Landlord and Tenant Relationship

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Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 1 The relationship of landlord and
tenant
Chapter 1 The relationship of landlord and tenant
Editors
John Male
Alison Oakes
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tenant/A Introduction
A
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tenant/A Introduction/1 Nature of leases
1 Nature of leases
(a) The relation of landlord and tenant
HR A[1]
The relation of landlord and tenant has its origins in the medieval land law and was originally one of contract only1.
However, from early times the contract conferred an estate or proprietary interest in the land on the tenant without
losing all its contractual characteristics. Today the Law of Property Act 19252 provides that a leasehold interest, known
as a term of years absolute3, is one of the two interests in land which can exist as a legal estate4, the other being an
estate in fee simple absolute in possession. Although it can be created by statute5 the relation normally arises from an
agreement under which one party confers on another the right to the exclusive possession6 of land, mines or buildings,
for a time which is either subject to a definite limit originally, as in the case of a lease for a term of years, or which,
though originally indefinite, can be made subject to a definite limit by either party, as in the case of a tenancy from year
to year. A tenancy from year to year is saved from being uncertain because each party has power to determine the
tenancy at the end of any year7. The two attributes of exclusive possession8 and a definite or potentially definite time
limit are essential to all tenancies9. The interest in the property which remains in the landlord or lessor is called the
reversion, and normally there is incident to it the right to receive from the tenant payment for the use of the property in
the shape of rent, and the right to compel the performance and observance by the tenant of covenants and conditions.
However, the right to receive rent is not an essential feature of a lease10. Since a person cannot covenant with
himself11 it is clear that a person cannot grant a lease to himself, nor can a number of persons grant a lease to all of
themselves and no others12. However an owner of land may grant a lease to a nominee acting for himself13.
HR A[2]
1 See paras HR A[3]-[5].
2 See Law of Property Act 1925, s 1(1)(b) whereby a 'term of years absolute' is made a legal estate. The expression 'a term of years
absolute' includes a tenancy for less than a year, a term for a number of years and a fraction of a year and a tenancy from year to year: see s
205(1)(xxvii).
4 See Law of Property Act 1925, s 1.
6 When someone is allowed to use or occupy land without being given the right to exclusive possession that person cannot be a tenant. He
is likely to be a licensee. An agreement will also be a licence rather than a lease where the subject matter of the agreement is other than land.
See para HR A[549] (distinction between tenancy and licence).
7 The law recognises certain periodic tenancies but, apart from these, it must be clear that, once the tenancy has commenced, it cannot last
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beyond a certain date (see para HR A[242]) unless continued after that date by statute.
8 See further para HR A[549].
11 Law of Property Act 1925, s 82(1) does not allow a person to covenant with himself but only with himself and others. As to the
impossibility of a person granting a lease to himself or a number of persons granting a lease to themselves (being all the grantors and no
additional persons) see Rye v Rye [1962] AC 496, [1962] 1 All ER 146.
12 See Rye v Rye [1962] AC 496, [1962] 1 All ER 146 in which a purported grant of a tenancy by two brothers to a partnership of which
they were the only partners was held to be ineffective. A person can convey land to himself under the Law of Property Act 1925, s 72(1), but
that does not permit the creation of a lease since, as soon as the tenancy and reversion are in the same hands, there is a merger and the term
sinks in the reversion: Rye v Rye [1962] AC 496 at 513. A landlord of premises vested in a partnership of which he is a member can obtain
possession of the premises with the leave of the court as against a receiver of the partnership property, and can sue for rent: Brenner v Rose
[1973] 2 All ER 535, [1973] 1 WLR 443.
13 See Ingram v IRC [1999] 1 All ER 297, HL approving on this point the dissenting judgment of Millett LJ in [1997] 4 All ER 395 at
419-428. It has also been held that an owner of land may grant a lease to a company wholly owned by the owner and her spouse,
notwithstanding that the grant might be described as an artificial transaction, the company having a separate legal existence: National
Westminster Bank plc v Jones [2000] EGCS 82, following Ingram v IRC.
(b) Origin of leasehold tenure
HR A[3]
From towards the end of the twelfth century leases for terms of years became common, but they formed no part either of
the feudal system, which was based on military tenure, or of the original agricultural system, which produced socage
and villein tenure. They were perhaps introduced partly as a means of raising money, the purpose being to evade the
medieval Church's prohibition on usury, and partly on account of the advantage that, unlike estates of freehold until the
Statute of Wills 1540, they could devolve by will. In their legal characteristics, however, terms of years differed from
other interests in land. They were not an estate of freehold (freehold estates being confined to the fee simple, entails and
life interests) and they did not entitle the lessee (or termor) to the ordinary possessory remedies which were only
available for freeholders. The termor's remedy at first was a personal one against the lessor, an action in covenant if he
was ejected by the lessor, possibly an action on the warranty if he was ejected by a stranger. The termor did not enjoy
'seisin', which is a concept of the land law denoting quiet possession and which was confined to freehold estates. By the
fifteenth century, if the lessee was dispossessed he could recover possession by an action of ejectment, an action which,
from being confined originally to leaseholders, became the universal form of action for recovering possession of land.
(c) Development of status as a proprietary right
HR A[4]
Under the formulary system (the forms of action) which characterised medieval law, the means by which a freeholder
recovered possession of land to which he laid claim was by the use of one of the old real actions, eg a writ of novel
disseisin. The real actions were not available to a leaseholder. A leaseholder was confined to an action in ejectment
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which was technically an action in trespass. At first, ejectment could only be used against the lessor, but by the fifteenth
century it became available as a means whereby a lessee could recover possession against anyone. The time at which
the action of ejectment became available to lessees to enable them to enforce their rights generally against any persons
can be seen as the point in the development of the law at which leases achieved the status of a true proprietary interest in
land. The old real actions became antiquated and proved generally unsatisfactory (for example, the right to trial by
battle was still available until formally abolished in the early nineteenth century). Freeholders came to use the action of
ejectment. This was accomplished by the fiction that the land sought to be recovered had been leased or demised by the
real plaintiff to a nominal plaintiff, John Doe. Thus, until modern procedures supervened, many actions were entitled
Doe on the demises of [the Plaintiff] v [the Defendants], usually shortened to Doe [the Plaintiff] v [the Defendant].
HR A[5]
The term of years, fully protected by these means, conferred an estate in the land, and the analogy of freehold estates
was followed to such an extent that fealty was said to be due from the lessee to the lessor; hence it became technically
correct to speak of leasehold tenure. Paradoxically, although all land is in strict theory still held in tenure, leasehold
tenure is the only tenure of any practical importance today. But the analogy did not prevail as to devolution on death,
and terms of years devolved as personalty and not as realty. Indeed, tenancies were classed as 'chattels real', a division
of personalty to be contrasted with pure personalty. There were other chattels real, such as wardships, though tenancies
are the only chattels real of importance today. The property legislation of 1925 abolished many of the legal distinctions
between realty and personalty. For example, the law on devolution on intestacy is now the same for tenancies and for
freehold interests in land.
(d) Term of years absolute
HR A[6]
A term of years absolute is one of the two legal estates in land capable of subsisting or of being conveyed or created at
law1. This means a term of years taking effect either in possession or in reversion, whether or not at a rent, with or
without impeachment of waste, subject or not to another legal estate, and either certain or liable to determination by
notice, re-entry, operation of law, or by a provision for cesser on redemption or in any other event (other than the
dropping of a life, or the determination of a determinable life interest); but does not include any term of years
determinable with life or lives or with the cesser of a determinable life interest, nor a term of years created on or after 1
January 1926, which is not expressed to take effect in possession within 21 years after the creation thereof where
required by the Act to take effect within that period2. The expression 'term of years' includes a term for less than a year,
or for a year or years and a fraction of a year or from year to year3.
HR A[7]
1 Law of Property Act 1925, s 1.
2 LPA 1925, s 205(1)(xxvii); and see Re Strand and Savoy Properties Ltd, DP Development Co Ltd v Cumbrae Properties Ltd [1960] Ch
582, [1960] 2 All ER 327) applied in Weg Motors Ltd v Hales [1961] Ch 176, [1960] 3 All ER 762; affd [1962] Ch 49, [1961] 3 All ER 181,
CA.
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3 LPA 1925, s 205(1)(xxvii).
HR A[8]
The use of the expression 'term of years absolute' in the legislation to describe a leasehold interest is curious, since the
interest may come within the definition and exist as a legal estate even though (a) it is not a term of years in the normal
sense (it may be a periodic tenancy) and (b) it is not absolute (it may be subject to determination on the happening of
some event). It is not to be implied from the Law of Property Act 1925, s 1 that because a tenancy is one of the two
estates that may exist at law it may not also exist in equity. A tenancy will normally exist as a legal estate but can exist
as an equitable interest under a trust. It may be noted that interests such as a life interest or an entail may be carved out
of a leasehold estate and, if so, these derivative interests can exist only in equity. Of course, a sublease, that is a lease
derived out of an existing leasehold estate, may exist at law. It is not possible in this work to deal in detail with the
scheme behind the property legislation of 1925, for which reference to a textbook on the law of real property must be
made1.
HR A[9]
1 See eg Cheshire and Burn Modern Law of Real Property (15th edn, 1994) Pt I, ch 5 and Megarry and Wade The Law of Real Property
(6th edn, 2000) ch 2.
(e) Requirement of definite or potentially definite time limit
HR A[10]-[20]
The attribute of a definite or potentially definite time limit is essential to all tenancies. Thus, a tenancy to continue until
the landlords required the land for road widening has been held to be void1, as also was a tenancy for the duration of the
war2. The rule of law which requires the maximum duration of a term of years to be ascertainable from the outset has
been recently described in the House of Lords as an ancient and technical rule which can lead to a bizzare outcome, and
as something to be considered by the Law Commission3. It does not matter that the tenancy may by its terms be
determined before its stipulated limit, for example by a right conferred on the landlord to terminate the tenancy in the
event of the tenant falling into arrears with the rent or otherwise failing to observe the covenants in the lease.
Furthermore, a tenancy, though for a fixed term, may be made determinable on the occurrence of some uncertain future
event such as the tenant joining a particular church. For example, the agreement first mentioned above could have been
validly effected by a lease granted for a fixed term of, say, five or ten years with either: (a) a right for the landlords to
determine it on notice if the land was required for road widening; or (b) a provision that the lease would automatically
determine upon the occurrence of some event such as a contract being let by the landlord for road widening works. In
both cases, the maximum duration would have been certain.
HR A[21]
1 Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386, [1992] 3 All ER 504, HL. See para HR A[242].
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2 Lace v Chantler [1944] KB 368; [1944] 1 All ER 305, CA. See para HR A[242].
3 See Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 396-397, [1992] 3 All ER 504 at 511-512, HL, per
Lords Browne-Wilkinson, Griffiths and Mustill.
HR A[22]
The requirement that a lease must be subject to a definite time limit means that only certain limitations can validly be
imposed on the right of a party under a periodic tenancy to determine that tenancy by service of a notice to quit. A
provision which prevents either party from determining a periodic tenancy is void, as is a provision which prevents one
party from determining the tenancy. Some limitations are effective. A landlord may fetter his right to end the tenancy
for a period, eg five years. He cannot fetter his right to end the tenancy until some uncertain event occurs, such as the
end of the war. These subtle distinctions are said to flow from the principle that the term must either be certain or
uncertain: it cannot be partly certain because the tenant can determine it at any time and partly uncertain because the
landlord cannot determine it for an uncertain period1. An earlier decision2 of the Court of Appeal upholding a proviso
that the landlords should not exercise their right to give a notice to quit unless they required the premises for their
undertaking has been overruled by the House of Lords3.
HR A[23]
1 See Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 395, [1992] 3 All ER 504 at 510.
2 Re Midland Rly Co's Agreement, Charles Clay & Sons v British Railways Board [1971] Ch 725, [1971] 1 All ER 1007.
3 See Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386, [1992] 3 All ER 504.
(f) Reservation of rent
HR A[24]
The right to receive rent is not an essential feature of a lease1. The acceptance of the lease by the tenant is a sufficient
consideration for the contract. The possibility of a lease existing without any rent being payable is now recognised by
statute2.
HR A[25]
1 Knight's Case (1588) 5 Co Rep 54b at 55a; R v Collett (1823) Russ & Ry 498; Lynes v Snaith [1899] 1 QB 486.
2 See eg Law of Property Act 1925, s 205(1)(xxvii) and Rent Act 1977, s 5(1).
HR A[26]
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Since a reservation of rent is not essential, its absence does not mean that a licence and not a tenancy has necessarily
been created1. It often occurs that no rent is payable for a part of the period of a lease; for example, tenants of
commercial premises are often given a rent-free period to enable them to fit out the premises for their use. In older
leases, if no rent is payable the reservation of a nominal rent such as a peppercorn is sometimes found. This antiquated
procedure is unnecessary.
HR A[27]
1 Ashburn Anstalt v Arnold [1989] Ch 1, [1988] 2 All ER 147, CA.
(g) Terminology
HR A[28]
The terminology of the law of landlord and tenant is profuse and sometimes less than clear. The grantor of a lease is
known as either the lessor or the landlord, the grantee as either the lessee or the tenant. In practice, the alternative words
are often used interchangeably. It might be as well in the interests of clarity to reserve the words lessor and lessee to the
original parties to the lease, leaving the words landlord and tenant to cover not only the original parties but their
assignees and other successors in title. Similarly, where there is a subtenancy the words 'subtenant', 'sublessee' and
'underlessee' are in practice used interchangeably. If there is a long chain of derivative subtenancies, expressions such as
'sub-underlessee' or 'sub-sub-underlessee' are sometimes used. The original lease is called the head lease to distinguish it
from the sublease carved out of it. The interest of the grantor is called the freehold reversion to distinguish it from the
interest of the grantee who has sublet, which latter interest is called the leasehold reversion. The words 'lease' and 'term
of years' are often used synonymously, although 'term of years' more frequently connotes a tenancy for a fixed term1.
The word 'term' derives from the latin word terminus and reflects the principle that the landlord's estate must have
certain duration. Thus, Coke Upon Littleton2 said: '[Terminus] in the understanding of the law does not only signify the
limits and limitation of time but also the estate and interest that passes from that time.' Blackstone's Commentaries3
explains: 'Every estate which must expire at a period and prefixed, by whatever words created, is an estate for years.
And therefore this estate is frequently called a term, "terminus" because its duration or continuance is bounded, limited
and determined: for every such estate must have a certain beginning, and a certain end.' 'Lease' itself may be used to
mean the document which creates the tenancy or the interest created. A further term used is 'demise', which can mean a
lease in either of the above senses. Matters of terminology may be of practical significance. For example, the rule that
the liability of the original lessor on the covenants in a lease after an assignment of the lease does not generally extend
to a period of statutory continuation of the lease may rest on a distinction which is drawn between a continuation of the
tenancy, which is effected by statute, and a continuation of the term, which is not effected by statute4.
HR A[29]
1 See Law of Property Act 1925, s 205(1)(xxvii) where a term of years is in fact defined so as to include a periodic tenancy.
2 (19th edn, 1832) vol I, para 45b.

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3 (1st edn, 1766) Book II, p 143.
4 City of London Corpn v Fell [1994] 1 AC 458, [1993] 4 All ER 968.

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tenant/A Introduction/2 Creation of tenancy
2 Creation of tenancy
(a) Tenancy based on contract
HR A[30]-[40]
Apart from tenancies which subsist by virtue of statute1, a tenancy is based on an agreement between the landlord and
the tenant. No special words are required and any words which express the intention of giving and taking exclusive
possession for a certain period of time are sufficient2. Usually the contract is express, but in the case of tenancies at will
or from year to year it may be implied from the acts of the parties or other circumstances3. In a situation where there are
conflicting indications, the court will weigh the evidence and may conclude there is no tenancy despite, for example, the
issue of a rent book or an assessment of rent rebate4. In certain cases a contract between two persons can, by itself, give
rise to a property interest in one of them. The contract between a landlord and a tenant is a classic example of such an
effect. The contract of tenancy confers on the tenant a legal estate in the land, a term of years absolute. That legal estate
gives rise to rights and duties incapable of being founded in contract alone. The most notable consequence of the
existence of a property or proprietary interest is that the rights and duties created are capable of binding parties other
than the original parties whose contract first created the interest.
HR A[41]
1 As to which see paras HR A[49]-[62].
2 See Morgan d Dowding v Bissell (1810) 3 Taunt 65 at 67, per Lawrence J; Doe d Pritchard v Dodd (1833) 5 B & Ad 689 at 693;
Stratton v Pettit (1855) I6 CB 420 at 436.
3 See paras HR A[202]-[207]FF.
4 Westminster City Council v Basson (1990) 62 P & CR 57, 23 HLR 225 (following Street v Mountford [1985] AC 809, [1985] 2 All ER
289).
(b) Distinction between contractual relationship and interest in land
HR A[42]
The distinction between a mere contractual relationship and an estate or interest in land is that the rights created under
the former are rights in personam whereas the rights created under the latter are rights in rem. A right in personam is
enforceable against certain specified parties only, generally the parties to the contract which creates the rights in
question, whereas a right in rem is enforceable against the whole world. Thus, the rights of a lessee of land are
enforceable not only against the lessor with whom there is privity of contract, but also against the successors in title of
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the lessor who are not contracting parties. A fundamental principle of the law of contract is that only the parties to the
contract can enforce its terms or be bound by its terms, usually described as the doctrine of privity of contract1.
HR A[42.1]
1 That principle is now subject to the provisions of the Contracts (Rights of Third Parties) Act 1999: see para HR A[1223].
HR A[43]
Reference is sometimes made to a 'lease' of chattels. For example, s 48(1) of the Local Government and Housing Act
1989 refers to 'lessees of any property (whether land or goods)'. All that is generally meant in such cases is a contract of
hire. The 'lessee' of the goods or chattels does not enjoy the status of a tenant of land; he does not have the capacity to
transfer the burden of his obligations to an assignee. The jurisprudential distinctions discussed are of cardinal practical
importance when the status of a licensee is discussed1.
HR A[44]
1 See paras HR A[549]-[900].
HR A[45]
The fact that a lease is not merely a contract has often been reiterated1. In one case Lord Denning MR said that a lease
conveyed an interest in land and did not come to an end like an ordinary contract on repudiation and acceptance2.
However, the soundness of this position is no longer clear in the light of remarks in later cases3. Moreover, a recent
decision of the House of Lords appears to have cast doubt upon whether a lease must always be more than a contract.
Lord Hoffmann has stated that, although a lease usually creates a proprietary interest, the relationship of landlord and
tenant can exist where the grantor has no such interest to grant irrespective of the operation of the doctrine of estoppel4.
HR A[46]
1 Hammersmith and Fulham London Borough Council v Monk [1992] 1 All ER 1 at 10, per Lord Browne-Wilkinson; London and
Northern Estates Co v Schlesinger [1916] 1 KB 20 at 24; Whitehall Court Ltd v Ettlinger [1920] 1 KB 680 at 687; Matthey v Curling [1922]
2 AC 180 at 185.
2 In Total Oil Great Britain Ltd v Thompson Garages Biggin Hill Ltd [1972] 1 QB 318 at 324.
3 Cf W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] 1 All ER 596 at 602 in which it was said that a tenant who repudiates the
relationship of landlord and tenant should be in no different position from a party to a contract who repudiates or renounces it. See also
Chartered Trust plc v Davies [1997] 2 EGLR 83; Nynehead Developments Ltd v RH Fireboard Containers [1999] 1 EGLR 7. Also cf
Hussein v Mehlman [1992] 2 EGLR 87. See para HR A[9421].
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4 Bruton v London & Quadrant Housing Trust [1999] 3 All ER 481, overturning Bruton v Quadrant Housing Trust [1998] QB 834,
[1997] 4 All ER 970. See further para HR A[88]. In Bruton, their Lordships expressly left open, however, the question as to whether the
tenants qualified for statutory security of tenure under the Housing Act 1985 as against the head lessor, that is the party with the estate in
land. That question was considered in Kay & Others v Lambeth LBC & London & Quadrant Housing Trust [2004] EWCA Civ 926, [2004]
EWCA Civ 56; [2004] HLR 56. The Court of Appeal held, inter alia, that when the head lessor terminated the interest of the tenant's
immediate landlord the tenants had no estate in land because, at the date of grant, the grantor itself had no such estate. Accordingly, when the
intermediate interest ended the tenants could not assert that they had an estate in land necessary to establish the direct relationship between
landlord and tenant required to convey security under the Housing Act 1988.
HR A[47]
The exact nature of a lease is relevant to the question of whether the general contractual doctrine of frustration applies
to leases, or is inapplicable by reason of a lease being more than a contract1. The fact that the obligations in a lease are
contractual in nature may have other important consequences. For example, damages for breach of a landlord's covenant
for quiet enjoyment cannot normally include any element for mental suffering, since a basic principle of the law of
damages states that such damages cannot generally be recovered for a breach of contract2.
HR A[48]
1 This is considered in detail in para HR A[9401].
2 See para HR A[6880].
(c) Tenancy created by statute
HR A[49]
There are various instances of tenancies being created by virtue of the different codes of statutory protection now given
to tenants. These codes are treated in detail in the subsequent Divisions of this book. The most important are
summarised below.
(a) Statutory tenancies may arise under the Rent Act 1977 in favour of tenants of residential premises
whose contractual tenancy has determined. See Division C.
(b) Statutory tenancies may arise under Part I of the Landlord and Tenant Act 1954 in favour of
tenants of residential premises under long leases which have expired. See Division E.
(c) Under the Leasehold Reform Act 1967 a landlord may be obliged to extend the tenant's lease of a
house by 50 years, and under the Leasehold Reform, Housing and Urban Development Act 1993 a
landlord may be obliged to extend the tenant's lease of a flat by 90 years. See Division E.
(d) New tenancies may be ordered by the High Court and county court to be granted to tenants of
business premises under Pt II of the Landlord and Tenant Act 1954. See Division B.
(d) Other examples of creation by statute: copyhold

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HR A[50]-[60]
By changes made in the law of real property which came into operation on 1 January 1926, copyhold land held for a life
or lives, or for years, without a right of perpetual renewal, was converted into a leasehold interest for the life or lives, or
for years determinable on the dropping of a life, or for a corresponding legal term of years absolute, as the case might
be, and if the copyhold interest was for life or lives, or determinable on the cesser of a life, the lease became a lease for
a term of ninety years determinable by notice in writing after the falling of the life, or the last survivor of the lives1.
HR A[61]
1 Law of Property Act 1922, s 133; LPA 1925, ss 149(6), 202.
(e) Other examples of creation by statute: mortgages
HR A[62]
A legal mortgage of freeholds or leaseholds since 1925 can only be effected either by a demise, or a subdemise in the
case of leaseholds, for a term of years absolute, subject to a provision for cesser on redemption, or by a charge by deed
expressed to be by way of legal mortgage, and existing mortgages were converted into mortgages, by demise or
subdemise, as the case might be1. Any purported assignment of a term of years absolute by way of mortgage made after
1925 is to operate as a subdemise2. 'Purported' here does not mean the deed is to be expressed to be by way of
mortgage: it is sufficient if the intention of the parties was that it should be a mortgage3.
HR A[63]
1 Law of Property Act 1925, ss 85, 86, Sch 1, Pts VII, VIII.
2 LPA 1925 s 86(2).
3 Grangeside Properties Ltd v Collingwoods Securities Ltd [1964] 1 All ER 143, [1964] 1 WLR 139, CA.
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tenant/A Introduction/3 Attornment
3 Attornment
(a) Nature of attornment
HR A[64]
'The attornment is the act of the tenant's putting one person in the place of another as his landlord'1. Attornment was
formerly necessary upon a grant of the reversion in order to complete the title of the grantee, but not in the case of a
devise2. The requirement goes back to the medieval period when, after the prohibition of subinfeudation of the fee
simple by the statute Quia Emptores, the assignment of the reversion or remainder after the grant of a life interest or
entail was only perfected as against the tenant for life in tail by the tenant attorning to the new reversioner or
remainderman. By the Law of Property Act 1925, s 151(1) it is no longer necessary. An attornment may be used to
defeat the operation of the rules governing limitation of action, but in such a case the attornment must be made before
the action is commenced3.
HR A[65]
1 Cornish v Searell (1828) 8 B & C 471 at 476, per Holroyd J.
2 See Doe d Wright v Smith (1838) 8 Ad & El 255 at 260.
3 Doe d Linsey v Edwards (1836) 5 Ad & El 95 at 106.
(b) Effect of attornment by tenant
HR A[66]
When a person is already in occupation of property, the relation of landlord and tenant may be established between
another person and himself by attornment. The person who is in occupation attorns tenant, ie acknowledges that he is
tenant, to the person who is to be landlord. The essence of attornment is, therefore, the acknowledgment or acceptance
of the relation of landlord and tenant between two persons. The two essentials1 of an attornment are (1) that the person
attorning tenant is in occupation of the property and (2) that the person attorning tenant agrees to the establishment of
the relation of landlord and tenant with another person who becomes his landlord2. Where the occupier is a tenant and
agrees to hold of a new landlord during the currency of the agreement without any change in the terms of the tenancy,
this is known as a mere attornment3, and if it is contained in an instrument in writing, the instrument requires no
stamp4. But where the instrument is more than a mere acknowledgment of a new landlord in that it contains new or
different terms of tenancy, it requires to be stamped either as a lease or as an agreement for a lease5. Prior to the
alteration in the law by the Law of Property Act 1925, it was customary, if not necessary, that, when the landlord's
reversion was assigned, the tenant should attorn to the purchaser of the reversion. The attornment estopped the tenant
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from disputing the title of the purchaser of the reversion6. There is a good deal of authority and old learning on the
nature and effect of attornment, but the procedure is of little usefulness today. As mentioned in para HR A[68],
attornment is sometimes used in mortgages although it is of dubious practical utility even in this limited area7.
HR A[67]
1 Shep Touchstone, ch 13.
2 When a tenant pays rent to his landlord, after that landlord's title has expired, it does not necessarily amount to an implied attornment:
Serjeant v Nash, Field & Co [1903] 2 KB 304, CA, Stirling LJ approving Fenner v Duplock (1824) 2 Bing 10.
3 Cornish v Searell (1828) 8 B & C 471.
4 Doe d Linsey v Edwards (1836) 5 Ad & El 95; Barry v Goodman (1837) 2 M & W 768.
5 Cornish v Searell (1828) 8 B & C 471; Doe d Frankis v Frankis (1840) 11 Ad & El 792 (where the instrument stated the rent and when
payable); Cooper v Lands (1866) 14 LT 287.
6 See Meeruppe Sumanatissa Terunnanse v Warakapitiye Pangnananda Terunnanse [1968] AC 1086 at 1095, [1968] 1 All ER 651, PC,
per Lord Devlin at 1095. As to tenancies by estoppel, see para HR A[86]. Many of the cases in the books on estoppel in regard to leases
concern tenants who are prevented by attornment from disputing the title of a purchaser of the reversion.
7 At one point attornment clauses gained some popularity when it was held that a mortgagor who had attorned tenant and was sued for
possession could not rely on the protection of the Rent Acts: see Portman Building Society v Young [1951] 1 All ER 191, CA, considered in
para HR A[84].
(c) Attornment and mortgages
HR A[68]
Attornment has also been used when an owner in occupation of property conveys the property to another to whom he
becomes tenant. An attornment clause is sometimes inserted in mortgages by an occupying mortgagor in order to give
the mortgagee the remedies available to a landlord. A procedure used at one time was that the mortgagor attorned tenant
at a rent equal to the interest, and the mortgagee then obtained a power to distrain for the interest1. Since 1878 an
attornment clause for the purpose of giving a mortgagee power to distrain has been void, unless registered as a bill of
sale2, but though unregistered, it remained effectual to give him power to eject the mortgagor by obtaining summary
judgment3. A mortgagee who had the benefit of an attornment clause formerly enjoyed certain procedural advantages4
if he sought to enforce his right to possession by legal proceedings, but these have largely disappeared, leaving it open
to doubt whether anything of significance is today to be gained from including attornment clauses in mortgages. The
possible advantages may be reduced to three.
(a) The mortgagee was enabled to distrain for his interest which corresponded to rent. This power
must now be read subject to the Bills of Sale Act 1878, s 62.
(b) The mortgagee was enabled more speedily to obtain possession by proceeding by specially
endorsed writ in the High Court in his capacity as landlord. The advantage of proceeding in this manner
Page 16
has been made available to a mortgagee without the necessity of disguising himself as a landlord since
alterations made to the Rules of the Supreme Court in 1937. Today, all actions for the recovery of land in
the High Court are commenced by claim form, in accordance with Part 7 or 8 of the Civil Procedure
Rules 1998 as appropriate. Actions for possession by mortgagees must be brought by part 8 claim form5
and are assigned to the Chancery Division6.
(c) The mortgagee could sometimes use the summary procedure available under the Small Tenements
Recovery Act 1838 to obtain possession4. However this Act was repealed on 1 October 19727.
HR A[69]
1 West v Fritche (1848) 3 Exch 216; Jolly v Arbuthnot (1859) 4 De G & J 224; Morton v Woods (1869) LR 4 QB 293, Ex Ch; Re Stockton
Iron Furnace Co (1879) 10 Ch D 335; Re Knight, ex p Voisey (1882) 21 Ch D 442, CA. The position of a mortgagor and mortgagee where
there is an attornment clause is clearly set out in a judgment of Lord Chelmsford LC in Jolly v Arbuthnot (1859) 4 De G & J 224 at 235ff. It
appears that at the time of that decision the purpose of an attornment clause was conceived to be as much to protect the mortgagor as to
benefit the mortgagee.
2 The Bills of Sale Act 1878, s 6: see para HR A[82].
3 Mumford v Collier (1890) 25 QBD 279.
4 For example, it was held in Dudley and District Benefit Building Society v Gordon [1929] 2 KB 105 that the procedure prescribed in the
Small Tenements Recovery Act 1838 was available to the mortgagee where an attornment clause was included in the mortgage. The
advantages of inserting attornment clauses into mortgage deeds are sometimes questioned; see eg per Danckwerts J in Portman Building
Society v Young (1950) 66 TLR (pt2) 447 at 449, and by the same judge in Steyning and Littlehampton Building Society v Wilson [1951] Ch
1018, [1951] 2 All ER 452.
5 See CPR Pt 8 and the 2nd Practice Direction thereto, section A.3.
6 RSC Ord 88, r 2 of Sch 1 to the CPR 1998.
7 Rent Act 1965, s 35(5) and SI 1972/1161.
HR A[70]-[80]
On the whole, it is legitimate to doubt whether attornment clauses have much practical advantages in present day
mortgages. The fact that they do create the relationship of landlord and tenant can itself create complications. Statutes
sometimes contain express provision that tenancies arising from attornment clauses are to be disregarded1.
HR A[81]
1 See eg Leasehold Reform Act 1967, s 1(2)(b).
(d) Attornment and Bills of Sale Acts

Page 17
HR A[82]
As mentioned in para HR A[68], since 1878 an attornment clause for the purpose of giving a mortgagee power to
distrain has been void unless registered as a bill of sale1. However, it is provided2 that a demise by a mortgagee in
possession to the mortgagor at a fair and reasonable rent is not to be deemed to be a bill of sale, but this proviso extends
only to cases where the mortgagee being in actual possession, has subsequently demised to the mortgagor, and does not
give protection when actual possession has not been taken, the only demise being by the mortgage deed; for an
attornment does not of itself make the mortgagee a mortgagee in possession within the meaning of the proviso3. A lease
in good faith to a mortgagor by a mortgagee in actual possession is protected, but not a lease to secure money. Thus,
when a mortgagor under a mortgage with an attornment clause, being in arrear with interest, undertakes in writing to
hold as tenant to the mortgagee at a fair rent, but the mortgagee does not take actual possession, the intention being
further to secure the mortgage debt, and not to create a real demise, the instrument is a bill of sale which must be
registered4 and a distress levied by the mortgagee on goods of strangers is avoided5.
HR A[83]
1 Bills of Sale Act 1878, s 6.
2 BSA 1878.
3 Re Willis, ex p Kennedy (1888) 21 QBD 384.
4 Under the Bills of Sale Act (1878) Amendment Act 1882, s 8.
5 Green v Marsh [1892] 2 QB 330, CA.
(e) Attornment and mortgages: nature of tenancy
HR A[84]
The tenancy created by an attornment clause in a mortgage may be a tenancy at will, a periodic or other tenancy1. Such
a clause where the tenancy is determinable on notice creates a tenancy greater than a tenancy at will2. No period of
notice is necessary to determine a tenancy at will. The scope of the mortgage deed may be inconsistent with a tenancy3.
In order to regain or resume possession the mortgagee must comply with the provisions of the attornment clause. Thus,
if the clause requires notice to be given before resuming possession, such notice must be duly given, and its period must
have expired, before applying to the court for an order for possession4. If the deed purports to create a yearly tenancy,
this will not be converted into a tenancy at will by a power for the mortgagee to determine it at any time5, but where the
mortgage provides that after the power of sale has arisen the tenancy can be determined without any previous notice to
quit, no notice is necessary before re-entry6. The fact that, under the Law of Property Act 1925, the mortgagee holds a
term of years while the mortgagor holds the reversion7, does not prevent the mortgagor attorning tenant to the
mortgagee, since it is not necessary that the landlord should be entitled to create the tenancy. It is usual in such clauses
to reserve only a nominal rent, but even where a rent of more than two-thirds of the rateable value of premises subject to
the Rent Acts was reserved, it was held that those parts of the Acts which protect a tenant from eviction by the landlord
Page 18
had no application8. Similarly, the requirement that a notice to quit any premises let as a dwelling must be given at least
four weeks before it is to take effect, did not apply to a tenancy created in this way9. It may be otherwise if the rent
reserved by the attornment clause is a full rack rent (instead of the peppercorn or other nominal rent often reserved), or
where the mortgage obliges the mortgagor to reside personally on the premises. An attornment clause in a mortgage of
agricultural land will not have the effect of creating an agricultural tenancy between the mortgagor and the mortgagee
for the purposes of the Agricultural Holdings legislation10. However, the tenancy created by an attornment clause in a
mortgage is real in the sense that it may be assigned as may other tenancies, and that the burden of covenants contained
in it, which touch and concern the land, run with the land and bind assignees of the tenancy11. If the attornment clause
has the effect of creating a tenancy at will there can be no assignment on the general principle that a tenancy at will
determines on a purported assignment of it12.
HR A[85]
1 Doe d Bastow v Cox (1847) 11 QB 122; Doe d Dixie v Davies (1851) 7 Exch 89; Wilkinson v Hall (1835) 1 Bing NC 713 (fixed term
created); Doe d Lyster v Goldwin (1841) 2 QB 143; Turner v Barnes (1862) 2 B & S 435.
2 Regent Oil Co Ltd v J A Gregory (Hatch End) Ltd [1966] Ch 402, [1965] 3 All ER 673, where the notice was to be 'at least seven days'.
3 Walker v Giles (1848) 6 CB 662; cf Pinhorn v Souster (1853) 8 Exch 763, in which it was held that an attornment clause creating a
tenancy at will was not inconsistent with the mortgage deed.
4 Hinckley and County Building Society v Henny [1953] 1 All ER 515, [1953] 1 WLR 352.
5 Re Threlfall, ex p Queen's Benefit Building Society (1880) 16 Ch D 274, CA; see Doe d Garrod v Olley (1840) 12 Ad & El 481; Doe d
Snell v Tom (1843) 4 QB 615.
6 Woolwich Equitable Building Society v Preston [1938] Ch 129.
7 See Law of Property Act 1925, ss 85, 86, Sch 1, Pts VII, VIII.
8 Portman Building Society v Young [1951] 1 All ER 191, CA. The reasoning was that there was not a 'letting' in any true sense of that
word.
9 Alliance Building Society v Pinwill [1958] Ch 788, [1958] 2 All ER 408.
10 Steyning and Littlehampton Building Society v Wilson [1951] Ch 1018, [1951] 2 All ER 452. See also Central Mortgage and Housing
Corpn v Hankins and Hankins (1962) 33 DLR (2d) 727, in which the Alberta Supreme Court held that proceedings normally available to
landlords against defaulting tenants were not available to a mortgagee who had become landlord under an attornment clause.
11 See Regent Oil Co Ltd v JA Gregory (Hatch End) Ltd [1966] Ch 402, [1965] 3 All ER 673, per Harman LJ at 677, 678, and see Re
Knight, ex p Voisey (1882) 21 Ch D 442, where a covenant in an attornment clause was held binding against a trustee in bankruptcy who was
the statutory assignee of the mortgagor who had attorned tenant.
12 Scobie v Collins [1895] 1 QB 375.

Page 19
tenant/A Introduction/4 Tenancies by estoppel
4 Tenancies by estoppel
(a) Estoppel generally
HR A[86]
Estoppel is a principle of the law of evidence under which a person who has represented the truth of a certain fact is
prevented from denying that the fact is true and is prevented from asserting the contrary of that fact1. The form of
estoppel which has its main effect in the law of evidence is an estoppel founded on a representation of fact, or common
law estoppel. The representation may be by words, written or oral, or may arise as an inference from conduct. It is this
form of estoppel which underlies the rules governing tenancies by estoppel. The parties to the transaction, by
representing to each other that they stand in the relationship of landlord and tenant, the one by granting the lease and the
other by accepting the lease and entering into possession, are estopped from denying that relationship. Other forms of
estoppel include: (a) promissory or equitable estoppel (based on a promise rather than an assertion of fact); (b)
proprietary estoppel (under which the court can order the vesting in a person of an interest in land); (c) estoppel by
convention (under which the parties are bound by a state of affairs which they both acted on and believed to be true);
and (d) estoppel by deed. Although strictly a rule of evidence, estoppel has a major impact on areas of substantive law.
HR A[87]
1 For a general account of the law of estoppel, see Spencer Bower and Turner on Estoppel by Representation (3rd edn, 1977); Cross and
Tapper on Evidence (8th edn, 1995) ch II, s 3; Phipson on Evidence (14th edn, 1990) ch 6.
(b) Application of estoppel to landlord and tenant
HR A[88]
The application of estoppel to the law of landlord and tenant may be subsumed under two related heads. First, a tenant
is prevented or estopped from denying the right of his landlord to grant the lease and, conversely, a landlord is
prevented or estopped from denying the title of his tenant under the lease. Second, a person who has no legal estate in
the land may nevertheless purport to grant a lease of that land; in that event, there is created between him and his
purported tenant a tenancy by estoppel1 which binds them and their respective successors in title just as if the landlord
had a sufficient interest to grant the lease. It does not bind strangers to the transaction. The effect of the two principles is
that a tenant cannot generally avoid his liability on the covenants in the lease, such as the liability to pay rent or to keep
the premises in proper repair, by asserting that the landlord had no title to grant the lease. However, the tenant can claim
that he is not liable on the ground that he has been disturbed by someone who has a better title than his landlord or on
the ground that his landlord's title has ended. For example, if A who has no good title to land grants a lease of it to B
and C, who has good title, evicts B, B can then assert as against A the better title of C. Indeed, should C recover from B
damages for trespass in respect of the period when B was in possession as a trespasser against C, B can probably
Page 20
recover from A any rent which he has paid prior to his eviction2. This general inability to set up, as a defence to a claim
by a landlord, the contention that some other person has a better title than the landlord (sometimes called an inability to
plead a ius tertii) is an aspect of the wider principle of English land law that title to land is relative not absolute3. Thus,
if A takes possession of land from B and is sued by B who seeks to recover possession and obtain damages, A cannot by
way of defence claim that C has a better title than B. The question is not whether B has a title that is absolutely good
but, rather, whether he has a better relative title than A3. The law of tenancies by estoppel is founded on the similar
principle that where a person takes a lease he cannot escape liability on the covenants simply by proving that his
landlord did not have a good title to grant the lease or that some third party had a better title. No distinction is drawn in
the many decided authorities between the two above general aspects of tenancies by estoppel4. Where the lease is by
deed the estoppel also arises by virtue of the deed5. Estoppel by deed rests on the principle that a person who has
entered into a deed cannot deny the facts which are asserted in the deed6. As a matter of historical development, the
doctrine of tenancies by estoppel is said to have arisen from estoppel by deed as applied to leases made by deed7. It is
said that many of the cases of estoppel relating to landlord and tenant in the books arise out of the old practice of the
tenant attorning to (ie recognising the title of) the successor landlord when the reversion was transferred. The cases
relate to tenants being prevented by their attornment from denying the title of the successor to the reversion8. The
estoppel operates whether or not the tenant knew of the landlord's lack of title and inability to grant the lease9. It is a
requisite of normal estoppel by representation that the representee who seeks to set up the estoppel has acted in reliance
on the truth of the representation made to him. Since a tenant who takes a lease knowing of his landlord's lack of good
title does not rely on a representation of the landlord's ability to grant the lease the doctrine of estoppel is applied to
leases in an unusual fashion. The doctrine here being explained is, therefore, a special doctrine developed by analogy
from leases under deed and peculiar to the relationship of landlord and tenant10.
HR A[89]
1 It should however be noted that in a recent decision by the House of Lords it was found that an estoppel was not necessary to create the
relationship of landlord and tenant, notwithstanding that the grantor of the rights in question was itself a mere licensee of the land and thus
lacked the estate necessary to enable it to grant a proprietary interest: see Bruton v Quadrant Housing Trust [1999] 3 All ER 481 overruling
Bruton v Quadrant Housing Trust [1998] QB 834, [1997] 4 All ER 970. Their lordships decided that as between the parties there could be a
contractual lease because it was the relationship between them that was the determining factor and not the existence of any proprietary
interest. Lord Hoffmann said that, although a lease usually does create a proprietary interest, whether it did in a particular case would depend
upon whether the landlord had an interest out of which he could grant such an estate. It is as yet unclear what impact that decision will have
upon the law on tenancy by estoppel given that it appears to ignore the previously accepted principle that, in the absence of such an estoppel,
a leasehold interest in land can only be granted by a party who has himself a sufficient estate in that land. The impact of the decision upon
statutory security of tenure under the Housing Act 1985 has, however, been considered. See Kay & Others v Lambeth LBC & London &
Quadrant Housing Trust [2004] EWCA Civ 926, [2004] EWCA Civ 56; [2004] HLR 56 and A[46].
2 See Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580 at 596, per Lord Denning MR. See
Newsome v Graham (1829) 10 B & C 234, where the tenant paid rent to his landlord until he was evicted by the true owner and required to
pay damages for trespass to that owner. It was held in the King's Bench that the tenant was entitled to recover the rent paid to the landlord by
estoppel prior to the eviction. He might also be entitled to damages from that landlord for breach of the covenant for quiet enjoyment,
depending on the exact terms of that covenant.
3 See Ocean Estates Ltd v Pinder [1969] 2 AC 19 at 24-25 per Lord Diplock; Asher v Whitlock (1865) LR 1 QB 1. For a full explanation
of the doctrine of relative titles, see Megarry and Wade The Law of Real Property (6th edn, 2000) paras 3.115 to 3.126.
4 The doctrine is of ancient origin: see James v Landon (1585) Cro Eliz 36; Blunden v Baugh (1633) W Jo 315; Brudnell v Roberts (1762)
2 Wils 143; Monroe v Kerry (1710) 1 Bro Parl Cas 67, HL.
5 Co Litt 47b; Smith v Low (1739) 1 Atk 489.

