to job commitments (if there is a mortgage secured against the property, the consent of the lender must be sought first) however, if the property is Leasehold, the terms of the Lease should be checked first.  Some Leases contain covenants which prevent the property from being occupied by anyone apart from the leaseholder and their immediate family.

In the recent case of Jones & Anor v Roundlistic Ltd [2018] EWCA Civ 2284 (19 October 2018) the Court of Appeal held that a covenant in an extended lease of a flat that required occupation by the lessee and its immediate family only was not an unfair contract term for the purposes of the Unfair Terms in Consumer Contracts Regulations 1999.  Therefore if a landlord wants to prevent tenants with long leases from underletting or allowing others to access the property under less formal arrangements, he/she may include a covenant in the Lease to this effect.

One of the reasons cited by the Court of Appeal for their decision was that to hold such a covenant unfair would be to “open the floodgates to claims by tenants under long leases who had, reluctantly or not, agreed to be bound by the covenants on acquisition or grant of the lease which later proved to be problematic”.  Therefore it is vital buyers are fully aware of the terms of the Lease before they commit to their purchase.

 

If you would like advice about purchasing a Leasehold Property, please email law@pwjsolictiors.co.uk

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