Page 21
6 See Greer v Kettle [1938] AC 156 at 171, [1937] 4 All ER 396 at 404, HL, per Lord Maugham.
7 See Edward H Lewis & Son Ltd v Morelli [1948] 2 All ER 1021 at 1024 per Harman J.
8 See Meeruppe Sumanatissa Terunnanse v Warakapitiye Pangnananda Terunnanse [1968] AC 1086 at 1095, PC, per Lord Devlin.
9 Morton v Woods (1869) LR 4 QB 293; Edward H Lewis & Son Ltd v Morelli [1948] 2 All ER 1021.
10 See Edward H Lewis & Son Ltd v Morelli [1948] 2 All ER 1021 at 1024 per Harman J.
(c) Tenancy by estoppel: examples
HR A[90]-[100]
A tenancy by estoppel will most frequently arise where a landlord believes he has good title to grant a lease but in fact
does not have sufficient title. For example, a person may believe that he has legal title to the freehold when he has in
truth only an equitable interest. In one of the older leading cases1 the freehold owner mortgaged his land, conveying
away the fee simple to the mortgagee as was then the custom in effecting mortgages and retaining only the equity of
redemption. He thereupon created a seven-year lease. It was held that the purported grant of the lease created a tenancy
by estoppel, so that the tenant was liable for failing to deliver up the land in proper repair in accordance with the
covenants at the end of the lease. Grants of leases by mortgagors who have no power to do so may constitute the most
frequent occasion in which tenancies by estoppel arise today. In the modern leading case2 the landlords when granting a
lease believed themselves to hold the legal estate in the land but in fact held only an equitable interest as purchasers
under a contract of sale. It was held that a tenancy by estoppel was created between them and the tenants and that the
tenants were liable for a failure to deliver up the premises in proper repair at the end of the lease. The facts of the former
case also illustrate the principle that a tenancy by estoppel enures for the benefit of and binds successors in title of the
original parties. The original landlord sold his equity of redemption after six years of the seven-year lease. The
purchaser was able to recover damages from the tenant for the failure to repair3.
HR A[101]
1 Cuthbertson v Irving (1859) 4 H & N 742 and also (1860) 6 H & N 135 on appeal in the Exchequer Chamber.
2 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580, [1977] 2 All ER 293, CA.
3 See also Mackley v Nutting [1949] 2 KB 55, [1949] 1 All ER 413 where it was held that the right to enforce a tenancy by estoppel passes
to the assignees of the tenant.
(d) Tenant estopped from denying landlord's title
HR A[102]
In one of the leading modern cases1 on tenancies by estoppel the underlying principle was stated as being 'If a landlord
Page 22
lets a tenant into possession under a lease, then, so long as the tenant remains in possession undisturbed by any adverse
claim--then the tenant cannot dispute the landlord's title'2. However, the principle that the tenant cannot dispute his
landlord's title depends upon the tenant having been allowed into possession and having been undisturbed by any
adverse claim. If the tenant goes out of possession without having been disturbed by an adverse claim, for example as a
result of the natural expiry of the term granted or following a voluntary surrender, the tenant still cannot dispute the
landlord's title. The fact that he has gone out of possession in these circumstances does not affect the normal operation
of the doctrine of tenancies by estoppel3. It follows that the landlord can recover damages for breach of covenant, such
as a failure to deliver up the premises in proper repair, even after the tenant has gone out of possession and the tenant
cannot then dispute the landlord's title4. The doctrine binds both landlord and tenant. Just as a tenant cannot assert that
some third party has better title than his landlord so a landlord cannot deny the right of his tenant to the lease which he
has granted5.
HR A[103]
1 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580 at 596, [1977] 2 All ER 293, at 301, CA,
per Lord Denning MR.
2 See also Cuthbertson v Irving (1859) 4 H & N 742 at 758. Martin B stated two propositions: '...if the lessor have no title, and the lessee
be evicted by him who has title paramount, the lessee can plead this and establish a defence to any action brought against him...but...so long
as the lessee continues in possession under the lease, the law will not permit him to set up any defence founded upon the fact that the lessor
"nil habuit in tenementis".'
3 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580, [1977] 2 All ER 293.
4 It was held by the Court of Appeal in Harrison v Wells [1967] 1 QB 263, [1966] 3 All ER 524 that once the tenant had gone out of
possession he could dispute the landlord's title and so could plead lack of title in the landlord as a defence to a claim for damages. The
decision in Harrison v Wells was per incuriam in the sense that the court misunderstood the earlier decision in Cuthbertson v Irving (1859) 4
H & N 742, affirmed in the Exchequer Chamber (1860) 6 H & N 135, through having had cited to them only a report in the Law Journal (28
LJ Ex 306) instead of the better report in Hurlstone and Norman. Consequently, Harrison v Wells, while it may have been a correct decision
on its own facts, cannot be regarded today as authority for any proposition of law.
5 The principle is that a landlord is estopped from repudiating a lease under which possession has been granted or a tenancy which he has
acknowledged: Webb v Austin (1844) 7 Man & G 701 at 724; Cuthbertson v Irving (1859) 4 H & N 742; Weller v Spiers (1872) 26 LT 866 at
867, per Cockburn CJ; and cf Darlington v Pritchard (1842) 4 Man & G 783, per Tindal CJ; Green v James (1840) 6 M & W 656 at 660 and
(judgment) 662, per Alderson B (in argument); Edward H Lewis & Son Ltd v Morelli [1948] 2 All ER 1021; Mackley v Nutting [1949] 2 KB
55, [1949] 1 All ER 413.
(e) Position where landlord's title has ended
HR A[104]
A tenant can always claim that his landlord's title has ended, for example, by the fact that the landlord has transferred
his reversion in the ordinary way1. A good example of the determination of the landlord's title is a case where that title
is itself leasehold and the lease has expired2. The tenant may show that the landlord's title has determined either before
or after the expiration of the term3. It appears that where the landlord's interest has been assigned the tenant, in order to
defeat a claim, has to show not only that the landlord's interest has determined but also that there is a good adverse title
in a third party4.
Page 23
HR A[105]
1 In Serjeant v Nash, Field & Co [1903] 2 KB 304, CA, Collins MR said: 'It is clear law that though a tenant cannot deny the title of his
landlord to deal with the premises, he may prove that the title has determined.'
2 See National Westminster Bank Ltd v Hart [1983] QB 773, [1983] 2 All ER 177. See also Neave v Moss (1823) 1 Bing 360; Fenner v
Duplock (1824) 2 Bing 10; Doe d Higginbotham v Barton (1840) 11 Ad & El 307; Harmer v Bean (1853) 3 Car & Kir 307; Langford v
Selmes (1857) 3 K & J 220.
3 England d Syburn v Slade (1792) 4 Term Rep 682; Doe d Lowden v Watson (1817) 2 Stark 230.
4 See National Westminster Bank v Har [1983] QB 773, [1983] 2 All ER 177, reviewing the earlier authorities.
(f) Position if tenant evicted by title paramount
HR A[106]
If the tenant is disturbed by being evicted by someone with a title superior to that of his landlord (usually described as
being evicted by title paramount) or its equivalent he can dispute the landlord's title. Instances of the equivalent of
eviction by title paramount are where the tenant is forced to acknowledge the title of a third party and attorns to him or
where the tenant contests the title of his landlord on being given an indemnity by a third party1. Where there is an
express covenant in the tenancy by estoppel which covers interruption by title paramount, the tenant can claim damages
from the landlord as a result of the eviction. In practice, many express covenants for quiet enjoyment are in a qualified
form and do not extend to eviction by title paramount. The implied covenant for quiet enjoyment is also in such a
qualified form2.
HR A[107]
1 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580, [1977] 2 All ER 293, CA, citing Wilson v
Anderton (1830) 1 B & Ad 450 at 457, per Littlewood J; Newsome v Graham (1829) 10 B & C 234; Mountnoy v Collier (1853) 1 E & B
630; Watson v Lane (1856) 11 Exch 769.
2 See para HR A[6806] on implied covenant for quiet enjoyment.
HR A[108]
It is not wholly clear what precisely is equivalent to eviction by title paramount such as to enable the tenant to deny the
title of the landlord who has granted him a lease. It has been said1 that a tenant by estoppel could dispute the title of his
landlord where he was in theory at risk of some claim by the true owner of the legal estate even though the tenant had in
fact enjoyed the full term granted to him without disturbance2. If this reasoning is correct, it appears that a tenant by
estoppel, even though he has not been disturbed in his full enjoyment of the lease granted to him, is able to avoid
liability on the covenants in the lease by pleading lack of title in the landlord unless the person with true or better title is
Page 24
unable in law to make any adverse claim against the tenant. In an Irish case3 where a tenant by estoppel was evicted by
the landlord for non-payment of rent, he defended the claim for rent on the basis that the landlord had no title to grant
the lease, and succeeded on this defence4.
HR A[109]
1 In Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580 at 605, [1977] 2 All ER 293 at 309, per
Roskill LJ.
2 On this basis Roskill LJ considered that Harrison v Wells [1967] 1 QB 263, [1966] 3 All ER 524 was correctly decided on its facts,
although it established no general proposition of law (and Lawton LJ tended to concur with this view). In Harrison v Wells a testator left
property on trust to pay the income to his widow for life. The widow was one of the trustees. The lease was granted by her and not by the
trustees as it should have been. The risk to which Roskill LJ referred was that the trustees could have sued the tenant for damages for
trespass or for waste. Lord Denning MR considered that Harrison v Wells was wrongly decided, since he thought that the trustees could
never have made an adverse claim against the tenant.
3 Levingston v Somers [1941] Ir R 183.
4 It was said in Industrial Properties (Barton Hill) Ltd v Associated Electrical IndustriesLtd [1977] QB 580, [1977] 2 All ER 293 that this
case was also correctly decided on the facts since the tenant was at risk at the instance of the true owner of the legal estate.
(g) General application of doctrine
HR A[110]-[120]
The doctrine is not confined to leases by deed1, but applies to all leases and tenancies2 and a landlord by estoppel can
be landlord for the purposes of the Rent Acts3. A tenancy by estoppel may be protected by Pt II of the Landlord and
Tenant Act 19544. Where the estoppel arises by delivery of possession, it is absolute5 and arises even where the deed or
writing contains (eg by recital) a statement showing that the landlord had no title6.
HR A[121]
1 Phipps v Sculthorpe (1817) 1 B & Ald 50; Doe d Jackson v Wilkinson (1824) 3 B & C 413; Cook v Whellock (1890) 24 QBD 658, CA.
The doctrine is said to have been extended by analogy from leases under seal to leases created by writing or orally: see Edward H Lewis &
Son v Morelli [1948] 2 All ER 1021 at 1024, per Harman J.
2 It applies to tenancies from year to year, at will or on sufferance: Mackley v Nutting [1949] 2 KB 55, [1949] 1 All ER 413.
3 Stratford v Syrett [1958] 1 QB 107, [1957] 3 All ER 363. See HR C[305].
4 Bell v General Accident Fire & Life Assurance Corpn Ltd [1998] 1 EGLR 69.
5 Parry v House (1817) Holt NP 489. Where possession is received from an agent of an unnamed principal, the estoppel applies in favour
of the principal (Fleming v Gooding (1834) 10 Bing 549). See also Ward v Ryan (1875) IR 10 Cl 17; Doe d Biddle v Abrahams (1816) 1
Page 25
Stark 305; Hopcraft v Keys (1833) 9 Bing 613.
6 Duke v Ashby (1862) 7 H & N 600; Morton v Woods (1869) LR 4 QB 293 in effect overruling Pargeter v Harris (1845) 7 QB 708.
(h) Parties affected by estoppel
HR A[122]
Successors in title to the original parties under a tenancy by estoppel are bound in the same way as the original parties1.
Thus, a tenancy by estoppel can be assigned and may devolve upon death2. However, the estoppel does not bind
strangers and thus while the landlord can distrain for unpaid rent against the goods of the tenant he cannot distrain
against the goods of strangers which are on the land3. Furthermore, the estoppel arises only between the parties in their
relationship of landlord and tenant and has no application to a case where the question arises between them in some
other relationship, eg as vendor and purchaser4.
HR A[123]
1 Doe d Bullen v Mills (1834) 2 Ad & El 17 (person claiming under tenant); London and North Western Rly Co v West (1867) LR 2 CP
553 (assignee of tenant); Williams v Heales (1874) LR 9 CP 177 (executors de son tort).
2 Seymour v Franco (1828) 7 LJOSKB 18; Doe d Higginbotham v Barton (1840) 11 Ad & El 307; Gouldsworth v Knights (1843) 11 M &
W 337; Webb v Austin (1844) 7 Man & G 701; Cuthbertson v Irving (1859) 4 H & N 742, (1860) 6 H & N 135 (in the Exchequer Chamber).
3 Tadman v Henman [1893] 2 QB 168.
4 Nesbitt v Mablethorpe UDC [1917] 2 KB 568.
(i) Estoppel not binding on strangers
HR A[124]
The estoppel binds the grantor and the grantee and their successors in title but not strangers1. It is a matter of fact in
every case to determine whether a person is a successor in title of a party to the tenancy or is a stranger to it. A landlord
is generally entitled to distrain for unpaid rent against goods of a third party which are on the tenant's land2. However,
in the case of a tenancy by estoppel, although the general principles of the law of distress apply, distress cannot be
levied on goods of a third party since the third party is a stranger to the transaction3.
HR A[125]
1 See Doe d Lord Downe v Thompson, Lord Down v Thompson (1847) 9 QB 1037, in which it was held that where a lease was granted by
Page 26
a mortgagor in such a way as to be good only by estoppel, the assignee of the mortgagee, though he received rent from the tenant, was not
bound by the estoppel, 'as he derived his estate from persons who were not privies to nor in any way estopped by the lease'; and Doe d Prior
v Ongley (1850) 10 CB 25.
3 Tadman v Henman [1893] 2 QB 168 (criticised in Megarry and Wade The Law of Real Property (6th edn, 2000) para 14.097, note 27).
(j) Mortgagors and tenancies by estoppel
HR A[126]
A mortgagor is frequently given no express power to grant leases and his statutory power may be excluded by the
mortgage deed. Consequently, any tenancy he purports to grant in these circumstances will take effect by estoppel, and
grants by mortgagors in this position constitute perhaps the most common example of tenancies arising by estoppel. It
has been held that when a mortgagor covenants not to grant any tenancy under his statutory power without the consent
of the mortgagee it is not a breach of covenant to grant a tenancy without the appropriate consent, since it takes effect
by estoppel not as an exercise of the statutory power1. The rights of a tenant by estoppel from a mortgagor are therefore
precarious. His rights under the Rent Act 1977 enure as against the mortgagor but not as against the mortgagee2. Where
there is an acknowledgment of the tenancy by the mortgagee this operates to create a tenancy between the tenant and the
mortgagee3. So where mortgagors had granted a weekly tenancy in breach of the provisions of the mortgage deed and
mortgagee appointed a receiver and wrote to the tenant telling him not to pay any further money to his former landlords
(the mortgagors) but to pay it to the receiver, it was held that there was such an acknowledgment as to create a tenancy
between the tenant and the mortgagee3. In another case it was held that there was no estoppel against the mortgagee
where the mortgagor had let persons into possession under agreements made before he had any title to the property,
being agreements for tenancies which a mortgagor is not entitled to grant, since the whole rent thereunder was paid in
advance and thus constituted a premium4. But where the same mortgagor, who had previously entered into an oral
contract for the grant of a similar tenancy, let the tenant into possession and thereby completed the letting after he had
contracted to purchase the freehold, the subsequent grant of a mortgage on completion of the purchase with a registered
title was held not to entitle the mortgagee to possession against the tenant, as the transfer of the legal estate to the
mortgagor and the mortgagee's title as such were subject to the tenant's overriding interest under the Land Registration
Act 1925, s 705.
HR A[127]
1 Iron Trades Employers Insurance Association Ltd v Union of House and Land Investors Ltd [1937] Ch 313.
2 Dudley and District Benefit Building Society v Emerson [1949] Ch 707, [1949] 2 All ER 252. But see Quennell v Maltby [1979] 1 All
ER 568, [1979] 1 WLR 318.
3 Chatsworth Properties v Effiom [1971] 1 All ER 604, [1971] 1 WLR 144.
4 Hughes v Waite [1957] 1 All ER 603, [1957] 1 WLR 713.
5 Grace Rymer Investments Ltd v Waite [1958] Ch 831, [1958] 2 All ER 777, CA.
Page 27
(k) Cases where no tenancy by estoppel
HR A[128]
Where a lease is void by reason of statute or the grantor has no power under statute to grant the lease the tenant does not
obtain a tenancy by estoppel, but there is nothing to prevent the running of a period of adverse possession under the
Limitation Act 1980 in his favour1. It seems that this principle applies to limited owners, such as tenants for life or
mortgagors, where leases may be good at common law as against the grantors during life or occupation although void as
against remaindermen or mortgagees as being beyond the grantor's statutory powers2. There is no estoppel when the
landlord has a good legal title but it is not sufficient to support the lease which he has created, for example, when a
landlord who holds a leasehold estate purports to grant a sublease which is longer than the unexpired residue of his own
lease. In such a case the purported sublease operates as an assignment of the head lease3. If a lease is purported to be
granted in circumstances in which the doctrine of tenancies by estoppel does not for some reason apply, there may still
be an ordinary contractual relationship between the parties to the transaction, so that they may enforce the obligations
agreed in contract provided they have a legitimate interest in doing so4.
HR A[129]
1 President and Governors of Magdalen Hospital v Knotts (1879) 4 App Cas 324. See also Minister of Agriculture and Fisheries v
Matthews [1950] 1 KB 148, [1949] 2 All ER 724 and Redbank Schools Ltd v Abdullahzedeh (1995) 95 LGR 176, 28 HLR 431, CA.
2 See Hughes v Waite [1957] 1 All ER 603, [1957] 1 WLR 713.
3 See Milmo v Carreras [1946] KB 306, [1946] 1 All ER 678.
4 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580 at 598, [1977] 2 All ER 293 at 303, CA,
per Lord Denning MR. See also Bruton v Quadrant Housing Trust [2000] 1 AC 406, [1999] 3 All ER 481, HL.
(l) Payment of rent and tenancy by estoppel
HR A[130]-[140]
Payment of rent to a person or his agent is prima facie evidence of a tenancy, but the person so paying is not estopped
from disputing the title of the person to whom such payment has been made1 and he may show that the rent was paid by
mistake2, or in consequence of a misrepresentation by the person receiving it3 or that the payment was made to an
agent of a third person4. He must, however, in any such case, go beyond showing the above facts and prove a better title
in someone else to receive the rent5. The payment of rent due under a lease by someone who is not the tenant, and its
acceptance by the landlord, is not in itself sufficient to create a tenancy by estoppel between the landlord and the person
who has paid the rent6. An offer to pay rent accompanied by entry into possession has been held to be an estoppel7 and
attornment to a new landlord by direction of the old landlord prevents the tenant setting up the title of a third person8.
The receipt of rent by a receiver appointed by mortgagees under the Law of Property Act 1925 does not, without more,
create a tenancy by estoppel as against the mortgagees9.
Page 28
HR A[141]
1 Cooke v Loxley (1792) 5 Term Rep 4; Williams v Bartholomew (1798) 1 Bos & P 326 at 328, per Buller J; Rogers v Pitcher (1815) 6
Taunt 202; Gravenor v Woodhouse (1822) 1 Bing 38 at 43; Fenner v Duplock (1824) 2 Bing 10, where a new lease was taken from the
original lessor, but the tenant was not estopped; Gregory v Doidge (1826) 3 Bing 474; Cooper v Blandy (1834) 1 Bing NC 45; Waddilove v
Barnett (1836) 2 Bing NC 538; Brook v Biggs (or Briggs) (1836) 2 Bing NC 572; Doe d Harvey v Francis (1837) 2 Mood & R 57; Doe d
Plevin v Brown (1837) 7 Ad & El 447; Hall v Butler (1839) 10 Ad & El 204; Doe d Higginbotham v Barton (1840) 11 Ad & El 307 at 313,
per Lord Denman CJ; Jew v Wood (1841) Cr & Ph 185 at 194, per Lord Cottenham LC; Doe d Marlow v Wiggins (1843) 4 QB 367;
Hitchings v Thompson (1850) 5 Exch 50, as explained by Lord Cranworth in A-G Stephens (1855) 6 De GM & G 111 at 141 and see also at
136; Knight v Cox (1856) 18 CB 645; Carlton v Bowcock (1884) 51 LT 659; Serjeant v Nash, Field & Co [1903] 2 KB 304, CA. In Jump v
Payne (1899) 68 LJ QB 607, submission to judgment in an action for rent was held to be an estoppel.
2 Rogers v Pitcher (1815) 6 Taunt 202; Fenner v Duplock (1824) 2 Bing 10; Doe d Plevin v Brown (1837) 7 Ad & El 447; Gravenor v
Woodhouse (1822) 1 Bing 38; Hall v Butler (1839) 10 Ad & El 204; Cooper v Blandy (1843) 1 Bing NC 45; Doe d Higginbotham v Barton
(1840) 11 Ad & El 307; Hitchings v Thompson (1850) 5 Exch 50.
3 Hall v Butler (1839) 10 Ad & El 204; Carlton v Bowcock (1884) 51 LT 659; Hindle v Hick Bros Manufacturing Co Ltd [1947] 2 All ER
825.
4 Jones v Stone [1894] AC 122, PC. In Doe d Hawey v Francis (1837) 2 Mood & R 57, Patteson J said that where a tenancy was
attempted to be established by mere evidence of payment of rent without proof of an actual demise or of the tenants having been let into
possession by the person to whom the payment was made, evidence was always admissible on the part of the tenant to explain the payment
of rent and to show on whose behalf the rent was received. See also Meeruppe Sumanatissa Terunnanse v Warakapitiye Pangnananda
Terunnanse [1968] AC 1086, [1968] 1 All ER 651, PC.
5 Carlton v Bowcock (1884) 51 LT 659; cf Cooper v Blandy (1834) 1 Bing NC 45.
6 Tickner v Buzzacott [1965] Ch 426, [1965] 1 All ER 131; Tichborne v Weir (1892) 8 TLR 713, CA.
7 Phipps v Sculthorpe (1817) 1 B & Ald 50.
8 Hall v Butler (1839) 10 Ad & El 204.
9 Chatsworth Properties Ltd v Effiom [1971] 1 All ER 604 at 606 per Salmon LJ approving Lever Finance Ltd v Needleman Property
Trustee [1956] Ch 375, [1956] 2 All ER 378.
(m) Submission to distress and tenancy by estoppel
HR A[142]
A submission to distress constitutes an acknowledgment of a tenancy. The landlord after distraining cannot bring an
action for possession for a cause accruing before distress and the occupier, if he does not replevy, is precluded from
denying the title of the landlord1. Payment of rent under a threat of distress is not a conclusive admission of title in the
distrainor2. Where a subdemise is a subdemise for the whole term and operates as an assignment, there is no right to
distrain and the estoppel which prevents the tenant denying the landlord's title does not prevent him from denying the
lessor's right to distrain3; but where in a deed creating a tenancy the want of a legal estate in the landlord is apparent,
the lessee is estopped and cannot allege that the distress is invalid on account of the want of the legal estate4.
Page 29
HR A[143]
1 Panton v Jones (1813) 3 Camp 372; Cooper v Blandy (1834) 1 Bing NC 45. Replevin is explained at para HR A[6101].
2 Knight v Cox (1856) 18 CB 645.
3 Preece v Corrie (1828) 5 Bing 24; Lewis v Baker [1905] 1 Ch 46 at 51.
4 Morton v Woods (1869) LR 4 QB 293, Ex Ch.
(n) Licensor and licensee
HR A[144]
The principles relating to tenancies by estoppel have been extended to the relationship of licensor and licensee1.
HR A[145]
1 Meeruppe Sumanatissa Terunnanse v Warakapitiye Pangnananda Terunnanse [1968] AC 1086, [1968] 1 All ER 651, PC; Doe d
Johnson v Baytup (1835) 3 Ad & El 188.
(o) Feeding the estoppel
HR A[146]
A further principle is that known as feeding the estoppel. If a person grants a lease without the capacity to do so, so
creating a tenancy by estoppel, and subsequently acquires a sufficient title or ability to create the lease, the estoppel is
then said to be fed, so that the lease takes full effect1. The most obvious example of feeding the estoppel is when the
landlord subsequently acquires the legal estate. The practical effect of the rule as to feeding the estoppel is seen in
relation to leases created by a purchaser of land who is let into possession prior to the completion of the sale and the
vesting in him of legal title. The lease takes effect as a tenancy by estoppel since the lessor has no legal estate at the date
of its creation. His subsequent acquisition of the legal estate on the completion of the purchase feeds the estoppel. The
complication is that the purchaser may create a mortgage of the land, the sum borrowed and secured on mortgage being
needed to complete the purchase. The question which arises is whether the lease binds the mortgagee. The answer given
in one case2 is that the purchaser on completion enjoys a scintilla temporis, or moment of time, at which he is the owner
which is sufficient to feed the estoppel, so that the lease becomes binding on the mortgagee. The ordinary process
would be that the completion of the sale and the creation of the mortgage took place at the same time as part of one
composite transaction. Quaere whether the position is different where the purchaser has contracted to create the
mortgage prior to the completion of the sale. If the estoppel is to be fed, the landlord must acquire the legal estate in the
capacity in which he purported to grant the lease. It is not enough if he purports to grant a lease as the owner of land in
Page 30
his personal capacity and later acquire title as one of the trustees under a settlement created by a will3.
HR A[147]
1 Rawlyn's Case (1587) Jenk 254; Webb v Austin (1844) 7 Man & G 701 at 724.
2 Church of England Building Society v Piskor [1954] Ch 553.
3 Harrison v Wing [1988] 2 EGLR 4, CA.
(p) Estoppel: other impacts on landlord and tenant
HR A[148]
The principle of estoppel has other and separate impacts on the law of landlord and tenant. These matters are dealt with
separately where appropriate. Other instances of the operation of estoppel as a principle include (a) the fact that a person
who has gone into possession and paid rent may be estopped from denying that he is an assignee of the lease1 and (b)
the fact that a person who receives an invalid notice to determine his lease and acts to his detriment on the faith of its
validity may estop the landlord from contending that it is an invalid notice2. On the other hand, an estoppel may not be
sufficient to override a mandatory provision for statutory protection of tenants. The reasoning is that if the parties
cannot expressly agree that the statutory protection shall not apply they cannot be brought to a situation in which the
statutory protection does not apply by reason of the operation of the doctrine of estoppel3.
HR A[149]
1 Rodenhurst Estates Ltd v Barnes Ltd [1936] 2 All ER 3, CA (see para HR A[1887]).
2 Farrow v Orttewell [1933] Ch 480, CA (see HR F[1019]).
3 See eg Keen v Holland [1984] 1 All ER 75, CA (agreement for tenancy of an agricultural holding held subject to statutory protection
even though made on the basis that the statutory protection would not apply).
Page 31
tenant/B Varieties of Tenancies
B
Page 32
tenant/B Varieties of Tenancies/1 Tenancy at sufferance
1 Tenancy at sufferance
(a) Nature of tenancy
HR A[150]-[160]
A tenancy at sufferance arises where a person who has held by a lawful title continues the possession after the title has
determined without any statutory right to retain possession and without either the agreement or disagreement of the
person then entitled to the property1. This is so whatever was the nature of the tenant's former estate, whether he was
tenant for years2, or the undertenant for years3, or a tenant at will4. The tenancy arises by implication of law and cannot
be created by contract between the parties5. A tenancy at sufferance does not arise, however, upon the holding over by
one whose title was created by act of law6; and there can be no tenancy at sufferance against the Crown7. In these cases
the person holding over is a mere trespasser8. Where the landlord consents, expressly or impliedly, to the holding over
there is created a tenancy at will, and upon receipt of rent, it will, subject to a contrary inference from the facts of the
case, become a tenancy from year to year or other appropriate periodic tenancy upon the terms of the old tenancy so far
as applicable to such a tenancy.
HR A[161]
1 Co Litt 57b. Any consent by the landlord to the holding over constitutes a tenancy at will (as to which see paras HR A[164]-[185]),
though a written acknowledgment that the tenant holds 'on sufferance only' has been held to be a mere acknowledgment and not to require to
be stamped as an agreement for a tenancy: Barry v Goodman (1837) 2 M & W 768.
2 Co Litt 57b. As to tenant for years holding over, see Bayley v Bradley (1848) 5 CB 396; Doe d Patrick v Duke of Beaufort (1851) 6
Exch 498 at 503. For a case where the lessee under a lessor who was only tenant for life held over after the lessor's death, see Roe d Jordan v
Ward (1789) 1 Hy Bl 97 at 99.
3 As to the undertenant of a tenant for years holding over, see Simkin v Ashurst (1834) 1 Cr M & R 261.
4 As to a tenant at will holding over, see Doe d Bennett v Turner (1840) 7 M & W 226; Turner v Doe d Bennett (1842) 9 M & W 643, Ex
Ch (where it was left open whether he would be a trespasser or tenant at sufferance); Doe d Goody v Carter (1847) 9 QB 863 at 868; Day v
Day (1871) LR 3 PC 751 at 760.
5 Watk Conv 24.
6 Eg where a guardian in socage held over after the heir had come of age: Co Litt 57b.
7 Co Litt 57b.
8 The recognition of a tenancy at sufferance in other cases probably arose from a desire to prevent the person holding over from being a
disseisor, and therefore in a position to acquire a title by adverse possession. The abolition of the old doctrine of adverse possession has
rendered this use of the tenancy obsolete.
Page 33
(b) Position of parties to tenancy at sufferance
HR A[162]
One tenant at sufferance cannot make another1. He has possession, but no privity of estate - hence a release to him is
void2. Tenancy at sufferance is a very precarious tenancy as it requires no notice to determine it, and the landlord may
enter at any time3. A tenant at sufferance is not entitled to emblements4. A tenant at sufferance can by virtue of his
possession maintain an action of trespass5 and he can, like any other person holding without title who is deprived of
possession, recover in an action of ejectment against a mere wrongdoer6. He may leave at any time without notice7.
The landlord can sue the tenant at sufferance for use and occupation8 but he cannot distrain.9
HR A[163]
1 See Thunder d Weaver v Belcher (1803) 3 East 449; but see Doe d Burrell v Perkins (1814) 3 M & S 271. However, a tenant at
sufferance can create a licence by admitting another person as his lodger: Bensing v Ramsey (1898) 62 JP 613.
2 Contra, as to tenant at will (Co Litt 270 b; Butler v Duckmonton (1607) Cro Jac 169) but such an instrument of release might be held to
operate as a grant.
3 Doe d Bennett v Turner (1840) M & W 226 at 235; see Doe d Godsell v Inglis (1810) 3 Taunt 54; Doe d Moore v Lawder (1816) 1 Stark
308; Doe d Rogers v Pullen (1836) 2 Bing NC 749; Randall v Stevens (1853) 2 E & B 641; contra, Doe d Harrison v Murrell (1837) 8 C & P
134, where Lord Abinger CB, considered that trespass would lie against a landlord who turned out his tenant at sufferance without notice.
But the landlord immediately on entry is lawfully in possession: Jones v Chapman 1849 2 Exch 803, Ex Ch. Tenants at sufferance of
premises to which the Increase of Rent and Mortgage Interest (Restrictions) Act 1919, applied were protected by the Act (Artizans,
Labourers and General Dwellings Co v Whitaker [1919] 2 KB 301; Hunt v Bliss (1919) 89 LJKB 174; Dobson v Richards (1919) 63 Sol Jo
663), and became statutory tenants. See Division C for tenancies within the Rent Act 1977.
4 Doe d Bennett v Turner (1840) M & W 226.
5 See Graham v Peat (1801) 1 East 244.
6 Asher v Whitlock (1865) LR 1 QB 1; Perry v Clissold [1907] AC 73, PC.
7 See n 3.
8 Bayley v Bradley (1848) 5 CB 396 at 406; see Hellier v Silcox (1850) 19 LJQB 295; Leigh v Dickeson (1884) 15 QBD 60, CA
(co-tenant lessee sued by co-tenant lessor). See further para HR A[3566] as to 'use and occupation'.
9 Jenner v Clegg (1832) 1 Mood & R 213; Alford v Vickery (1842) Car & M 280.
Page 34
tenant/B Varieties of Tenancies/2 Tenancy at will
2 Tenancy at will
HR A[164]
A tenancy at will is a tenancy under which the tenant is in possession, and which is determinable at the will of either
landlord or tenant. Even if the tenancy is expressed to be at the will of the landlord only or at the will of the tenant only,
yet the law implies that it shall be at the will of the other party also; for every tenancy at will must in law be at the will
of both parties1. Like other tenancies, a tenancy at will arises by contract binding both lessor and lessee2, and the
contract may be express3 or implied. In the case of an express tenancy at will a rent may be reserved. The fact that rent
is reserved as an annual rent does not necessarily negative an expressed intention to create a tenancy at will4. The
absence of an express proviso for re-entry may be indicative of an intention to create a tenancy at will. The use of the
expression 'tenant at will' in an agreement will not create a tenancy at will if the rest of the agreement contains terms
which are inconsistent with such a tenancy5. In the case of an implied tenancy at will the acceptance of rent may make
the tenant a tenant from year to year depending upon the surrounding circumstances6.
HR A[165]
1 Littleton's Tenures, s 68; Co Litt 55 a; Fernie v Scott (1871) LR 7 CP 202. If one party has agreed that the tenancy shall continue until a
certain event happens, such as failure to pay mortgage instalments, there is no tenancy at will (Errington v Errington and Woods [1952] 1
KB 290, [1952] 1 All ER 149).
2 Ley v Peter (1858) 3 H & N 101 at 107. For a discussion of the distinction between a tenancy at will and a licence, see Binions v Evans
[1972] Ch 359, [1972] 2 All ER 70, CA. On the contractual nature of the arrangement, see Cardiothoracic Institute v Shrewdcrest Ltd [1986]
3 All ER 633, [1986] 1 WLR 368.
3 Tenancies at will are created by express contract less frequently than they arise by implication. For examples of express creation, see
Morgan v William Harrison Ltd [1907] 2 Ch 137; Young v Hargreaves (1963) 186 Estates Gazette 355, CA; Richardson v Langridge (1811)
4 Taunt 128; Manfield & Sons Ltd v Botchin [1970] 2 QB 612, [1970] 3 All ER 143; Hagee (London) Ltd v A B Erikson and Larson [1975] 3
All ER 234, 29 P & CR 512.
4 Doe d Bastow v Cox (1847) 11 QB 122; Walker v Giles (1848) 6 CB 662 at 702; Doe d Dixie v Davies (1851) 7 Exch 89. In these cases
the tenancy was between mortgagee and mortgagor and tenancies at will are frequently created by the attornment clause in mortgage deeds;
see also Pinhorn v Souster (1853) 8 Exch 763; Turner v Barnes (1862) 2 B & S 435; Morton v Woods (1869) LR 4 QB 293, Ex Ch; Re
Stockton Iron Furnace Co (1879) 10 Ch D 335, CA; Cardiothoracic Institute v Shrewd Crest [1986] 3 All ER 633, [1986] 2 EGLR 57.
5 Binions v Evans [1972] Ch 359, [1972] 2 All ER 70, CA. A tenancy at will is commonly created by a building agreement which
provides that the lease shall not be granted until the buildings have been completed. A tenancy at will without any consideration is not
enlarged into a tenancy from year to year by the Agricultural Holdings Act 1986, s 2, Sch 12: Goldsack v Shore [1950] 1 KB 708, [1950] 1
All ER 276.
6 As to the effect of payment of rent on an implied tenancy, see para HR A[201].

Page 35
(b) Implied tenancy at will
HR A[166]
A tenancy at will is implied when a person is in possession by the consent of the owner1, and his possession is not that
of servant or agent2, and is not enjoyed by virtue of any freehold estate or of any tenancy for a certain term3. It is
implied accordingly in cases of mere permissive occupation without payment of rent4, and of this nature is the
occupation by a dissenting minister of a house vested in trustees5. It is also implied upon a mere general letting, unless
there are circumstances showing an intention that the tenancy shall be from year to year, as where a yearly rent or a rent
measured by reference to an aliquot part of a year is agreed to be paid6. Similarly, a person who enters on land with the
consent of the owner under a contract which does not immediately give him a definite interest in the land enters as
tenant at will, for example, a purchaser who enters into possession of land pending the completion of the purchase7, or
an intending lessee who enters during negotiation for a lease8, or under a lease which should be, but is not, under seal 9
or under an executory agreement providing for the grant of a lease at a future date, eg when certain buildings have been
erected. Where a prospective tenant enters and pays rent while negotiations proceed, in the absence of any other
material factors it is to be inferred that the parties intend to create a tenancy at will rather than a periodic tenancy10.
HR A[167]
1 Doe d Hull v Wood (1845) 14 M & W 682 at 687. It has been said that this must be an affirmative consent, and not a mere negative or
silent consent (Ley v Peter (1858) 3 H & N 101 at 108, per Bramwell B), but it seems to be sufficient if the circumstances show consent by
the owner, see eg Cardiothoracic Institute v Shrewdcrest [1986] 3 All ER 633, [1986] 2 EGLR 57.
3 See Doe d Rogers v Pullen (1836) 2 Bing NC 749.
4 Doe d Groves v Groves (1847) 10 QB 486 (occupation by permission of owner free of rent); Smith v Seghill Overseers (1875) LR 10
QB 422 at 429 (occupation dependent on employment); Woodhouse v Hooney [1915] 1 IR 296 (by mere arrangement with owner without
payment of rent); Buck v Howarth [1947] 1 All ER 342 (oral permission to occupy, owner continuing to pay rates, distinguished in Bannister
v Bannister [1948] 2 All ER 133, where the occupier on rather different facts was held to have a life interest in the property); R v Collet
(1823) Russ & Ry 498 (house rent free); cf R v Jobling (1823) Russ & Ry 525; Meye v Electric Transmission Ltd [1942] Ch 290 (occupation
by agreement with landlord as trespasser liable for mesne profits). A cestui que trust in actual occupation is in law tenant at will to the
trustees (Garrard v Tuck (1849) 8 CB 231); but if he is receiving the rents, he does so as agent of the trustees (Melling v Leak (1855) 16 CB
652 at 669); cf Morgell v Paul (1828) 2 Man & Ry KB 303; Vallance v Savage (1831) 7 Bing 595.
5 See Doe d Jones v Jones (1830) 10 B & C 718.
6 Richardson v Langridge (1811) 4 Taunt 128 at 132, per Chambre J; Doe d Hull v Wood (1845) M & W 682; Doe d Roberton v Gardiner
(1852) 12 CB 319; see Doe d Bree v Lees (1777) 2 Wm Bl 1171 at 1173; Re Stroud and East and West India Docks and Birmingham
Junction Rly Co (1849) 8 CB 502; Bayley v Fitzmaurice (1857) 8 E & B 664 at 679; on appeal sub nom Fitzmaurice v Bayley (1860) 9 HL
Cas 78; Hunt v Allgood (1861) 10 CBNS 253; and cf Doe d Martin v Watts (1797) 7 Term Rep 83 at 85 (where a 'general occupation' was
said to be an occupation from year to year, but there rent had been paid).
7 Right d Lewis v Beard (1811) 13 East 210; Doe d Newby v Jackson (1823) 1 B & C 448; Ball v Cullimore (1835) 2 Cr M&R 120; Doe d
Tomes v Chamberlaine (1839) 5 M & W 14; Howard v Shaw (1841) 8 M & W 118; Doe d Stanway v Rock (1842) 4 Man & G 30; see Doe d
Parker v Boulton (1817) 6 M & S 148. Consequently, the tenancy cannot be determined without demand of possession (see Pollen v Brewer
(1859) 7 CBNS 371); though in Doe d Leeson v Sayer (1811) 3 Camp 8, this was not considered necessary; cf Doe d Moore v Lawder (1816)
Page 36
1 Stark 308; Doe d Hiatt v Miller (1833) 5 C&P 595. But while the purchaser is thus in possession he is not bound to pay rent, and an action
for use and occupation will not lie against him (Winterbottom v Ingham (1845) 7 QB 611; see Hearn v Tomlin (1793) Peake 253 [191];
Kirtland v Pounsett (1809) 2 Taunt 145; Corringan v Woods (1867) 15 WR 318; and cf Tew v Jones (1844) 13 M & W 12) save by virtue of
special agreement (Saunders v Musgrave (1827) 6 B & C 524); in which case he is entitled to the protection afforded by the Rent Act 1968
(Francis Jackson Developments Ltd v Stemp [1943] 2 All ER 601, CA); distinguished and explained in Dunthorne and Shore v Wiggins
[1943] 2 All ER 678, CA; though if he remains in possession after the purchase has gone off (in which case he ceases to be a tenant at will,
see Wheeler v Mercer [1956] 1 QB 274, [1955] 3 All ER 455, per Denning LJ), the action for use and occupation will lie even where there is
no such special agreement (Howard v Shaw (1841) 8 M & W 118; Markey v Coote (1876) IR 10 CL 149 at 155); and a vendor who remains
in possession after the time for completion may be liable for use and occupation (Metropolitan Rly Co v Defries (1877) 2 QBD 387, CA).
Where the contract for sale provides that the purchaser shall be allowed possession so long as he duly pays instalments of the purchase price
and specified outgoings no tenancy is created (Dunthorne and Shore v Wiggins [1943] 2 All ER 678).
8 Coggan v Warwicker (1852) 3 Car & Kir 40 (where the intending tenant was held liable for use and occupation); cf Doe d Knight v
Quigley (1810) 2 Camp 505. In British Railways Board v Bodywright Ltd (1971) 220 Estates Gazette 651 the defendants had gone into
possession during negotiations for a lease. The rent paid and accepted was not calculated by reference to a year, and no lease was ever
entered into. The defendants were held to be tenants at will. See also Edwin Shirley Productions Ltd v Workspace Management Ltd [2001]
23 EG 158 in which a prospective tenant failed to obtain a mandatory injunction reinstating him to premises from which he had been ousted
by the prospective landlord during subject to contract negotiations for a lease.
9 Goodtitle d Gallaway v Herbert (1792) 4 Term Rep 680; Denn d Warren v Fearnside (1747) 1 Wils 176; so also on entry under an
agreement for a lease (Hamerton v Stead (1824) 3 B & C 478 at 483; Braithwaite v Hitchcock (1842) 10 M & W 494 at 497; Anderson v
Midland Rly Co (1861) 3 E & E 614; Coatsworth v Johnson (1886) 55 LJQB 220, CA). But if specific performance is obtainable, the tenant
holds for the term agreed to be granted; see para HR A[908].
10 Javad v Aqil [1991] 1 All ER 243, 61 P & CR 164. That will be so notwithstanding that the prospective tenant has undertaken some
further responsibility which is not such as to give rise to a proprietary estoppel or constructive trust: James v Evans [2000] 3 EGLR 1.
(c) Tenant holding over
HR A[168]
A lessee who, with the consent of the lessor, remains in possession after his lease has expired, by effluxion of time and
otherwise than in reliance on some statutory provision protecting him from eviction1, is tenant at will until some other
interest is created, until, for instance, the tenancy is turned into a yearly tenancy by payment of rent2. When, on the
expiration of a lease, a lessee is expressly authorised to continue in possession as tenant at will, in the absence of
evidence of a contrary intention, the terms and conditions of the original lease apply to the tenancy at will so far as they
are consistent with such tenancy3.
HR A[169]
1 Eg as statutory tenant by virtue of the Rent Act 1977 or under the Landlord and Tenant Act 1954. Where a tenant remained in
occupation with the landlord's consent after service of a notice of disclaimer under the Landlord and Tenant (War Damage) Acts 1939 and
1941, it was held that a tenancy at will was created (Meye v Electric Transmission Ltd [1942] Ch 290). Where a possession order is made
against a secure tenant in circumstances in which the court may suspend or stay the order or postpone the date of possession, a tenant who is
allowed to remain on the premises is likely to do so as a 'tolerated trespasser': Burrows v Brent London Borough Council [1996] 4 All ER
577, [1996] 1 WLR 1448; Lambeth London Borough Council v Rogers (1999) 32 HLR 361, [2000] 03 EG 127, CA. A tolerated trespasser
retains exclusive occupation and possession of premises and, as such, will have sufficient interest to sustain an action in nuisance:
Pemberton v Southwark London Borough Council [2000] 3 All ER 924, [2000] 21 EG 135, CA.
2 Or, perhaps, by an increase in the amount paid by a former tenant in respect of his occupation: see, for example, Stirling v Leadenhall
Page 37
Residential 2 Ltd [2001] EWCA Civ 1011, [2001] 3 All ER 645. See paras HR A[201] and [204] for factors negativing the grant of the
tenancy; Doe d Hollingsworth v Stennett (1799) 2 Esp 717 at 719; cf Morgan v William Harrison Ltd [1907] 2 Ch 137, CA. But in Simkin v
Ashurst (1834) 1 Cr M&R 261, a holding over by an undertenant with consent was said to make him tenant at sufferance only. Moreover, in
London Baggage Co (Charing Cross) Ltd v Railtrack plc [2000] EGCS 57, circumstances were held to have negatived an intention to grant a
periodic tenancy where a tenant held over after termination of his business tenancy pending negotiations for a lease of new premises,
notwithstanding payment of sums representing basic rent to the landlord's managing agents. A notice to quit the premises, stating that the
term has long since expired, does not recognise a yearly tenancy, but is a mere demand of possession: Doe d Godsell v Inglis (1810) 3 Taunt
54.
3 Morgan v William Harrison Ltd [1907] 2 Ch 137, CA.
(d) Termination of tenancy at will
HR A[170]-[180]
Subject to any applicable statutory provision under which the tenant is afforded security of tenure1, a tenancy at will is
determinable by either party on his expressly or impliedly intimating to the other his wish that the tenancy should be at
an end2. A tenant at will has a reasonable time to remove himself and his chattels after the determination. But until such
intimation the tenant is lawfully in possession, and, accordingly, the landlord cannot recover the premises in an action
for recovery of land without a previous demand of possession3 or other determination of the tenancy. Where rent is
payable under a tenancy at will, and the tenancy is determined between the rent days, the rent is apportioned4. A
tenancy at will is a personal relation between the original landlord and tenant, and is determined by the death of either
of them5, or by a conveyance of the reversion6.
HR A[181]
1 A tenancy at will is not a tenancy within the meaning of the Landlord and Tenant Act, 1954, s 69(1) at HR B[773], since although the
definition in that section would otherwise be wide enough to comprehend a tenancy at will it is clear from a study of the Act as a whole, and
particularly of ss 25(3), 43 thereof, that tenancies at will are excluded from Pt II of the Act: Wheeler v Mercer [1957] AC 416, [1956] 3 All
ER 631, HL; Manfield & Sons Ltd v Botchin [1970] 2 QB 612, [1970] 3 All ER 143 (concerning an express tenancy at will). A tenancy at
will is within the provisions of the Rent Act 1977 provided the rent is not less than two-thirds of the rateable value on the appropriate day:
Chamberlain v Farr [1942] 2 All ER 567; Francis Jackson Development Ltd v Stemp [1943] 2 All ER 601; cf Dunthorne and Shore v
Wiggins [1943] 2 All ER 678.
2 For form of notice to determine a tenancy at will see 22 Forms & Precedents (5th edn) [1170]. No notice to quit as such is required, and
the Protection from Eviction Act 1977, s 5 (which requires a minimum of four weeks' notice to quit of residential premises) accordingly has
no application: Crane v Morris [1965] 3 All ER 77, [1965] 1 WLR 1104.
3 Right d Lewis v Beard (1811) 13 East 210: Goodtitle d Gallaway v Herbert (1792) 4 Term Rep 680; and receipt of rent under a void
lease, though in such circumstances as not to imply a yearly tenancy, is such a recognition of the lawful possession of the tenants as to
prevent his being a trespasser till after notice to quit (Denn d Brune v Rawlins (1808) 10 East 261). Cf Dossee v Doe d East India Co (1859)
1 LT 345.
4 Apportionment Act 1870. Formerly it was otherwise, and a lessee at a quarterly rent determining the tenancy during a quarter paid the
rent for the quarter, but the lessor determining the tenancy lost it (Leighton v Theed (1701) 2 Salk 413; see Disdale v Iles (1673) 2 Lev 88).
Rent payable in advance is not apportionable (Ellis v Rowbotham [1900] 1 QB 740) in the absence of special statutory provision or express
agreement. See also William Hill (Football) Ltd v Willen Key and Hardware Ltd (1964) 108 Sol Jo 482. Cf Manfield & Sons Ltd v Botchin
[1970] 2 QB 612, [1970] 3 All ER 143, in which it was said obiter that where rent was payable in advance under a tenancy at will and the
tenancy was determined during a period for which rent had been paid an appropriate adjustment would have to be made.
Page 38
5 Co Litt 57b; James v Dean (1805) 11 Ves 383 at 391; Doe d Stanway v Rock (1842) Car & M 549 at 553; Turner v Barnes (1862) 2 B &
S 435; Scobie v Collins [1895] 1 QB 375; though in Morton v Woods (1869) LR 4 QB 293 at 306, Ex Ch it was intimated that a tenancy at
will might continue to subsist after the death of one of the parties unless the successor in title manifested his intention to determine it; and
see Re Manser, Killick v Manser [1910] WN 61 (where the administratrix of a deceased tenant at will was accepted as tenant at will, and it
was held that her tenancy was on behalf of the estate of the deceased). On the death of one of two joint tenants at will the tenancy subsists
and vests in the surviving tenant.
6 Doe d Davies v Thomas (1851) 6 Exch 854 at 857; Doe d Dixie v Davies (1851) 7 Exch 89 at 93; Daniels v Davison (1809) 16 Ves 249
at 252. An involuntary alienation, such as a vesting in a trustee in bankruptcy, has the same effect: Doe d Davies v Thomas (1851) 6 Exch
854 at 857.
(e) Termination by landlord
HR A[182]
Anything which amounts to a demand of possession, although not expressed in precise and formal language, is
sufficient to indicate the determination of the landlord's will1. Thus, the landlord may expressly demand possession2, or
state that the tenant is in against his will3, or send for the keys3; and if the notice states terms and intimates that if they
are not accepted the landlord will take steps to recover the premises, and the terms are rejected, this is a sufficient notice
to determine the tenancy4. A fortiori, the bringing of ejectment proceedings determines the tenancy5. The tenancy is
impliedly determined by the landlord when he does any act on the premises which is inconsistent with the continuance
of the tenancy; for example, when he re-enters to take possession6, or puts in a new tenant7, or cuts down trees or
carries away stone8, the trees and stone not being excepted from the demise9; and also when he does an act off the
premises which is inconsistent with the tenancy, or grants a lease of the premises to commence forthwith10. But an act
done off the premises does not determine the tenancy until the tenant has notice of it11.
HR A[183]
1 Doe d Price v Price (1832) 9 Bing 356 at 358; Fox v Hunter-Paterson [1948] 2 All ER 813 (threat of proceedings); and see Locke v
Matthews (1863) 13 CBNS 753.
2 Previous notice to quit is unnecessary; see Doe d Jones v Jones (1830) 10 B & C 718; Doe d Nicholl v M'Kaeg (1830) 10 B & C 721 at
723; Doe d Rogers v Pullen (1836) 2 Bing NC 749 at 753; Doe d Tomes v Chamberlaine (1839) 5 M & W 14; Coatsworth v Johnson (1886)
55 LJQB 220, CA; Crane v Morris [1965] 3 All ER 77, [1965] 1 WLR 1104.
3 Pollen v Brewer (1859) 7 CBNS 371 at 373.
4 Doe d Price v Price (1832) 9 Bing 356; Fox v Hunter-Paterson [1948] 2 All ER 813.
5 Dossee v East India Co (1859) 1 LT 345. Cf Goodtitle d Gallaway v Herbert (1792) 4 Term Rep 680.
6 Co Litt 55b. Entering for the purpose of doing repairs does not determine the tenancy: Lynes v Snaith [1899] 1 QB 486. A feoffment
with livery of seisin on the land determined the tenancy, although the tenant was off the land and had no notice: Ball v Cullimore (1835) 2 Cr
M & R 120.
7 Wallis v Delmar (1860) 29 LJ Ex 276.

Page 39
8 Turner v Doe d Bennett (1842) 9 M & W 643, Ex Ch.
9 If they are excepted the act is lawful although the tenancy continues, and hence it is not an implied determination of the tenancy: Co Litt
55b.
10 Disdale v Iles (1673) 2 Lev 88; Hogan v Hand (1861) 14 Moo PCC 310; Farrelly v Robins (1869) IR 3 CL 284.
11 Doe d Davies v Thomas (1851) 6 Exch 854 (notice need not be formal); Pinhorn v Souster (1853) 8 Exch 763, 770. Similarly, a verbal
notice given off the premises must be shown to have reached the tenant (Co Litt 55b). But he is presumed to have notice of any act done
openly on the premises: Pinhorn v Souster (1853) 8 Exch 763; cf Ball v Cullimore (1835) 2 Cr M & R 120.
(f) Termination by tenant
HR A[184]
A mere notice by the tenant to determine the tenancy at will is not effectual unless he actually gives up possession1. The
tenancy is impliedly determined by the tenant when he usurps the rights of the landlord, as when he cuts down timber
trees or pulls down houses2, or when he assigns3 or underlets4 the premises, and such assignment or underletting comes
to the knowledge of the landlord5.
HR A[185]
1 Co Litt 55b, n 373.
2 Co Litt 57a.
3 Pinhorn v Souster (1853) 8 Exch 763 at 772.
4 Birch v Wright (1786) 1 Term Rep 378 at 382. Cf the observations of the Privy Council in Day v Day (1871) LR 3 PC 751 at 760.
5 Pinhorn v Souster (1853) 8 Exch 763.

Page 40
tenant/B Varieties of Tenancies/3 Tenancy from year to year
3 Tenancy from year to year
HR A[186]
A tenancy from year to year developed out of tenancies at will1. In the older cases a tenancy from year to year is often
described as being a tenancy at will in point of substance2. It differs from an estate at will strictly so called only in that
the will can, apart from special stipulation, only be determined by notice complying with the common law conditions3.
The old learning is of little practical significance today and a tenancy from year to year is best regarded as a species of
periodic tenancy. In point of interest the tenancy has been described as a tenancy for a term and is included in the
definition of a term of years absolute in the Law of Property Act 19254. It is said that the requirement that a term must
be certain applies to all leases and tenancy agreements. A tenancy from year to year is saved from being uncertain
because each party has power to determine it by notice at the end of any year. The term continues until determined as if
both parties made a new agreement at the end of each year for a new term for the ensuing year5. This principle applies
to weekly and other periodic tenancies6. The concept of a periodic tenancy has been applied by Parliament to 'licences'
with statutory reference to a 'periodic licence'7. It is necessary to distinguish those cases in which the parties use words
which either create a tenancy for one year only8 or for two years at least9 and those in which a periodic tenancy based
on some period other than an exact year is created10.
HR A[187]
1 The process of the development of the concept of a yearly tenancy from the earlier concept of a tenancy at will is explained in the
speech of Lord Bridge in Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478, [1992] 1 All ER 1, HL. In Bacon's
Abridgment (4 Bac Abr (7th edn, 1832) 839) a yearly tenancy is described as arising de anno in annum, quamdiu ambabus partibus placuerit
(from year to year, so long as both parties please). This essential characteristic of the tenancy is repeated in Blackstone's Commentaries (2 Bl
Com (1st edn, 1766) 145-147) where after a discussion of tenancies at will it is stated as follows: 'And upon the same principle, courts of law
have of late years leant as much as possible against construing demises, where no certain term is mentioned, to be tenancies at will; but have
rather held them to be tenancies from year to year so long as both parties please, especially where an annual rent is reserved: in which case
they will not suffer either party to determine the tenancy even at the end of the year, without reasonable notice to the other.'
2 See also Parker d Walker v Constable (1769) 3 Wils 25; Right d Flower v Darby (1786) 1 Term Rep 159. The tenancy is not treated as
commencing afresh every year, but as springing out of the original contract and parcel of it; see Oxley v James (1844) 13 M & W 209 at 214;
Cattley v Arnold, Banks v Arnold (1859) 1 John & H 651 at 660; R v Thornton Inhabitants (1860) 2 E & E 788 at 792; Gandy v Jubber
(1865) 9 B & S 15 at 18, Ex Ch; cf Hayes v Fitzgibbon (1870) IR 4 CL 500.
3 See paras HR A[8163]FF. There may be a stipulation for determination without notice or by some special length of notice: Prudential
Assurance Co Ltd v London Residuary Body [1992] 2 AC 386, [1992] 3 All ER 504; Re Threlfall, ex p Queen's Benefit Building Society
(1880) 16 Ch D 274, CA; and see n 6.
4 Section 205(1)(xxvii); Doe d Hull v Wood (1845) 14 M & W 682 at 686.
5 Prudential Assurance Co Ltd v London Residuary Body [1992] 3 WLR 279 at 285, HL, per Lord Templeman. However, the juridical
nature of an annual tenancy is less than certain: see the cases cited in n 2.
Page 41
6 See paras HR A[208]FF.
7 Section 5(1A) of the Protection from Eviction Act 1977 refers to a 'periodic licence', something which is not defined in the legislation.
See Norris v Checksfield [1992] 1 EGLR 159, CA, and para HR A[742].
8 See Messenger v Armstrong (1785) 1 Term Rep 53 at 54; Right d Flower v Darby (1786) 1 Term Rep 159 at 162; Cobb v Stokes (1807)
8 East 358 at 361. An agricultural tenancy for 18 months terminates at the expiration of the 18 months and no notice to quit is necessary;
Gladstone v Bower [1960] 2 QB 384, [1960] 3 All ER 353.
9 Doe d Chadborn v Green (1839) 9 Ad & El 658; R v Chawton Inhabitants (1841) 1 QB 247; Cannon Brewery v Nash (1898) 77 LT 648,
CA (a lease of six months and so on from six months to six months until six calendar months' notice is given for a year at least); Herron v
Martin (1911) 27 TLR 431 (a lease for three years and so on from year to year is properly terminated by notice to quit at the and of the
fourth year); British Iron and Steel Corpn Ltd v Malpern [1946] KB 171, sub nom British Iron and Steel Corpn Ltd v Halpern [1946] 1 All
ER 408 (a lease for two years and then quarterly subject to three calendar months' notice expiring on any quarter day, can be determined at
the end of the first quarter after the expiration of the two years' period and it is immaterial if the notice is given too early, that is to say before
the end of the two years; Re Searle, Brooke v Searle [1912] 1 Ch 610 (a lease for two years certain and thereafter from year to year, until
either party gives three months' notice to determine, is a lease for three years at least terminable at the end of the third or any subsequent
year); Re John Brinsmead & Sons Ltd (1912) 56 Sol Jo 253; see Birch v Wright (1786) 1 Term Rep 378 at 380; Doe d Monck v Geekie
(1844) 5 QBD 841. Similarly, where the tenancy is 'not for one year only, but from year to year' (Denn d Jacklin v Cartwright (1803) 4 East
29 at 33). But a yearly tenancy does not become a tenancy for two years at least by the inclusion in the lease of expressions showing that the
parties contemplated that it would last for more than one year (Doe d Plumer v Mainby (1847) 10 QB 473); and the lease may be so worded
that it will be for one year only unless there is a further agreement between the parties (Harris v Evans (1756) Amb 329; cf Bishop of Bath's
Case (1605) 6 Co Rep 34b, 36 a; Austin v Newham [1906] 2 KB 167). An option to continue a tenancy after a certain date from year to year
on the lessee giving notice creates, not a strict tenancy from year to year, as such a perpetual right of renewal was repugnant to such a
tenancy, but a succession of reversionary terms, each for one year certain, if the requisite notice is given (Gray v Spyer [1922] 2 Ch 22, CA),
and by virtue of the Law of Property Act 1922, Sch 15, para 7(1) now takes effect as an agreement for a demise for 2,000 years
(Northchurch Estates Ltd v Daniels [1947] Ch 117, [1946] 2 All ER 524). Generally as to perpetually renewable leases, see paras HR
A[281]FF. In all these cases it is a question of construction of the whole document creating the tenancy, and it must be determined on such
construction when the tenancy expires or can be determined, and it is open to the parties to make any agreement whatever on these points.
10 Land Settlement Association Ltd v Carr [1944] KB 657, [1944] 2 All ER 126, CA where it was held that a letting for 364 days, and
thereafter for successive periods of 364 days until determined by notice is not a letting from year to year. A letting for such a curious period
was a device designed to exclude the operation of the Agricultural Holdings Act 1923, but is now ineffectual on account of the Agricultural
Holdings Act 1986, s 2 (at HR F[582]), which provides that a letting of agricultural land for less than a year shall take effect as a letting
from year to year unless the letting was approved by the minister before the agreement was entered into.
(b) Determination and devolution of yearly tenancy
HR A[188]
In the absence of express stipulation1, the tenancy can only be determined by half a year's notice to quit2, which should
expire on a day corresponding to the day before the commencement of the tenancy3. At the end of each year if not
determined by proper notice, another year is added to the term; so that if at or before the end of the first half year no
proper notice is given it continues for two years; if at the end of the third half year no notice is given then for three years
and similarly in subsequent years. A tenancy from year to year is not, like a tenancy at will, a mere personal interest, but
an interest in the land and, therefore, it is assignable4 and, on the death of the tenant, devolves upon the personal
representative5. Although the tenancy can be created orally or by writing not under seal, it can only be assigned by
deed6.
HR A[189]
Page 42
1 It is open to the parties to contract for the determination on any notice of whatever length and whenever expiring that they think fit: Re
Threlfall, ex p Queen's Benefit Building Society (1880) 16 Ch D 274, CA; King v Eversfield [1897] 2 QB 475, CA; H & G Simonds Ltd v
Heywood [1948] 1 All ER 260, distinguishing Mayo v Joyce [1920] 1 KB 824; and see Godfrey Thornfield Ltd v Bingham [1946] 2 All ER
485. However, any express stipulation will be void if it is repugnant to the nature of an annual tenancy, for example if one party is wholly
deprived of the right to serve a notice to determine the tenancy: see Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386
[1992] 3 All ER 504.
2 Doe d Clarke v Smaridge (1845) 7 QB 957 at 959; Doe d Hogg v Taylor (1837) 1 Jur 960. Originally the common law required a
reasonable notice and it was decided in the eighteenth century that six months' notice ending with a current year of the tenancy was
reasonable.
3 As to the effect of an express stipulation, see Wembley Corpn v Sherren [1938] 4 All ER 255: see also Harler v Calder (1988) 21 HLR
214, [1989] 1 EGLR 88, CA. For form of notice, see 22 Forms & Precedents (5th edn) [1169].
4 See Allcock v Moorhouse (1882) 9 QBD 366, 47 JP 85; Botting v Martin (1808) 1 Camp 317; and see Elliott v Johnson (1866) LR 2 QB
120, 31 JP 212.
5 See Mackay v Mackreth (1785) 4 Doug KB 213; Doe d Shore v Porter (1789) 3 Term Rep 13; see Parker d Walker v Constable (1769)
3 Wils 25.
6 See Crago v Julian [1992] 1 All ER 744, [1992] 1 WLR 372 and the Law of Property Act 1925, s 52; and see Botting v Martin (1808) 1
Camp 317.
(c) Methods of creation of annual tenancy
HR A[190]-[200]
A tenancy from year to year may be created by statute or by express agreement, or arise by implication. As to statute,
this may occur under the Agricultural Holdings Act 19861 or under the Housing Act 19882. As to express agreement
when the parties expressly agree 3 upon a tenancy from 'year to year' such tenancy is created and may be determined
notwithstanding that the parties evidently contemplated that the tenancy would last longer. As to creation by implication
a tenancy from year to year may arise when a person who has entered upon premises4, or, having been tenant, has
remained in possession of premises with the consent of the landlord5, in such circumstances as to be in the first instance
tenant at will, or, in the case of holding over, tenant at sufferance6, subsequently pays rent7 with reference to a yearly
holding8, provided that there are no circumstances to negate the implication. In such cases, where there is an instrument
of tenancy with reference to which possession is taken or retained, the yearly tenancy implied by law will be deemed to
be upon such of the terms of the instrument as are applicable to a yearly tenancy.
HR A[201]
1 See the Agricultural Holdings Act 1986, s 2 (at HR F[582]), which provides that a letting for use as agricultural land for an interest less
than a tenancy from year to year shall take effect as a letting from year to year.
2 Housing Act 1988, s 5(2) under which on the coming to an end of an assured tenancy the tenant may be able to hold over as a statutory
periodic tenant.
3 The words from 'year to year' are desirable but not essential: King v Eversfield [1897] 2 QB 475. For a form of demise, see 23 Forms &
Page 43
Precedents (5th edn) HR A[1040].
4 Eg where the entry was permissive, or was under an agreement for a lease or a void lease (see para HR A[1164]). Possession under an
agreement for a lease is turned into a yearly tenancy by payment of rent; see Knight v Benett (1826) 3 Bing 361; Mann v Lovejoy (1826) Ry
& M 355; Doe d Westmoreland and Perfect v Smith (1827) 1 Man & Ry KB 137; Cox v Bent (1828) 5 Bing 185; Doe d Thomson v Amey
(1840) 12 Ad & El 476; Chapman v Towner (1840) 6 M & W 100; Braythwayte v Hitchcock (1842) 10 M & W 494; Doe d Bailey v Foster
(1846) 3 CB 215; Bennett v Ireland (1858) EB & E 326. Where the agreement is specifically enforceable, this doctrine is not now of
practical importance, since the tenant holds for the term mentioned in the agreement (see para HR A[908]), but is still applicable where the
agreement is not specifically enforceable (see Foster v Reeves [1892] 2 QB 255, where it was held that, the action being in a court which
could not enforce specific performance, the tenant had rightly treated his tenancy as a tenancy from year to year). In Bell Street Investments
Ltd v Wood (1970) 216 Estates Gazette 585, a duly executed deed of lease had been prepared but it did not include any dates. Rent had in the
past been paid and accepted on a yearly basis. It was held that the incomplete deed created no interest, but that a yearly tenancy had been
established. It is not necessary that a lease shall have been tendered by the lessor or demanded by the lessee (Weakly d Yea v Bucknell (1776)
2 Cowp 473). As to entry under a void lease, see Doe d Rigge v Bell (1793) 5 Term Rep 471; Doe d Martin v Watts (1797) 7 Term Rep 83;
Clayton v Blakey (1798) 8 Term Rep 3; Richardson v Gifford (1834) 1 Ad & El 52; Doe d Pennington v Taniere (1848) 12 QB 998 at 1013;
Doe d Brammall v Collinge (1849) 7 CB 939 at 960; Doe d Davenish v Moffatt (1850) 15 QB 257; Lee v Smith (1854) 9 Exch 662; Tress v
Savage (1854) 4 E & B 36; Martin v Smith (1874) LR 9 Exch 50 at 52. For a modern case where the court was prepared to hold that an
annual tenancy had been created following entry under a void lease, see Industrial Properties (Barton Hill) Ltd v Associated Electrical
Industries Ltd [1977] QB 580, [1977] 2 All ER 293; Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386, HL, [1992] 3
All ER 504. But a void lease may be construed as an agreement for a lease (see para HR A[908]); and hence, if it is enforceable as an
agreement, the tenant will, in effect, hold for the agreed term, and not as tenant from year to year.
5 This may be because his lease has expired by effluxion of time: Digby v Atkinson (1815) 4 Camp 275; Bishop v Howard (1823) 2 B & C
100; Finch v Miller (1848) 5 CB 428; Hyatt v Griffiths (1851) 17 QB 505; Dougal v McCarthy [1893] 1 QB 736 at 740, CA); Swift v
Ambrose (1931) 47 TLR 594; or because the lessor's title has determined (Doe d Martin v Watts (1797) 7 Term Rep 83; Doe d Tucker v
Morse (1830) 1 B & Ad 365 at 369; Cornish v Stubbs (1870) LR 5 CP 334; Wyatt v Cole (1877) 36 LT 613; Nixon v Darley (1868) IR 2 CL
467. When the tenant remains in possession not because the landlord has abstained voluntarily from turning him out but because the Rent
Act 1977 (Division C) or, semble, any other statute, eg the Landlord and Tenant Act 1954, deprive the landlord of any power of
intervention, the legal position is a matter of inference from the surrounding circumstances: Murray, Bull & Co Ltd v Murray [1953] 1 QB
211, [1952] 2 All ER 1079, explaining Morrison v Jacobs [1945] KB 577, [1945] 2 All ER 430, CA; Marcroft Wagons Ltd v Smith [1951] 2
KB 496, [1951] 2 All ER 271; Lewis v MTC (Cars) Ltd [1975] 1 All ER 874, [1975] 1 WLR 457. That is to say that, though in general the
tenant will remain in possession by virtue of a statutory tenancy under the Rent Act 1977 or the Landlord and Tenant Act 1954, special
circumstances may show that a further contractual tenancy has been created. Morrison v Jacobs [1945] KB 577, [1945] 2 All ER 430 and
Marcroft Wagons Ltd v Smith [1951] 2 KB 496, [1951] 2 All ER 271 were applied in Harvey v Stagg (1978) 247 Estates Gazette 463. In
Longrigg, Burrough and Trounson v Smith [1979] 2 EGLR 42 at 43, CA the test was formulated as follows: 'is it right and proper to infer
from all the circumstances of the case, including the payments, that the parties had reached an agreement for a tenancy?' per Ormrod LJ.
7 It is sufficient if the rent has been charged in account, and the charge admitted (Cox v Bent (1828) 5 Bing 185; cf Vincent v Godson
(1854) 4 De GM & G 546); or if there has been a render in the nature of rent (Doe d Tucker v Morse (1830) 1 B & Ad 365). But a notice to
'quit the premises which you hold under me, your term therein having long since expired,' is a mere demand of possession, and does not
recognise a subsisting tenancy from year to year subsequent to the term (Doe d Godsell v Inglis (1810) 3 Taunt 54). Payment of rent under
attornment to a person claiming by title paramount creates a tenancy from year to year: see Doe d Chawner v Boulter (1837) 6 Ad & El 675.
But there may be evidence of a yearly tenancy where there has been no payment of rent: see Taylor v Young (1837) 6 LJ KB 141; Fahy v
O'Donnell (1870) IR 4 CL 332; Neall v Beadle (1912) 107 LT 646. The fact that the whole rent is payable in one sum in advance will not
cause it to lose its character as rent so that the tenant remains a mere tenant at will (Grace Rymer Investments Ltd v Waite [1958] Ch 831,
[1958] 2 All ER 777), but there may be cases where such payment is not 'with reference to a yearly holding'.
8 That is, the rent must be expressed as so much a year, though it may be payable quarterly or at any other interval constituting an aliquot
part of a year: Richardson v Langridge (1811) 4 Taunt 128; Pope v Garland (1841) 4 Y & C Ex 394; Braythwayte v Hitchcock (1842) 10 M
& W 494 at 497; Doe d Hull v Wood (1845) 14 M & W 682 at 687; King v Eversfield [1897] 2 QB 475, CA; Covered Markets Ltd v Green
[1947] 2 All ER 140; Adler v Blackman [1953] 1 QB 146, [1952] 2 All ER 945, CA; approving Ladies' Hosiery and Underwear Ltd v
Parker [1930] 1 Ch 304; and disapproving Covered Markets Ltd v Green [1947] 2 All ER 140. The phrase used by Chambre J, in
Richardson v Langridge (1811) 4 Taunt 128: 'yearly rent or rent measured by an aliquot part of a year' is not to be taken as going beyond the
phrase of Lord Mansfield CJ, in the same case 'a yearly rent, though payable half-yearly or quarterly.' Thus, payment of £10 as rent under an
agreement reserving a yearly rent of £120, payable monthly, would create a yearly tenancy but not under an agreement reserving a rent of
£10 a month, without any reference to a year; see also R v Herstmonceaux Inhabitants (1827) 7 B & C 551; R v St Giles without Cripplegate
Inhabitants (1863) 4 B & S 509; Willesden Overseers v Paddington Overseers (1863) 3 B & S 593; Hastings Union v St James, Clerkenwell
Page 44
(1865) LR 1 QB 38 (cases on tenancy for a year for poor law purposes); R v Norwich Incorporation (1874) 30 LT 704. So, too, where the
original tenancy is for a period of less than one year, a holding over does not create a tenancy from year to year in the absence of special
agreement, but creates either a tenancy at will or a weekly tenancy, or possibly no tenancy at all (Swift v Ambrose (1931) 47 TLR 594),
where, however, a tenancy for 364 days with an option to renew for 'one year more' was held not to be a tenancy for a period of less than a
year, the judgment on this point being, possibly, no longer good law in view of the decision of the Court of Appeal in Land Settlement
Association Ltd v Carr [1944] KB 657, [1944] 2 All ER 126, that a letting for successive periods of 364 days until determined by notice
creates a periodic tenancy for the purposes whereof the 'period' is less than a year). A letting of agricultural land for an interest less than a
tenancy from year to year now takes effect as a letting from year to year unless approved by the minister before agreement entered into: see
the Agricultural Holdings Act 1986, s 2 (at HR F[582]).
(d) Examples of creation by implication
HR A[202]
Upon entry under an agreement for a lease, followed by payment of rent, the tenant becomes a yearly tenant upon such
of the terms of the agreement as are consistent with that tenancy1, and the agreement so far controls the implied
tenancy, that the tenancy ceases without notice to quit at the end of the agreed term2. In accordance with the same
principle, a person who enters under an invalid lease, for example a lease granted for an uncertain duration, and who
pays an annual rent reserved by the agreement may become a tenant under an implied annual tenancy. The terms of the
implied tenancy will be those of the invalid lease so far as consistent with the nature of the annual tenancy3. Similarly, a
tenant who holds over after the expiration of his lease and pays rent4, in the absence of facts pointing to a contrary
conclusion, is held as a matter of law impliedly to have agreed to hold as tenant from year to year upon such terms of
the old lease as are applicable to such a tenancy5. Such terms are not confined to those necessarily incidental to a yearly
tenancy, but include terms which may be incidental to such a tenancy provided they are consistent with the nature of an
annual tenancy6.
HR A[203]
1 Roe d Jordan v Ward (1789) 1 Hy Bl 97; Doe d Rigge v Bell (1793) 5 Term Rep 471; Mann v Lovejoy (1826) Ry & M 355; Richardson
v Gifford (1834) 1 Ad & El 52; Beale v Sanders (1837) 3 Bing NC 850; Doe d Thomson v Amey (1840) 12 Ad & El 476; Tress v Savage
(1854) 4 E & B 36; Elliott v Johnson (1866) LR 2 QB 120 at 124; Wyatt v Cole (1877) 36 LT 613. Before payment of rent, and while the
tenant is tenant at will, he is subject to the terms of the agreement (Richardson v Gifford (1834) 1 Ad & El 52 at 56); and the doctrine applies
equally to assignees of a void lease (Beale v Sanders (1837) 3 Bing NC 850) and to lessees who continue in occupation after the term under
an express agreement that they shall be tenants at will (Morgan v William Harrison Ltd [1907] 2 Ch 137, CA). It follows that reference may
be made to the instrument to ascertain the terms of the holding (De Medina v Polson (1815) Holt NP 47; Lee v Smith (1854) 9 Exch 662,
665, 666; Tress v Savage (1854) 4 E & B 36), and reference may be made to it also to ascertain the commencement of the year of the
tenancy (Roe d Jordan v Ward (1789) 1 Hy Bl 97; Kelly v Patterrson (1874) LR 9 CP 681).
2 Doe d Tilt v Stratton (1828) 4 Bing 446; Berrey v Lindley (1841) 3 Man & G 498 at 513; Doe d Davenish v Moffatt (1850) 15 QB 257;
Tress v Savage (1854) 4 E & B 36, see Sauvage v Dupuis (1811) 3 Taunt 410.
3 Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 396, [1992] 3 All ER 504, HL.
4 Digby v Atkinson (1815) 4 Camp 275; Bishop v Howard (1823) 2 B & C 100; Finch v Miller (1848) 5 CB 428; Hyatt v Griffiths (1851)
17 QB 505; Dougal v McCarthy [1893] 1 QB 736 at 740, CA. So also where a bankrupt tenant continues to hold after his discharge:
Ponsford v Abbott (1884) Cab & El 225.
5 Wedd v Porter [1916] 2 KB 91 at 98, CA, per Swinfen Eady LJ; Cole v Kelly [1920] 2 KB 106 at 132 CA, per Atkin LJ. The doctrine of
holding over has never been held to apply in the case of leases of chattels: Re United Railways of the Havana and Regla Warehouses Ltd
Page 45
[1960] Ch 52 at 101, [1959] 1 All ER 214 at 239, CA. Payment of rent for lodgings for a year is not evidence of a tenancy from year to year,
since this would be contrary to the general usage in letting lodgings: Wilson v Abbott (1824) 3 B & C 88 at 90.
6 Hyatt v Griffiths (1851) 17 QB 505 at 509. Terms consistent with the nature of an annual tenancy are provisions for payment of rent in
advance (Finch v Miller (1848) 5 CB 428; Lee v Smith (1854) 9 Exch 662), or for payment of rent, damage by fire excepted (Bennett v
Ireland (1858) EB & E 326); covenants to keep the premises in repair (Digby v Atkinson (1815) 4 Camp 275; Richardson v Gifford (1834) 1
Ad & El 52; Beale v Sanders (1837) 3 Bing NC 850; Arden v Sullivan (1850) 14 QB 832; Ecclesiastical Comrs v Merral (1869) LR 4 Exch
162; Wyatt v Cole (1877) 36 LT 613) covenants relating to the user of the premises, such as to carry on a particular trade (Sanders v Karnell
(1858) 1 F&F 356) covenants in agricultural tenancies with respect to the cultivation of the land (Roe d Jordan v Ward (1789) 1 Hy Bl 97 at
99; Doe d Thomson v Amey (1840) 12 Ad & El 476; Tooker v Smith (1957) 1 H & N 732 at 736); and provisions as to the liabilities and
rights of the tenant at the end of the tenancy, such as liability to leave manure on the farm (Roberts v Barker (1833) 1 Cr & M 808); or the
right to be paid for tillages or to have away-going crops (Boraston v Green (1812) 16 East 71; Hutton v Warren (1836) 1 M & W 466;
Brocklington v Saunders (1864) 13 WR 46); or (probably) in a lease of nursery gardens, to be paid for fruit trees (Oakley v Monck (1866) LR
1 Exch 159 at 164, Ex Ch); or to use the land after the end of the term (Hyatt v Griffiths (1851) 17 QB 505 at 509); provisos with respect to
the determination of the tenancy by a specified notice (Bridges v Potts (1864) 17 CBNS 314), and provisos for re-entry on non-payment of
rent or breach of covenant (Doe d Thomson v Amey (1840) 12 Ad & El 476, Thomas v Packer (1857) 1 H & N 669; Crawley v Price (1875)
LR 10 QB 302). But covenants to put premises into repair (Pinero v Judson (1829) 6 Bing 206 at 210, 211); or to build or to do substantial
repairs, such as are not usually done by tenants from year to year (Doe d Thomson v Amey (1840) 12 Ad & El 476 at 497; Bowes v Croll
(1856) 6 E & B 255 at 264); or to paint every three years (Pinero v Judson (1829) 6 Bing 206); or a provision for a two years' notice to quit
(Tooker v Smith (1957) 1 H & N 732) are inconsistent with a yearly tenancy; though a covenant to paint every three or seven years will be
imported if the tenant occupies for so long (Martin v Smith (1874) LR 9 Exch 50); and generally, where the tenant has occupied during the
full period of the agreed lease, he is bound to perform all the covenants (Pistor v Cater (1842) 9 M & W 315; Adams v Clutterbuck (1883)
10 QBD 403 at 406). An option to purchase the reversion, since it does not regulate the relationship of landlord and tenant, is not regarded as
a term of the original tenancy, and so is not applicable to a yearly tenancy (Re Leeds and Batley Breweries and Bradbury's Lease, Bradbury
v Grimble & Co [1920] 2 Ch 548).
(e) Factors negativing implication
HR A[204]
Payment of rent with reference to a yearly holding is not conclusive as to the creation of a tenancy from year to year; it
is only evidence of such a tenancy1. Accordingly, it is competent for either payer or receiver of rent to prove the
circumstances in which the payment was made, and thereby to rebut the presumption which would arise from the
unexplained receipt of rent2. Whether the circumstances exclude the implication of a yearly tenancy is a question of fact
to be decided on the circumstances of the case3. Thus, the implication of a yearly tenancy is excluded where the parties
have expressly created a tenancy at will4, or where the rent has been received in ignorance that the former tenancy has
expired5; and in the case of a holding under a void lease, the yearly tenancy may not be implied if there is a great
disproportion between the rent reserved by the void lease and the real value6. Where a prospective tenant is allowed
into possession and pays rent while negotiations continue, in the absence of any other material factors the Court will
infer a tenancy at will rather than a periodic tenancy pending the outcome of the negotiations7. A tenancy by a firm of
premises belonging to one partner is not a tenancy from year to year, but determines on the dissolution of the
partnership8.
HR A[205]
1 See Longrigg, Burrough and Trounson v Smith [1979] 2 EGLR 42 and Javad v Aqil [1991] 1 All ER 243; [1991] 1 WLR 1007. See also
Doe d Tucker v Morse (1830) 1 B & Ad 365; Doe d Pennington v Taniere (1848) 12 QB 998 at 1013; Finlay v Bristol and Exeter Rly Co
(1852) 7 Exch 409 at 420; Smith v Widlake (1877) 3 CPD 10, CA. Thus, the payment may be made in the course of negotiations for a new
lease (Caulfield v Farr (1873) IR 7 CL 469); and mere payment of rent is not proof of a demise from year to year from a particular date
(Phillips v Mosely (1824) 1 C&P 262). In the case of joint lessees the payment must be with the consent of all (Doidge v Bowers (1837) 2 M
Page 46
& W 365).
2 Thus in Tickner v Buzzacott [1965] Ch 426, [1965] 1 All ER 131 the fact that the landlord, on the information known to him, could only
have intended to create a reversionary lease was held sufficient to rebut the presumption. See Doe d Lord v Crago (1848) 6 CB 90 at 98; see
Right d Dean and Chapter of Wells v Bawden (1803) 3 East 260; Mildmay d Lord Digby v Shirley (1806) cited in 10 East at 164; Doe d
Harvey v Francis (1837) 2 Mood & R 57: Woodbridge Union Guardians v Colneis and Carlford Hundreds Guardians (1849) 13 QB 269;
Bramwell v Bramwell [1942] 1 KB 370, [1942] 1 All ER 137, CA; see Marquis of Camden v Batterbury (1860) 7 CBNS 864; Hurley v
Hanrahan (1867) 15 WR 990 (lessee held liable in use and occupation for a sum in excess of the rent).
3 Finlay v Bristol and Exeter Rly Co (1852) 7 Exch 409 at 417, 420; see Jones v Shears (1836) 4 Ad & El 832. Legal and General
Assurance Society Ltd v General Metal Agencies (1969) 20 P&CR 953.
4 Doe d Bastow v Cox (1847) 11 QB 122; see Doe d Dixie v Davies (1851) 7 Exch 89. In Manfield & Sons Ltd v Botchin [1970] 2 QB
612, [1970] 3 All ER 143 it was held (applying Doe d Bastow v Cox (1847) 11 QB 122) that an express tenancy at will was not converted
into a periodic tenancy on account of the regular demand for and payment of rent on a monthly basis. It was said by Cooke J at 620 that even
if there had been a settled practice of demanding and paying rent in advance (which he found as a fact there had not been) it would be
questionable whether that led to the conclusion that the parties had changed their relationship to a periodic tenancy.
5 Doe d Lord v Crago (1848) 6 CB 90.
6 Roe d Brune v Prideaux (1808) 10 East 158; Denn d Brune v Rawlins (1808) 10 East 261; Smith v Widlake (1877) 3 CPD 10, CA. In
Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386, [1992] 3 All ER 504, HL an annual tenancy arose by implication
of law where the tenants entered under a void lease granted in 1930 at a rent of £30 per year; by 1992, the annual value of the land exceeded
£10,000 per year.
7 Javad v Aqil [1991] 1 All ER 243.
8 Pocock v Carter [1912] 1 Ch 663. Upon determination of the partnership the owner can eject his late partner forthwith: Doe d Colnaghi
v Bluck (1838) 8 C&P 464; Benham v Gray (1847) 5 CB 138.
(f) Holding over
HR A[206]
The old common law presumption - that a tenancy arose by implication of law in favour of a tenant who retained
possession otherwise than in exercise of some statutory right1 after the expiration of his lease and paid rent - no longer
applies2. Where a tenant remains in possession after the expiration of his lease and pays rent, all the circumstances must
be examined to see whether the parties have reached an agreement for some further tenancy3. Where there have been
negotiations after the expiration of the old lease with regard to the terms of a new tenancy, it is a question of fact
whether there has been a consent by both parties to a continuance of the old tenancy, and if so, upon what terms4. The
terms may be implied from the relationship of the parties, as in the case of a landlord and tenant of an agricultural
holding, from the use of certain words, such as the word 'demise', and from the surrounding circumstances existing at
the time when the parties consent to the continuance of the tenancy; and what terms are to be implied is in each case an
inference of fact5. Thus, where there have been negotiations for a letting at an increased rent, and the tenant stays on, it
is not a necessary inference that he is liable only for the former rent6; though, if a different rent has been in fact agreed
upon, this will not prevent the new tenancy being upon the old terms in other respects7. The implied tenancy operates as
a new contract and has reference to the state of affairs existing at its commencement; so that a covenant to repair and to
leave premises in the same state as at the beginning of the lease, if imported into the new tenancy, has reference to the
state of the premises at the commencement of the new, not of the old, tenancy8. The presumption that the former terms
are incorporated in the new tenancy does not apply when the new tenancy is under a different lessor--eg where the lease
Page 47
is by a tenant for life, and then after his death the reversioner receives rent--so as to bind the new lessor by a term which
is unusual, and which was in fact unknown to him9.
HR A[207]
1 See Divisions B-F for details of the right to hold over under statutory provisions.
2 Longrigg, Burrough and Trounson v Smith [1979] 2 EGLR 42.
3 'The old common law presumption of a tenancy from the payment and acceptance of a sum in the nature of rent dies very hard. But I
think the authorities make it quite clear that in these days of statutory controls over the landlord's rights of possession, this presumption is
unsound and no longer holds. The question now is a purely open question; it is simply: is it right and proper to infer from all the
circumstances of the case, including the payments that the parties had reached an agreement for a tenancy. I think it does not now go any
further than that': per Ormrod LJ, in Longrigg, Burrough and Trounson v Smith [1979] 2 EGLR 42 at 43. For a case where, despite a
considerable period of occupation following the expiry of a fixed-term lease, coupled with payment of rent monthly by reference to a year, it
was held that a tenancy at will and not an annual or other periodic tenancy arose, see Cardiothoracic Institute v Shrewdcrest Ltd [1986] 3 All
ER 633, [1986] 1 WLR 368.
4 Cole v Kelly [1920] 2 KB 106, CA; Ladies' Hosiery and Underwear Ltd v Parker [1930] 1 Ch 304; Adler v Blackman [1953] 1 QB 146,
[1952] 2 All ER 945, CA, overruling Covered Markets Ltd v Green [1947] 2 All ER 140.
5 Cole v Kelly [1920] 2 KB 106 at 126. For examples of terms which have been implied, see para HR A[203], n 6.
6 Thetford Corpn v Tyler (1845) 8 QB 95; and see Elgar v Watson (1842) Car & M 494.
7 Digby v Atkinson (1815) 4 Camp 275; Doe d Monck v Geekie (1844) 5 QB 841.
8 Johnson v St Peter, Hereford Churchwardens (1836) 4 Ad & El 520. See also Felnex Central Properties Ltd v Montague Burton
Properties Ltd [1981] 2 EGLR 73 where the general principles relating to the terms on which a tenant holds over were discussed and the
principles enunciated by Lord Hanworth MR in Lowther v Clifford [1927] 1 KB 130 at 136 were followed.
9 Oakley v Monck (1866) LR 1 Exch 159, Ex Ch.

Page 48
tenant/B Varieties of Tenancies/4 Weekly, monthly or other periodic tenancies
4 Weekly, monthly or other periodic tenancies
HR A[208]
A weekly or other periodic1 tenancy is a continuing tenancy by the week or other period2, and does not expire without
notice at the end of the first week or period or at the end of each succeeding week or period3, there being not a reletting
at the beginning of every week or period but a springing interest which arises and which is only determined by a proper
notice to quit4. A weekly or other periodic tenancy arises either by express agreement or by implication5. A holding
over with the consent of the landlord, which prima facie gives rise to a tenancy at will, may be converted by the parties
by their acts or by agreement into a weekly or other periodic tenancy6. All the circumstances must be examined to see
whether the parties have reached an agreement for some further tenancy there being no presumption that a new tenancy
arises7. Whether any new tenancy is weekly, quarterly or otherwise will depend upon how the rent is reserved rather
than how it is payable8.
HR A[209]
1 Eg a tenancy for successive periods of 364 days: Land Settlement Association Ltd v Carr [1944] KB 657, [1944] 2 All ER 126. This was
formerly popular in the case of agricultural land in order to prevent the demise becoming an agricultural holding within the meaning of the
Agricultural Holdings Act 1923; but by the Agricultural Holdings Act 1986, s 2 (at HR F[582]), such a letting of agricultural land now takes
effect as a letting from year to year unless the minister consents. But a letting for 364 days is a 'letting for a specified period of a year' within
AHA 1986, s 2(1); Reid v Dawson [1955] 1 QB 214, [1954] 3 All ER 498. A month in any instrument coming into force since 1926 means a
calendar month not a lunar month: Law of Property Act 1925, s 61.
2 Queen's Club Gardens Estates Ltd v Bignell [1924] 1 KB 117 at 125.
3 Bowen v Anderson [1894] 1 QB 164, differing from Sandford v Clarke (1888) 21 QBD 398; Mellows v Low [1923] 1 KB 522; and see
Jones v Chappell (1875) LR 20 Eq 539 at 544.
4 Mellows v Low [1923] 1 KB 522 at 525. For the application of this principle to a tenancy from year to year, see para HR A[186]. For the
requisites of a proper notice to quit, see para HR A[8163].
5 See, eg Beamish v Cox (1885) 16 LR Ir 270; affd 16 LR Ir 458, CA. If there be nothing more than the reservation of a weekly rent, the
inference may be drawn that there is a weekly tenancy, but no such inference will be drawn where the reservation of a weekly rent is
followed by a provision inconsistent with a weekly tenancy: Adams v Cairns (1901) 85 LT 10, CA. See also Longrigg, Burrough and
Trounson v Smith [1979] 2 EGLR 42, referred to in para HR A[206], n 2 and 3.
6 Cole v Kelly [1920] 2 KB 106 at 132, CA; Ladies' Hosiery and Underwear Ltd v Parker [1930] 1 Ch 304 at 328, CA (holding over
under the agreement at a rent not exactly divisible into the number of days either of an ordinary year or of a leap year); Adler v Blackman
[1953] 1 QB 146, [1952] 2 All ER 945, CA (holding over after a tenancy for one year at rent expressed to be payable as a weekly rent); and
see Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540 (Aus) (holding over at a weekly rent creates weekly tenant).
Page 49
7 See Longrigg, Burrough and Trounson v Smith [1979] 2 EGLR 42.
8 See Adler v Blackman [1953] 1 QB 146, [1952] 2 All ER 945, CA.
(b) Determination of tenancy
HR A[210]-[220]
Except where otherwise provided by statute, a weekly or other periodic tenancy is determinable by notice to quit1,
which, in the absence of special stipulation2, should be given so as to expire at the end of any current period of the
tenancy3, and, unless some specified length of notice is required by statute (as in the case of a notice to quit premises let
as a dwelling, where the minimum length is four weeks4), should be equal to the length of the period, ie in a weekly
tenancy a weeks' notice5, in a monthly tenancy a months' notice6, and in a quarterly tenancy a quarter's notice7. A
notice to quit either on the 'anniversary' of the date of commencement of the tenancy or on the previous day is valid as a
notice expiring at the end of a current period8. A notice to quit 'on or before' that date is likewise valid9, and so is a
notice to quit 'by' that date which has the same meaning10. On the other hand, a notice to quit by a specified time on the
anniversary is bad11. Any question as to the validity of the notice may be avoided by giving it in general form, ie to quit
at the end of the next complete week or other period of the tenancy after the service of the notice12.
HR A[221]
1 See para HR A[208], n 4.
2 See Soames v Nicholson [1902] 1 KB 157; Weston v Fidler (1903) 88 LT 769; Land Settlement Association Ltd v Carr [1944] KB 657,
[1944] 2 All ER 126, where there was a proviso for determination on notice 'at any time'; Maconochie Bros Ltd v Brand [1946] 2 All ER
778, where a 'half-yearly tenancy' from 29 September was expressed to be determinable by six months' notice expiring on any quarter day
and it was held that an effective notice to quit could be given to expire at Midsummer or Christmas as well as at Lady Day or Michaelmas;
Harler v Calder (1988) 21 HLR 214, [1989] 1 EGLR 88, CA.
3 Lemon v Lardeur [1946] KB 613, [1946] 2 All ER 329, approving Queen's Club Garden Estates Ltd v Bignell [1924] 1 KB 117; and
overruling Simmons v Crossley [1922] 2 KB 95, and other cases to the contrary.
4 See Protection from Eviction Act 1977, s 5 (replacing the Rent Act 1957, s 16). The requirement is not for four clear weeks. Thus it is
sufficient if a notice is given on one day to expire that day four weeks hence, eg on a Friday to expire on the Friday four weeks from the first
Friday: Schnabel v Allard [1967] 1 QB 627, [1966] 3 All ER 816, CA, overruling Thompson v Stimpson [1961] 1 QB 195, [1960] 3 All ER
500; see also Dalgleish v Jennings [1980] CA Transcript 501 and Hogg Bullimore & Co v Co-operative Insurance Society Ltd (1984) 50 P &
CR 105 (applying the same principle in the context of the Landlord and Tenant Act 1954, Pt II). Regulations prescribing the contents of a
notice to quit have been made under the Protection from Eviction Act 1977, s 5. See the Notices to Quit etc (Prescribed Information)
Regulations 1988, SI 1988/2201, (HR C[3251]). The Caravan Sites Act 1968, s 2 provides that at least four weeks' notice of termination
must be given of a residential contract relating to the stationing or occupation of a caravan.
5 Doe d Peacock v Raffan (1806) 6 Esp 4; Jones v Mills (1861) 10 CBNS 788; Bowen v Anderson [1894] 1 QB 164; Queen's Club
Gardens Estates Ltd v Bignell [1924] 1 KB 117. A tenancy determinable at any time at a week's notice may properly include a stipulation
allowing the tenant a reasonable time after the week to remove his goods: Cornish v Stubbs (1870) LR 5 CP 334.
6 Doe d Parry v Hazell (1794) 1 Esp 94; Beamish v Cox (1885) 16 LR Ir 270; Precious v Reedie [1924] 2 KB 149.
Page 50
7 Kemp v Derrett (1814) 3 Camp 510; Wilkinson v Hall (1837) 3 Bing NC 508 at 531.
8 Sidebotham v Holland [1895] 1 QB 378, CA; Crate v Miller [1947] KB 946, [1947] 2 All ER 45, CA, and see Newman v Slade [1926] 2
KB 328, following Sullivan v Sheehan (1916) 50 ILT 41.
9 Ahearn v Bellman, Sedgwick v Ahearn (1879) 4 Ex D 201, with which the dicta of Lush J, in Queen's Club Gardens Estates Ltd v
Bignell [1924] 1 KB 117 at 122, are inconsistent. These dicta have been disapproved by the Court of Appeal in Dagger v Shepherd [1946]
KB 215, [1946] 1 All ER 133.
10 Eastaugh v Macpherson [1954] 3 All ER 214, [1954] 1 WLR 1307, CA.
11 Bathavon RDC v Carlile [1958] 1 QB 461, [1958] 1 All ER 801, CA (weekly tenancy running from Monday to Sunday midnight,
notice to quit 'by noon' on Monday held to be bad).
12 Doe d Campbell v Scott (1830) 6 Bing 362; Crate v Miller [1947] KB 946, [1947] 2 All ER 45, CA.
Page 51
tenant/B Varieties of Tenancies/5 Tenancy for years
5 Tenancy for years
HR A[222]
A tenancy for years arises by express contract1. The contract may sometimes be created as a result of statute rather than
by the true consent of the parties2. It is essential to the contract that the commencement and maximum duration of the
term, which at common law must be for two years at least3, should be so defined as either to be certain in the first
instance4, or to be capable of being afterwards ascertained with certainty5. The law requires that once the term has
commenced, its latest date for determination must be ascertainable with certainty6. The principle rests on 500 years of
juridical acceptance of the requirement that a term must be certain7. The principle is an ancient and technical rule of law
and is has been said in the House of Lords that no one has produced any satisfactory rationale for the genesis of the
rule8. However, the rule was upheld since to depart from a rule relating to land law established for many centuries
might upset long-established titles9. A lease purported to be granted for an uncertain term is not within the definition of
a 'term of years absolute' and so cannot exist as a legal estate10. A lease purportedly granted in contravention of this
requirement is invalid when granted, but if the occupier enters and pays rent the arrangement may take effect as a
periodic tenancy11.
HR A[223]
1 A demise for years is a contract for the exclusive possession and profit of lands and tenements for some determinate period, whereby the
lessor lets them to the lessee for a certain term of years agreed upon between the parties, and thereupon the lessee enters. Such an estate is
denominated a term, which word signifies not only the limitation of time, but the estate and interest that pass for such time (Co Litt 45 b).
2 Eg the court may order the grant of a new tenancy of business premises under the Landlord and Tenant Act 1954, s 29, or the landlord
may be obliged under the Leasehold Reform Act 1967 or the Leasehold Reform, Housing and Urban Development Act 1993 to grant a new
lease of a period equal to the residue of the existing term and 50 years (LRA 1967) or 90 years (LRHUDA 1993).
3 Bishop of Bath's case (1605) 6 Co Rep 34b; Land Settlement Association Ltd v Carr [1944] KB 657, [1944] 2 All ER 126. For this
reason, a term certain is often referred to as a term of years. Where a statute refers to a term of years certain the prima facie inference is that
the tenancy in question must be for at least a year to come within that expression. The reason is that at common law the tenancy must be for
two years, while under the Interpretation Act 1978 this can be read as a year, the plural being taken to include the singular. If the expression
is to include leases for a period of less than a year it must either be expressly defined as extending to such leases (as in the Law of Property
Act 1925, s 205(1)(xxvii)) or the context of the Act as a whole must give it that extended meaning (as in the Landlord and Tenant Act 1954,
s 38(4)): Re Land and Premises at Liss, Hants [1971] Ch 986, [1971] 3 All ER 380.
4 See Say v Smith (1563) 1 Plowd 269, 272; Anon (1674) 1 Mod Rep 180 (lease made 10 October, habendum from 20 November, without
mentioning the year, void for uncertainty); see Kirsley v Duck (1712) 2 Vern 684. Where a lease was granted for a term certain and there was
a purported addition of a term which was uncertain, the lease was held to be valid only as to the certain term: Say v Smith (1563) 1 Plowd
269.
5 In Lace v Chantler [1944] KB 368 at 370, [1944] 1 All ER 305 at 306, Lord Greene MR said: 'A term created by a leasehold tenancy
agreement must be expressed either with certainty and specifically or by reference to something which can, at the time when the lease takes
Page 52
effect, be looked to as a certain ascertainment of what the term is meant to be.'
6 Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 [1992] 3 All ER 504, HL (lease held invalid where granted
until the land was required by the landlords for road widening purposes); Lace v Chantler [1944] KB 368, [1944] 1 All ER 305, CA (lease
held invalid when granted for the duration of the war).
7 In Say v Smith (1563) 1 Plowd 269 at 272, Anthony Brown J is reported to have said: 'every contract sufficient to make a lease for years
ought to have certainty in these limitations, viz in the commencement of the term, in the continuance of it, and in the end of it; so that all
these ought to be known at the commencement of the lease, and words in a lease which don't make this appear, are but babble...and these
three are in effect but one matter, showing the certainty of the time for which the lessee should have the land, and if any of these fail, it is not
a good lease, for then there wants certainty.'
8 See Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 387, per Lord Browne-Wilkinson. The decisions in the
Court of Appeal in Re Midland Railway Co's Agreement, Charles Clay & Sons Ltd v British Railways Board [1971] Ch 725, [1971] 1 All ER
1007 and in Ashburn Anstalt v Arnold [1989] Ch 1, [1989] 2 All ER 147, are overruled. The decision of the Court of Appeal in Canadian
Imperial Bank of Commerce v Bello (1991) 64 P & CR 48, 24 HLR 155 must also be regarded as wrongly decided.
9 The principle explained above can clearly operate to defeat the intention and expectation of the parties. It is difficult to see why parties
should not be able to create a lease for an indefinite period if they so wish. In practice this can be achieved by the grant of a lease for a long
period with a provision for automatic determination on the occurrence of some uncertain event. For example, a lease to last until the next
general election is invalid but a lease for 25 years, with a provision for determination on the occurrence of the next general election is valid:
see para HR A[242]. A rule which can be evaded by the mere use of language has little to commend it.
10 See Law of Property Act 1925, s 205(1)(xxvii) and see Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386.
11 See para HR A[202]. For example, in Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 a tenant under a lease
granted in 1930 to continue until the land was required by the landlords for road widening was held to take effect as an annual periodic
tenancy since the lessee had entered into possession and paid the annual rent of £30 reserved by the agreement. In general the periodic
tenancy which arises in this way by implication of law may be determined by the service of an ordinary notice to quit: see paras HR A[188]
and [210].
(b) Commencement of term
HR A[224]
The term may commence1 either immediately, or from a past or future2 date. Although it is expressed to commence
from a past day, yet the actual interest of the lessee commences only on the execution of the deed3, and his liability is
limited accordingly. Thus as a general rule (but see the last sentence below) he is not liable for matters arising before
the date of execution under the covenant to repair4, or under a covenant not to erect buildings of less than a specified
value5. But under a proviso allowing the determination of the lease at the end of seven or fourteen years, these periods
are reckoned from the commencement of the term6. While the interest of the lessee commences openly on the execution
of the lease, there is nothing to prevent the parties agreeing that the term shall run from a prior date, and that contractual
rights and obligations shall be created as from such date - eg payment of rent7.
HR A[225]
1 Earl Cadogan v Guinness [1936] Ch 515, [1936] 2 All ER 29. But by the Landlord and Tenant Act 1985, s 13(2) in the case of a lease
granted for a term part of which falls before the grant, that part is left out of account and the lease is treated as a lease for a term commencing
Page 53
with the grant for the purpose of deciding whether a lease is for a term of less than seven years within s 11 of the Act. For the purposes of
ascertaining what is a long tenancy (that is a tenancy granted for a term certain exceeding 21 years) under Pt I of the Landlord and Tenant
Act 1954, the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993 it is necessary to look at
the length of term to run from the date of the grant. For example, a lease granted in 1968 for a period of 25 years to run from 1950 would
not, on this reasoning, be a long lease: see Roberts v Church Comrs for England [1972] 1 QB 278, [1971] 3 All ER 703, CA. See also
Brikom Investments v Seaford [1981] 2 All ER 783, [1981] 1 WLR 863, CA.
2 A lease for a term to commence at a future date is often called a reversionary lease.
3 Jervis v Tomkinson (1856) 1 H & N 195; see Cooper v Robinson (1842) 10 M & W 694 at 696.
4 Shaw v Kay (1847) 1 Exch 412.
5 Bennett v Kidd [1926] NI 50.
6 Bird v Baker (1858) 1 E & E 12. Cf Spikins of Twickenham v Edmunds (1971) 221 Estates Gazette 23, CA.
7 Bradshaw v Pawley [1979] 3 All ER 273, [1980] 1 WLR 10. In that case, involving the renewal of a lease to which Pt II of the Landlord
and Tenant Act 1954 applied, it was held as a matter of construction of the order of the court and the lease that the higher rent was payable
from the expressed date of commencement of the term, being some four years prior to execution.
(c) Interpretation of instrument
HR A[226]
It is the office of the habendum in a deed to limit the estate granted, and hence in a lease by deed the habendum should
state specifically both the commencement and duration of the term1. Where the term is expressed to commence 'from' a
specified day, this day is in strictness not included in the term, and generally the term therefore, lasts during the whole
anniversary of the day thus specified2; while if it commences 'on' a specified day, that day is included3. But the deed
must be interpreted so as to give effect to the substantial rights of the parties, and for practical purposes this distinction
can usually be ignored4. Though the term commences from the date specified the tenant's interest commences from the
date of the lease5. If in a lease by deed6 the term is expressed to commence 'from henceforth', or 'from making hereof'7,
or if no date is specified8, it commences from the time when the deed takes effect, that is, from delivery9. A deed may
be delivered in escrow, ie subject to fulfilment of a condition10. If it is expressed to commence from the date of the
deed, this date is by reference inserted in the habendum, and the term commences on the following day11; but if in such
case the deed is not dated, or if it bears an impossible date, the term commences from delivery9. Where the tenant enters
under an agreement not under seal, which does not specify the commencement of the term, this will usually commence
from entry12, but parol evidence is admissible to show when the instrument was intended to take effect13.
HR A[227]
1 Buckler's case (1597) 2 Co Rep 55a; Burton v Barclay (1831) 7 Bing 745 at 747; Doe d Timmis v Steele (1843) 4 QB 663 at 667. The
limitation in the habendum may, in a clear case, be controlled by other parts of the instrument: Strickland v Maxwell (1834) 2 Cr & M 539 at
549.
2 'From' a specified day Co Litt 46b; Anon (1773) Lofft 275; Ackland v Lutley (1839) 9 Ad & El 879 at 894; see Cutting v Derby (1776) 2
Wm Bl 1075; Sidebotham v Holland [1895] 1 QB 378, CA; Meggeson v Groves [1917] 1 Ch 518, in which it was stated that while the
Page 54
judgments in Sidebotham v Holland [1895] 1 QB 378 were in accordance with Ackland v Lutley (1839) 9 Ad & El 879, the headnote was
misleading. The tenancy, therefore, commences at midnight following the day specified, ie from 25 March means from midnight of the night
of 25 March. However, the circumstances (eg that the first payment is to be on the day from which the term is expressed to run) may lead to
the conclusion that the true intention of the parties was that that day is to be included in the term: Ladyman v Wirrel Estates [1968] 2 All ER
197. This and the following two sentences were cited with approval by the Court of Appeal in Whelton Sinclair (a firm) v Hyland [1992] 2
EGLR 158, which case also approved Ladyman v Wirral Estates Ltd. In Meadfield Properties Ltd v Secretary of State for the Environment
[1995] 1 EGLR 39, it was held that where the term in a lease was not expressed as being 'from' a specified date, but was from one specified
date to another specified date, this was an indication which rebutted the presumption that the date from which the lease commenced was not
included in the term.
3 Co Litt 46b; Clayton's case (1585) 5 Co Rep 1a.
4 Sidebotham v Holland [1895] 1 QB 378; see Pugh v Duke of Leeds (1777) 2 Cowp 714 at 717, 725; Doe d Cox v Day (1809) 10 East
427; Wilkinson v Gaston (1846) 9 QB 137 at 144, 145.
5 Northcote Laundry Ltd v Frederick Donnelly Ltd [1968] 2 All ER 50, [1968] 1 WLR 562, CA. Thus a lease dated 23 September for a
term commencing on 29 September creates an interest in the tenant on 23 September.
6 The Law of Property (Miscellaneous Provisions) Act 1989, s 1 (which came into effect from 31 July 1990) makes new provision with
respect to deeds and their execution: see para HR A[1246].
7 Co Litt 46b; Clayton's case (1585) 5 Co Rep 1a; Llewelyn v Williams (1610) Cro Jac 258; Steele v Mart (1825) 4 B & C 272 at 278.
8 Co Litt 46b.
9 No special form or observance is necessary for the delivery of a deed. It may be made in words or by conduct (Xenos v Wickham (1863)
14 CBNS 435 at 473, Ex Ch; on appeal (1866) LR 2 HL 296). In modern practice the usual form of delivering a deed is for the executing
party to say, while putting his finger on the seal, 'I deliver this as my act and deed'. But it is not necessary to follow this form of execution
(Keith v Pratt (1862) 10 WR 296). Nor is it necessary that the deed should actually be delivered over into the possession or custody of the
person intended to take the benefit thereof. What is essential to delivery of the document as a deed is that the party whose deed the document
is expressed to be (having first signed and sealed it) shall by word or conduct expressly or impliedly acknowledge his intention to be
immediately and unconditionally bound by the provisions contained therein. See cases cited above and the Law of Property Act 1925, s
73(1), and Stromdale and Ball Ltd v Burden [1952] Ch 223, [1952] 1 All ER 59 (signing, wafer seal, and usual testimonium and attestation
clause is sufficient execution of a deed). The foregoing must now be read subject to the provisions of the Law of Property Miscellaneous
Provisons Act 1989, s 1, as to which see para HR A[1246].
10 As to delivery as an escrow, see Xenos v Wickham, and Beesley v Hallwood Estates Ltd [1961] Ch 105, [1961] 1 All ER 90; D'Silva v
Lister House Development Ltd [1971] Ch 17, [1970] 1 All ER 858. In order that there may be delivery as an escrow, there must be execution
with a definite condition as to when the deed is to become binding. If the condition is performed the deed becomes binding and there can be
no resiling from the deed otherwise than by non-performance of the condition. Thus, where a deed was executed in pursuance of an option to
renew duly exercised, and it was later learnt that the option was not binding owing to lack of registration, the landlord could not say that the
delivery was an escrow because the condition to which it might have been subject was not known to the landlord at the time of delivery:
Beesly v Hallwood Estates Ltd [1961] 1 Ch 105; cf Longman v Viscount Chelsea [1989] 2 EGLR 242 at 245, CA. It was held in Alan Estates
Ltd v W G Stores Ltd [1982] Ch 511, [1981] 3 All ER 481, CA; reversing (1980) 254 Estates Gazette 989 that where a deed, eg a lease, is
delivered in escrow subject to fulfilment of a condition, upon fulfilment of that condition the deed becomes effective as from the date of
delivery and not from the date of fulfilment of the condition.
11 Co Litt 46b; Styles v Wardle (1825) 4 B & C 908 at 911.
12 Doe d Cornwall v Matthews (1851) 11 CB 675; cf Sandill v Franklin (1875) LR 10 CP 377.
13 Davis v Jones (1856) 17 CB 625.
(d) Commencement at future date

Page 55
HR A[228]
It is sufficient if the commencement of the term is ascertained with certainty at the time when the lease is to take effect
in possession1; hence the term may be made to commence after the failure of specified lives2, or upon the occurrence of
a future contingent event3. Where it is to take effect after the expiration of a previous term, and the previous term is
surrendered or forfeited, the lease takes effect on the surrender or forfeiture4, and if the previous lease has already
determined, or if it is void or non-existent, the new lease takes effect at once5.
HR A[229]
1 Co Litt 45b; Shep Touch (ed Preston) 272; Bishop of Bath's Case (1605) 6 Co Rep 34b.
2 Goodright d Hall v Richardson (1789) 3 Term Rep 462 at 463.
3 Bishop of Bath's Case (1605) 6 Co Rep 34b, Co Litt 45b. Where a mortgagor in possession was, on default, to become tenant at a rent, it
was held that the mortgagee was not entitled to distrain after default unless he had given notice to the mortgagor of his intention to treat him
as tenant (Clowes v Hughes (1870) LR 5 Exch 160), but such a case could not now arise (see para HR A[64]).
4 Co Litt 45b; Wrotesley v Adams (1560) 2 Dyer 177b; Rector of Chedington's Case (1598) 1 Co Rep 148b at 154b. Where the premises
are subject in part to lease A and in part to lease B and the new lease is to begin after the determination of leases A and B, it will begin as to
each part on the determination of the lease of that part: Justice Windham's case (1589) 5 Co Rep 7a.
5 Miller v Manwaring (1635) Cro Car 397 at 399.
(e) Restriction on terms in futuro
HR A[230]-[240]
A term at a rent or granted in consideration of a fine, limited on or after 1 January 1926 to take effect more than 21
years from the date of the instrument purporting to create it, is void, and any contract made on or after such date to
create such a term is likewise void1. If the term is to commence within the 21 years and the contract is an executory
contract, it seems that the lease may commence at any time within the period allowed by the rule against perpetuities.
Thus, one may have a contract to enter into a lease at any time within 80 years (or within lives in being and 21 years
thereafter), so long as the lease, when entered into, is to commence within the 21 years after the date of the lease2.
HR A[241]
1 Law of Property Act 1925, s 149(3). This subsection does not apply to any term taking effect in equity under a settlement or created out
of an equitable interest under a settlement or under an equitable power for mortgage, indemnity, or other like purposes. Neither does it apply
to a contract to create a perpetually renewable leasehold, as to which see para HR A[280]: Northchurch Estates Ltd v Daniels [1947] Ch
117, [1946] 2 All ER 524.
Page 56
2 The only condition in the section is that the lease must commence within 21 years of the date of the lease. It does not say within 21 years
of the date of the contract; see Re Strand and Savoy Properties Ltd, DP Development Co Ltd v Cumbrae Properties Ltd [1960] Ch 582,
[1960] 2 All ER 327. As to the perpetuity periods now applicable, see the Perpetuities and Accumulations Act 1964. In particular it should
be noted that PAA 1964, s 1 of the Act enables a period of years not exceeding 80 to be chosen in place of the common law perpetuity
period of a life or lives in being and 21 years. Section 3 provides for a 'wait and see' rule so that no interest is void for remoteness until it is
certain that it must vest, if at all, outside the perpetuity period. The perpetuity period is relevant to the time elapsing between the formation
of the contract to grant the lease and the grant, not to the period between the grant of the lease and the date it is to take effect. That latter
period, which must now exceed 21 years, could, under the common law principles applicable before 1 January 1926, be of any length. The
reason that the rule against perpetuities did not and does not affect the latter period is that the grantee takes a vested interest forthwith. As to
the distinction between a reversionary lease and an agreement for a lease, see further Green v Bowes-Lyon [1960] 1 All ER 301, [1960] 1
WLR 176.
(f) Duration of term
HR A[242]
The maximum duration of the term must be either fixed by specifying the number of years in the first instance, or
expressed by reference to a collateral matter which can, at the time when the lease takes effect, be looked to in order to
ascertain precisely the latest date on which the term must end1. Thus, the term may be fixed by reference: (1) to a
certainty, eg for the same term as in another specified lease; or (2) to a matter capable of being rendered certain before
the lease takes effect, eg for so many years as A shall name. If to a certain term the lease purports to add a term which is
uncertain, it is valid only as to the certain term2. A lease cannot be granted for a term which will be rendered certain by
the happening of some event after the term has commenced to run3. A lease under which the tenant agrees to give up
possession by a certain date is valid since its maximum duration is certain though the tenant may give up possession
earlier4. The term may be for any length of time, however great. In building leases terms of 99 years or 999 years are
frequently granted, but there is no special virtue in these particular numbers and leases can be, and are, granted for any
number of years, and often with a part of a year in addition. But there must be a definite limit; there cannot be a lease in
perpetuity5, except by virtue of statute6. An instrument purporting to create a perpetual lease at a rent would operate, if
at all, as a conveyance in fee simple subject to a perpetual rentcharge, or as an agreement to convey such an estate7.
HR A[243]
1 Lace v Chantler [1944] KB 368 at 370, [1944] 1 All ER 305 at 306, CA, per Lord Greene MR; Prudential Assurance Co Ltd v London
Residuary Body [1992] 2 AC 386, [1992] 3 All ER 504, [1992] 3 WLR 279, HL.
2 Say v Smith (1563) 1 Plowd 269 at 271; Gwynne v Mainstone (1828) 3 C & P 302.
3 Lace v Chantler [1944] KB 368.
4 Joseph v Joseph [1966] 3 All ER 486 at 489, per Denning MR.
5 Doe d Roberton v Gardiner (1852) 12 CB 319 at 333; Sevenoaks, Maidstone and Tunbridge Rly Co v London, Chatham and Dover Rly
Co (1879) 11 Ch D 625 at 635. As to covenants for perpetual renewal, see para HR A[280].
6 Sevenoaks, Maidstone and Tunbridge Rly Co v London Chatham and Dover Rly Co (1879) 11 Ch D 625; Manchester Ship Canal Co v
Manchester Racecourse Co [1900] 2 Ch 352 at 360, per Farwell J; affd [1901] 2 Ch 37, CA.
Page 57
7 It would, perhaps, operate as a conveyance subject to a rentcharge if made by deed in favour of the lessee and his heirs (Doe d Roberton
v Gardiner (1852) 12 CB 319) otherwise it might operate as an agreement for a conveyance, or, if not, a tenancy from year to year would
arise on payment of rent: Doe d Roberton v Gardiner (1852) 12 CB 319; cf Re Coleman's Estate [1907] 1 IR 488.
(g) Further examples
HR A[244]
It is sufficient, however, if the maximum duration of the term is known when the lease commences. Provided this is so,
the lease may be subject to determination within the period, either directly by a provision that it shall be determinable
during the fixed term by notice on the happening of a given event--for instance1, upon the termination of a war, or
indirectly by a provision that it shall continue only during the continuation of a specified state of affairs--for instance2,
while the lessee remains in the lessor's service3, or continues to occupy the premises4. A clause which provides that on
the exercise of an option the lease is to be construed as though it had been granted for a fixed term longer than that
named in the lease appear to be good5. An under-tenancy at a weekly rent, with a provision that the rent shall not be
raised during the head term, gives the under-tenant a right to hold till the end of that term6. During the 1939-45 war
many leases were created 'for the duration of the war'7. Such leases were void for uncertainty in accordance with the
above principles8. To meet widespread grievances leases of the above nature had to be validated by statute9. It follows
that a lease granted by a local authority which was to last until the land was required by the authority for some statutory
purpose would be void10. If a lease is void under the above principles but the proposed tenant occupies the premises
and pays rent it is likely that a periodic tenancy will arise by implication of law10.
HR A[245]
1 The Law of Property Act 1925, s 205(1)(xxvii), contains the following definition: '"Term of years absolute" means a term of years
(taking effect either in possession or in reversion whether or not at a rent) with or without impeachment for waste, subject or not to another
legal estate, and either certain or liable to determination by notice, re-entry, operation of law, or by a provision for cesser on redemption, or
in any other event (other than the dropping of a life, or the determination of a determinable life interest); but does not include any term of
years determinable with life or lives with the cesser of a determinable life interest, nor, if created on or after 1 January 1926, a term of years
which is not expressed to take effect in possession within 21 years after the creation thereof where required by the Act to take effect within
that period; and the expression "term of years" includes a term for less than a year, or for a year or years and a fraction of a year or from year
to year.' As to leases for lives, see further para HR A[248]. It was said in Prudential Assurance Co Ltd v London Residuary Body [1992] 3
WLR 279 at 285, HL, that a lease could be made for five years subject to the tenant's right to determine the lease if the war ended before the
expiry of five years.
2 As to leases for a life or lives, see n 1 and para HR A[248]; Hughes and Crowther's case (1610) 13 Co Rep 66; Wright d Plowden
Cartwright (1757) 1 Burr 282; Co Litt 225a; Shep Touch (ed Preston) 274; see Truepenny's case (1587) cited in Cro Eliz at 270 (reported
sub nom Baldwin v Cooke Moore KB 239; Daniel v Waddington (1615) Cro Jac 377; cf Nesham v Selby (1872) LR 13 Eq 191; affd 7 Ch
App 406.
3 Wrenford v Gyles (1597) Cro Eliz 643 (where, however, it was held that the lease did not determine by the lessor's death).
4 Doe d Lockwood v Clarke (1807) 8 East 185; Doe d Shaw v Steward (1834) 1 Ad & E1 300 (condition for occupation in a will). Such
conditions need careful drafting if they are not to be void for uncertainty: see Sifton v Sifton [1938] AC 656, [1938] 3 All ER 435; Re
Talbot-Ponsonby's Estate, Talbot-Ponsonby v Talbot-Ponsonby [1937] 4 All ER 309; Re Coxen, McCallum v Coxen [1948] Ch 747, [1948] 2
All ER 492.
5 Baker v Merckel [1960] 1 QB 657, [1960] 1 All ER 668, CA, where it was held that the exercise of the option resulted in privity of
Page 58
contract between the lessor and the original lessee throughout the extended term.
6 Adams v Cairns (1901) 85 LT 10, CA.
7 These leases were created in reliance on the decision in Great Northern Rly Co v Arnold (1916) 33 TLR 114, which was overruled by
Lace v Chantler [1944] KB 368, [1944] 1 All ER 305, CA.
8 Lace v Chantler [1944] KB 368, [1944] 1 All ER 305, CA, applied in Prudential Assurance Co Ltd v London Residuary Body [1992] 2
AC 386, [1992] 3 All ER 504, HL. In Eker v Becker [1946] 1 All ER 721; (1946) 174 LT 410, the term was expressed to continue until 'the
actual day of the cease fire order' and Lace v Chantler was distinguished on the ground that the day of the cease fire order was an easily
ascertainable date and not a vague time such as 'the cessation of hostilities', and it was held that the lease was, therefore, not void for
uncertainty; it is difficult to support this decision on established principle since the date when the cease fire order would be made was not
known when the term commenced.
9 See the Validation of War-Time Leases Act 1944, now repealed by the Statute Law (Repeals) Act 1976, Sch 1.
(h) Time of quitting
HR A[246]
A lease for a fixed term generally1 requires no notice to quit at the end of the term, whether the term expires by
effluxion of time2, or on the happening of an event on which it is expressed to determine3. A lease for a fixed term lasts
until the last moment of the last day. Thus, if the term expires on 25 December, the moment of termination of the
tenancy by effluxion of time is that instant of midnight which divides 25 and 26 December4. A lessee is not justified in
quitting before the end of the term because the lessor has failed in the performance of a stipulation on his part, such as a
covenant to repair5 unless the lessor's conduct amounts to a repudiation of the lease which the lessee accepts as such. In
the case of a breach not amounting to a repudiation, the lessee remains liable for the rent, although he may be entitled to
recover from the lessor damages for breach of the covenant; indeed, he may be able to set off a counterclaim for
damages against a claim for rent brought by the landlord6. The lease may provide for different parts of the premises to
be delivered up at different times7, or it may enable the lessor to resume possession of the premises, or part of them, for
building or other purposes, on a specified notice8.
HR A[247]
1 As to leases of agricultural holding, see Division F. As to leases of business and professional premises to which Pt II of the Landlord
and Tenant Act 1954, applies, see Division B. As to long leases which may be continued under Pt I of that Act, see Division E. As to leases
for a term determinable on notice after death or marriage, see para HR A[248].
2 Cobb v Stokes (1807) 8 East 358.
3 Right d Flower v Darby (1786) 1 Term Rep 159 at 162. A lease by a partner to a firm of which he is a member determines on the
dissolution of the partnership (Doe d Waithman v Miles (1816) 1 Stark 181; Doe d Colnaghi v Bluck (1838) 8 C & P 464). But the common
form clause for re-entry only gives the lessor an option to determine the lease, although it commonly states that the lease shall on the
happening of certain events be determined; see para HR A[8542].
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4 See in Re Crowhurst Park, Sims-Hilditch v Simmons [1974] 1 All ER 991 at 996, per Goulding J.
5 Surplice v Farnsworth (1844) 7 Man & G 576. See now Hussein v Mehlman [1992] 2 EGLR 87 as to whether there can be repudiation
of a lease.
6 See British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] QB 137, [1979] 2 All ER 1063, in which a
tenant was able to raise its counterclaim for unliquidated damages for breach of the landlord's repairing obligations under an agreement for a
lease as an equitable set-off against the landlord's claim for arrears of rent due under the lease. See also Melville v Grapelodge Developments
Ltd [1980] 1 EGLR 42. Where a tenant has spent a sum of money in doing repairs which, in breach of covenant, the landlord has failed to
carry out, he may be able to recoup himself out of future rents for that sum, or raise it as a common law set off against the landlord's claim
for rent: Lee-Parker v Izzet [1971] 3 All ER 1099, [1971] 1 WLR 1688. The right declared in Lee-Parker v Izzet, for the tenant to recoup
himself out of future rents applies equally to arrears of rent: Asco Developments Ltd v Gordon [1978] 2 EGLR 41.
7 Doe d Waters v Houghton (1827) 1 Man & Ry KB 208. Consequently, ejectment will lie for the part to be delivered up first, before the
time for delivering up the rest has arrived.
8 The premises must be bona fide wanted for the purpose specified: Gough v Worcester and Birmingham Canal Co (1801) 6 Ves 354;
Russell v Coggins (1802) 8 Ves 34; see also para HR A[7725]. The resumption may extend to the whole of the premises: Doe d Lady Wilson
v Abel (1814) 2 M & S 541; Doe d Gardner v Kennard (1848) 12 QB 244; Liddy v Kennedy (1871) LR 5 HL 134. If possession is resumed
by an assignee of part of the premises, any liability to pay compensation will attach to him and not to the lessor: Bath v Bowles (1905) 93 LT
801. As to the position apart from special provision, see the Law of Property Act 1925, s 142(2).
(i) Lease for a term determinable on notice after death or marriage
HR A[248]
A lease, or underlease, at a rent, or in consideration of a fine, for life or lives specified1, or for a term of years
determinable with the life or lives, or on the marriage of the lessee, or any contract therefor, made before, on, or after 1
January 1926, takes effect as a lease, underlease, or contract therefor, for a term of 90 years determinable by notice in
writing after the death or marriage (as the case may be) of the original lessee, or of the survivor of the original lessees2.
If the lease, underlease, or contract therefor, is made determinable on the dropping of the lives of persons other than or
besides the lessees, then the notice may be given after the death of any person or of the survivor of any persons (whether
or not including the lessees) on the cesser of whose of whose life or lives the lease, underlease, or contract therefor, is
made determinable, instead of after the death of the original lessee or of the survivor of the original lessees3. The notice
must be in writing, and be at least one month's notice to determine the tenancy on one of the quarter days applicable to
the tenancy, or, if no quarter days are specially applicable to the tenancy, on one of the usual quarter days. The notice
may be given either by the lessor or the persons deriving title under him, to the person entitled to the leasehold interest,
or, if no such person is in existence, by fixing it to the premises; or it may be given by the lessee or other persons on
whom the leasehold interest is vested to the lessor or the persons deriving title under him4.
HR A[249]
1 Before 1926 a lease for the life of the lessee or the life or lives of any other person or persons created a freehold estate, in the latter case
an estate pur autre vie (Co Litt 41b). The lease could also be for the lives of the lessee and some other person or persons: Wright d Plowden
v Cartwright (1757) 1 Burr 282). A lease for a term of years determinable on the death of a specified person or of the survivor of several
persons was a chattel interest. A tenant who entered into an agreement in writing to rent a house, the landlord agreeing not to raise the rent so
long as the tenant paid it regularly, and not to give him notice to quit, was, before 1926, entitled to obtain the grant of a lease for his life
(Zimbler v Abrahams [1903] 1 KB 577, CA; Re Coleman's Estate [1907] 1 IR 488; cf Austin v Newham [1906] 2 KB 167), even though the
Page 60
tenancy was prima facie a weekly one: Adams v Cairns (1901) 85 LT 10, CA. If the lessor had only a leasehold interest the tenant was
entitled to a lease for the residue of the term if he lived so long: Kusel v Watson (1879) 11 Ch D 129, CA; Re King's Leasehold Estates, ex p
East London Rly Co (1873) LR 16 Eq 521. For a similar case after 1925, see Kingswood Estate Co Ltd v Anderson [1963] 2 QB 169, [1962]
3 All ER 593. Formerly, a distinction was made between executory agreements for a lease of which a court of equity would grant specific
performance (Browne v Warner (1807) 14 Ves 156; Re King's Leasehold Estates, ex p East of London Rly Co Co (1873) LR 16 Eq 521) and
instruments which were intended to pass a present interest, but which were void at law because not made by deed (Cheshire Lines
Committee v Lewis & Co (1880) 50 LJQB 121, CA); and the former were assisted, but not the latter. In accordance, however, with the
doctrine of Parker v Taswell (1858) 2 De G & J 559, both execututory agreements and invalid leases which operate in equity as agreements,
have been held to be equally entitled to the benefit of specific performance (Zimbler v Abrahams; Mardell v Curtis (1899) 43 Sol Jo 587),
but the better view appears to be that it is only in so far as it operates as an agreement for a lease that an invalid lease is specifically
enforceable (Lace v Chantler [1944] KB 368, [1944] 1 All ER 305). Where the agreement is not capable of specific performance, then the
tenant, on payment of rent becomes tenant from year to year or for other periodic period according to the computation of the rent: see Doe d
Warner v Browne (1807) 8 East 165; para HR A[1164]. If the duration of the lease is made dependent on the lessor's power of letting, the
lease is void for uncertainty: Wood v Beard (1876) 2 Ex D 30. But see Siew Soon Wah v Yong Tong Hong [1973] AC 836, [1973] 2 WLR
713, PC. It has been held that such an agreement is merely personal and is not binding on a purchaser of the reversion whether with or
without notice: Roberts v Tregaskis (1878) 38 LT 176, sed quaere). See Siew Soon Wah v Yong Tong Hong [1973] AC 836, [1973] 2 WLR
713.
2 Law of Property Act 1925, s 149(6). Note that this provision only applies when there is a rent or a premium. Thus it will not operate
when someone is permitted to occupy property free rent for life: Binions v Evans [1972] Ch 359, [1972] 2 All ER 70. The provision does not
apply to a term taking effect in equity under a settlement or created out of an equitable interest under a settlement for mortgage, indemnity,
or other like purposes. Formerly, where no reference to survivors was made in a lease, if the lease was to A during the lives of B and C, A
continued to hold during the life of the survivor; but otherwise where the lease was for 100 years if B and C should so long live: Brudnel's
Case (1592) 5 Co Rep 9a; Hughes and Crowther's case (1610) 13 Co Rep 66.
3 Law of Property Act 1925, s 149(6).
4 LPA 1925, s 149(6).
(j) Lease for whole life
HR A[250]-[260]
A lease for life without mentioning the life which was to define its duration was formerly deemed to be for the life of
the lessee1; unless the lessor might lawfully grant a lease for his own life, but not for the life of the lessee, and then the
lease was taken to be for the life of the lessor2. Similar principles would, it seems, apply in deciding upon the cesser of
whose life the term for 90 years into which leases for lives are now converted, would become determinable by notice. It
is always desirable that the life should be clearly specified in the habendum of the lease, and where the lease is
determinable upon the cesser of lives other than that of the lessee, the lives must be so specified. Leases for a term of
years determinable on lives frequently contained a covenant for renewal on the dropping of any of the lives3. Upon an
assignment of the lease with a covenant that the lease is a valid and subsisting lease determinable upon notice after the
dropping of the lives mentioned in it, there is no implied covenant that all the original lives are still in existence4.
HR A[261]
1 An estate for a man's own life is deemed to be greater than an estate for the life of another; and since a lease is to be construed most
strongly against the grantor, it was the lessee's life which set the measure of the term (Co Litt 41b, 42a; Re Coleman's Estate [1907] 1 IR
488). In a demise by A to B for the term of 'his' life, the word 'his' was usually referred to B, but it referred to A if it appeared upon the
whole instrument that such was the intention (Doe d Pritchard v Dodd (1833) 5 B & Ad 689 at 693).
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2 Co Litt 42 a. In Doe d Bromfield v Smith (1805) 6 East 530, such a lease was held to be for the joint lives of the lessor and lessee.
3 See para HR A[262]; but in the modern form of a lease for 90 years determinable on notice such a provision is hardly appropriate. In the
case of such a lease granted after 1925 there is no absolute necessity to make the term 90 years, and it is now a common practice where
possible to adopt a term not exceeding 21 years in order to avoid any question of continuance under the Landlord and Tenant Act 1954.
4 Coates v Collins (1871) LR 7 QB 144, Ex Ch.
(k) Covenants for renewal
HR A[262]
A lease may contain a covenant on the part of the lessor1 that he will, at the end of the term, or at some stated period
within the term2, grant a renewal of the lease if so required by the lessee. On notice to renew being given the contract
for renewal becomes binding3. Such a lease confers on the lessee an immediate term with a right to the further term;
and this right will, in the event of his death within the term, devolve upon his personal representatives4 and will run
with the land and the reversion5. But if the lease is granted in the exercise of a power, the covenant cannot be enforced
unless, at the date of renewal, the renewal lease is one authorised by the power6. A contract entered into on or after 1
January 1926 for the renewal of a lease or underlease for a term exceeding 60 years from the termination of the lease or
underlease is void7.
HR A[263]
1 The lessor cannot deal with the property in prejudice of the lessee's right under the covenant for renewal; see A-G of Straits Settlement v
Wemyss (1888) 13 App Cas 192, PC. As to options to renew, see para HR A[7685], and for a form thereof, see 22 Forms & Precedents (5th
edn) [996].
2 Where the lease is renewable at the end of any certain periods, as at the end of every 14 years of the term, the lessee can require renewal
at the end of any such period notwithstanding that he has missed previous periods (Bogg v Midland Rly Co (1867) LR 4 Eq 310; cf
Swinburne v Milburn (1884) 9 App Cas 844, where a lease was renewable on the dropping of lives), unless on the terms of the covenant he is
bound to renew, if at all, at the end of the various periods in order: Rubery v Jervoise (1786) 1 Term Rep 229; Hussey v Domvile (No 2)
[1903] 1 IR 265, CA; Domvile v Callwell [1907] 2 IR 617; see Reid v Blagrave (1831) 9 LJOS Ch 245; Maxwell v Ward (1824) 13 Price
674.
3 Dawson v Lepper (1892) 29 LR Ir 211. As to the consideration for an agreement to renew, see Richardson v Sydenham (1703) 2 Vern
447; Robertson v St John (1786) 2 Bro CC 140; Redshaw v Governor of Bedford Level Co (1759) 1 Eden 346, Dowling v Mill (1816) 1
Madd 541; Crofton v Ormsby (1806) 2 Sch & Lef 583. Where the lessee is bound to renew under a penalty, this does not give him the option
to pay the penalty and not renew (Reid v Blagrove (1831) 9 LJOS Ch 245); and as a penalty on failure to renew in time, see Lord Doneraile
v Chartres (1784) 1 Ridg Parl Rep 122. Where a covenant for renewal was expressed in terms that the landlord would grant a lease 'for rent
and containing the like covenants and provisions as are herein contained' (except the renewal covenant) it was held as a matter of
construction that the rent would be the same as in the original lease: Rothwell v Wakeling (1974) 29 P & CR 234.
4 Hyde v Skinner (1723) 2 P Wms 196.
5 Muller v Trafford [1901] 1 Ch 54 and see para HR A[7687].
6 Gas Light and Coke Co v Towse (1887) 35 Ch D 519; Doe d Bromley v Bettison (1810) 12 East 305; Dooell v Dew (1842) 1 Y & C Ch
Cas 345; Salamon v Sopwith (1876) 35 LT 826, CA.
Page 62
7 Law of Property Act 1922, s 145, Sch 15, para 7(2). This is so whether or not the contract is contained in the lease or underlease, but is
subject to the express provision of LPA 1922 Pt VII, Sch 15, para 7(2).
HR A[264]
If the covenant requires that the lease to be granted is to contain so far as possible clauses identical with those in the
lease, the landlord may not be bound to grant a new lease if, owing to a change of circumstances, it becomes impossible
to renew on the same terms as the original lease1. The reduction of the rent under Pt IV of the Rent Act 1977, and the
registration of the rent so reduced does not make void an option to grant a new lease at the same rent. A grant of a new
lease at that rent is not unlawful though an attempt to recover it in the absence of changed circumstances would be2.
Where the covenant is conditional on the lessor himself obtaining a renewal, the lessor is not bound to obtain a renewal
unless the covenant expressly binds him to do so3 and where the lease itself is void the covenant is also void4.
HR A[265]
1 Hollies Stores Ltd v Timmis [1921] 2 Ch 202, where the lease provided for the payment of rent by three named sureties, and, as one of
them died prior to the time for renewal, it was impossible to grant a similar lease with the rent payable by such three named sureties. But in
each case everything must depend on the precise wording of the covenant for renewal.
2 Mauray v Durley Chine (Investments) Ltd [1953] 2 QB 433, [1953] 2 All ER 458, CA. It was held in Newman v Dorrington
Developments Ltd [1975] 3 All ER 928, [1975] 1 WLR 1642, that an option to renew a lease at the appropriate 'commercial yearly rack rent'
was not rendered unenforceable by the fact that the rent registered under the Rent Act 1968 (and thus the maximum rent lawfully
recoverable) was less than what would have been the commercial yearly rack rent had the Rent Act 1968 not existed. Since the registered
rent was the highest rent obtainable on account of the statutory restrictions, it was the 'commercial yearly rack rent'.
3 Lumley v Timms (1873) 28 LT 608.
4 Bunting v Sargent (1879) 13 Ch D 330 (failure to enrol lease); Moore v Clench (1875) 1 Ch D 447 (charity lease); Tierman v Feeley
[1949] IR 381.
(l) Observance of conditions by lessee
HR A[266]
The covenant usually requires that the lessee shall give notice of his intention to take a renewal before the determination
of the term, and, when this is the case, he will lose his right if he fails to give the notice in time1, while notice given
before the time appointed may be ineffective2. Where a lease is granted to two persons and the covenants are joint and
several and both lessees are alive, the notice must be by both and the landlord cannot be called upon to grant a renewal
to one3. If the renewal is made conditional on the observance of his covenants by the lessee, such observance is a
condition precedent to the right of renewal, and the right of renewal is not enforceable if at the time for renewal there is
a subsisting breach of covenant4, even though it is not a serious breach5. However, a past, but remedied or spent, breach
of covenant will not normally deprive a tenant of the right of renewal6. Furthermore, where the condition is that the
tenant shall have 'reasonably' performed or fulfilled his covenant he may be entitled to renew even if there are
outstanding breaches7. But if the new lease is to be granted on payment of a sum of money, and it is not stipulated that
this shall be paid before the expiration of the old lease, it is sufficient if it is paid on the granting of the new lease
notwithstanding that this is after the expiration of the old term8.
Page 63
HR A[267]
1 Bayley v Leominster Corpn (1792) 1 Ves 476; Wight v Earl Hopetoun (1864) 4 Macq 729, HL; Nicholson v Smith (1882) 22 Ch D 640;
Relief will not be given in equity against failure to give notice in time (Eaton v Lyon (1798) 3 Ves 690; City of London v Mitford (1807) 14
Ves 41); save under special circumstances: Earl of Ross v Worsop (1740) 1 Bro Parl Cas 281, HL; Statham v Liverpool Dock Co (1830) 3 Y
& J 565; Hunter v Earl Hopetoun (1865) 13 LT 130, HL. Where notice to renew a lease for lives had to be given within six months after the
dropping of any life, relief was not given on the ground of ignorance of the death if the lessee might with reasonable diligence have
discovered it (Harries v Bryant (1827) 4 Russ 89); and generally accident will not entitle the lessee to time for renewal unless it could not by
reasonable diligence have been avoided (Reid v Blagrave (1831) 9 LJOS Ch 245); see Maxwell v Ward (1824) 13 Price 674, but contra in a
case of surprise: Firman v Lord Ormonde (1829) Beat 347. Formerly, relief against failure to renew was granted (Lennon v Napper (1802) 2
Sch & Lef 682), but this case was overruled (Reid v Blagrave (1831) 9 LJOS Ch 245).
2 Biondi v Kirklington and Piccadilly Estates Ltd [1947] 2 All ER 59, where the notice was to be given '6 calendar months before the
expiration of the term' and it was held that it could not be given more than a reasonable time before the six months began to run. In Multon v
Cordell [1986] 1 EGLR 44 the option for renewal was operable by 'the written request of the tenant made three months before the expiration
of the term hereby created'. That period expired at Christmas 1983. It was held that the request had to be made a reasonably short time before
Christmas 1983 and that a request made in January 1981 was ineffective. Where a 6 months' notice had to be given 'expiring at the end of the
10th year of the term', this was calculated by reference to the commencement of the term and not the (later) date of the execution of the
lease: Trane (UK) Ltd v Provident Mutual Life Assurance [1995] 1 EGLR 33.
3 Finch v Underwood (1876) 2 Ch D 310, CA.
4 Job v Banister (1856) 2 K & J 374; affd 26 LJ Ch 125; Finch v Underwood (1876) 2 Ch D 310, CA; Bastin v Bidwell (1881) 18 Ch D
238; Greville v Parker [1910] AC 335, PC; Robinson v Thames Mead Park Estates Ltd [1947] Ch 334, [1947] 1 All ER 366; See Thompson
v Guyon (1831) 5 Sim 65.
5 Finch v Underwood (1876) 2 Ch D 310 West Country Cleaners (Falmouth) Ltd v Saly [1966] 3 All ER 210, [1966] 1 WLR 1485; Kitney
v Greater London Properties Ltd [1984] 2 EGLR 83; Trane (UK) Ltd v Provident Mutual Life Assurance [1995] 1 EGLR 33. See also Hare
v Nicoll [1966] 2 QB 130, [1966] 1 All ER 285, in which it was held that an option to purchase shares must be exercised strictly in
accordance with the conditions stipulated.
6 Bass Holdings Ltd v Morton Music Ltd [1988] Ch 493.
7 Bassett v Whiteley (1982) 45 P & CR 87; Gardner Blaxhill [1960] 2 All ER 457, [1960] 1 WLR 752.
8 Nicholson v Smith (1882) 22 Ch D 640. The lessor cannot require payment of a collateral debt as a condition of renewal: Fitzgerald v
Carew (1839) 1 I Eq 346.
(m) Renewal by persons in a fiduciary position
HR A[268]
A renewal by a tenant for life is for the benefit of the settlement and the renewed lease is vested in the tenant for life
upon the trusts of the settlement1. Apart from express provisions in the settlement, the tenant for life may renew or
allow the lease to expire2. The expenses of renewal, apart from a special provision in the settlement, are borne by the
tenant for life and remainderman in proportion to their actual enjoyment of the renewed lease3. A person holding as
trustee or in any other fiduciary capacity holds any renewed lease in trust for those persons to the extent of their
respective interests4. The fact that the lessor expressly refused to renew for the benefit of the cestui que trust makes no
Page 64
difference5 and it is immaterial that the new lease contains additional property and is at an increased rent6. Where such
a person purchases the reversion, he holds it on trust if the lease is renewable7 but not, in the absence of fraud, if it is
not renewable8. Where persons are jointly interested in a lease (as in the case of partners) a renewal by one is held for
the benefit of all according to their respective shares9 but if one of the persons jointly interested is an infant and the
renewal is not beneficial the person of full age must bear the loss; but, if it is beneficial, the infant is entitled to his
share10. Where the landlord or the tenant is a person mentally disordered there is a statutory power to deal with a
renewal of a lease11.
HR A[269]
1 Giddings v Giddings (1827) 3 Russ 241; Cridland v Luxton (1834) 4 LJ Ch 65; Waters v Bailey (1843) 2 Y & C Ch Cas 219; Trumper v
Trumper (1873) 8 Ch App 870; Hahesey v Guiry [1918] 1 IR 135; Re Biss, Biss v Biss [1903] 2 Ch 40.
2 White v White (1804) 9 Ves 554 at 561; O'Ferrall v O'Ferrall (1834) L & G temp Plunk 79. A tenant for life, however, should not
surrender a lease and thus deprive himself of the option of renewing for the benefit of remaindermen: Harvey v Harvey (1842) 5 Beav 134.
3 Giddings v Giddings (1827) 3 Russ 241; Cridland v Luxton (1834) 4 LJ Ch 65; Jones v Jones (1846) 5 Hare 440; Hudleston v
Whelpdale (1842) 9 Hare 775; Bradford v Brownjohn (1868) 3 Ch App 711.
4 Randall v Russell (1817) 3 Mer 190; Mill v Hill (1852) 3 HL Cas 828; Clegg v Edmondson (1857) 8 De GM & G 787; Archbold v Scully
(1861) 9 HL Cas 360; Re Morgan, Pillgrem v Pillgrem (1881) 18 Ch D 93; Re Knowles' Will Trusts, Nelson v Knowles [1948] 1 All ER 866.
The general position is discussed in Re Biss, Biss v Biss [1903] 2 Ch 40.
5 Keech v Sandford (1726) Cas temp King 61; Fitzgibbon v Scanlan (1813) 1 Dow 261 at 269.
6 Re Morgan, Pillgrem v Pillgrem (1881) 18 Ch D 93; but see Acheson v Fair (1843) 2 Con & Law 208 (where the additional land was
held not to be a graft upon the old lease).
7 Re Lord Ranelagh's Will (1884) 26 Ch D 590; Phillips v Phillips (1885) 29 Ch D 673.
8 Longton v Wilsby (1897) 76 LT 770; Bevan v Webb [1905] 1 Ch 620.
9 Featherstonhaugh v Fenwick (1810) 17 Ves 298; Clegg v Fishwick (1849) 1 Mac & G 294.
10 Ex p Grace (1799) 1 Bos & P 376.
11 Mental Heath Act 1983, s 103.
(n) Perpetual renewal
HR A[270]-[280]
A lease may contain a covenant for perpetual renewal1. However, the court will not give it this effect unless the
intention in that behalf is clearly shown2, as, for instance, where the covenant expressly states that the lease is to be
renewable for ever3. A provision that the new lease shall contain the same covenants as the old lease does not entitle the
Page 65
lessee to have the covenant for renewal inserted4, unless the provision expressly includes 'this present covenant'5. The
intention to renew perpetually must be clear on the language of the lease6; the fact that several renewals have been
granted is not admissible to explain the intention of the parties to the lease7. However phrased, a covenant for perpetual
renewal will not be construed as a covenant to grant an infinite series of reversionary terms, and thus void as to all terms
starting more than 21 years after the date of the agreement8.
HR A[281]
1 See, however, para HR A[282]. The covenant is not open to objection on the ground of perpetuity (Bridges v Hitchcock (1715) 5 Bro
Parl Cas 6, HL, and see Northchurch Estates Ltd v Daniels, nn 6 and 8), unless the persons entitled to renewal are an ascertained class: Hope
v Gloucester Corpn (1855) 7 De GM & G 647: see also London and South Western Rly Co v Gomm (1882) 20 Ch D 562 at 572, CA per
Jessell MR; Muller v Trafford [1901] 1 Ch 54 at 61.
2 Baynham v Guy's Hospital (1796) 3 Ves 295 at 298; Moore v Foley (1801) 6 Ves 232 at 237; Iggulden v May (1804) 9 Ves 325 at 330;
Brown v Tighe (1834) 2 Cl & Fin 396 at 416, HL; Swinburne v Milburn (1884) 9 App Cas 844; cf Smyth v Nangle (1840) 7 Cl & Fin 405,
HL; Wynn v Conway Corpn [1914] 2 Ch 705, CA. As to an agreement to grant a term where the lessor holds for lives with perpetual
renewal, see Leathem v Allen (1850) 1 I Ch R 683.
3 City of London v Mitford (1807) 14 Ves 41; Nicholson v Smith (1882) 22 Ch D 640; see Atkinson v Pillsworth (1787) 1 Ridg Parl Rep
449; Palmer v Hamilton (1793) 2 Ridg Parl Rep 535. An express covenant to renew is not essential (Chambers v Gaussen (1844) 2 Jo & Lat
99); and it seems that the habendum may be so framed as to amount to a covenant for perpetual renewal (Sheppard v Doolan (1842) 3 Dr &
War 1).
4 Hyde v Skinner (1723) 2 P Wims 196; Tritton v Foote (1789) 2 Bro CC 636; Russel v Darwin (1767) 2 Bro CC 639n; Lewis v
Stephenson (1898) 67 LJQB 296; cf Swan v Colclough (1834) Hayes & Jo 607.
5 Hare v Burges (1857) 4 K & J 45; Parkus v Greenwood [1950] Ch 644, [1950] 1 All ER 436, CA, where it was held that this form of
words was 'a well-recognised method of producing perpetually renewable leaseholds', in effect overruling Green v Palmer [1944] Ch 328,
[1948] 1 All ER 670. Parkus v Greenwood was applied in Re Hopkin's Lease, Caerphilly Concrete Products Ltd v Owen [1972] 1 All ER
248, [1972] 1 WLR 372, CA. See also Marjorie Burnett Ltd v Barclay [1981] 1 EGLR 41.
6 A covenant to renew 'from time to time' (Furnival v Crew (1744) 3 Atk 83), or 'at any time' (Copper Mining Co v Beach (1823) 13 Beav
478), will be a covenant for perpetual renewal if on the whole language it means 'to renew and continue renewing', but not otherwise
(Browne v Tighe (1834) 2 Cl & Fin 396 at 419, HL). An agreement for a tenancy for one year with an option to renew from year to year,
notice of intention to renew to be given on or before a specified date in each year, was held to be a contract to create a perpetually renewable
leasehold, notwithstanding that certain terms of the agreement were inconsistent (Northchurch Estate Ltd v Daniels [1947] Ch 117, [1946] 2
All ER 524).
7 Baynham v Guy's Hospital (1796) 3 Ves 295; see Sadlier v Biggs (1853) 4 HL Cas 435 at 437. The burden of strict proof of the right to a
renewal lies on the lessee (Swinburne v Milburn (1884) 9 App Cas 844 at 850), though it is not really a question of proof.
8 Northchurch Estates Ltd v Daniels [1947] Ch 117, [1946] 2 All ER 524 where it was held that the Law of Property Act 1925, s 149(3)
(as to which, see para HR A[240]) has no application to covenants for perpetual renewal.
(o) Effect of Law of Property Act 1922 on covenants for perpetual renewal
HR A[282]
Page 66
Since 1925, perpetually renewable leases and underleases1 have been abolished2, and if a lease contains a covenant for
renewal which amounts to a covenant for perpetual renewal3, the lease takes effect as a demise for a term of 2,000
years4, and any contract for the grant of a lease with a covenant for perpetual renewal operates as an agreement for a
demise for a term of 2,000 years5. In the case of subsisting leases, the term is calculated from the date at which the
existing lease commenced; in all other cases the term commences from the date fixed for the commencement of the
perpetually renewable lease6. Every term so created is subject to all the same trusts, powers, executory limitations over,
rights and equities, if any, and to all the same incumbrances and obligations of every kind, as the perpetually renewable
lease which it replaces would have been subject to7, and is deemed to contain: (1) a power, exercisable only with the
consent of the persons interested in any derivative interest which might be perpetually affected, for the lessee, by giving
at least ten days' notice in writing to the lessor, to determine the lease at any date upon which the original lease would
have expired if it had not been renewed; and (2) a covenant by the lessee to register every assignment or devolution of
the term, including probates and letters of administration, with the lessor or his solicitor, within six months from the
date of the assignment or devolution8. Any power of re-entry contained in the lease applies and extends to the breach of
such covenant9. Fines required to be paid on renewal were converted into sums payable by annual instalments10 as
additional rent11, which is deemed to be part of the rent reserved by the lease for all purposes, including any covenant
for payment of rent or proviso for re-entry contained in the lease12.
HR A[283]
1 As to underleases, see para HR A[284]. Such leases and underleases may be deposited at the Central Office, and power to search the file
for instruments so deposited and to obtain copies of such instruments is given by the Law of Property Act 1922, Sch 15, para 20, and the
Filing of Leases Rules 1925, SR & O 1925/1149.
2 Law of Property Act 1922, s 145, Sch 15, paras 1(5), 5, which came into operation on 1 January 1926 (Law of Property (Amendment)
Act 1924; Law of Property Act (Postponement) Act 1924, s 1).
3 As to when a covenant for renewal amounts to a covenant for perpetual renewal, see para HR A[280].
4 The conversion of perpetually renewable leases subsisting on 1 January 1926, into long terms was effected by the Law of Property Act
1922, Sch 15, para 1(1), and the Law of Property Act 1925, s 202, and the creation of such leasehold interests is prevented by the Law of
Property Act 1922, Sch 15, para 5. In the case of subsisting leases, the term vested in the person entitled to such lease on 1 January 1926
(LPA 1922, Sch 15, para 1(1)); if such a person was an infant, the term vested in the person of full age who became entitled by statute to the
legal estate of the infant (LPA 1922, Sch 15, para 3(1)).
5 Existing contracts to grant perpetually renewable interest were converted into contracts to grant long terms by the Law of Property Act
1922, Sch 15, para 6(1), and contracts for renewal entered into since 1925 operate as agreements to grant long terms (LPA 1922, Sch 15,
para 7(1).
6 The Law of Property Act 1922, Sch 15, paras 1(1), 5, 7(1).
7 LPA 1922, Sch 15, para 3.
8 LPA 1922, Sch 15, para 10(1). The covenant for registration of assignments or devolutions of the term must provide for payments of a
fee of one guinea, which is to be in satisfaction of all costs, in respect of each registration. The covenant is in substitution for any express
covenant contained in the lease for registration with the lessor or his solicitor or agent of assignments and devolutions of the term and for
payment of fees in respect of such registration.
9 LPA 1922, Sch 15, para 10(1).

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10 An annual instalment, until paid, carries interest from the date on which the instalment becomes due, if the lease provided that unpaid
fines should carry interest, and at the same rate at which such interest would have been payable at the current rate from the time when
demand in writing is made claiming the money (LPA 1922, Sch 15, para 13).
11 LPA 1922, Sch 15, para 12. The amount of such instalments was ascertained either by agreement (LPA 1922, Sch 15, para 14(1), or, in
default thereof, in accordance with the provisions of LPA 1922, Sch 15, para 12 as amended by the Law of Property (Amendment) Act 1924,
s 2 Sch 2 and the Renewable Leaseholds Regulations 1925, SR & O 1925/857, reg 1. Disputes between persons affected by the conversion
of fines into additional rent were submitted to the Minister of Agriculture and Fisheries (Law of Property Act 1922, Sch 15, para 16, as
amended by the 1924 Act, s 2, Sch 2; Renewable Leaseholds Regulations 1925, reg 2), from whom an appeal lay by way of originating
notice of motion to the Chancery Division of the High Court (RSC Ord 93, r 9). These provisions, it seems, remain applicable in the event of
a perpetually renewable lease now being granted and providing for the payment of a fine on renewal.
12 LPA 1922, Sch 15, para 12(4).
(p) Underlease with covenant for renewal
HR A[284]
A lessee holding for a term or for lives with a covenant for renewal might before 1926 underlet upon similar
conditions1; but since 1925 perpetually renewable underleases have been abolished 2, and if an underlease contains a
covenant for perpetual renewal3, it takes effect in the same manner as a perpetually renewable lease4, except that the
term of the substituted underlease is one day less in duration than the term out of which it takes effect5. Where a
covenant to renew is conditional on the lessor himself obtaining a renewal, the lessor is not bound to obtain a renewal
unless the covenant expressly binds to him to do so6 and, where the lease itself was void, the covenant for renewal in it
was also void7.
HR A[285]
1 The right of the underlessee to renewal (Morgan v Gurley (1851) 1 I Ch R 482), and of the underlessor to compel acceptance of renewal
(Curry v Stanley (1833) Hayes & Jo 487; Pilson v Spratt (1889) 25 LR Ir 5), might be lost by their conduct; thus, the underlessee might
forfeit his right of renewal by non-payment of fines: Hunt v Sayers (1832) Hayes 590; Cullen v Leonard (1842) 5 I EqR 134; Chesterman v
Mann (1851) 9 Hare 206.
3 As to what amounts to a covenant for perpetual renewal, see para HR A[280].
5 Law of Property Act 1922, Sch 15, para 2. Similarly, a contract for the grant of an underlease with a covenant for perpetual renewal
operates as an agreement for a subdemise for a term less in duration by one day than the term out of which it is derived (LPA 1922, Sch 15,
paras 6(1), 7(1)).
6 Lumley v Timms (1873) 28 LT 608.
7 Bunting v Sargent (1879) 13 Ch D 330; Moore v Clench (1875) 1 Ch D 447; Tiernan v Feeley [1949] Ir R 381.
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tenant/B Varieties of Tenancies/6 Concurrent and future leases
6 Concurrent and future leases
(a) Effect of concurrent leases
HR A[286]
After a lease has been granted, another lease of the same premises is sometimes granted, the term being either
concurrent with or subsequent to that of the existing lease. A concurrent lease, provided it is made by deed, operates as
a lease of the reversion upon the existing term1. If the concurrent term is equal to or exceeds the residue of the existing
term, the concurrent lessee is entitled to the rent for the whole of such residue, and afterwards to possession for the
remainder (if any) of his own term. The concurrent lessee is also entitled to sue for service charge contributions2. If the
concurrent term expires during the existing term, the concurrent lessee is entitled to the rent during his own term. In
effect, the lessee under the concurrent lease is inserted between the lessor and the lessee under the existing lease, so that
the lessee under the existing lease takes the position of an underlessee3. The rule of law that a legal term may be created
to take effect in reversion expectant on a longer term4 is confirmed by statute5.
HR A[287]
1 Shep Touch (ed Preston) 276; Palmer v Thorpe (1589) Cro Eliz 152; Wordsley Brewery Co v Halford (1903) 90 LT 89. The Coal
(Concurrent Leases) Act 1942 (now repealed) provided that where the term under one of two concurrent coal-mining leases was held in
reversion expectant on the termination of the other such other should, whatever the date at which it began, be treated as an underlease.
2 Adelphi (Estates) Ltd v Christie [1984] 1 EGLR 19, CA, where, as a matter of construction, it was held that the contribution recoverable
was a percentage of the head landlord's expenditure rather than a percentage of the concurrent lessee's expenditure.
3 Bac Abr, tit 'Leases and Terms for Years' (N); Neale v Mackenzie (1836) 1 M & W 747 at 759-762, Ex Ch. The transfer of the reversion
carries the right to rent, and hence the lessor cannot during the second lease recover rent from the first lessee: Harmer v Bean (1853) 3 Car &
Kir 307. If the existing term is prematurely determined by surrender or otherwise, the concurrent lessee is immediately entitled to possession
under his lease, by virtue of the estoppel arising under the deed: Neale v Mackenzie (1836) 1 M & W 747 at 762, Ex Ch.
4 See Re Moore and Hulm's Contract [1912] 2 Ch 105.
HR A[288]
A concurrent lease not made by deed, and thus incapable of operating as a grant of the reversion, if it is for a term
exceeding the residue of the existing term, is void as to such residue, but it would seem probable that if the concurrent
lessee enters at the expiration of the existing term, the lessor will be estopped from denying the lessee's title to the
remainder of the lease1: if, however, the parol concurrent lease is for a term which is less than the residue of the
existing term, it is altogether void2. If the original lease comprises only part of the premises demised by the concurrent
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lease, then, so long as the original term continues, no part of the rent reserved by the concurrent lease can be distrained
for or recovered as rent. It cannot be apportioned, and, the lease being void during the first lease as to part of the
premises, the reservation of rent is void during the same time. In such circumstances the concurrent lessee can refuse to
enter at all; but if he enters on the part of the premises not comprised in the prior lease, he is liable to pay rent for that
part in an action for use and occupation3.
HR A[289]
1 The effect of a concurrent parol lease after the determination of the existing term is obscure, and, as a parol lease to be effective at all
must be for less than three years (see para HR A[1162]), it is improbable that the question will be the subject of judicial determination or of
much practical importance.
2 Neale v Mackenzie (1836) 1 M & W 747 at 760; Doe d Thomas v Jenkins (1832) 1 LJKB 190. The surrender of the first term does not
accelerate the concurrent parol lease; but it seems that, if the first term is determinable upon an uncertainty, then upon its determination the
concurrent parol lease, if then existing, would at once take effect (Neale v Mackenzie (1836) 1 M & W 747 at 761).
3 Neale v Mackenzie (1836) 1 M & W 747 at 762-764.
(b) Future leases
HR A[290]-[300]
Before 1926, a lease made to commence at a future date1 only conferred on the lessee an interesse termini until that date
arrived, and the lessee's title was completed by entry2. The doctrine of interesse termini and the necessity for actual
entry were abolished by statute3; but a term at a rent or granted in consideration of a fine, limited on or after 1 January
1926 to take effect more than 21 years from the date of the instrument purporting to create it, and any contract to create
such a term, are void, except when the term takes effect in equity under a settlement, or is created out of an equitable
interest under a settlement, or under an equitable power for mortgage, indemnity, or other like purposes4. This
provision does not invalidate a contract to grant, at a date more than 21 years after the date of the contract, a lease which
when granted will commence not more than 21 years after the date of the lease5. Where the future lease is to take effect
on the termination of a present lease, the reversion and the right to distrain for the rent due under the present lease
remain in the lessor6. Where a landlord, by way of a time-sharing arrangement, granted leases which entitle the tenant
to occupy a cottage for a limited period in each year, usually one week, for 80 years at a peppercorn rent and a
management fee, it was held that since the interest granted was 80 separate periods, it was not a lease for a period
exceeding 21 years7.
HR A[301]
1 Littleton and Tenures, s 58, Co Lit 46 b, 270 a; Copeland v Stephens (1818) 1 B & Ald 593 at 605; Doe d Rawlings v Walker (1826) 5 B
& C 111 at 118; Hyde v Warden (1877) 3 ExD 72 at 84, CA; Gillard v Cheshire Lines Committee (1884) 32 WR 943, CA; Joyner v Weeks
[1891] 2 QB 31 at 47, CA. The doctrine did not apply to leases for life or lives (Co Litt 270b; Ecclesiastical Comrs for England v Treemer
[1893] 1 Ch 166 at 171).
2 The lessee of a reversionary lease had not an executory but an immediate vested interest, a right in rem capable of alienation, but the
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interesse termini gave him no estate in land. Such a lease did not offend the rule against perpetuities: Mann, Crossman and Paulin v Land
Registry Registrar [1918] 1 Ch 202; Redington v Browne (1893) 32 LR Ir 347.
3 Law of Property Act 1925, s 149(1), (2). The abolition of the doctrine of interesse termini does not affect the rights of any person to
recover any rent, or to enforce or take the advantage of any covenants or conditions, or vary any statutory or other obligations imposed in
respect of terms created before 1926: LPA 1925, s 149(4).
4 LPA 1925, s 149(3). In Northchurch Estates Ltd v Daniels [1947] Ch 117, [1946] 2 All ER 524 the argument that an option for
perpetual renewal is a contract to create a series of reversionary terms and void under this subsection as to all terms starting more than 21
years after the date of the agreement was rejected on the ground that such a result would be inconsistent with the Law of Property Act 1922,
Sch 15, para 7(1), which converted contracts for perpetual renewal into agreements for a demise for 2,000 years. A contract for the renewal
of a lease or underlease for a term exceeding 60 years from the termination of the lease or underlease is (subject to the express provisions of
LPA 1922, s 149) void (LPA 1922, Sch 15, para 7(2)); see para HR A[262].
5 Re Strand and Savoy Properties Ltd, DP Development Co Ltd v Cumbrae Properties Ltd [1960] Ch 582, [1960] 2 All ER 327. The
contract, however, except as between the immediate parties and their personal representatives will be subject to the rule against perpetuities
and must be registered as a local land charge to be valid against a purchaser for value.
6 Smith v Day (1837) 2 M & W 684. Where the present lease and the reversionary lease were vested in the same person, the estate under
the former and the interesse termini (which existed prior to 1 January 1926) under the latter remained distinct. The two leases were not
merged together so as to entitle the lessee to the same rights as though he had a lease for the aggregate period, and they could not be added
together in order to determine the 'unexpired term' for the purposes of the compensation charge under the Licensing Act 1904 (repealed):
Lord Llangattock v Watney, Combe, Reid & Co Ltd [1910] AC 394; Knight v City of London Brewery Co [1912] 1 KB 10. Whether as a
result of the changes made by the Law of Property Act 1925, the two terms can now be treated as added together or merged is undecided, but
it would seem that by the abolition of the doctrine of interesse termini there is now no objection to such merger.
7 Cottage Holiday Associates Ltd v Customs and Excise Comrs [1983] QB 735, [1983] 2 WLR 861. The interest therefore was not a major
interest in land zero-rated under the provisions of the Finance Act 1972, Sch 4, Group 8, item 1 and the landlord was liable for value added
tax on the grant of a lease. The court did not need to consider any complication which might have been created by s 149(3), given that the
Customs and Excise Commissioners had accepted, for the purposes of the proceedings, that the leases granted were granted for a single
discontinuous term.
(c) Underleases
HR A[302]
The lessee of property can, in the absence of agreement restricting his right, underlet it for any period less than the
residue of his own term1, but if he purports to underlet by deed for a term equal to2, or greater than, the residue of his
own term, this operates as an assignment of his term, and not as an underlease3. Consequently, in such a case, no
reversion remains in the underlessor, and he cannot distrain for rent reserved by the underlease4, though he can sue for
it as rent, and not merely as an independent sum5.
HR A[303]
1 When an underlease is made for the whole term less one day, and the underlessor is trustee for the underlessee of the nominal reversion,
the underlessee can on the underlessor's death intestate obtain administration limited to the outstanding day for the purpose of getting it in:
Re Kingwell's Goods (1899) 81 LT 461. The underlease comes to an end with the head lease, and the underlessee does not, in the absence of
fresh agreement, become tenant to the head lessor (Simkin v Ashurst (1834) 1 Cr M & R 261), or to the new lessee (Freeman v Jury (1826)
Mood & M 19); but, if the underlessor continues to hold as tenant, the yearly under-tenancy also continues (Pearce v Shard (1828) 6
LJOSKB 354; see Hayes v Fitzgibbon (1870) IR 4 CL 500). For drafting underleases, see 22 Forms & Precedents (5th edn) [1015].
Page 71
2 Parmenter v Webber (1818) 8 Taunt 593; Beardman v Wilson (1868) LR 4 CP 57; Hallen v Spaeth [1923] AC 684 at 687, PC.
3 Hicks v Downing (1696) 1 Ld Raym 99; Pluck v Digges (1831) 5 Bli NS 31, HL; Thorn v Woollcombe (1832) 3 B & Ad 586 at 595;
Fawcett v Hall (1833) Alc & N 248 at 259n; Wollaston v Hakewill (1841) 3 Man & G 297 at 323; Bryant v Hancock & Co [1898] 1 QB 716
at 719, CA. A sublease by a tenant at will ipso facto determines the tenancy at will (Birch v Wright (1786) 1 Term Rep 378 at 382), and
hence it cannot operate as an assignment; but it creates a tenancy by estoppel as between the parties to the sublease (see Doe d Goody v
Carter (1847) 9 QB 863 at 865); a tenant at sufferance can, of course, create no interest binding on the landlord; cf Thunder d Weaver v
Belcher (1803)3 East 449 at 451.
4 Parmenter v Webber (1818) 8 Taunt 593; Preece v Corrie (1828) 5 Bing 24; Pascoe v Pascoe (1837) 3 Bing NC 898; Lewis v Baker
[1905] 1 Ch 46. Nor is the rent a rent seck within the Landlord and Tenant Act 1730, s 5, so as to attach to it the power of distress given by
that statute (------ v Cooper (1768) 2 Wils KB 375; Langford v Selmes (1857) 3 K & J 220; Lewis v Baker [1905] 1 Ch 46; cf Pluck v Digges
(1831) 5 Bli NS 31). There is no reversion by estoppel, nor does payment of the sum reserved as rent operate as an attornment so as to give a
power of distress: Hazeldine v Heaton (1883) Cab & El 40).
5 Baker v Gostling (1834) 1 Bing NC 19 at 27; Clarke v Coughlan (1841) 3 ILR 427 at 431; Creman v Johnson (1846) 9 I Eq R 143 at
145, 147; Pennefather v Stephans (1847) 11 I Eq R 61 at 62; see Lloyd v Langford (1677) 2 Mod Rep 174; Newcomb v Harvey (1690) Carth
161; Williams v Hayward (1859) 1 E & E 1040; and cf Smith v Mapleback (1786) 1 Term Rep 441.
HR A[304]
If the underlease is one which, considered as an underlease, can be made by parol, and is so made, it cannot operate as
an actual assignment for want of a deed1. It has been decided, however, that an assignment will arise by operation of
law on an oral agreement provided that the underlease would otherwise be effective in its own right2. Alternatively, it
may be that, if it cannot operate as an assignment, the above doctrine is excluded, and then, in order to give effect to the
intention of the parties, it would operate as a lease according to its tenor3. The true effect is, however, doubtful, though
the view that there is an assignment by operation of law is perhaps best4. A further possibility is that the purported parol
underlease takes effect as an agreement to assign. In any event the underlessor cannot sue for possession5, nor can he
distrain6.
HR A[305]
1 See as to leases by parol, para HR A[1162].
2 See Parc Battersea Ltd v Hutchinson [1999] 22 EG 149. See also Preece v Corrie (1828) 5 Bing 24 at 27; Milmo v Carreras [1946] KB
306, [1946] 1 All ER 288.
3 Poultney v Holmes (1720) 1 Stra 405; Pollock v Stacy (1847) 9 QB 1033.
4 In Preece v Corrie (1828) 5 Bing 24 it was suggested that the assignment, being by operation of law, need not be by deed. That view
was described as attractive, though not held to be either right or wrong, in Milmo v Carreras [1946] KB 306 at 312, [1946] 1 All ER 288 at
291, per Lord Greene MR. Other cases, such as Pollock v Stacy (1847) 9 QB 1033, assume that it must be by deed; and Poultney v Holmes
(1720) 1 Stra 405, was disapproved in the Court of Exchequer (Barrett v Rolph (1845) 14 M & W 348 at 352), though approved in the
Queen's Bench (Pollock v Stacy (1847) 9 QB 1033). Similarly, a parol assignment, void under the statute, will not be treated as an underlease
(Barrett v Rolph (1845) 14 M & W 348). The point formerly at issue between the Exchequer and the Queen's Bench seems not to have been
finally decided (see Beardman v Wilson (1868) LR 4 CP 57; and see also 2 Wms Saund (1871), 834n).
5 Milmo v Carreras [1946] KB 306, [1946] 1 All ER 288.

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6 Preece v Corrie (1828) 5 Bing 24. See n 4.
HR A[306]
It is usual to insert a covenant in a lease which prohibits subletting either absolutely or without the consent of the lessor.
If there is a subletting in contravention of the covenant the head landlord can defeat the lease and the sublease by
forfeiting the lease1.
HR A[307]
1 See Parker v Jones [1910] 2 KB 32.
(d) Tenancy from year to year
HR A[308]
A tenancy from year to year is regarded, for the purpose of this doctrine, as a tenancy continuing until it is in fact
determined, and the tenant can grant an underlease from year to year or for a term of years. So long as the original
tenancy lasts, it is potentially longer than the underlease, and the underlessor has a reversion by virtue of which he can
distrain for the rent reserved on the underlease1.
HR A[309]
1 Mackay v Mackreth (1785) 4 Doug KB 213; Curtis v Wheeler (1830) Mood & M 493; Pike v Eyre (1829) 9 B & C 909; Oxley v James
(1844) 13 M & W 209 at 214; Sharp v Coates [1949] 1 KB 285, [1948] 2 All ER 871; and the principle applies to other periodic tenancies:
Peirse v Sharr and Claughton (1828) 2 Man & Ry KB 418.
(e) Liability of underlessee to lessor
HR A[310]-[320]
Where the underlease does not operate as an assignment, there is neither privity of contract nor privity of estate between
the head lessor and the underlessee1, and hence the underlessee is not personally liable for the rent reserved by2, nor on
the covenants contained in, the head lease3; on the same principle the underlessee cannot normally enforce covenants in
the head lease against the head landlord4. But, unless he is protected by the Law of Distress Amendment Act 19085, his
goods upon the demised premises are liable to distress for the rent reserved by the head lease6 and, if the head lease
contains a proviso for re-entry on breach of covenant, he is liable to be evicted for such a breach7. Moreover, it is the
duty of the underlessee to inform himself of the covenants which are contained in the lease under which the underlessor
holds, and he is bound in equity to observe such of these covenants as are of a negative character8, on the ground that he
takes with notice, and he is liable to be restrained by injunction from committing a breach of them9; this is on the
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general principle that a restrictive covenant binds persons who take an interest in the land with notice of it, a doctrine
that depends on neither privity of contract nor privity of estate. The lessee, although personally liable on the covenant,
will not be included in the injunction10, unless he has caused or facilitated the breach - where, for instance, he is
prohibited by the lease from underletting11, or where he has represented to the underlessee that the act complained of
might be done12.
HR A[321]
1 Berney v Moore (1791) 2 Ridg Parl Rep 310 at 331; Beswick v Beswick [1968] AC 58, [1967] 2 All ER 1197, HL. (Law of Property Act
1925, s 56(1) does not affect the general rule that a stranger to a contract cannot sue or be sued on it). An underlessee may be liable under the
terms of the head lease, even though there be no privity of estate between him and the head lessor, if he be a person entitled under the Law of
Property Act 1925, Sch 1, Pt II, paras 3 and 6(d), to require a legal estate to be conveyed to or otherwise vested in him, and he has not under
the Law of Property (Amendment) Act 1926 disclaimed the vesting of the estate (Peachey v Young [1929] 1 Ch 449); and if the leasehold
title was registered with a possessory title before 1925; see Re King, Robinson v Gray [1962] 2 All ER 66, [1962] 1 WLR 632.
2 See Holford v Hatch (1779) 1 Doug KB 183.
3 Berney v Moore (1791) 2 Ridg Park Rep 310 at 323, 331; Slough Picture Hall Co Ltd v Wade, Wilson v Nevile, Reid & Co Ltd (1916) 32
TLR 542 at 544.
4 Taylor v Gillott (1875) LR 20 Eq 682; South of England Dairies v Baker [1906] 2 Ch 631. But where the covenant is one which touches
and concerns the land the effect of the Law of Property Act 1925, ss 78, 79 is that an undertenant can enforce the obligation against the head
landlord: Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500, [1949] 2 All ER 179.
5 Where the head lessor, whose tenant is in arrears with his rent, serves upon the underlessee, under the provisions of the Law of Distress
Amendment Act 1908 (see para HR A[3317]), a notice stating the amount of the rent due and requiring him to pay the rent to the head lessor
until such arrears are paid, the giving of the notice operates to transfer to the head lessor the right to recover, receive, and give a discharge
for the underlessee's rent; see Jarvis v Hemmings [1912] 1 Ch 462.
6 The liability of an undertenant is the same in this respect as of a stranger whose goods are on the demised premises at the time when a
distress is levied. If the undertenant pays the head rent under threat of distress, he can deduct this from his own rent (see paras HR A[3408]);
but he cannot claim contribution from an underlessee of another part of the premises demised by the head lease, since the underlessees are
not subject to a common demand (Hunter v Hunt (1845) 1 CB 300; see Johnson v Wild (1890) 44 Ch D 146; contra Webber v Smith (1689) 2
Vern 103; Allison v Jenkins [1904] 1 IR 341 (where contribution was based on salvage)). In Whitham v Bullock [1939] 2 KB 81, [1939] 2
All ER 310 it was held that, though contribution cannot be claimed, recoupment can, and the result appears to be the same as in a case where
the remedy of contribution is available.
7 See Spencer v Marriott (1823) 1 B & C 457. As to relief of an undertenant against forfeiture, see para HR A[9226].
8 Cosser v Collinge (1832) 3 My & K 283 at 287; see Lewis v Bond (1853) 18 Beav 85.
9 See Wilson v Hart (1866) 1 Ch App 463; Tritton v Bankart (1887) 56 LT 306; cf Hall v Ewin (1887) 37 Ch D 74, CA; and see Abbey v
Gutteres (1911) 55 Sol Jo 364. The rule applies to the case of an underlease to a tenant from year to year (Tritton v Banka (1887) 56 LT
306r); and, since the underlessee is supposed to examine the title to the lease under which the underlessor holds, as well as the lease itself, he
is also affected with notice of, and is bound in equity by, negative covenants contained in an assignment of the lease, although not contained
in the lease itself (Clements v Welles (1865) LR 1 Eq 200).
10 Moses v Taylor (1862) 11 WR 81.

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12 Tritton v Bankart (1887) 56 LT 306.
(f) Covenants by underlessor and underlessee
HR A[322]
Upon the granting of an underlease the obligations of the head lease in respect of the payment of rent and the
observance of the covenants in respect of any of the property in the head lease which is not comprised in the underlease,
are usually imposed by express covenant on the underlessor, while the underlessee covenants for payment of his own
rent and enters into covenants in respect of the subdemised property corresponding to those in the head lease; and the
covenants on either side may be accompanied by an express covenant of indemnity1. Where the underlessor gives a
covenant of indemnity against non-payment of the head rent, payment by the underlessee of his own rent is not a
condition precedent to an action by him on the covenant of indemnity2.
HR A[323]
1 See Ebbetts v Conquest [1895] 2 Ch 377 at 382, CA. A mortgagee by subdemise, who has gone into possession, may be liable to the
mortgagor for forfeiture of the lease: Perry v Walker (1855) 24 LJ Ch 319. If an underlessee has caused a forfeiture both of his own and the
head lease he is not entitled to the benefit of a waiver of the forfeiture of the head lease: Hillier v Parkinson (1831) 9 LJOS Ch 156. Where
the head lease includes a covenant by the lessee therein to repair and in an underlease that lessee as underlessor covenants to observe the
covenants in the head lease, the underlessor is liable to the underlessee for damages for breach of covenant to repair, and his covenant is not
one of indemnity only: Ayling v Wade [1961] 2 QB 228, [1961] 2 All ER 399. For precedent of a covenant by an underlessee to perform the
lessee's covenants in the head lease see 22 Forms & Precedents (5th edn) [1020].
2 Briant v Pilcher (1855) 16 CB 354.
HR A[324]
The question of indemnity is important with reference to the covenant to repair. An independent covenant to repair in
the underlease, following the terms of the corresponding covenant in the head lease, is not by itself construed as a
covenant of indemnity and the underlessor cannot recover under it the costs which he has incurred by reason of the
underlessee's default, such as costs of defending an action for possession and procuring relief against forfeiture1. Where
there is no covenant of indemnity, whether or not the head lessee is able to pass on all the liability for disrepair will
depend upon (1) the difference between the repairing covenants in the head lease and the underlease and (2) the effect
of the disrepair on the value of the reversion to the head lease and the underlease for the purpose of s 18(1) of the
Landlord and Tenant Act 19272. If, however, the underlease does not contain an independent covenant to repair, but
binds the underlessee to perform the covenant in the head lease, a contract of indemnity is implied, and the underlessor
can recover the costs of an action which he has reasonably defended3. It seems that in any case he can recover the
expenses of repairs which have been properly effected by him to avoid a forfeiture4; and he can recover substantial
damages for breach of the underlessee's covenant to repair, notwithstanding that the head lessor has re-entered for
non-payment of the head rent5. The head lessee could join the underlessee in any proceedings by making him a third
party6.
HR A[325]
Page 75
1 Penley v Watts (1841) 7 M & W 601; Walker v Hatton (1842) 10 M & W 249; Logan v Hall (1847) 4 CB 598 at 624; Clare v Dobson
[1911] 1 KB 35; cf Short v Kalloway (1839) 11 Ad & El 28. Neale v Wyllie (1824) 3 B & C 533, contra, is overruled.
2 It has been held in Lloyds Bank Ltd v Lake [1961] 2 All ER 30, [1961] 1 WLR 884 that the fact that the reversion on a sublease is only
momentary and notional does not prevent it from being valued. See also Crown Estate Comrs v Town Investments Ltd [1992] 1 EGLR 61
and Shortlands Investments Ltd v Cargill plc [1995] 1 EGLR 51.
3 Hornby v Cardwell (1881) 8 QBD 329, CA.
4 Colley v Streeton (1823) 2 B & C 273.
5 Davies v Underwood (1857) 2 H & N 570; cf Clow v Brogden (1840) 2 Man & G 39.
6 See RSC Ord 16; and see eg Crown Estate Comrs v Town Investments Ltd [1992] 1 EGLR 61.
(g) Necessity for underlessee to inspect immediately superior lease
HR A[326]
An intending underlessee should examine the immediately superior lease in order to ascertain that the term of the
underlease can be validly granted, and that the superior lease contains no unduly onerous covenants. If the subterm is, in
fact, longer than the original term, the underlessee cannot, after the underlease has been granted, obtain compensation1,
unless the agreement for the underlease so provides2. After the agreement for an underlease has been entered into the
underlessee, whether he has had a chance of inspecting the head lease or not, cannot refuse to accept the underlease on
the ground of the existence of any ordinary covenants3; for in the absence of any term in the agreement to the contrary,
and in the absence of any evidence that he has in fact been made acquainted with the actual terms of the lease, the
agreement must be read as an agreement for an underlease containing the usual covenants4; but he can refuse to accept
it on the ground of the existence of unusual and onerous covenants, unless the agreement otherwise provides or he has
in fact been made acquainted with them5. If the agreement for the underlease provides for the insertion of a particular
restrictive covenant, this amounts to a representation that the underlessor is entitled to grant a lease with that restriction
only, and he is not at liberty to insist on the insertion of a wider covenant contained in the head lease6. But although an
underlessor may not be able to have specific performance of an agreement for the underlease, by reason of the
covenants in the head lease debarring him from granting the underlease in accordance with the agreement, yet if he is
ready to grant the underlease, and the underlessee refuses to accept it, he has an action for breach of the agreement, and
the underlessee, on the other hand, if his enjoyment is interfered with, should have a remedy on the covenant for quiet
enjoyment7.
HR A[327]
1 Besley v Besley (1878) 9 Ch D 103; Clayton v Leech (1889) 41 Ch D 103, CA, where it was pointed out that Palmer v Johnson (1884)
13 QBD 351, CA went too far in treating Besley v Besley as erroneous.
Page 76
2 Palmer v Johnson (1884) 13 QBD 351. A lessee, subject to covenants which give a right of re-entry for breach under a lease which
includes other premises, cannot compel specific performance of an agreement to purchase, even though he offers to indemnify the purchaser
(Fildes v Hooker (1818) 3 Madd 193; Warren v Richardson (1830) You 1; Leathem v Allen (1850) 1 I Ch R 683.
3 Flight v Barton (1832) 3 My & K 282. 'Usual covenants' in this connection means ordinary covenants, not merely 'usual covenants' in
the strict technical sense; see para HR A[1208]; cf Bennett v Womack (1828) 7 B & C 627.
4 Melzak v Lilienfeld [1926] Ch 480 at 492.
5 Hyde v Warden (1877) 3 Ex D 72 at 80, CA; Melzak v Lilienfeld [1926] Ch 480 at 492. The same rule applies between vendor and
purchaser of leasehold property: Reeve v Berridge (1888) 20 QBD 523, CA; Re White and Smith's Contract [1896] 1 Ch 637; Re Haedicke
and Lipski's Contract [1901] 2 Ch 666 at 669; Molyneaux v Hawtrey [1903] 2 KB 487, CA; Allen v Smith [1924] 2 Ch 308; Melzak v
Lilienfeld [1926] Ch 480 at 492.
6 Van v Corpe (1834) 3 My & K 269 at 277.
7 Hayward v Parke (1855) 16 CB 295.
(h) Agreement for underlease to contain same covenants as lease
HR A[328]
Where the agreement for an underlease provides that the underlease shall contain the like provisions in all respects as
are contained in the head lease, the provisions of the head lease are to be taken as models for those in the underlease,
and must be introduced therein with the proper alterations of names and other matters. Consequently, a provision
against assigning without the consent of the head lessor will become in the underlease a provision against assigning
without the consent of the underlessor1; but the tenor of the agreement may indicate that certain covenants, such as the
covenant against assignment without consent, are to be introduced without modification, and then the consent of the
head lessor will be required2. Where a lessee grants an underlease containing a covenant by the underlessee to deliver
up the premises and all landlord's fixtures at the end of the subterm, this does not amount to a representation that he will
be at liberty to remove trade fixtures; and hence if the head lease contains a covenant for delivery up of trade fixtures,
and the head lessor enforces this by preventing the underlessee from removing them, the latter is without remedy3.
HR A[329]
1 Williamson v Williamson (1874) 9 Ch App 729.
2 Haywood v Silber (1885) 30 Ch D 404, CA. In the absence of any such provision in the underlease, the underlessee is not bound by the
stipulations in the head lease: Williamson v Williamson (1874) 9 Ch App 729 at 732; Slough Picture Hall Co Ltd v Wade, Wilson v Nevile,
Reid & Co Ltd (1916) 32 TLR 542 at 544.
3 Porter v Drew (1880) 5 CPD 143.

Page 77
tenant/C Capacity to make and take leases
C
Page 78
tenant/C Capacity to make and take leases/1 Capacity generally
1 Capacity generally
HR A[330]-[340]
An owner absolutely entitled in fee simple, who is an individual and is under no personal incapacity, has, as incident to
his right of disposition, power to grant leases for such periods, and on such terms and conditions, as he pleases provided
that he does not discriminate against any potential tenants on the grounds of the person's sex or race. An individual who
is under no personal disability which incapacitates him from contracting or from holding land is able to accept any such
lease. Persons entitled to limited, or defeasible, or partial interests in property, persons under disability, and
corporations, can grant leases to the extent permitted by law in the particular case. Similarly, persons under disability
and corporations can accept leases to the same extent. Particular cases are considered in the following paragraphs1.
HR A[341]
1 See paras HR A[342] TO [548]FF.
(a) Aliens
HR A[342]
An alien can now acquire, hold and dispose of real property in the United Kingdom and personal property of every
description other than a British ship in the same manner as a British subject. Title to real property in the United
Kingdom and personal property of every description can, likewise, be derived through, from, or in succession to, an
alien1. A lease cannot be granted to an alien enemy but a lease granted before the outbreak of war to a person who
becomes an alien enemy is not determined and liability for rent continues2. However, an enemy tenant cannot claim an
indemnity against an assignee by third party proceedings as his remedies are suspended which he is an alien enemy3.
HR A[343]
1 See the British Nationality and Status of Aliens Act 1914, s 17; as amended by the British Nationality Act 1948, s 34, Sch 4, Pt II. There
were previous statutory restrictions on the capacity of aliens to hold leases; all such restrictions were abolished by the Naturalization Act
1870, now replaced by the Status of Aliens Act 1914.
2 London and Northern Estates Co v Schlesinger [1916] 1 KB 20 and Halsey v Lowenfeld [1916] 2 KB 707.
3 Halsey v Lowenfield [1916] 2 KB 707.

Page 79
(b) Trustee in bankruptcy
HR A[344]
A trustee in bankruptcy has the same powers of leasing as the bankrupt had before the bankruptcy. The trustee of a
bankrupt lessee, unless he has disclaimed the lease, or unless the lease contains a clause providing for forfeiture on
bankruptcy of the lessee, has all the powers of an assignee of the lease1.
HR A[345]
1 See the Insolvency Act 1986, ss 305(2) and 314, Sch 5. See further the Law of Property Act 1925, ss 110, 146(9), (10).
(c) Building societies
HR A[346]
A building society incorporated under the Building Societies Act 1986, as amended by the Building Societies Act 1997,
has the powers1 conferred on it by its memorandum2. Accordingly, the capacity of any society to acquire and hold
premises will depend upon the powers conferred on it by its memorandum. Before the amendments made by the 1997
Act the position was that a building society incorporated under the 1986 Act might acquire and hold premises for the
purpose of conducting its business3; and might, otherwise than by acquisition, provide itself with premises for the same
purpose4. Also before those amendments, larger building societies5 might acquire, hold or dispose of land by way of
lease where the land was or was to be used (a) primarily for residential purposes, or (b) for purposes incidental to the
present or future residential use of adjoining land which is or is to be held by the society6.
HR A[347]
1 These powers are subject to the provisions of the Building Societies Act 1986: s 5(5) as amended by the Building Societies Act 1997, ss
1 and 3(1).
2 BSA 1986 s 5(5) and Sch 2 para 2(2)(c) as amended by the BSA 1997.
3 BSA 1986, s 6(1) as unamended; 'acquire' and 'hold' include, as well as outright purchase, the taking etc of premises upon lease.
4 BSA 1986, s 6(2) as unamended. The following would be among the activities permitted by this subsection: occupying premises under
contractual licence and constructing premises on vacant land owned or leased by the society.
5 Ie those having a qualifying asset holding within s 118(1) as unamended: s 17(9) as unamended. The powers conferred by s 17 did not
become exercisable until they had been adopted by the society: s 17(11) as unamended.
Page 80
6 BSA 1986, s 17(1), (2) as unamended.
HR A[348]-[360]
Where a society holds land as a mortgagee in possession, it may grant leases thereof in accordance with the Law of
Property Act 19251; any lease so granted must comply with the 1925 Act whether or not the society makes rules on this
subject2.
HR A[361]
2 The topic does not have to be covered by a society's rules: Building Societies Act 1986, Sch 2, para 3.
(d) Leases by charities before 1993
HR A[362]
At common law, the trustees of a charity had a general power of leasing, provided that such leases were for the benefit
of the charity1. But such transactions were dangerous unless sanctioned by the court, for the onus was on the trustees to
show that they had not committed a breach of trust2 and on the lessee to show that the lease was beneficial to the
charity3. Prior to 1993, most lands held on charitable trusts were subject to the jurisdiction of the Charity
Commissioners and leases of such lands (except for leases within the operation of the Landlord and Tenant Act, 19274)
were valid only if made, prior to 1 January 1961, according to the requirements of the Charitable Trusts Acts 1853 to
19395 or, if made after that date but before 1 January 1993, in accordance with the Charities Act 19606.
HR A[363]
1 A-G v Warren (1818) 2 Swan 291 at 302, 303.
2 A-G v South Sea Co (1841) 4 Beav 453.
3 A-G v South Sea Co (1841) 4 Beav 453.
4 The Landlord and Tenant Act 1927, ss 14, 24.
5 The trustees were prohibited, except under the express authority of Parliament or of the court or according to a scheme legally
established, or with the approval of the Charity Commissioners or of the Secretary for Education, as successor of the Board of Education, as
the case may be, from granting a lease of the charity estates in reversion after more than three years of any existing term, or for any term of
life or in consideration wholly or partly of a fine or for any term exceeding 21 years (Charitable Trusts Amendment Act 1855, s 29). A lease
in contravention of these provisions was absolutely void (Bishop Bagnor v Parry [1891] 2 QB 277). The Charity Commissioners could
authorise the trustees or administrators of a charity to let the charity estates, or any part of them, on building, improving, mining or other
Page 81
leases if they considered such leases would be for the benefit of the charity (Charitable Trusts Act 1853, s 21). The acting trustees of any
charity, or the majority of them, had the same power of granting leases of lands vested in the Official Trustee of charity lands as if the lands
were vested in themselves (Charitable Trusts Amendment Act 1855, s 16). Where trustees or administrators of a charity had power to lease,
a majority of them who were present at a meeting of their body duly constituted and voted on the question had, and were deemed to have
always had, full power to lease; leases so granted were as valid as if they were executed by all the trustees or administrators and by the
Official Trustee (Charitable Trusts Act 1869, s 12) for classes of property exempted from the Charitable Trusts Acts, see Charitable Trusts
Act 1853, s 62.
6 See Charities Act 1960, s 17(2) (leases of land vested in the official custodian of charity lands); s 18 (schemes); s 23 (power to authorise
dealings with charity property); s 29 (restrictions on dealings with charity property with exemption for leases for not more than 22 years
where no fine is taken).
(e) Leases by charities after 1992
HR A[364]
Sections 36 to 40 of the Charities Act 1993 and s 36 of the Charities Act 1992 make new provisions in relation to the
dispositions of charity land by trustees1. No land held by or in trust for a charity may be sold, leased or otherwise
disposed of without an order of the court or of the Charity Commissioners2. However, this restriction does not apply to
a disposition of such land if the disposition is made to a person who is not a connected person3 (or a trustee or nominee
for such a person) and certain specified requirements have been complied with in relation to it4.
HR A[365]
1 The 1992 Act introduced the changes which came into effect on 1 January 1993: see Charities Act 1992 (Commencement No 1 and
Transitional Provisions) Order 1992, SI 1992/1900. The provisions of the 1992 Act were consolidated in the 1993 Act, which came into
force on the 1 August 1993: see s 99.
2 Charities Act 1993, s 36(1).
3 Connected persons are defined in Sch 5.
(f) Leases for not more than seven years
HR A[366]
Where the proposed disposition is the granting of a lease for a term ending not more than seven years after it is granted
(other than one wholly or partly in consideration of a fine), the charity trustees must, before entering into an agreement
for the lease: (a) obtain and consider the advice on the proposed disposition of a person who is reasonably believed by
the trustees to have the requisite ability and practical experience to provide them with competent advice on the proposed
disposition; and (b) decide that they are satisfied, having considered that person's advice, that the terms on which the
disposition is proposed to be made are the best that can reasonably be obtained for the charity1.
Page 82
HR A[367]
(g) Other leases
HR A[368]
In all other cases the charity trustees must before entering into an agreement for the sale, or for a lease or other
disposition, of the land: (a) obtain and consider a written report on the proposed disposition from a qualified surveyor1
instructed by the trustees and acting exclusively for the charity; (b) advertise the proposed disposition for such period
and in such manner as the surveyor has advised in his report (unless he has there advised that it would not be in the best
interests of the charity to advertise the proposed disposition); and (c) decide that they are satisfied, having considered
the surveyor's report, that the terms on which the disposition is proposed to be made are the best that can reasonable be
obtained for the charity2.
HR A[369]
1 A fellow or professional associate of the Royal Institution of Chartered Surveyors or of the Incorporated Society of Valuers or
Auctioneers or satisfying any other requirement prescribed by regulations: Charities Act 1993, s 36(4).
(h) Further restrictions
HR A[370]-[380]
Where any land is held by or in trust for a charity, and the trusts on which it is held stipulate that it is to be used for the
purposes, or any particular purposes of the charity, then the land must not be sold, leased or otherwise disposed of
unless the charity trustees have previously given public notice of the proposed disposition, inviting representations to be
made to them1 and taken into consideration any representations made to them. This does not apply if the disposition is
to be effected with a view to acquiring replacement property or the disposition is the granting of a lease for a term
ending not more than two years after it is granted (other than one granted wholly or partly in consideration of a fine)2.
HR A[381]

Page 83
(i) Exceptions
HR A[382]
The restrictions imposed by s 36 apply notwithstanding anything in the trusts of a charity but they do not apply to: (a)
any disposition for which authority is expressly given by any Act of Parliament or by any scheme legally established; or
(b) any disposition of land held by or in trust for a charity made to another charity otherwise than for the best price that
can reasonably be obtained, and authorised to be made by the trusts of the first-mentioned charity; or (c) the granting,
by or on behalf of a charity and in accordance with its trusts, of a lease to any beneficiary under those trusts where the
lease: (i) is granted otherwise than for the best rent than can reasonably be obtained; and (ii) is intended to enable the
demised premises to be occupied for the purposes, or any particular purposes, of the charity1.
HR A[383]
(j) The lease
HR A[384]
Any lease granted must state (i) that the land is held by or on trust for a charity, (ii) whether the charity is an exempt
charity and whether the disposition is within the exceptions set out above and (ii) if it is not an exempt charity and the
disposition is not one falling within those exceptions that the land is land to which the restrictions above apply1. Where
any land is disposed of by a disposition authorised under s 36(1) or (2) the charity trustees must certify in the instrument
either that it has been sanctioned by an order of the court of the commissioners or that the charity trustees have power
under the trusts to effect the disposition and that they have complied with the relevant requirements.2 Where this is
done then in favour of a purchaser, it is conclusively presumed that the facts are as stated in the certificate3. Where it is
not done but land is disposed of by a disposition to which s 36(1) or (2) applies then in favour of a person who in good
faith acquires an interest in the land for money or money's worth, the disposition shall be valid whether or not the
requirements have been complied with4.
HR A[385]
2 CA 1993, s 37(2).
3 CA 1993, s 37 (3).
Page 84
4 CA 1993, s 37(4).
(k) Charities and settled land
HR A[386]
Before 1 January 1997 trustees in whom land was vested on charitable, ecclesiastical or public trusts had in reference to
such land the powers of leasing conferred upon a tenant for life by the Settled Land Act 1925. Those powers were
exercisable only subject to such consents or orders, if any, being obtained as would, if the Settled Land Act 1925 had
not been passed, have been requisite if the lease had been made under an express power conferred by the instrument
creating the trust1. Since 1 January 19972 no land held on charitable, ecclesiastical or public trusts shall be or be
deemed to be settled land, even if it was or was deemed to be settled land before that date3 instead such trusts are now
trusts of land4 under the Trusts of Land and Appointment of Trustees Act 1996. The trustees have all the powers of
leasing of trustees of land under that Act5.
HR A[387]
1 Settled Land Act 1925, s 29(1), (2). This section is amended from 1 January 1961, by the Charities Act 1960, s 48(3), Sch VII, Pt I.
2 See the Trusts of Land and Appointment of Trustees Act 1996 (Commencement) Order 1996, SI 1996/2974.
3 TLATA 1996, s 2(5).
4 See paras HR A[533]-[538].
5 TLATA 1996, s 6.
(l) Companies
HR A[388]
With the repeal of the law of mortmain1 all companies regulated by the Companies Act 1985 have an unrestricted
power of holding lands. There being no restriction on the mode in which the company may acquire land, this provision
authorises the taking of land on lease, if required for the purposes of the company as stated in its memorandum of
association; and, having acquired land by purchase or lease, the company can let the land so far as the objects as set
forth in the memorandum of association of the company expressly or impliedly authorise the letting of its property2.
Usually, express provision, authorising the taking of land on lease and the letting of the property of the company, is
made by the memorandum of association3. However, it is provided that the validity of an act done by a company shall
not be called into question on the ground of lack of capacity by reason of anything in the company's memorandum4. In
favour of a person dealing with a company in good faith, the power of the board of directors to bind the company, or
authorise others to do so, is deemed to be free of any limitation under the company's constitution5. There is no duty on a
party to a transaction with a company to inquire as to its capacity to enter into it or as to the authority of its directors to
bind the company6.
Page 85
HR A[389]
2 A lease of the undertaking of the company may be sanctioned as a term in a scheme of arrangement made under the Companies Act
1985, s 425. See Re Dynevor, Dyffryn and Neath Abbey Collieries Co (1879) 11 Ch D 605, CA.
3 If the company takes premises which are the best that can be got for its purposes, it is no objection to the validity of the lease that the
premises are too large, and that part will have to be sublet: Re London and Colonial Co Horsey's Claim (1868) LR 5 Eq 561 at 562, n(1).
Directors entering into an agreement for a lease in their own names are personally liable: (Kay v Johnson (1864) 2 Hem & M 118.
4 Companies Act 1985, s 35(1).
5 CA 1985, s 35A(1).
6 CA 1985, s 35B.
HR A[390]-[400]
The repeal of the law of mortmain also enables an overseas company to hold property in the same way as a company
regulated by the Companies Act 1985, though formerly it could only do so if it registered certain prescribed particulars
and if it failed to do so it could not take a lease or accept an assignment without licence in mortmain1. Where a
company is dissolved, leasehold property vested in or held on trust for the company vests in the Crown, or in the Duchy
of Lancaster, or in the Duchy of Cornwall for the time being, as bona vacantia2.
HR A[401]
1 A-G Parsons [1956] AC 421, [1956] 1 All ER 65; Morelle Ltd v Wakeling [1955] 2 QB 379, [1955] 1 All ER 708.
2 Companies Act 1985, s 654. See further para HR A[7445].
(m) Form of contracts by companies
HR A[402]
A company registered under the Companies Act 1985 or the former Companies Acts may contract by itself by writing
under its common seal or on behalf of it by any person acting under its authority, express or implied1. Any formalities2
required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a
contract made by or on behalf of a company3. Such companies are not subject to the Corporate Bodies Contracts Act
19604.
Page 86
HR A[403]
1 Companies Act 1985, s 36, as substituted by the Companies Act 1989, s 130.
2 Eg Law of Property (Miscellaneous Provisions) Act 1989, s 2 and Law of Property Act 1925, s 54.
3 Companies Act 1985, s 36.
4 Corporate Bodies Contracts Act 1960, s 2, as substituted by the Companies (Consequential Provisions) Act 1985, s 30.
(n) Convicts
HR A[404]
Formerly, a person who had been convicted of treason or felony, and sentenced to death or penal servitude, was
precluded from leasing any property1, except when he was lawfully at large2, or had suffered his punishment or
received a pardon3. During his disability, the administrator of his property could let any part thereof at his discretion4;
and he could take such leases as might become necessary to the proper management of the convict's property5. These
provisions, however, ceased to have effect on 18 April 1949 and a person who has been convicted of any crime is no
longer under any disability with regard to the grant or acceptance of leases6. At one time a lease held by a person
attained of treason or felony was forfeited to the Crown, but forfeiture per delictum tenentis has long been abolished7.
HR A[405]
1 Forfeiture Act 1870, s 8.
4 Forfeiture Act 1870, ss 9, 12.
6 Criminal Justice Act 1948, ss 70, 83.
(o) Co-owners
Page 87
HR A[406]
Before 1926, land might be held by two or more persons as joint tenants, tenants in common, or as coparceners, but
from 1 January 1926, the only form of co-ownership of a legal estate is that of holding as joint tenant1. A lease after
that date to any persons of full age in undivided shares operates as if the land had been expressed to be demised to the
grantees, or, if there are more than four, to the four first named in the lease, as joint tenants upon the statutory trusts2,
and so as to give effect to the rights of the persons who would have been entitled to the shares had the lease operated to
create those shares3. Where a legal estate, not being settled land4, is beneficially limited to or held in trust for any
persons as joint tenants, it is held on trust for sale, in like manner as if the persons beneficially entitled were tenants in
common, but not so as to sever their joint tenancy in equity5. Such a trust is now a trust of land6 within the meaning of
the Trusts of Land and Appointment of Trustees Act 19967 and the power of leasing is that conferred by that Act.8
HR A[407]
1 Tenancy in common in a legal estate was abolished by the Law of Property Act 1925, ss 1(6), 34(1). The entirety of land vested before
1926 in persons as tenants in common became vested in accordance with the Law of Property Act 1925, s 39(4), Sch 1, Pt IV, upon the
statutory trusts.
2 Land held upon the statutory trusts is held upon trust to sell the same and to stand possessed of the net proceeds of sale, after payment of
costs, and of the net rents and profits until sale, after payment of rates, taxes, costs of insurance, repairs and other outgoings, upon such
trusts, and subject to such powers and provisions, as may be requisite for giving effect to the rights of the persons interested in the land: Law
of Property Act 1925, s 35.
3 LPA 1925, s 34(2).
4 'Settled land' has the same meaning as in the Settled Land Act 1925, which includes land deemed to be settled land; see LPA 1925, s
205(1)(xxvi); Re Gaul and Houlston's Contract [1928] Ch 689, CA.
5 LPA 1925, s 36(1). The section is not merely a transitional section: Re Gaul and Houlston's Contract [1928] Ch 689 at 700; Re King's
Theatre, Sunderland, Denman Picture Houses v Thompson and Collins Enterprises [1929] 1 Ch 483 at 495.
6 Trusts of Land and Appointment of Trustees Act 1996, s 5(1) and Sch 2.
7 See paras HR A[533] to [538].
8 TLATA 1996, s 6(1).
HR A[408]
Where land is settled, and two or more persons of full age are entitled for life as joint tenants, they together constitute
the tenant for life for the purpose of the Settled Land Act 1925, and they must therefore join in the exercise of the
statutory power of leasing1. If the persons so entitled are not all of full age, such one or more of them as is, or are, of
full age constitutes or together constitute the tenant for life2. No new Settled Land Act settlements may be created after
1 January 19973.
HR A[409]
Page 88
1 Settled Land Act 1925, s 19(2), but see the LPA 1925, Sch 1, Pt IV, para 4.
2 SLA 1925, s 19(3).
3 Trusts of Land and Appointment of Trustees Act 1996, s 2(1).
(p) Position between co-owners
HR A[410]-[420]
One lessee who is a joint tenant and pays the rent is entitled to contribution from the others but not from the personal
representatives of another after his death1. Where a joint tenant is in occupation he is not normally liable to pay rent to
the other as they are equally entitled to occupation2. However, where one co-owner has been ousted by another then he
is entitled to an occupation rent from the other3. A notice to quit can be given by one of two co-owners even though the
other does not consent4. This is because a contractual joint tenancy held by two or more joint tenants continues only so
long as they all agree in its continuation.
HR A[421]
1 Cunningham-Reid v Public Trustee [1944] KB 602, [1944] 2 All ER 6, CA.
2 Jones v Jones [1977] 2 All ER 231, [1977] 1 WLR 438.
3 Dennis v McDonald [1982] Fam 63.
4 Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478, [1992] 1 All ER 1.
(q) Corporations
HR A[422]
A statutory corporation1 has such power of granting or accepting leases as is expressly conferred upon it by its
constitution2, or is implied from the nature of its objects. A corporation created otherwise than by statute has the same
power of dealing with its property and contracting as an individual, and hence it may make and take leases except so far
as the general power is restricted by its constitution or by statute3. A corporation may contract without the necessities of
a seal in all cases of contracts which if made by private individuals would not have needed to be under seal4. Formerly
a contract by a corporation generally had to be under seal5.
Page 89
HR A[423]
1 As to companies regulated by the Companies Act 1985, which are, of course, a form of corporation see para HR A[388].
2 In general, where power to lease is given by statute, the requirements of the statute must be strictly complied with (Kent Coast Rly Co v
London, Chatham and Dover Rly Co (1868) 3 Ch App 656); but power to sell or exchange land given by a private Act may authorise the
grant of a building lease with an option to purchase: Re Female Orphan Asylum (1867) 15 WR 1056.
3 See Colchester Corpn v Lowten (1813) 1 Ves & B 226 at 244. Formerly, land could not be assured to or for the benefit of, or be
acquired by or on behalf of, a corporation in mortmain otherwise than under the authority of a licence from the Crown, or of a statute for the
time being in force, and if any land was so assured without such authority, the land was liable to be forfeited to the Crown from the date of
the assurance, but the law of mortmain has been replaced from 20 July 1960, by the Charities Act 1960; see para HR A[386], n 2.
4 Corporate Bodies' Contracts Act 1960, s 1. This Act does not apply to any company formed and registered under the Companies Act
1985 or an existing company as defined in that Act.
5 The exceptions to the requirement of a seal may be summarised under the following categories: (1) routine and frequent contracts; (2)
where the use of a seal was rendered unnecessary by the constitution of the corporation; (3) contracts by trading companies within the scope
of their constitution (South of Ireland Colliery Co v Waddle (1868) LR 3 CP 463); (4) executory contracts connected with the purposes of a
non-trading corporation: Lawford v Billericay RDC [1903] 1 KB 772. Where a lease by a corporation should have been, but was not, under
seal, a lessee who had entered and paid rent under it was a tenant from year to year and was bound by such of the terms of the lease as were
applicable to a yearly tenancy (Wood v Tate (1806) 2 Bos & PNR 247; Stafford Corpn v Till (1827) 4 Bing 75; Doe d Pennington v Taniere
(1848) 12 QB 998; Ecclesiastical Comrs v Merral (1869) LR 4 Exch 162); but a tenancy of an incorporeal hereditament cannot be thus
created (R v North Duffield Inhabitants (1814) 3 M&S 247). As to the operation of an invalid lease as an agreement, see para HR A[1164].
A corporation may become liable for the use and occupation of land: Lowe v London and North Western Rly Co (1852) 18 QB 632.
HR A[424]
Any corporation holding land has power to lease the land for the erection of dwelling-houses for the working classes for
such rent as, having regard to the purpose for which the land is to be used and all the circumstances of the case, is the
best that can reasonably be obtained, notwithstanding that a higher rent might have been obtained if the land were
leased for another purpose1.
HR A[425]
1 Housing Act 1985, s 31.
(r) Ecclesiastical corporations
HR A[426]
By the common law ecclesiastical corporations aggregate, such as the dean and chapter, were capable of granting leases
for any term without the consent or confirmation of any person whomsoever. But ecclesiastical corporations sole,
consisting of one person such as a bishop, could only make leases co-durable with their own estate with the consent or
confirmation of such person as the law required1 which being obtained they could exercise equally unlimited powers.
Page 90
This common law power has been controlled and restrained by numerous Acts of Parliament which it is necessary to
consult to determine any question arising in relation to such land2.
HR A[427]
1 Co Litt 44a; 2 Bla Com 318-321; Shep Touch 281.
2 See on this question: 14 Halsbury's Laws (4th edn) paras 1153-1157.
(s) The Crown
HR A[428]
The letting of Crown lands is subject to the provisions of the Crown Estate Act 19611. Subject to conditions thereby
prescribed, the Crown Estate Commissioners2 may lease any Crown land, or any easement, right, or privilege of any
kind over or in relation to the land, for a term ending not more than 150 years from the date of the lease. Every such
lease must take effect in possession not more than one year after its date or in reversion on an existing lease with not
more than 21 years to run3. It must not be granted except for the best consideration in money or money's worth which in
the Commissioner's opinion can reasonably be obtained having regard to all the circumstances of the case but excluding
any element of monopoly value attributable to the extent of the Crown's ownership of comparable land.
HR A[429]
1 As to leases of lands of the Duchy of Lancaster and Duchy of Cornwall, and of land comprised in the private estates of the Crown, see
12(1) Halsbury's Laws (4th edn), paras 314, 334 and 359.
2 The Commissioners were formerly known as the Commissioners of Crown Lands and earlier as the Commissioners of Woods, but by
the combined operation of the Forestry (Transfer of Woods) Act 1923 and the Forestry (Title of Commissioners of Woods) Order 1924, SR
& O 1924/1370, and the Crown Estate Act 1961 their name was changed to that of Crown Estate Commissioners.
3 Crown Estate Act 1961, s 3(2) as amended by the Miscellaneous Financial Provisions Act 1983, s 5.
4 CEA 1961, s 3(1).
(t) Executors and administrators
HR A[430]-[440]
In dealing with the real and personal estate of a deceased person his personal representatives have, for purpose of
administration, or during the minority of any beneficiary or the subsistence of any life interest, or until the period of
Page 91
distribution arrives, the same leasing powers1, as the trustees2 under a trust of land3. A lease made by personal
representatives for these purposes can contain an option to purchase4. An executor can make a lease before probate5,
but an administrator can only do so after the grant of letters of administration6. Where there are two or more personal
representatives, a lease of real estate7, devolving under the provisions relating to the devolution of real estate, requires
the concurrence therein of all such representatives or an order of the court; but if probate is granted to one or some of
two or more persons named as executors, whether or not power is reserved to the other or others to prove, any lease of
the real estate may be made by the proving executor or executors for the time being, without an order of the court, and is
as effectual as if all the persons named as executors had concurred therein8.
HR A[441]
1 Administration of Estates Act 1925, s 39(1), as amended by the Trusts of Land and Appointments of Trustees Act 1996, s 25(1) and Sch
3, para 6. In addition to the leasing powers conferred by the Administration of Estates Act 1925, s 39(1), all such powers of disposition and
dealing as were formerly exercisable as respects chattels real by personal representatives are now exercisable by the personal representatives
of the deceased with respect to his real estate (s 2(1)). Before 1926 executors and administrators had an absolute power of disposition over
leasehold property of the deceased, and, as incident to that power, they could grant underleases which were good in law, but this was
regarded as being an exceptional way of dealing with the assets, and the underlease was only supported in equity if the granting of it was the
best way of administering the estate: see Keating v Keating (1835) L & G temp Sugd 133; Hackett v M'Namara (1836) L & G temp Plunk
283; Oceanic Steam Navigation Co v Sutherberry (1880) 16 Ch D 236, CA. It was held that if the persons beneficially interested required a
sale, a lease should not be granted: Drohan v Drohan (1809) 1 Ball & B 185. These principles now apply not only to underleases of
leaseholds but also to leases of freeholds except in so far as the personal representatives have further powers under the Administration of
Estates Act 1925, s 39(1).
2 TLATA 1996, s 6(1).
3 See paras HR A[533] to [538].
4 See previously Settled Land Act 1925, s 51 but now see TLATA 1996, s 6(1). Before 1926 such an option could not be given by the
representative: Oceanic Steam Navigation Co v Sutherberry (1880) 16 Ch D 236; Johnson v Clarke [1928] Ch 847.
5 Roe d Bendall v Summerset (1770) 2 Wm Bl 692 at 694; but if he dies before probate the will must be subsequently proved in order to
validate the lease: Brazier v Hudson (1836) 8 Sim 67; Wankford v Wankford (1704) 1 Salk 299 at 308; Johnson v Warwick (1856) 17 CB
516. An executor's power of leasing ceased on his assenting to the devise or bequest in the will; cf Doe d Saye and Lord Sele v Guy (1802) 3
East 120.
6 Wankford v Wankford (1704) 1 Salk 299 at 301.
7 Including chattels real: Administration of Estates Act 1925, s 3(1).
8 Administration of Estates Act 1925, s 2(2); and see Johnson v Clarke [1928] Ch 847. Special personal representatives may dispose of
settled land without the concurrence of general personal representatives who may likewise dispose of other property of the deceased without
the concurrence of the special personal representatives (s 24(1)). A tenancy granted by one executor who has been permitted by the other
executor(s) to remain in possession of the land will be void: Harrison v Wing [1988] 2 EGLR 4, CA.
(u) Friendly societies, industrial societies, and trade unions
HR A[442]
Page 92
Registered friendly societies or branches may (if the rules thereof so provide) take on lease in the names of the trustee of
the society and grant leases of land1. Registered industrial societies (if their rules do not direct otherwise) hold,
purchase or take on lease in the name of the society and may grant leases of land2. Any registered trade union can,
subject to the rules of the union, take on lease in the name of the trustees and can grant leases of land3.
HR A[443]
1 See Friendly Societies Act, 1974, s 53(1), as substituted by Friendly Societies Act 1992, s 95.
2 Industrial and Provident Societies Act 1965, s 30. An industrial society is a body corporate and can deal with land in the same way as a
limited company or a building society.
3 The former power in the Trade Union Act 1871, s 7 no longer exists, the Act being repealed by the Industrial Relations Act 1971. The
current provisions relating to the holding of property of a trade union are to be found in the Trade Union and Labour Relations
(Consolidation) Act 1990, s 12(1).
(v) Infants
HR A[444]
Lease to minors before 1 January 1997
An infant or minor cannot hold a legal estate in land1. Prior to 1 January 1997 and the enactment of the Trusts of Land
and Appointment of Trustees Act 1996 a minor could only be beneficially entitled to land under a settlement, and leases
would normally be made by the trustees under the powers conferred by the settlement or under the Settled Land Act
19252. An attempt to convey a legal estate, whether by lease or otherwise, to a minor operated as an agreement for
valuable consideration to execute a settlement in his favour3, the agreement being voidable at his option during infancy,
or within a reasonable time after attaining his majority, or, if he should die, by his successor within a reasonable time
after his death4; but slight acts were evidence of ratification5. Where a legal estate was conveyed to a minor jointly with
one or more persons of full age, the person or persons of full age took the legal estate on trust for sale6. If a minor was
entitled to a legal estate immediately before 1 January 1926, the land became settled land on that date, and the legal
estate vested in the trustees of the settlement (if any) or in the Public Trustee7. The trustees, in whom land to which a
minor was beneficially entitled was vested, had wide powers of management in addition to the ordinary powers of
leasing conferred on tenants for life and statutory owners8.
HR A[445]
1 Law of Property Act 1925, s 1(6). By virtue of the Family Law Reform Act 1969, s 1, the term 'infant' or 'minor' (see s 12) is now
deemed to refer to a person who has not reached the age of 18 years.
2 In practice, the land was often vested in trustees for sale who could exercise the powers conferred by the Law of Property Act 1925, s
28. As to the extent of these powers, see Re Wellsted's Will Trusts, Wellsted v Hanson [1949] Ch 296, [1949] 1 All ER 577.
Page 93
3 Law of Property Act 1925, s 19(1); Settled Land Act 1925, s 27(1). 'Conveyance' includes lease for the purpose of the Law of Property
Act 1925, s 19(1), see s 205(1)(ii).
4 North Western Rly Co v M'Michael (1850) 5 Exch 114.
5 Slator v Brady (1863) 14 ICLR 61.
7 Settled Land Act 1925, Sch 2, para 3.
8 SLA 1925, s 102.
HR A[446]
Lease to minors after 1 January 1997
After 1 January 1997 a purported conveyance of a legal estate to a minor is not effective to pass the legal estate but
operates as a declaration that the land is held in trust for the minor1. After 1 January 1997 a purported conveyance of a
legal estate to a minor infant and another person of full age operates to vest the land in the other person in trust for the
minor and the other person2. Any conveyance operating immediately before 1 January 1997 as an agreement to execute
a settlement in favour of a minor now operates as a declaration that the land is held in trust for the minor3. These
declarations are all trusts of land within the 1996 Act4.
HR A[447]
1 Trusts of Land and Appointment of Trustees Act 1996, s 2(6) and Sch 1, para 1(1).
2 TLATA 1996, s 2(6) and Sch 1, para 1(2).
3 TLATA 1996, s 2(6) and Sch 1, para 1(3).
4 See paras HR A[533]-[538].
HR A[448]
Minors and succession
An infant or minor can succeed to a statutory tenancy1 and can inherit a secure tenancy2.
HR A[449]
1 Portman Registrars and Nominees v Mohammed Latif [1987] 6 CLY 217.

Page 94
2 Kingston upon Thames Borough Council v Prince (1998) Times, 7 December, CA.
HR A[450]
Leases granted by a minor
As a minor is unable to hold a legal estate in land1 he cannot grant a legal estate. A lease granted by a minor was
voidable2 at common law and the minor was entitled to affirm or avoid the lease on his coming of age2 or within a
reasonable time thereafter3. The lease might be affirmed by accepting rent2 or by other actions recognising its
continued existence4.
HR A[451]
2 Ashfield v Ashfield (1627) W Jo 157.
3 Edwards v Carter [1893] AC 360.
4 Doe d Miller v Noden (1797) 2 Esp 528.
(w) Local authorities: disposal of land by lease
HR A[452]
A principal council (ie the council of a county, a district or London Borough) may dispose of land held by it in any
manner it thinks fit1. However, except with the consent of the Secretary of State for the Environment, a council cannot
dispose of land, otherwise than by way of a short tenancy, for a consideration less than the best that can reasonably be
obtained2. A disposal by way of a short tenancy consists of the grant of a term not exceeding seven years or the
assignment of a term which at the date of assignment has not more than seven years to run3. Where under these or any
other provisions a local authority purport to dispose of land then in favour of any person claiming under the authority
the disposal shall not be invalid by reason that any consent required has not been given or any requirement of
advertisement or consideration of objections has not been complied with4. Parish and community councils have similar
powers of disposal5.
HR A[453]
1 Local Government Act 1972, s 123(1). Cf the more limited power of a local authority under the Local Government Act 1933, s 164
which did not include power to grant an option to purchase the reversion or to renew a lease: see Trustees of Chippenham Golf Club v North
Wiltshire District Council (1991) 64 P & CR 527 and Stretch v West Dorset District Council [1998] 48 EG 183. However under LGA 1933,
s 172 (3) a borough council could grant an option to renew a lease provided the land was corporate land as defined in s 305 of that Act: see
Stretch v West Dorset District Council.
Page 95
2 LGA 1972, s 123(2).
3 LGA 1972, s 123(7).
4 LGA 1972, s 128(2).
5 LGA 1972, s 127.
(x) Local authorities: acquisition of land by lease
HR A[454]
Principal councils are authorised to acquire, inter alia by way of lease, any land whether situate within or without their
area for any purpose for which they are authorised to acquire land under that Act or any other enactment, or for the
purposes of the benefit, improvement or development of their area1. A similar power is given to parish and community
councils with the words 'public general Act' substituted for 'enactment'2.
HR A[455]
1 Local Government Act 1972, s 120.
2 LGA 1972, s 124.
(y) Married women
HR A[456]-[460]
A married woman is now capable of acquiring, holding and disposing of any property in all respects as if she were a
femme sole. Consequently, she may create and accept leases of land in the same manner as if she were not married1.
HR A[461]
1 Law Reform (Married Women and Tortfeasors) Act 1935, s 1; see also s 2(1). There was a saving in respect of women married before
1883 (s 4(1)(a)). The expression 'as if she were a femme sole' is retained as according to custom, but it is equivalent to 'as if she were a man'.
Page 96
tenant/C Capacity to make and take leases/2 Mortgagors and mortgagees
2 Mortgagors and mortgagees
(a) Powers
HR A[462]
A mortgagor of land, while in possession, has statutory1 powers as against every incumbrancer to make: (1) an
agricultural or occupation lease for any term not exceeding 21 years2, or in the case of a mortgage made on or after 1
January 1926, 50 years; and (2) a building lease for any term not exceeding 99 years, or in the case of a mortgage made
on or after 1 January 1926, 999 years3. Every such lease must, however, reserve the best rent that can reasonably be
obtained, regard being had to the circumstances of the case, and without a fine being taken4, for this purpose to take the
whole rent in advance being taken to be a fine5. Further every such lease must include a condition for re-entry on the
rent not being paid within a specified time not exceeding 30 days6. A mortgagee of land, while in possession, has the
like power as against all prior incumbrancers, if any, and as against the mortgagor7, and if a receiver of the income of
the mortgaged property had been appointed by the mortgagee under his statutory power8, the power of leasing, while
the receiver is acting, is exercisable by the mortgagee as if he were in possession9. But the power is exercisable only if
and so far as a contrary intention is not expressed by the mortgagor and mortgagee in the mortgage deed, or otherwise in
writing, and is subject to the terms of the mortgage deed or of any such writing10. In practice, the statutory power of
leasing is often expressly excluded; and it is frequent practice for the mortgagor to covenant not to grant leases without
the consent of the mortgagee. A contract to make or accept such a lease may be enforced by or against every person on
whom the lease, if granted, would be binding11. These statutory provisions apply, as far as circumstances permit, to any
letting, and to any agreement, whether in writing or not, for leasing or letting12. An express power of leasing may, by
agreement in writing, whether or not contained in the mortgage deed, be conferred on the mortgagor or mortgagee13.
Special provisions exist regarding mortgages of agricultural land14.
HR A[463]
1 Law of Property Act 1925, s 99. A lease or tenancy agreement of business or professional premises executed by a mortgagor pursuant to
an order of the court under Pt II of the Landlord and Tenant Act 1954 is deemed to be one authorised by the Law of Property Act 1925, s 99:
LTA 1954, s 36(4) at HR B[565].
2 An agricultural lease does not cease to be one because of the reservation of sporting rights (Brown v Peto [1900] 1 QB 346 at 354, per
Bigham J); and a lease of a house, furniture and such sporting rights at a single rent is an occupation lease (Brown v Peto [1900] 2 QB 653,
CA).
3 Law of Property Act 1925, s 99(1), (3).
4 LPA 1925, s 99(6). As to building leases, see s 99(9), (10).
5 Hughes v Waite [1957] 1 All ER 603, [1957] 1 WLR 713, but cf Grace Rymer Investments Ltd v Waite [1958] Ch 831, [1958] 2 All ER
777, CA where the whole rent under a tenancy prior to the mortgage was paid in advance and was held not to have lost its character of rent
and the tenancy was held valid against the mortgagee.
Page 97
6 Law of Property Act 1925, s 99(7). When the exercise of the statutory power of leasing by a mortgagor is by means of an oral lease it is
not necessary for an oral right of re-entry to be reserved to satisfy the LPA 1925, s 99(7): see Rhodes v Dalby [1971] 2 All ER 1144 at 1149;
Wolstenholme and Cherry's Conveyancing Statutes (12th edn, 1932) vol 1, p 400; but cf Pawson v Revell [1958] 2 QB 360, [1958] 3 All ER
233 where the point is doubted. Nor in the case of such an oral lease is s 99(11) (which requires the mortgagor to deliver a counterpart of the
lease to the mortgagee) applicable and there is no analogous obligation to deliver particulars of the lease granted: Rhodes v Dalby [1971] 2
All ER 1144.
7 LPA 1925, s 99(2). The mortgagee, on going into possession, becomes entitled to the benefits of a lease granted by the mortgagor under
his statutory powers as if he had been a party to it: Municipal Permanent Investment Building Society v Smith (1888) 22 QBD 70, CA.
8 See LPA 1925, s 101(1)(iii).
9 LPA 1925, s 99(19). The mortgagee may delegate such power to the receiver.
10 LPA 1925, s 99(13). See Rhodes v Dalby [1971] 2 All ER 1144 at 1147. A restriction of the statutory power does not affect the
common law power of leasing: Iron Trades Employers' Insurance Association Ltd v Union Land and House Investors Ltd [1937] Ch 313,
[1937] 1 All ER 481; Dudley and District Benefit Building Society v Emerson [1949] Ch 707, [1949] 2 All ER 252.
11 LPA 1925, s 99(12).
12 LPA 1925, s 99(17). See also n 6.
13 LPA 1925, s 99(14). The rights of any other mortgagee are preserved.
14 Agricultural Tenancies Act 1995, s 31: HR F[30].
(b) Effect of lease within powers
HR A[464]
A lease granted by a mortgagor under these statutory powers binds the mortgagee and those claiming under him so as to
prevent any interference by him or them with such rights as the lessee may have against his lessor1. It must not demise
the mortgaged property and other property at a single rent2. It may contain a power for the lessee to determine the lease
within the term; and it is not invalidated because it contains an option for the lessee to take a new lease at the end of the
term, though the lessee cannot require the mortgagor to grant a renewed lease unless the lease is at the time of renewal a
proper one to be granted under the statutory provisions3.
HR A[465]
1 Wilson v Queen's Club [1891] 3 Ch 522.
2 King v Bird [1909] 1 KB 837.
3 King v Bird [1909] 1 KB 837 at 845; eg the best rent must be obtained.
Page 98
(c) Effect of lease outside powers
HR A[466]
A lease by the mortgagor, made otherwise than under the statutory power, is binding on the mortgagee if made before
the mortgage1. If made after the mortgage, it is valid by way of estoppel as between the mortgagor and the lessee2, but
it is void as against the mortgagee3. For the purpose of claiming the protection of the Rent Act 1977, although the
tenant thereunder is deemed to be 'lawfully' in possession as against the mortgagor, he cannot claim to be so as against
the mortgagee and is not entitled to the protection of the Rent Act4. However, a mortgagee who seeks possession of the
premises must do so with the bona fide purpose of enforcing his security, not merely for the purpose of evicting a tenant
who has the protection of the Rent Act 19775. A lease by the mortagee, not made under the statutory power, is not
binding on the mortgagor after redemption6. Consequently, where the lease is not made under the statute, nor under an
express power of leasing, both mortgagor and mortgagee should concur in granting it7.
HR A[467]
1 Moss v Gallimore (1779) 1 Doug KB 279. Where the lease takes effect by estoppel which is fed by a conveyance to the mortgagor, it is
binding on the mortgagee: Church of England Building Society v Piskor [1954] Ch 553, [1954] 2 All ER 85.
2 Alchorne v Gomme (1824) 2 Bing 54; Doe d Lord Downe v Thompson, Lord Downe v Thompson (1847) 9 QB 1037; Cuthbertson v
Irving (1860) 6 H & N 135 at 139, Ex Ch; Hartcup & Co v Bell (1883) Cab & El 19; Rust v Goodale [1957] Ch 33, [1956] 3 All ER 373.
3 Rust v Goodale [1957] Ch 33, [1956] 3 All ER 373, where the statement in the text was expressly approved by Harman, J. See also
Keech v Hall (1778) 1 Doug KB 21; Pope v Biggs (1829) 9 B & C 245 at 253; Lows v Telford (1876) 1 App Cas 414 at 425. No legal estate
is created at all and no question of priority of legal estates arises: Rust v Goodale [1957] Ch 33, [1956] 3 All ER 373). But the lessee is
entitled to redeem (Tarn v Turner (1888) 39 Ch D 456, CA; Rust v Goodale [1957] Ch 33, [1956] 3 All ER 373); and a mortgagee who
purchases the equity of redemption may be bound by the lease (Smith v Phillips (1837) 1 Keen 694. Probably, a lease granted by a mortgagor
other than under the statutory powers does not bind a transferee of the mortgage: see Quennell v Maltby [1979] 1 All ER 568, [1979] 1 WLR
318, CA, where this was assumed without being decided.
4 Dudley and District Benefit Building Society v Emerson [1949] Ch 707 [1949] 2 All ER 252; Brittania Building Society v Earl [1990] 2
All ER 469, [1990] 1 WLR 422.
5 Quennell v Maltby [1979] 1 All ER 568, [1979] 1 WLR 318, CA, where the wife of the mortgagor bought the benefit of the mortgage
from the original mortgagee with the purpose of using her position as transferee of the mortgage to evict a tenant of her husband which
proved unsuccessful.
6 Franklinski v Ball (1864) 33 Beav 560; unless, perhaps, where the granting of it was urgent: Hungerford v Clay (1722) 9 Mod Rep 1 at
2.
7 The lease operates then as a demise by the mortgagee and confirmation by the mortgagor: Doe d Barney v Adams (1832) 2 Cr & J 232;
cf Smith v Pocklington (1831) 1 Cr & J 445. The lease should treat the mortgagee as the actual lessor: see Webb v Russell (1789) 3 Term Rep
393; Saunders v Merryweather (1865) 3 H & C 902.
(d) Attornment
Page 99
HR A[468]
Where a lease is made by the mortgagor after the mortgage and is void against the mortgagee the lessee does not
become tenant under the mortgagee unless he attorns to the mortgagee, or it appears on a consideration of all the
circumstances of the case that the mortgagee has so conducted himself as in some way to confirm the tenancy1. Notice
given to the lessee by the mortagee is not sufficient to create the relationship of landlord and tenant between them2,
even though followed by continued occupation by the lessee3. There must be payment of rent to the mortgagee, which
usually creates a tenancy from year to year, or other evidence that the tenant assents to the mortgagee becoming his
landlord4. The receipt of rent by a receiver appointed out of court by the mortgagee will not create a tenancy between
the tenant and the mortgagee because the receiver is the agent of the mortgagor, but the fact of the receivership does not
prevent the mortgagee from consenting by conduct to accept the mortgagor's tenant as his own5. Mere inanition by the
mortgagee after he had knowledge of the lease does not amount to recognition by conduct6. Nor in one case did
encouragement by the agent of the mortgagee to the tenant to do repairs amount to an acknowledgment of the tenancy7.
HR A[469]
1 Lysaght v Callinan (1831) Hayes 141; Evans v Elliot (1838) 9 Ad & El 342; Doe d Prior v Ongley (1850) 10 CB 25; see Doe d
Whitaker v Hales (1831) 7 Bing 322.
2 Evans v Elliot (1838) 9 Ad & El 342; cf Biner v Walters (1869) 20 Lt 326.
3 Towerson v Jackson [1891] 2 QB 484, CA.
4 Doe d Prior v Ongley (1850) 10 CB 25; Brown v Storey (1840) 1 Man & G 117 at 126. A tenancy from year to year between mortgagee
and lessee arising from payment of rent does not import the terms of the lease made by the mortgagor unless such is in fact agreed expressly
or by implication between the mortgagee and lessee: Oakley v Monck (1866) LR 1 Exch 159, Ex Ch; Keith v R Gancia & Co Ltd [1904] 1
Ch 774, CA. The new tenancy gets rid of the mortgagor's lease (Johnson v Jones (1839) 9 Ad & El 809; Corbett v Plowden (1884) 25 Ch D
678, CA; Underhay v Read (1887) 20 QBD 209, CA).
5 Stroud Building Society v Delamont [1960] 1 All ER 749, [1960] 1 WLR 431; Chatsworth Properties Ltd v Effiom [1971] 1 All ER 604,
[1971] 1 WLR 144, CA.
6 Re O'Rourke's Estate (1889) 23 LR Ir 497; Bradford Permanent Building Society v Cholmondeley (1952), unreported; Parker v
Braithwaite [1952] 2 All ER 837 (where the fact that the district manager of a building society collected the rent for a considerable time did
not amount to recognition by the society); Taylor v Ellis [1960] Ch 368, [1960] 1 All ER 549 (where the mortgagee had been content to go
without interest for many years).
7 Barclays Bank Ltd v Kiley [1961] 2 All ER 849. [1961] 1 WLR 1050.
(e) Position of receiver
HR A[470]-[480]
A lease granted by a receiver appointed by the court is good by estoppel as between the receiver and the tenant1, and,
similarly, an attornment to the receiver by the person in possession creates a tenancy under the receiver by estoppel. The
Page 100
attornment does not enure for the benefit of the owner of the legal estate, but gives the legal powers of a landlord to the
receiver2. The lease is also binding on the persons beneficially interested if it is for a term not exceeding three years,
since such a lease can be created at the discretion of the receiver3, but a lease for a longer period requires the sanction
of the court4. In order to pass the legal estate in the term5 the legal owner must be a party to the lease, and, in practice,
where a receiver is in possession, the court directs the lease to be made by the receiver in the name of the person in
whom the power of leasing would have been vested if the receiver had not been appointed. Where a receiver of the
income of the mortgaged property or of any part of it has been appointed by the mortgagee under his statutory power6
without recourse to the court, the power of leasing exercisable by the mortgagee may be delegated by him in writing to
the receiver7.
HR A[481]
1 Dancer v Hastings (1826) 4 Bing 2.
2 Evans v Mathias (1857) 7 E & B 590. Where the premises are already subject to a lease the mere appointment of the receiver without
attornment constitutes him the 'landlord' for the purpose of the Landlord and Tenant Act 1709, s 1: Cox v Harper [1910] 1 Ch 480, CA.
3 Shuff v Holdaway (1863) Daniell's Chancery Practice vol II, 8th edn, 1487n. Formerly, it seems a receiver could not let even for one
year without sanction of the court: Wynne v Lord Newborough (1709) 1 Ves 164.
4 Morris v Elme (1790) 1 Ves 139; see Neale v Bealing (1744) 3 Swan 304n.
5 Ie the true legal estate as distinguished from a legal estate by estoppel.
6 See Law of Property Act 1925, s 101(1).
7 LPA 1925, s 99(19).
(f) Persons suffering from mental disorder
HR A[482]
A contract made by a person of unsound mind, now designated as 'a person incapable, by reason of mental disorder, of
managing and administering his property and affairs', is not necessarily void. Prima facie it is binding, and the person
suffering from mental disorder cannot avoid it unless it can be shown that the state of his mind was known to the other
party and that advantage was taken of it1. Hence a lease made by or to a person suffering from mental disorder is valid
if the other party acted in good faith and was not aware of the mental illness; and a lease made in a lucid interval by a
person suffering from mental disorder for whom a receiver has not been appointed is valid, the burden of proof that it
was so made being upon the party supporting the lease2. If a receiver has been appointed, the person suffering from
mental disorder cannot even during a lucid interval, so long as the receiver has not been discharged, make a valid
disposition of his property3. Where a person suffering from mental disorder is entitled to property, provision for making
leases, and, in the case of leasehold property, for surrendering it and accepting a new lease, is made by statute4.
HR A[483]
Page 101
1 Imperial Loan Co v Stone [1892] 1 QB 599, CA; Baxter v Earl of Portsmouth (1926) 5 B & C 170; Brown v Jodrell (1827) Mood & M
105; Dane v Viscountess Kirkwall (1838) 8 C & P 679; Molton v Camroux (1848) 2 Exch 487; affd (1849) 4 Exch 17; Beaton v M'Donnell
(1854) 9 Exch 309; Beavan v M'Donnell (1854) 10 Exch 184.
2 Creagh v Blood (1845) 2 Jo & lat 509 at 520.
3 A receiver of the person's property is appointed under the Mental Health Act 1983, s 99. Where a receiver has been appointed, the
position is the same as if the person had been 'so found' by inquisition under the obsolete practice of holding inquisitions: Re Marshall,
Marshall v Whatley [1920] 1 Ch 284. Every contract he makes himself, even during a period of lucidity is therefore, void: Re Walker [1905]
1 Ch 160. Every dealing with his property must be made by the receiver, until such time as the receiver is discharged under the statute.
4 Mental Health Act 1983, s 96.
HR A[484]
The receiver must do all such things as the judge1, in the exercise of his powers, orders or directs him to do, and may do
anything which the judge authorises him to do2. Where a legal estate in land is vested in a person suffering from mental
disorder, the receiver must, under an order of the authority having jurisdiction under Pt VII of the Mental Health Act
1983 or of the court or under any statutory power, make or concur in making all requisite dispositions for conveying or
creating a legal estate in the name and on behalf of the person suffering from mental disorder3.
HR A[485]
1 The 'judge' means the Lord Chancellor, any judge of the Supreme Court nominated by him, or the Master of the Court of Protection or
any official nominated by the Lord Chancellor: Mental Health Act 1983, ss 93, 94.
2 It seems that a receiver of a tenant for life suffering from mental disorder may, by an order of the court under the general jurisdiction of
the Mental Health Act 1983, s 101 exercise the leasing powers of the tenant for life.
3 Law of Property Act 1925, s 22(1), as amended by the Mental Health Act 1983, s 148, Sch 4, para 5. In Re Wynne (1872) 7 Ch App 229,
it was held that possession for 18 months under an agreement for a lease with the agent of the committee was sufficient to entitle the tenant
to an order directing the committee to give effect to the agreement, although the sanction of the Master in Lunacy had not been applied for.
HR A[486]
A lease granted by a person in a state of intoxication is probably valid unless the drunken person was incapable of
appreciating the nature of the transaction and his incapacity was known by the other party. That, at any rate, appears to
be the law as regards contracts made by intoxicated persons1.
HR A[487]
Page 102
1 Gore v Gibson (1845) 13 M & W 623; Matthews v Baxter (1873) LR 8 Exch 132; Molton v Camroux (1848) 2 Exch 487.
Page 103
tenant/C Capacity to make and take leases/3 Settled land
3 Settled land
HR A[488]
Settled land after 1 January 1997
After 1 January 1997 it is not possible to create a settlement within the Settled Land Act 19251. Any attempt to create a
settlement results in a trust of land2 under the Trusts of Land and Appointment of Trustees Act 19963. That Act does
not affect existing settlements which are considered below4.
HR A[489]
1 Trustees of Land and Appointment of Trustees Act 1996, s 2(1).
2 For trusts of land see paras HR A[533]-[538].
3 TLATA 1996, s 2(1).
(a) Tenants for life and statutory powers
HR A[490]
For the purposes of the Settled Land Act 1925, a person of full age, who is for the time being beneficially entitled under
a settlement to possession of settled land for his life, is the tenant for life of that land and the tenant for life under the
settlement1. Other persons of full age whose estate or interest is in possession have the powers of a tenant for life under
that Act2.
HR A[491]
1 Settled Land Act 1925, s 19.
2 For such persons, see SLA 1925, s 20. A tenant under a lease at a rent, however, small, has not the powers of a tenant for life under this
section, see Re Catling, Public Trustee v Catling [1931] 2 Ch 359.
Page 104
(b) Power of leasing
HR A[492]-[500]
A lease can be granted by a tenant for life1. The power of leasing extends to the settled land, or any part thereof, or any
easement, right or privilege of any kind over or in relation to the same. The principal mansion-house2, and the park and
land usually occupied therewith, cannot, where the settlement was made or came into operation before 1 January 1926,
and the settlement does not expressly provide to the contrary, be leased without the consent of the trustees or an order of
the court. In the case of a settlement made or operating after that date3, such consent or order is unnecessary unless the
settlement provides to the contrary. The lease may be for any purpose whatever, whether involving waste or not, and for
the following terms: (1) in the case of a building lease4 or a forestry5 lease, 999 years; (2) in the case of a mining
lease6, 100 years; and (3) in the case of any other lease, 50 years. If the persons who together with the tenant for life are
able to dispose of the fee simple join in the lease, the demise can be for any length of time, but the actual demise must
be made by the person holding the legal estate.
HR A[501]
2 A farmhouse, or a house which with its pleasure grounds and park and land does not exceed 25 acres in extent, is not to be deemed a
principal mansion-house: SLA 1925, s 65(2).
3 SLA 1925, s 65 see Dowager Duchess of Sutherland v Duke of Sutherland [1893] 3 Ch 169 (lease easement over park held void); Re
Marquis of Ailesbury's Settled Estates [1892] 1 Ch 506; CA; affd sub nom Lord Henry of Bruce to Marquess of Ailesbury [1892] Ac 356
(order for sale of mansion-house sanctioned). A clause in a settlement requiring the tenant for life to occupy a house personally is ineffective
to prevent the tenant for life exercising his statutory powers of leasing: Re Pattern, Westminster Bank v Carlyon [1929] 2 Ch 276.
4 As to building leases (which include repairing and improving leases; SLA 1925, s 117(1)(i), see SLA 1925, ss 44, 46; see also Re
Grosvenor Settled Estates, Duck of Westminsterv McKenna [1933] Ch 97; Re Daniell's Settled Estates [1894] 3 Ch 503, CA.
5 As to forestry leases, see the SLA 1925, s 48, as amended by the Forestry Act 1945, s 4(10)(b) and s 117 (1)(x) as amended by the
Forestry Act 1945, s 4(1)(b), and the Forestry Act 1967, s 50 Sch 6 para 5.
6 As to mining leases, see SLA 1925, ss 45, 44, 47 and 50.
(c) Other requirements
HR A[502]
The lease must be granted with due regard to the interests of all parties entitled under the settlement1, and must be by
deed and be made to take effect in possession not later than 12 months after its date or in reversion after an existing
lease having not more than seven years to run at the date of the new lease; and it must reserve the best rent2 that can
reasonably be obtained, and also contain a covenant by the lessee for payment of the rent and a condition of re-entry on
non-payment3. The above conditions are modified in the case of a lease for a term not exceeding beyond three years
Page 105
from the date when the lease is made, which may be made by any writing under hand only, containing an agreement
instead of a covenant for payment of rent4. The lease may contain an option to purchase5. On a lease a purchaser
dealing in good faith with a tenant for life is, as against all parties entitled under the settlement, conclusively taken to
have given the best rent that could reasonably be obtained by the tenant for life, and to have compiled with all the
requisition of the Act8. Notice of an intended lease or grant of an option must in general be given to the trustees of the
settlement9. In the case of a lease for not more than 21 years at the best rent reasonably obtainable without a fine, where
the lessee is not exempted from liability for waste, such notice is unnecessary, and a tenant for life may make such a
lease notwithstanding there are no trustees of the settlement5. A lease of settled land may be made to the tenant for
life6. In general, the ordinary forms of leases should be used in such cases without any reference to the position of the
grantor. Since both the tenant's and the landlord's interest may be assigned, it is preferable not to include in any lease
any matter relating to their special position in any particular case where that course can be avoided.
HR A[503]
1 Settled Land Act 1925, s 107(1): see Dowager Duchess of Sutherland v Duke of Sutherland [1893] 3 Ch 169; Chandler v Bradley [1897]
1 Ch 315; Middlemas v Stevens [1901] 1 Ch 574; Re Handman and Wilcox's Contract [1902] 1 Ch 599, CA.
2 SLA 1925, s 42. In estimating the best rent, regard must be had to any fine taken and any money spent or to be spent on the land. A
grant of a lease not at the best rent because partly in consideration of the waiver of a personal claim may have the effect of vitiating a
subsequent sale (Re Handman and Wilcox's Contract [1902] 1 Ch 599, CA). See also Pumford v W Butler & Co Ltd [1914] 2 Ch 353 (lease
invalid because best rent not reserved and no enforceable covenant to pay rent). In possession proceedings there is no onus on the defendant
to show that the rent in fact reserved was the best rent (Davies v Hall [1954] 2 All ER 330, [1954] 1 WLR 855, CA, explaining Kisch v
Hawes Bros Ltd [1935] Ch 102).
3 SLA 1925, s 42.
4 SLA 1925, s 42(5)(ii). It has been suggested that in the case of the short leases to which this paragraph relates there is no statutory
requirement that the lease should contain a proviso for re-entry on non-payment of rent (Davies v Hall [1954] 2 All ER 330, [1954] 1 WLR
855, CA per Romer LJ), but such proviso is in practice always inserted.
5 SLA 1925, s 110(1). It applies even when the lessee was unaware at the time of the taking of the lease that the lessor was a tenant for
life: Re Morgan's Lease, Jones v Norseowicz [1972] Ch 1 [1971] 2 All ER 235.
6 SLA 1925, s 101. See Wheelwright v Walker (1883) 23 Ch D 752; Hatten v Russell (1888) 38 Ch D 334; Mogridge v Clapp [1892] 3 Ch
382, CA.
(d) Tenants in tail
HR A[504]
A tenant in tail has the powers of a tenant for life under the Settled Land Act 19251. He can also create a lease under the
general power of disposition conferred by the Fines and Recoveries Act 18332, the lease in such a case being subject to
the requirements of that statute; that is, if there is a protector of the settlement, his consent is necessary to make the
lease effectual against persons entitled after the estate tail3; the lease must be by deed4. A lease by a tenant in tail, made
neither under one of the above-mentioned statutes nor under an express power, is void as regards persons entitled after
the estate tail5; but as against the issue in tail it is voidable only6, and may be either expressly or impliedly confirmed
by the person next entitled7.
Page 106
HR A[505]
1 Settled Land Act 1925, s 20(1)(i).
2 SLA 1925, s 15.
3 SLA 1925, s 34. The owner of the first existing estate under a settlement prior to an estate tail under the same settlement is the 'protector
of the settlement', see s 22.
4 SLA 1925, s 40.
5 Co Litt 45b; Andrew v Pearce (1805) 1 Bos & PNR 158 at 162.
6 Co Litt 45b; Earl of Bedford's case (1586) 7 Co Rep 7b.
7 Eg by acceptance of rent (Stiles v Cowper (1748) 3 Atk 692 at 693; Doe d Southouse v Jenkins (1829) 5 Bing 469 at 476; see Doe d
Phillips v Rollings (1847) 4 CB 188); and as to specific performance of an agreement for a lease not made in accordance with a statutory
power where the remainderman has accepted rent, see Osborn v Duke of Marlborough (1866) 14 LT 789.
(e) Leases under express powers
HR A[506]
The statutory powers of leasing conferred on tenants for life by the Settled Land Act 1925 are cumulative and do not
take away, abridge, or affect prejudicially any power of leasing for the time being subsisting under a settlement, or by
statute or otherwise, exercisable by a tenant for life1. A settlor may confer on the tenant for life powers of leasing
additional to or larger than those conferred by the Act2. Such additional or larger powers operate as if conferred by the
Act on the tenant for life3. In the case of conflict between the powers of leasing conferred by the Act and the powers
conferred by the settlement, the provisions of the Act prevail. Any powers of leasing conferred by the settlement on the
trustees of the settlement of other persons, whether or not provided for in the Act are exercisable by the tenant for life as
if they were additional powers4 conferred on the tenant for life5.
HR A[507]
1 Settled Land Act 1925, s 108(1).
2 SLA 1925, s 109(1).
3 SLA 1925, s 109(2).
4 It was held, before 1926, that trustees had an implied power of leasing from year to year (Fitzpatrick v Waring (1882) 11 LR Ir 35, CA;
Re North, Garton v Cumbernauld [1909] 1 Ch 625; (lease of brickfield), but a lease for ten years was held not to be proper: Re Shaw's Trusts
Page 107
(1871) LR 12 Eq 124).
5 Settled Land Act 1925, s 108(2). Application may be made to the court to settle any doubts as to the matters within this section (s
108(3)).
HR A[508]
A lease by a tenant for life which is not authorised by his powers of leasing is valid only during his life1 and on his
decease it becomes absolutely void2. But if the remainderman allows the tenant to continue in possession, and stands by
while the tenant expends money on property, he may be bound to grant him a new lease3; and merely allowing a yearly
tenant to continue in possession for a substantial time is a recognition of his tenancy and entitles him to notice to quit4.
A lease by a tenant in tail, not authorised by his powers, will, as against the issue, be voidable only. As between the
parties to the lease, it is in any case good by way of estoppel5.
HR A[509]
1 Bragg v Wiseman (1614) 1 Brownl 22; see Re Smyth, ex p Smyth (1818) 1 Swan 337; Symons v Symons and Powell (1821) 6 Madd 207.
But the lease subsists for his life, notwithstanding the determination of his estate by surrender, or even, it has been said, by forfeiture
(Sutton's case (1701) 12 Mod Rep 557). As to covenants for renewal entered into by a limited owner, see Macartney v Blundell (1789) 2
Ridg Parl Rep 113; Higgins v Earl of Rosse (1821) 32 Bligh 112, HL; Brereton v Tuohey (1858) 8 ICLR 190, Ex Ch. A lease granted by
trustees not authorised by their powers was bad in equity as a breach of trust, notwithstanding that it might be valid at law by reason of a
sufficient legal estate in the trustees (Bowes v East London Waterworks (1818) 3 Madd 375 at 383; cf Doe d Earl of Shrewsbury v Wilson
(1822) 5 B & Ald 363; Doe d Lord Egremont v Hellings (1842) 6 Jur 821); and as to leases under a statutory power, see Pearse v Morrice
(1834) 2 Ad & El 84.
2 Doe d Simpson v Butcher (1778) 1 Doug KB 50; Roe d Jordan v Ward (1789) 1 Hy Bl 96; Doe d Pulteney v Lady Cavan (1794) 5 Term
Rep 567 at 570, 571; Doe d Potter v Archer (1796) 1 Bos & P 531. Hence the remainderman cannot confirm the lease (Jones d Cowper v
Verney (1739) Willes 169; James d Aubrey v Jenkins (1758) Bull NP 96; Jenkins d Yate v Church (1776) 2 Cowp 482; Doe d Simpson v
Butcher (1778) 1 Doug KB 50; Ludford v Barber (1786) 1 Term Rep 90; Doe d Jolliffe v Sybourn (1798) 2 Esp 677); though the receipt of
rent will constitute a yearly tenancy under the remainderman (see Doe d Martin v Watts (1797) 7 Term Rep 83); and the tenancy will
commence from the day and be on the terms of the original demise so far as applicable to a yearly tenancy (Roe d Jordan v Ward (1789) 1
Hy Bl 97) but to have this effect the rent must be suitable to a tenancy from year to year (see Reynolds v Reynolds (1848) 12 1 Eq R 172);
the receipt of a nominal sum as 'chief rent' will not suffice (Smith v Widlake (1877) 3 CPD 10, CA; cf Jegon v Vivian (1865) LR 1 CP 9; on
appeal sub nom Vivian v Jegon (1868) LR 3 HL 285, as to infant remainderman).
3 Stiles v Cowper (1748) 3 Atk 692; Hardcastle v Shafto (1794) 1 Anst 184 at 186; Dann v Spurrier (1802) 7 Ves 231 at 236; Pilling v
Armitage (1805) 12 Ves 78 at 85; and cf Bowes v East London Waterworks (1818) 3 Madd 375 at 384; O'Fay v Burke (1858) 8 I Ch R 511.
4 Doe d Cates v Somerville (1826) 6 B & C 126 at 132; O'Keeffe v Walsh (1880) 8 LR Ir 183, CA; and the acceptance of a lessee by the
remainderman will import into the new tenancy a covenant in the original lease by the lessee to repair (Morrogh v Alleyne (1873) 7 IR Eq
487).
5 Yellowly v Gower (1855) 11 Exch 274. A tenant for life who agrees to grant a lease for a term in excess of the power is bound to carry
out his agreement to the extent of his own interest (cf Byrne v Acton (1721) 1 Bro Parl Cas 186; Dyas v Cruise (1845) 2 Jo & Lat 460; with
compensation (Leslie v Crommelin (1867) IR 2 Eq 134). But the remainderman cannot have specific performance of the agreement; see
Ricketts v Bell (1847) 1 De G & Sm 335.
HR A[510]-[520]
Page 108
Much of the law as stated here was formulated with reference to express powers contained in settlements before the
statutory provisions were as extensive as they now are. The cases are, however, applicable in the construction of the
statutory powers and of the additional or larger powers deemed to be conferred by the Act on the tenant for life.
(f) Construction of powers
HR A[521]
Under a power to lease 'to any person or persons' a lease may be granted to a limited company1. Under a power to grant
building leases, the lease must impose an obligation to build; hence a mere repairing lease is not justified by the power2.
If the power requires that the lessee shall not be exempted from liability to waste, the lease must not contain a covenant
by the lessor to repair3.
HR A[522]
1 Re Jeffcock's Trusts (1882) 51 LJ Ch 507; and where the power is created by an instrument after 1925, see Law of Property Act 1925, s
61(b) which defines 'person' as including a corporation. Probably this definition applies for the purpose of the interpretation of the 1925
Property Statutes themselves, see Re Earl of Carnarvon's Chesterfield Settled Estates [1927] 1 Ch 138; see Interpretation Act 1889, s 19.
2 Jones d Cowper v Verney (1739) Willes 169; Hallet to Martin (1883) 24 Ch D 614. But a repairing lease need not specify particular
repairs or a particlar sum to be spent in repairs; it is sufficient that it contains the usual covenants to repair and to yield up in repair (Easton v
Pratt (1864) 2 H & C 676, Ex Ch; Truscott v Diamond Rock Boring Co (1882) 20 Ch D 251, CA). Cf Settled Land Act 1925, s 117(1)(i).
3 Yellowly v Gower (1855)11 Exch 274. But a provision for the lessee to pull down and rebuild does not permit 'waste' for this purpose
(Doe d Egremont v Stephens (1844) 6 QB 208; Morris v Rhydydefed Colliery Co (1858) 3 H & N 885, Ex Ch); as to a clause permitting
waste where the power is unlimited, see Muskerry v Chinnery (1835) L & G temp Sugd 185 at 228, on appeal sub nom Sheehy v Lord
Muskerry (1839) 7 Cl & Fin 1, HL; Sheehy v Lord Muskerry (1848) 1 HL Cas 576. As to a direction that 'usual covenants' shall be inserted,
see Doe d Ellis and Medwin v Sandham (1787) 1 Term Rep 705; subsequent proceedings sub nom Medwin v Sandham (1789) 3 Swan 685.
(g) To what land power applies
HR A[523]
Under a power to lease lands usually demised, lands which have been previously demised, although not together may be
included in the same lease1; but not lands which have not been leased for a considerable period, such as 20 years2. A
direction that the usual rents shall be reserved has the same effect, and prohibits a lease of property which has not been
previously let3. A power to lease land or any part thereof authorises leases only of the corporeal substance of the land,
and hence it does not permit a lease of part of the land with an easement over the rest4. If the power does not mention
mines, a lease may be made of open mines, but not of unopened mines; if the power mentions mines generally, and
there are any open on the land, then these only can be leased; but if there are no open mines a lease may be made of
unopened mines5.
HR A[524]
Page 109
1 Doe d Earl Egremont v Stephens (1844) 6 QB 208.
2 Sugden on Powers (8th edn) p 728. See Co Litt 44b.
3 Pomery v Partington (1790) 3 Term Rep 665; Doe d Bartlett v Rendle (1814) 3 M & S 99.
4 Dayrell v Hoare (1840) 12 Ad & El 356.
5 Clegg v Rowland (1866) LR 2 Eq 160; Re Baskerville, Baskerville v Baskerville [1910] 2 Ch 329; Re Harter, Harter v Harter [1913]
WN 104; cf Re Barker, Wallis v Barker (1903) 88 LT 685.
(h) Term authorised by power
HR A[525]
The term created by the lease may be less than the period authorised by the power1; if it exceeds this period it is good to
the extent of the period, but void as to the excess2; and a lease for the specified period (as 21 years) may be made
determinable at the option of either lessor or lessee within the period3. If no period is specified, the intention of the
settlor in this respect must be gathered from all the relevant provisions of the instrument4. The term must begin and the
lease take effect in possession at once5, unless a lease to commence in futuro is expressly or impliedly authorised by the
power6. But an agreement for a new lease may be made before the determination of the old one7.
HR A[526]
1 Isherwood v Oldnow (1815) 3 M & S 382.
2 Alexander v Alexander (1755) 2 Ves Sen 640 at 644; Campbell v Leach (1775) Amb 740.
3 Edwards v Millbank (1859) 4 Drew 606. This was doubted in Lowe v Swift (1814) 2 Ball & B 529 at 536; and see Muskerry v Chinnery
(1835) L & G temp Sugd 185 at 229; on appeal L & G temp Plunk 182; on appeal sub nom Sheehy v Lord Muskerry (1839) 7 Cl & Fin 1,
HL
4 Vivian v Jegon (1868) LR 3 HL 285; where the power was held to be restricted to mining leases for the life of the tenant for life; cf
Sheehy v Lord Muskerry (1848) 1 HL Cas 576 at 593.
5 (Countess) Sussex v Wroth (1582) Cro Eliz 5; Fitzwilliam's Case (1604) 6 Co Rep 32a as 33 a; Shecomb v Hawkins (1613) Cro Jac 318;
Bowes v East London Waterworks (1818) 3 Madd 375; Doe d Allan v Calvert (1802) 2 East 376; see Doe d Mount v Roberts (1785) 4 Doug
KB 306. For this purpose possession includes receipt of rents: Goodtitle v Funucan (1781) 2 Doug KB 565.
6 A covenant for renewal may be inserted, but it will not be effective unless at the time of renewal the conditions of the new lease as to
rent and otherwise are proper for a lease under the power: Dyas v Cruise (1845) 2 Jo & Lat 460 at 486; Gas Light and Coke Co v Towse
(1887) 35 Ch D 519; see Harnett v Yielding (1805) 2 Sch & Lef 549 at 599.
7 Shannon v Bradstreet (1803) 1 Sch & Lef 52; Dowell v Dew (1842) 1 Y & C Ch Cas 345.
Page 110
(i) Rent and fines
HR A[527]
The power frequently requires that the lease shall be 'at the best rent'1. This precludes any fine being taken; for any
advantage obtained by the lessor over his successors is decisive that he has not obtained the best rent2. But the donee of
the power need not accept the highest rent offered. He must have regard to other considerations which would influence
a prudent owner, such as the solvency and eligibility of the prospective tenant3. If, however, a tenant for life is
enpowered to grant such lease as he thinks proper, there appears to be no objection if he exercises the power so as get a
benefit for himself at the expenses of the estate4.
HR A[528]
1 See Ellard v Lord Llandaff (1810) 1 Ball & B 241.
2 Montgomery v Earl of Wemyss Charteris, Duke of Buccleuch v Montgomery, Queensbury Leases (1817) 5 Dow 293 at 344, HL. The
lease is not necessarily void because it includes other land held under a different title and reserves a single rent: Muskerry v Chinnery (1835)
L & G temp Sugd 185 at 230; but see Rees d Perkins v Phillip (1810) Wight 69.
3 Doe d Lawton v Radcliffe (1808) 10 East 278; Dyas v Cruise (1845) 2 Jo & Lat 460 at 482. Where a lease was granted in consideration
of a rent and also of a covenant by the lessee to execute improvements, it seems to have been considered that this was evidence that the best
rent was not reserved (Roe d Earl of Berkeley v Archbishop of York (1805) 6 East 86), but this is only an element to be taken into
consideration; whether the best rent is reserved is a question of fact, and the covenant putting improvements on the tenant may be a proper
means of securing an adequate rent: see Shannon v Bradstreet (1803) 1 Sch & Lef 52 at 72.
4 Mostyn v Lancaster, Taylor v Mostyn (1883) 23 Ch D 583, CA (where the tenant for life, under a power to grant such mining lease as he
should think proper, granted a lease at a peppercorn rent by way of mortgage to secure a sum of money advanced to himself); cf Muskerry v
Chinnery (1835) L & G temp Sugd 185 at 225. The duties of fiduciary owners were, however, rather more strictly stated in Buttle v Saunders
[1950] 2 All ER 193.
(j) Validation of defective leases
HR A[529]
In favour of a purchaser for value, equity will relieve against the defective execution of a power, though not against its
non-execution1. For this purpose a lessee is a purchaser for value2. Consequently, where a lease is void at law through
failure to comply with a mere formality required by the power, equity will relieve against the defect and will enforce the
granting of a valid lease3. Upon the same principle a contract by a tenant for life to grant a lease under a power may be
enforced after his death against the remainderman4 or may be properly carried out by trustees5.
HR A[530]
Page 111
1 Shannon v Bradstreet (1803) 1 Sch & Lef 52 at 62; cf Ellard v Lord Llandaff (1810) 1 Ball & B 241. As to execution and attestation, it
is sufficient if the lease is by deed attested by two witnesses, notwithstanding that further or other formalities are required by the terms of the
power (Law of Property Act 1925, s 159(1)). Equity will not relieve against the defective execution of a power which is originally in its
nature legal, such as a statutory power: Darlington v Pulteney (1775) 1 Cowp 260 at 267.
2 Campbell v Leach (1775) Amb 740 at 748; Long v Rankin (1822) Sugden on Powers (8th edn) 895 at 900, HL, per Abbott CJ; Re King's
Leasehold Estates, ex p East London Rly Co (1873) LR 16 Eq 521 at 525; Shepheard v Beetham (1877) 6 Ch D 597 (as to premium); cf
Donnell v Church and Clark (1842) 4 I Eq R 630; but perhaps a lessee at a rack-rent is not entitled to the intervention of equity unless he had
expended money on the estate or there are other special circumstances which would make it unjust to deprive him of the lease.
3 Doe d Collins v Weller (1798) 7 Term Rep 478 at 480; Clark v Smith (1842) 9 Cl & Fin 126 at 141, HL. But where a necessary consent
has not been obtained, the court will not enforce an agreement for a lease under the power: Lawrenson v Butler (1802) 1 Sch & Lef 13.
4 Shannon v Bradstreet (1803) 1 Sch & Lef 52; Dowell v Dew (1842) 1 Y & C Ch Cas 345. It is assumed that the contract was binding on
the tenant for life: Morgan v Milman (1853) 3 De G M & G 24; Kennan v Murphy (1879) 6 LR Ir 108; on appeal (1880) 8 LR Ir 285, CA.
An equitable ground for enforcing it, such as part performance, is not available against the remainderman (Shannon v Bradstreet, (1803) 1
Sch & Lef 52 at 72; see Blore v Sutton (1817) 3 Mer 237; Lowry v Lord Dufferin (1839) 1 I Eq R 281; Morgan v Milman (1853) 3 De GM &
G 24 at 33), unless he has brought himself within the equity by lying by while the part performance was continued after the death of the
tenant for life: Stiles v Cowper (1748) 3 Atk 692.
5 Davis v Harford (1882) 22 Ch D 128.
(k) Validation by statute
HR A[531]
In addition to the above general doctrine of equity (see para HR A[529]), statutory provision is made for validating
leases where there has been a deviation from the terms of the power. Under the Law of Property 19251, if the lease has
been made in intended exercise of the power2, and has been made bona fide and the lessee has entered under it3, it is to
be considered in equity as a contract for a grant at the request of the lessee of a valid lease to the same effect as the
invalid lease, with any variation necessary for compliance with the terms of the power; but the lessee is not entitled to a
variation, if the reversioners are willing to confirm the lease without variation4. On the other hand, if the reversioner
wishes to confirm the lease, the lessee is bound to accept such confirmation5. Consequently, the lessee is entitled to
have either a confirmation of the invalid lease, or a lease varied so as to conform with the power, but which form the
lease shall take is at the option of the reversioner. The Law of Property Act 1925 further provides for the case of a lease
granted in the intended exercise of a power, where the lessor is not at the time capable of granting it, but subsequently
becomes capable. The lease becomes valid as soon as he becomes thus capable of granting it6. A lessee who claims the
benefit of the statutory protection must show that the lease granted to him was in all other respects within the terms of
the power under which it was granted7.
HR A[532]
1 LPA 1925, s 152. This Act repealed and replaced similar provisions in the Leases Act 1849, and the cases on that Act are, therefore, still
of importance. In Pawson v Revell [1958] 2 QB 360, [1958] 3 All ER 233, CA, Jenkins and Parker LJJ seem to have questioned whether it is
legitimate to refer to the preamble to the 1849 Act when construing the present section, but in fact did so. The section does not apply to
leases of land held on charitable, ecclesiastical or public trusts: LPA 1925, s 152(7)).
Page 112
2 If the lease cannot take effect except under the power, it is deemed to be granted in the intended exercise of the power, although the
power is not referred to (LPA 1925, s 152(6). The lease must not have been made by a stranger to the power: Re North London Rly Co (City
Branch), ex p Cooper (1865) 2 Drew & Sm 312 at 320.
3 Moffett v Lord Gough (1878) 1 LR Ir 331, CA.
4 LPA 1925, s 152(1). The Act does not assist a lease which is of a different nature from that authorised by the power (Hallett to Martin
(1883) 24 Ch D 624), or where the lease is in the form intended by the parties (Gas Light and Coke Co v Towse (1887) 35 Ch D 519 at 539);
nor does it enable matters of substance to be cured (Re Newell and Nevill's Contract [1900] 1 Ch 90 at 94 (overruled on another point, Re
Gladstone v Gladstone [1900] 2 Ch 101, CA)); nor does it enable a lease which is invalid, because part of the premises cannot be demised, to
be turned into a valid lease without this part (Dowager Duchess of Sutherland v Duke of Sutherland [1893] 3 Ch 169 at 194; Brown v Peto
[1900] 1 QB 346 at 355; affd [1900] 2 QB 653, CA; King v Bird [1909] 1 KB 837). There is nothing in the authorities which warrants the
view that a variation of an invalid agreement by inserting the condition for re-entry required by the Law of Property Act 1925, s 99(7)
involves a substantial departure from the agreed terms (Pawson v Revell [1958] 2 QB 360, [1958] 3 All ER 233, CA).
5 LPA 1925, s 152(3), (4). The confirmation may be by memorandum in writing, signed by each of the parties or their agents (LPA 1925,
s 152(3), (4)). A receipt or memorandum in writing confirming an invalid lease, and signed upon or before the acceptance of rent, is to be
deemed, as against the person signing it, a confirmation of the lease: LPA 1925, s 152(3), (4); Re North London Rly Co (City Branch), ex p
Cooper (1865) 34 LJ Ch 373 at 378.
6 Law of Property Act 1925, s 152(2). For an example of the operation of this subsection, see Readymix Concrete v Farnborough UDC
[1972] CLY 2020.
7 Kisch v Hawes Bros Ltd [1935] Ch 102 (lease by tenant for life to take effect in possession more than 12 months after its date).
HR A[533]
Trusts of land
The Trusts of Land and Appointment of Trustees Act 19961 replaces settlements under the Settled Land Act 19252 and
trusts for sale with trusts of land. A trust of property which consists of or includes land3 now constitutes a 'trust of land'
subject to the provisions of the 1996 Act. No new settlement may be created under the Settled Land Act 19254. The
provisions which formerly gave rise to trusts for sale now create a trust of land under the 1996 Act5.
HR A[534]
1 The 1996 Act came into force on 1 January 1997: see The Trusts of Land and Appointment of Trustees Act 1996 (Commencement)
Order 1996 (SI 1996/2974).
3 This does not include existing settlements under the SLA 1925 as to which see paras HR A[488]FF or land subject to the Universities
and Colleges Act 1925 as to which see para HR A[547].
5 TLATA 1996, s 5(1) and Sch 2.

Page 113
HR A[535]
Powers of leasing
The trustees under a trust of land have all the powers of an absolute owner in relation to any land the subject of the
trust.1 The trustees can therefore grant leases as if they were the absolute owner. The trustees also have power to
purchase a legal estate in any land2 in England or Wales whether by way of investment or for any other reason3. The
trustees must have regard to the rights of the beneficiaries4 but a purchaser is not concerned to ascertain whether there
has been compliance with this requirement.5 Before exercising any functions relating to land subject to the trust the
trustees must as far as practicable consult6 the beneficiaries7 and give effect to their, or the majority's, wishes. A
purchaser is not concerned to ascertain whether there has been compliance with his requirement.5
HR A[536]
1 Trusts of Land and Appointment of Trustees Act 1996, s 6(1).
2 TLATA 1996, s 6(3).
3 TLATA 1996, s 6(4).
4 TLATA 1996, s 6(5).
5 TLATA 1996, s 16(1).
6 TLATA 1996, s 11(1).
7 This refers to those of full age and beneficially entitled to an interest in possession in the land: s 11(1).
HR A[537]
Delegation
The trustees may delegate1 to any beneficiary2 entitled to an interest in possession in the land subject to the trust any of
their functions3 which relate to the land. This includes the power of leasing. The beneficiaries are then, in relation to the
exercise of that function, in the same position as the trustees with the same duties and liabilities.4 There are provisions
to protect any person dealing in good faith with the delegate in relation to the land.5
HR A[538]
1 The Trusts of Land and Appointment of Trustees Act 1996, s 9(1).
2 The beneficiary must be of full age and beneficially entitled to such an interest: s 9(1).
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3 The delegation is by power of attorney and may be for any period or indefinite: TLATA 1996, s 9(1) and (5).
4 TLATA 1996, s 9(7).
5 TLATA 1996, s 9(2).
(l) Trusts for sale before 1 January 1997
HR A[539]
The position before 1 January 1997 was that trustees for sale have all the powers of a tenant for life and of the trustees
of a settlement under the Settled Land Act 19251, including the power of management conferred by that Act during a
minority2, and where by statute settled land is, or becomes, vested in the trustees of the settlement upon the statutory
trusts, such trustees and their successors have any additional or larger powers conferred by the settlement3 on the tenant
for life, statutory owner or trustees of the settlement4. Trustees for sale may by writing revocably delegate these leasing
powers to any person of full age (not being an annuitant) for the time being entitled in possession to the net rents and
profits for his life or any less period, but the delegated power must be exercised in the name of the trustees5.
HR A[540]
4 Law of Property Act 1925, s 28(1); Law of Property (Amendment) Act 1926, s 7, Schedule. The extent of the power granted by this
section was considered in Re Wellsted's Will Trusts, Wellsted v Hanson [1949] Ch 296, [1949] 1 All ER 577, and it was held to give the
trustees for sale all the powers mentioned above and not administrative powers only. Formerly trustees for sale could not in general grant a
lease: Evans v Jackson (1836) 8 Sim 217.
5 Law of Property Act 1925, s 29. This does not prevent an income beneficiary who is let into possession by the trustees from creating in
his own name a tenancy which is good as between himself and the tenant" Stratford v Syrett [1958] 1 QB 107, [1957] 3 All ER 363.
HR A[541]
Trusts for sale after 1 January 1997
Under the Trusts of Land and Appointment of Trustees Act 19961 the provisions which previously gave rise to trusts
for sale create a trust of land under that Act2. The powers of the trustees under such a trust are dealt with earlier3. There
is now implied into every trust for sale created by disposition a power for the trustees to postpone sale, despite any
provision to the contrary4.
HR A[542]
Page 115
1 The Act came into force on 1 January 1997: The Trusts of Land and Appointment of Trustees Act 1996 (Commencement) Order 1996,
SI 1996/2974.
2 TLATA 1996, s 5(1) and Sch 2.
3 See paras HR A[533]-[538].
4 TLATA 1996, s 4(1).
(m) Unincorporated associations
HR A[543]-[545]
A lease cannot be granted to an association which, being unincorporated, has no legal entity. Thus, a lease cannot be
granted to the members from time to time of such an association, nor can a lease be granted to all the persons who at the
time when it was executed, were members of the association, where no one has himself undertaken, or authorised any
one on his behalf to undertake, the obligations which are imposed upon a lessee1. The lease is, in such cases, granted to
trustees for the association. A short term tenancy agreement is often entered into by the chairman or some other officer
acting under a resolution of the association or its executive committee.
HR A[546]
1 Jarrott v Ackerley (1915) 113 LT 371.
(n) Universities and colleges
HR A[547]
Leases of lands of the universities of Oxford, Cambridge, and Durham, and of the colleges in those universities, and of
the colleges of Winchester and Eton, are made under the Universities and College Estates Act 19251, which enables
these corporations to grant: (1) building leases for any term not exceeding 99 years; (2) mining leases for any term not
exceeding 60 years; and (3) any other leases2 for any term not exceeding 21 years. They may also grant leases to a
smallholding authority or to the Ministry of Agriculture, Fisheries and Food for the purpose of smallholdings for a term
not exceeding 35 years with or without a right of renewal for a further term not exceeding 35 years3. These powers,
which must be exercised in compliance with statutory provisions4 similar to those applicable to the powers of leasing of
a tenant for life of settled land5, are in general exercisable by these universities and colleges by such body and in such
manner as is provided by the statutes regulating the corporation in question6, but the power of making a building or
mining lease for a longer term or on other conditions than those specified in the Act7, must not be exercised without the
consent of the Minister of Agriculture, Fisheries and Food. These corporations also have general power to effect, under
an order of the minister, any lease or option, not otherwise authorised by the Act, which, in the opinion of the minister,
Page 116
would be for the benefit of land belonging to the corporation8. Fines received on the grant of leases, and the
consideration, if any, for the grant of an option, are capital money9.
HR A[548]
1 Universities and College Estates Act 1925, ss 6-12.
2 Any of these universities or colleges may lease land, or any easement, right, or privilege of any kind, over or in relation to the same, for
any purpose, whether involving waste or not: UCEA 1925, s 6. There is nothing in the Ecclesiastical Leases Act 1571, to restrict the powers
of leasing conferred by this Act: Eton College v Minister of Agriculture, Fisheries and Food [1964] Ch 274, [1962] 3 All ER 290.
3 Agriculture Act 1970, s 61(1) and (6).
4 UCEA 1925, ss 6-12.
5 See Settled Land Act 1925, ss 41-48, 51 at paras HR A[488]-[503].
6 UCEA 1925, s 41(2).
7 UCEA 1925, s 11.
8 UCEA 1925, s 21.
9 UCEA 1925, ss 7(4), 23.

Page 117
tenant/D Licences
D
Page 118
tenant/D Licences/1 Distinction between lease and licence
1 Distinction between lease and licence
(a) Exclusive possession
HR A[549]
It is essential to the creation of a tenancy of a corporeal hereditament that the tenant should be granted the right to the
exclusive possession of the premise1. A grant under which the grantee takes only the right to use the premises without
being entitled to exclusive possession must operate as a licence and not as a lease2. The general principle is that if the
true legal effect of the arrangement entered into is that the occupier of property has exclusive possession of the property
for an ascertainable period in return for periodical money payments a tenancy is created, whatever the label the parties
may have chosen to attach to it. In Street v Mountford3 it was made clear that the grant of exclusive possession for a
fixed or periodic term in consideration of a premium will inevitably result in law in the grant of a tenancy unless there
are circumstances of legal significance to negative such a grant. Such circumstances were ascertained from earlier cases.
In summarising his view of the previous cases Lord Templeman stated:
'the intention to create a tenancy was negatived if the parties did not intend to enter into legal relationships at all, or where the
relationship between the parties was that of vendor and purchaser, master and service occupier or where the owner, a requisitioning
authority has no power to grant a tenancy.'
HR A[550]-[560]
1 Taylor v Caldwell (1863) 3 B & S 826 at 832; cf Glenwood Lumber Co Ltd v Phillips [1904] AC 405 at 408-409, PC. It is self evident
that the tenant must be granted exclusive possession of land or something that has become part of the land: see, for example, Chelsea Yacht
and Boat Club Ltd v Pope [2001] 2 All ER 409, [2000] 1 WLR 1941, CA, applying Elitestone Ltd v Morris [1997] 2 All ER 513, [1997] 2
EGLR 115.
2 Hancock v Austin (1863) 14 CBNS 634; Wislon v Tavener [1901] 1 Ch 578 at 581; King v David Allen & Sons Billposting Ltd [1916] 2
AC 54; Walton Harvey Ltd v Walker and Homfrays Ltd [1931] 1 Ch 274, CA; Smith v Northside Developments Ltd (1987) 58 P & CR 64,
[1987] 2 EGLR 151, CA; Antoniades v Villiers, AG Securities v Vaughan [1990] 1 AC 417, [1988] 3 All ER 1058, HL.
3 [1985] AC 809 at 821.
HR A[561]
It is inconsistent with the with the view expressed in paras HR A[549]-[560] to consider the actual intention of the
parties, even though this may be expressed in their written agreement, as being in any way determinative of the legal
consequences of their agreement. Accordingly, those cases in which the courts have stated that the distinction between a
lease and licence is a matter which depends on the true intention of the parties can no longer be viewed as representing
Page 119
the correct approach1. It has been said that the law will not impute an intention to enter into the legal relation of
landlord and tenant where circumstances and conduct negative that intention2; but the fact that the agreement contains a
clause that no tenancy is to be created will not, of itself, preclude the instrument from being a lease3. If the effect of the
instrument is to give the holder the exclusive right of occupation of the land, though subject to certain reservations, or to
a restriction of the purposes for which it may be used, it is prima facie a lease4; if the contract is merely for the use of
the property in a certain way and on certain terms, while it remains in the possession and under the control of the owner,
it is a licence5.
HR A[562]
1 Eg Murray Bull & Co Ltd v Murray [1953] 1 QB 211. By the same reasoning, it is dangerous to treat what the parties actually did in the
course of the relationship as indicative of the true nature of the agreement: see, for example, Uratemp Ventures Ltd v Collins [2000] 1 EGLR
156, CA per Peter Gibson LJ at pp 158H-M, 159J-K (although a decision of the Court of Appeal was reversed by the House of Lords on a
different point: [2001] 3 WLR 806).
2 Booker v Palmer [1942] 2 All ER 674, CA; and see Parcar Utilities Ltd v Fordhamstead Ltd [1967] EGD 781
3 Facchini v Bryson [1952] 1 TLR 1386, CA; Street v Mountford [1985] AC 809 at 819.
4 Glenwood Lumber Co Ltd v Phillips [1904] AC 405 PC; Joel v International Circus and Christmas Fair (1920) 124 LT 459.
5 Wells v Kingston-upon-Hull Corpn (1875) LR 10 CP 402 at 408; Cory v Bristow (1877) 2 App Cas 262 at 276. See also Essex Plan Ltd
v Broadminster Ltd [1988] 2 EGLR 73, [1988] 43 EG 84.
HR A[563]
In deciding whether a grant amounts to a lease, or is only a licence, regard must therefore be had to the substance rather
than the form of the agreement, for the relationship between the parties is determined by the law and not by the
description which they choose to put on it1. To put it another way, it is the effect of the agreement in law which
determines its category and not what the parties say their intention was - still less the label they put on the agreement2:
'One must look at the transaction as a whole and at any indications that one finds in the terms of the contract between the two
parties to find whether in fact it is intended to create a relationship of landlord and tenant or that of a licensor and licensee.'
HR A[564]
1 Street v Mountford [1985] AC 809 at 819; AG Securities v Vaughan [1900] 1 AC 417, [1988] 3 All ER 1058, HL; Nicolau v Pitt [1989]
1 EGLR 84, [1989] 21 EG 71, CA. See also Mikeover Ltd v Brady [1989] 3 All ER 618, [1989] 2 EGLR 61, CA; Bostock v Bryant (1990) 22
HLR 449, [1990] 39 EG 64, CA.
2 Shell-Mex and BP Ltd v Manchester Garages Ltd [1971] 1 All ER 841 at 845, [1971] 1 WLR 612 at 618 per Buckley LJ.
HR A[565]
Page 120
It may not always be easy to ascertain whether exclusive possession has been conferred. The most important
consideration is likely to be the degree of control over the premises and their use retained by the owner. For example,
where a local authority provided a room in a hostel to a single homeless man pursuant to their statutory duty to do so
there was held not to be a grant of exclusive possession since the authority could at any time change the room which he
occupied or require him to share a room with someone else. They also controlled the extent of the use by forbidding
visitors without consent and by requiring that the occupier was in the premises by a stated time each evening1.
HR A[566]
1 Westminster City Council v Clarke [1992] 2 AC 288, [1992] 1 All ER 695, HL. See also Monmouth Borough Council v Marlog [1994] 2
EGLR 68, CA (no tenancy granted by named tenant to person with whom he shared occupation).
HR A[567]
The question of the degree of control exercisable by the owner of the property would normally be determined by
examining the contractual provisions governing the relationship between the parties. However, a contractual provision
not intended to be acted upon, and put in as a pretence or a sham in order to give a colourable or untrue impression that
exclusive possession is not granted to the occupier where in reality it is, will be ignored. For example the owner of a flat
occupied by two persons as man and wife purported to reserve the right to introduce other persons to share the
accommodation with them1. The provision was treated as a pretence and did not prevent the conclusion that exclusive
possession had been granted to the couple. Moreover, to give exclusive possession there need not be express words to
that effect; it is sufficient if the nature of the acts to be done by the grantee require that he should have exclusive
possession2. On the other hand, the employment of words appropriate to a lease such as 'rent' or 'rental' will not prevent
the grant from being a mere licence if from the whole document it appears that the possession of the property is to be
retained by the grantor3. In any event it is clear that payment and acceptance of rent is not in itself decisive of an
agreement being a tenancy4.
HR A[568]
1 Antoniades v Villiers, AG Securities v Vaughan [1990] 1 AC 417, [1988] 3 All ER 1058, HL
2 See eg Roads v Trumpington Overseers (1870) LR 6 QB 56 (exclusive possession notwithstanding landlord's power to inspect tenant's
excavations); Crosby v Wadsworth (1805) 6 East 602 (purchaser of crop and grass or hay has exclusive possession). See, however, Mogg v
Yatton Overseers (1880) 6 QBD 10 (contra where a purchaser of grass purchases it for feeding, and the vendor pays all rates, tithes and
taxes).
3 Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173, [1947] 2 All ER 331, HL.
4 Issac v Hotel de Paris Ltd [1960] 1 All ER 348, [1960] 1 WLR 239, PC per Lord Denning.
(b) The nature of the grant
HR A[569]
Page 121
Certain types of agreements are frequently held by the courts to be by their very nature incapable of amounting to a
grant of exclusive possession. For example agreements giving permission to erect or affix advertisements or advertising
hoardings will generally create licences on the basis that the permissions granted do not constitute exclusive possession
of land1.
HR A[570]
1 See eg Wilson v Taverner [1901] 1 Ch 578; King v David Allen & Sons Billposting Ltd [1916] 2 AC 54; UK Advertising Co v Glasgow
BagWash Laundry 1926 SC 303.
HR A[571]
An agreement for the occupation of a houseboat attached to the bank of a river by ropes and service connections was
held to be a licence. The degree of annexation to the land and the purpose of such annexation were insufficient to result
in the houseboat becoming part of the land itself. Accordingly, being a chattel, the houseboat was incapable of forming
the subject matter of a tenancy1.
HR A[572]-[580]
1 Chelsea Yacht and Boat Club Ltd v Pope [2001] 2 All ER 409, [2000] 1 WLR 1941, CA, applying Elitestone Ltd v Morris [1997] 2 All
ER 513, [1997] 2 EGLR 115.
HR A[581]
The same will usually apply to the grant of 'front of house rights' in a theatre. For example, it has been held1 that an
agreement whereby the grantee was given free and exclusive use of refreshment rooms for the purpose of supplying
visitors to the theatre was a licence. It has also been accepted that an agreement for the use of a theatre conveyed no
interest in land, notwithstanding the payment of weekly sums described by the parties as 'rental'2. In contrast, however,
the grantee of the sole right for five years to supply refreshments to public using premises was held to be a tenant by the
High Court of Australia3.
HR A[582]
1 In Clore v Theatrical Properties Ltd [1936] 3 All ER 483, CA. See also Daly v Edwards (1900) 83 LT 548, CA; affd Edwardes v
Barrington (1901) 85 LT 650, HL; Frank Warr & Co Ltd v LCC [1904] 1 KB 713.
3 Radaich v Smith (1959) 101 CLR 209.

Page 122
HR A[583]
Agreements relating to the extraction of minerals etc from, or the disposal of waste on, the grantor's land might also be
consistent with the grant of a licence rather than a tenancy. Accordingly, a permission to search for and extract copper
on certain land at a yearly rental with a proviso for re-entry for non-payment of rent has been held to be a licence1.
Similarly, a permission to dig and search for coal2 or to lay and stack coals upon land3.
HR A[584]
1 Ward v Day (1863) 4 B & S 337 at 335; affd (1864) 5 B & S 359.
2 Cheltham v Williamson (1804) 4 East 469; Doe d Hanley v Wood (1819) 2 B & Ald 724.
3 Wood v Lake (1751) Say 3. As to rights to deposit refuse see, for example, Hunts Refuse Disposals Ltd v Norfolk Environmental Waste
Services Ltd [1997] 1 EGLR 16 CA.
HR A[585]
A grant of exclusive right of photography is of no effect and incapable of amounting to a tenancy. The owner of land
who purports to make such a grant has no right of such property himself, and the grantee has no cause of action against
another person for taking photographs unless that person is debarred from doing so by a contract which the grantee can
enforce:
HR A[586]
1 Sports and General Press Agency Ltd v Our Dogs Publishing Co. Ltd [1917] 2 KB 125 CA.
HR A[587]
Rights granted in respect of stalls, such as a market stall, or franchise agreements have also been considered to exclude,
by their nature, the grant of exclusive possession. It is considered that a franchise agreement, where there is no
allegation that the document creating it conceals the true state of affairs, will be a licence1. Care needs to be taken with
stall arrangements. It is fair to say that agreements for the use of stalls in an exhibition or market have in several
instances been held to amount to licences2. However, each case depends upon its own facts and it is possible for such
rights to amount to a tenancy, notwithstanding that a trader's access to the stall is restricted to certain hours of the day3.
HR A[588]
1 Rossvale Ltd v Green (1978) 250 Estates Gazette 1183 (where judgment for possession was granted under RSC Ord 14).
Page 123
2 See eg R v Morrish (1863) 32 LJMC 245; Rendell v Roman (1893) 9 TLR 192 (exhibitions); Wigan Borough Council v Green & Son
(Wigan) Ltd [1985] 2 EGLR 242 (market stalls).
3 See Joel v International Circus and Christmas Fair (1920) 124 LT 459; Westminster City Council v Southern Rly Co [1936] AC 511,
[1936] 2 All ER 322. Contrast Manchester City Council v National Car Parks [1982] 1 EGLR 94, CA (restriction of use of car park to
specified hours held to negative grant of tenancy). See also National Car Parks Ltd v Trinity Development Co (Banbury) Ltd [2001] 28 EG
144; affd sub nom National Car Parks Ltd v Trinity Development Co (Banbury) Ltd [2001] EWCA Civ 1686, [2002] 2 P & CR 253
(agreement to administer a car park could not be construed as conferring exclusive possession and was therefore a licence).
(c) Exceptions to the general principle
HR A[589]
The fact that exclusive possession is granted is not decisive against the view that there is a mere licence, as a distinct
from a tenancy, although it is at all events a consideration of the first importance1. In order that a licence may give an
exclusive right to the benefit conferred, it must either be expressed to be exclusive in the grant, or it must be possible to
infer from the language of the grant a clear intention to that effect, and indeed it has been said that a grant of exclusive
possession under an ordinary business agreement excludes the possibility of the grant being that of a licence2. The
grantor is not, however, at liberty to grant further licences so as to defeat the purposes of the first licence3: A licence
which confers the right of exclusive possession has been termed a 'possessory licence', an expression which marks it off
from the more usual type of licence which serves to authorise acts which would otherwise be a trespass4. In essence a
possessory licence is usually a subdivision of that category of licences known as contractual licences5.
HR A[590]-[600]
1 See Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513, [1957] 3 All ER 563, criticising dictum of Denning LJ in Errington v
Errington & Woods [1952] 1 KB 290, [1952] 1 All ER 149, CA. See also Cobb v Lane [1952] 1 All ER 1199.
2 Bracey v Read [1963] Ch 88, [1962] 3 All ER 472.
3 See Newby v Harrison (1861) 1 John & H 393 at 397, affd 4 LT 424.
4 See (1965) 29 Conv (NS) (M C Cullity).
HR A[601]
In general1, a grant of exclusive possession may amount to a licence and not a tenancy where the parties did not intend
to enter into any binding legal relationship at all, where the exclusive possession is referable to some other legal
relationship such as occupancy under a contract of sale of land, occupancy pursuant to a contract of employment or
occupancy referable to the holding of an office, or where the grantor has no power to grant a lease2.
HR A[602]
Page 124
1 Following the dicta in Street v Mountford [1985] AC 809, [1985] 2 All ER 289.
2 See paras HR A[609]-[628].
HR A[603]
The categories listed in paras HR A[549]-[568] are not closed and indeed may not be precisely the same in respect of
business premises1. It is thought that with regard to such premises the court may be more willing to make a finding that
exclusive possession was not granted or as to what were the parties intentions in that respect2:
HR A[604]
1 London & Associated Investment Trust plc v Calow [1986] 2 EGLR 80 and Dellneed Ltd v Chin [1987] 1 EGLR 75.
2 See Dresden Estates Ltd v Collinson (1987) 55 P & CR 47, [1987] 1 EGLR 45 and Smith v Northside Developments Ltd [1987] 2 EGLR
151, 283 Estates Gazette 1211, CA.
(d) Intention to enter into legal relations
HR A[605]
It is important for an understanding of those cases in which 'the intention of the parties' is mentioned as negativing the
intention to create a tenancy, even though exclusive possession is granted, to appreciate that what it usually meant is
that the parties did not intend to enter into a legal relationship at all. Accordingly it may be that a person to whom
exclusive possession has been granted in terms applicable to a licence will be a mere licensee where the grant is made
out of generosity. For example, an arrangement that friends might have exclusive possession of a furnished flat during a
tenant's absence and in exchange should make weekly payment but without any provision for termination has been held
to create a licence1. Similarly an arrangement that bombed-out people should occupy a cottage rent free for the duration
of the war was held to be a licence2. Further where homeless persons had been put into possession of a house
requisitioned by a local authority the court found that no tenancy had been created3.
HR A[606]
1 See E Moss Ltd v Brown [1946] 2 All ER 557, CA.
2 Booker v Palmer [1942] 2 All ER 674, CA.
3 Southgate Borough Council v Watson [1944] KB 541, [1944] 1 All ER 603.

Page 125
HR A[607]
The same principle will apply where a grant of exclusive possession is made as a matter of family arrangement. There
have been a number of cases in which the courts have spelled out licences from such arrangements1, although the
existence of a family relationship between grantor and grantee does not in itself preclude the grant of a tenancy2.
Moreover, cases of this nature are to be distinguished from cases where the monetary or other contribution of the
mistress to the property is such that a constructive trust arises in her favour to give her a proprietary interest in the
property3. The lack of an intention to enter into legal relations may also feature in cases in which the grant of exclusive
possession is referable to some other legal relationship.
HR A[608]
1 See eg Hardwick v Johnson [1978] 2 All ER 935, [1978] 1 WLR 683; Chandler v Kerley [1978] 2 All ER 942, [1978] 1 WLR 693;
Tanner v Tanner [1975] 3 All ER 776, [1975] 1 WLR 1346, CA.
2 See eg Ward v Warnke (1990) 22 HLR 496.
3 Such as in Eves v Eves [1975] 3 All ER 768, [1975] 1 WLR 1338, CA.
(e) Grant referable to some other legal relationship
HR A[609]
A grant of exclusive possession may amount to a licence and not a tenancy where the exclusive possession is referable
to some other legal relationship such as occupancy under a contract of sale of land or during negotiations pending the
grant of a lease, occupancy with consent pending execution of a possession order, occupancy pursuant to a contract of
employment or occupancy referable to the holding of an office. Thus, where a grantee entered into possession of a
nightclub situated within a hotel pending negotiations for the purchase of the share capital of the company that owned
that hotel and the grantee both managed the club and paid the hotel's outgoings he was none the less held to be a mere
licensee1. Similarly, a licence agreement for a market granted pending a grant of a 30-year lease was held not to be a
tenancy2.
HR A[610]
1 See Isaac v Hotel de Paris [1960] 1 All ER 348, [1960] 1 WLR 239, PC.
2 In Essex Plan Ltd v Broadminster Ltd [1988] 2 EGLR 73, [1988] 43 EG 84. See also Edwin Shirley Productions Ltd v Workspace
Management Ltd [2001] 23 EG 158 for an example of the effect of 'subject to contract' negotiations.
HR A[611]
Page 126
Where a former tenant, by virtue of his former landlord's forebearance, remained in premises paying mesne profits and
contributions to arrears of rent pending execution of a possession order, the occupation was governed by the terms of
the order. Accordingly, such occupation was not, without more, referable to the grant of a tenancy1.
HR A[612]-[620]
1 Stirling v Leadenhall Residential 2 Ltd [2001] EWCA Civ 1011, [2001] 3 All ER 645.
HR A[621]
Where a person is employed for life and while employed is entitled to rent-free accommodation in a house belonging to
his employer, the occupation is referable to a licence (and not a tenancy for life under the Settled Land Act 1925). Being
ancillary to the contract of employment, the licence comes to an end with that contract, even if the contract of
employment is determined unlawfully, and the employer is entitled to an order for possession1.
HR A[622]
1 See Ivory v Palmer [1975] ICR 340, CA; Whitbread West Pennines Ltd v Reedy [1988] ICR 807, 20 HLR 642, CA.
HR A[623]
However, the question remains one of the true construction of the agreement and if all of the essential elements of a
tenancy are present the fact that possession of the land might be explicable on some other basis will not prevent the
creation of a tenancy. Accordingly, it has been held that an agreement for a lease under which the grantee had entered
into possession and paid the first instalment of rent created a tenancy even though by a term of the agreement the
grantee was to be a licensee until the completion of the transaction (although that term was only incorporated insofar as
not inconsistent with the agreement for a lease)1. By way of further example, an occupier who is granted exclusive
possession with the hope of becoming a possible future purchaser is not in the same position as a purchaser allowed into
possession pending completion and will be a tenant2.
HR A[624]
1 Joel v Montgomery & Taylor [1967] Ch 272, [1966] 3 All ER 763.
2 Bretherton v Paton [1986] 1 EGLR 172, CA.
(f) Grantor lacking power to grant a lease

Page 127
HR A[625]
A grant of exclusive possession might not amount to a tenancy where the grantor has no power to grant a lease.
Accordingly a person appointed by trustees of a registered charity to occupy an almshouse was not an assured tenant
under the Housing Act 1988 notwithstanding that she had exclusive possession of the almshouse and paid a weekly sum
in respect of her occupation1. The circumstances of the grant negatived any intention to create a tenancy as the trustees
had no power under the trust to let the almshouses.
HR A[626]
1 Gray v Taylor [1998] 4 All ER 17, CA. This case highlights the importance of the nature of the agreement when a claim is made to
some statutory protection; for example licences are not within the protection of the Rent Act 1977, the Housing Act 1988 or Part II of the
Landlord and Tenant Act 1954.
HR A[627]
It also appears that no tenancy is created by estoppel in such a case1. However, there seems to be a distinction between
a case in which the grantor would, by granting a lease, be ultra vires its statutory powers and a case in which the grantor
merely lacks the estate necessary to grant such an interest2.
HR A[628]
1 Minister of Agriculture and Fisheries v Matthews [1950] 1 KB 148.
2 Bruton v London & Quadrant Housing Trust [1999] 3 All ER 481 per Lord Hoffmann, overturning Bruton v Quadrant Housing Trust
[1998] QB 834, [1997] 4 All ER 970.
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tenant/D Licences/2 Nature of licence
2 Nature of licence
(a) No legal estate
HR A[629]
A licence does not create any estate or legal or equitable interest in the property to which it relates1; it confers a right
making that lawful which would otherwise be unlawful. Thus, a licence by A to permit B to enter upon A's land is, in
effect, an authority which prevents B from being a trespasser when he avails himself of the licence2. The difference
between a tenancy and a licence is that a legal estate in the land arises in the tenant as a necessary incident of the
tenancy3. The classic definition of a licence has been propounded thus4:
'a dispensation or licence properly passeth no interest, nor alters or transfers property in any thing, but only makes an action lawful
which without it had been unlawful5.'
HR A[630]-[640]
1 Thomas v Sorrell (1673) Vaugh 330 at 351; Muskett v Hill (1839) 5 Bing NC 694 at 707; Heap v Hartley (1889) 42 Ch D 461 at 468,
CA.
2 Thomas v Sorrel (1673) Vaugh 330 at 351; Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173, [1947]
2 All ER 331, HL.
3 Macroft Wagons Ltd v Smith [1951] 2 KB 496 at 500, [1951] 2 All ER 271 at 273, per Sir Raymond Evershed MR.
4 Thomas v Sorrell (1673) Vaugh 330 at 351.
5 The more recent tendency is, however, towards a blurring of the distinction between a proprietary interest and a licence. In Manchester
Airport plc v Dutton [2000] 1 QB 133; [1999] 1 EGLR 146 sub nom Dutton v Manchester Airport plc [1999] 2 All ER 675 CA (Chadwick
LJ dissenting) it was held that a contractual licence to enter onto land to carry out tree felling works gave the licensee, although not in actual
possession, sufficient interest to bring summary proceedings for possession against trespassers under RSC Ord 113 of Sch 1 to the CPR. The
House of Lords refused leave to appeal. The same point was considered in a subsequent case, Countryside Residential (North Thames) Ltd v
Tugwell [2000] 17 LS Gaz R 34. Although the Court of Appeal decided against the claim for possession, it did so on the basis that the
licence, properly construed, did not give the licensee effective control for the purposes of a claim for possession. See also the commentary
on the decision in Bruton v London & Quadrant Housing Trust [2000] 1 AC 406, [1999] 3 All ER 481, HL at para HR A[89].
(b) Equitable interest
HR A[641]
Page 129
In contrast to the above it has been suggested in more recent times that a licence may create an equitable interest in land
binding not only on the licensor but also on his successors in title and, further, that we may be witnessing the birth
throes of a new species of rights in rem akin to the transformation of restrictive covenants to such a status in Tulk v
Moxhay1. That suggestion is based upon two sources: first it arises from the decision of the Court of Appeal in
Errington v Errington & Woods2; and secondly it comes from a line of cases considering the rights of a deserted wife as
against successors in title of her husband. It is submitted that both lines of thought can now be rejected as being
incorrect.
HR A[642]
1 Tulk v Moxhay (1848) 2 Ph 774.
2 Errington v Errington & Woods [1952] 1 KB 290, [1952] 1 All ER 149.
(c) The decision in Errington v Errington & Woods
HR A[643]
In Errington v Errington & Woods1 the father bought a house on mortgage and allowed his son and daughter-in-law to
live in it, they to repay the mortgage instalments, on the understanding that the house would become theirs when the
repayments were complete. The father died having devised the house to his widow. The issue was whether the widow
was entitled to possession as against the son and his wife. The Court of Appeal rejected the view that the relationship
created between father and son was a tenancy for the period of the repayment of the instalments or was a tenancy at
will, rather concluding that there was a licence. It was then held by Denning LJ that as a result of statements in Winter
Garden Theatre (London) Ltd v Millennium Productions Ltd 2, there was a right in equity for the son to remain even as
against the successors in title of the licensor. In other words the licence was elevated to the status of an equitable
interest binding on the licensor and everyone who claimed through him except a purchaser for value without notice3.
HR A[644]
1 Errington v Errington & Woods [1952] 1 KB 290, [1952] 1 All ER 149.
3 See per Denning LJ [1952] 1 All ER 149 at 155.
HR A[645]
In Binions v Evans1 Lord Denning MR similarly suggested that on the facts of that case the rights of the contractual
licensee were an equitable interest and that a purchaser of the land was bound by a constructive trust in favour of the
licensee. The other two members of the Court of Appeal decided the case on other grounds. However, Lord Denning
Page 130
MR's suggestion in Binions v Evans, that a possessory licence creates in the licensee an equitable interest in land by way
of a constructive trust, was applied in DHN Food Distributors Ltd v London Borough of Tower Hamlets2. Land was
vested in a wholly owned and wholly controlled subsidiary company which allowed the parent company into
possession. The licence of the parent company was held to be an irrevocable contractual licence which gave rise to a
constructive trust.
HR A[646]
1 Binions v Evans [1972] Ch 359, [1972] 2 All ER 70.
2 DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 3 All ER 462, [1976] 1 WLR 852, CA.
(d) Criticisms of the decision
HR A[647]
The criticisms that have been advanced of the decision in Errington v Errington & Woods are cogent. It is not necessary
on any social or general grounds that licensees should be afforded the extra protection and status of holders of true
interests in land. The decision blurs the essential distinction between interest in land and mere contractual rights which
happen to have land as their subject matter. The previous law was clearly to the contrary. The House of Lords has held
that a licence to display advertisements on a building did not bind a tenant of the licensor1; it has also been held that a
licence to use refreshment rooms at a theatre did not bind an assignee of the licensor2. Nor does the decision of the
House of Lords in Winter Garden Theatre (London) Ltd v Millennium Productions Ltd3 in truth support Denning LJ,
since that case is best considered as appertaining to the logically separate topic of when a licence may be revoked.
Finally, the reasoning was not even necessary to the decision itself, since there appears to have been no obstacle to
holding that the transaction was an estate contract and enforceable against the widow for that reason. It is therefore
submitted with respect that Errington's case, above, is not good law and does not justify any general conclusion that a
licence is more than a purely contractual interest4.
HR A[648]
1 King v David Allen & Sons Billposting Ltd [1916] 2 AC 54.
2 Clore v Theatrical Properties Ltd [1936] 3 All ER 483.
4 See further on this subject 68 LQR 337, 169 LQR 466, 16 MLR 1.
(e) The 'deserted wife's equity'

Page 131
HR A[649]
The doctrine that grew up surrounding the deserted wife's equity concerned the existence of a supposed licence which
entitled her to possession as against successors in title of her husband. In Thompson v Earthy1 Roxburgh J had no
hesitation in rejecting a submission that such an enforceable right existed even where the purchaser had notice of the
wife's position. However, in a line of subsequent cases, beginning with the minority reasoning of Denning LJ in Bendall
v McWhirter2, the doctrine of the equitable right of the wife to remain in possession was defined and developed. For
example it has been held that the right was a mere equity not an equitable interest3, and was determinable at the
discretion of the court4.
HR A[650]-[660]
1 Thompson v Earthy [1951] 2 KB 596, [1951] 2 All ER 235.
2 Bendall v McWhirter [1952] 2 QB 466 [1952] 1 All ER 1307.
3 See Westminster Bank v Lee [1956] Ch 7, [1955] 2 All ER 883.
4 See Jess B Woodcock & Sons Ltd v Hobbs [1955] 1 All ER 445, [1955] 1 WLR 152, CA.
HR A[661]
These decisions need not now be reviewed in any detail following the decision of the House of Lords in National
Provincial Bank v Ainsworth1. The facts were that a husband owned a house in which he lived with his wife. He
deserted her leaving her in occupation of the house. He then mortgaged the house to a bank. The bank sought possession
when default was made under the mortgage. It was held that the wife's right to occupy the matrimonial home was a
personal right as against her husband and did not confer on her any equitable interest or right of property in the land.
Indeed it was strongly doubted whether the wife was in truth a licensee at all. Thus Thompson v Earthy2 stands
approved whilst the following cases must now stand overruled, at any rate on the present point: Bendall v McWhirter3;
Churcher v Street4; Westminster Bank v Lee5; Ferris v Weaven6. It was always unfortunate that the just claim of a
deserted wife to remain came to be supported by an unnecessary alteration of the established law relating to licences. It
has been pointed out that the matter could best be covered by an adjustment of the law of matrimonial relations, as has
been done in other countries. The Matrimonial Homes Act 1983 now performs that function, allowing a spouse to
register a right of occupation as a land charge.
HR A[662]
1 National Provincial Bank Ltd v Ainsworth [1965] AC 1175, [1965] 2 All ER 472.
2 Thompson v Earthy [1951] 2 KB 596, [1951] 2 All ER 235.

Page 132
3 Bendall v McWhirter [1952] 2 QB 466 [1952] 1 All ER 1307.
4 Churcher v Street [1959] Ch 251, [1959] 1 All ER 23.
5 Westminster Bank Ltd v Lee [1956] Ch 7, [1955] 2 All ER 883.
6 Ferris v Weaven [1952] 2 All ER 233 (though the actual conclusion of Jones J in that case may be supported by the fact that the sale
there of the house by the husband for £30 was a sham: see per Lord Hodson in National Provincial Bank v Ainsworth [1965] AC 1175 at
1223, [1965] 2 All ER 472 at 479; Short v Short [1960] 3 All ER 6, [1960] 1 WLR 833 (see per Devlin LJ).
Page 133
tenant/D Licences/3 The categories of licence
3 The categories of licence
HR A[663]
There are three categories of licence. The category into which a licence falls has consequences in terms of both
revocability and assignability (of which see paras HR A[669]-[747]). The first category of licence, a bare licence, is
granted without any valuable consideration to support it. The second category is that of a licence coupled with the grant
of an interest, such as a right to enter onto land and enjoy a profit a prendre or other incorporeal hereditament. The word
'interest' has been given a wide meaning. Megarry J has stated that he doubted whether the word meant anything more
than an interest in property, whether that property be real or personal or whether the interest be legal or equitable1. It
has also been said that a person on the premises for the purposes of a creditors meeting was there as a licensee under a
licence coupled with an interest, though there was not a shred of proprietary interest in the licensor's land or any chattels
on it2.
HR A[664]
1 Hounslow London Borough Council v Twickenham Garden Developments Ltd [1971] Ch 233, [1970] 3 All ER 326.
2 Vaughan v Hampson (1875) 33 LT 15.
HR A[665]
Formerly, it was necessary that the grant of the interest itself should be valid; thus if the interest was an incorporeal
hereditament - such as a licence to make and use a watercourse - the grant was not valid unless under seal and the
licence fell into the category of a bare licence with all of the implications in respect of revocability that that involved.
However since the Judicature Act 18731 any court is bound to give effect to equitable doctrines and will accordingly
restrain the revocation of a licence coupled with a grant which should be, but is not, under seal2.
HR A[666]
1 Replaced by the Supreme Court of Judicature (Consolidation) Act 1925, s 44 and see now the Supreme Court Act 1981, s 49.
2 See eg Lowe v Adams [1901] 2 Ch 598; Hurst v Picture Theatres Ltd [1915] 1 KB 1, CA; Allen v King [1915] 2 IR 213, on appeal
[1915] 2 IR 448, affd sub nom King v David Allen & Sons Billposting Ltd [1916] 2 AC 54, HL; Whipp v Mackey [1927] IR 372; Creedon v
Collins (1964) Sol Jo 580.
HR A[667]
Page 134
The third category is a contractual licence, that is any licence which is not coupled with a grant but which is supported
by valuable consideration. A contractual licence is not an entity distinct from the contract which brings it into being but
is merely one of the provisions of that contract. A licence is still a contractual licence when it arises under or as a term
of a contract even though the conferring of the right to go onto the land is an ancillary or secondary purpose of the
contract rather than its primary purpose1. Examples of such licences are the right to enter a cinema or a railway station
after buying a ticket: it is clear that such licences may fall far outside the confines of landlord and tenant.
HR A[668]
1 Hounslow London Borough Council v Twickenham Garden Developments Ltd [1971] Ch 233, [1970] 3 All ER 326.
Page 135
tenant/D Licences/4 Assignment of licences
4 Assignment of licences
HR A[669]
It is sometimes said that a licence is not assignable by the licensee1. However, whatever may be the position as regards
a bare licence, a licence coupled with the grant of an interest is capable of assignment2. Moreover covenants may be
made to run with such a licence: and it has been held that the assignees of a licensee were liable for damage caused
following the assignment3.
HR A[670]-[680]
1 See eg Re Davis & Co, ex p Rawlings (1888) 22 QBD 193 at 197, CA.
2 See Muskett v Hill (1839) 5 Bing NC 694 (concerning a licence to search for and carry away metals).
3 Norval v Pascoe (1864) 34 LJ Ch 82.
HR A[681]
Equally, there does not seem to be any reason in principle why the benefit of a contractual licence may not be assigned
in accordance with the general principle that the benefit of a contract is assignable in equity or under the Law of
Property Act 1925, s 146. Contrast, however, the case of a contract which is personal to one party which, by its nature,
may not be assigned1. It appears that the decision of Cross J in Dorling v Honnor Marine Ltd2, where he held that a
licence was prima facie personal to the licensee and incapable of assignment, is explicable on this basis in that he seems
to contemplate that a licence can by its terms be made assignable.
HR A[682]
1 See eg Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660 at 668 per Collins MR; Kemp v Baerselman
[1906] 2 KB 604.
2 Dorling v Honnor Marine Ltd [1964] Ch 560 at 568, [1963] 2 All ER 495 at 502.
Page 136
tenant/D Licences/5 Revocation of licences
5 Revocation of licences
(a) The nature of the licence
HR A[683]
The question of revocation of licences must be considered under the three categories of licence. A bare licence does not
even amount to a contract, with the result that it may be revoked by the licensor at any time without giving a right to
damages to the licensee: in Aldin v Latimer Clark, Muirhead & Co1 it was assumed that the gratuitous licence was
revocable at will, although as the licensor had not given reasonable notice of the revocation the licensee was on the
particular facts entitled to damages2. However, the courts have a power to prevent by injunction the revocation of a bare
licence when that revocation would cause particular hardship3.
HR A[684]
1 Aldin v Latimer Clark, Muirhead & Co [1894] 2 Ch 437.
2 See also Vaughan v Vaughan [1953] 1 QB 762, [1953] 1 All ER 209, CA.
3 Plimmer v City of Wellington Corpn (1884) 9 App Cas 699; Dillwyn v Llewelleyn (1862) 4 De G F & J 517; A-G of Southern Nigeria v
John Holt & Co (Liverpool) Ltd [1915] AC 599. This principle was applied by the Court of Appeal in Inwards v Baker [1965] 2 QB 29,
[1965] 1 All ER 446.
HR A[685]
A licence coupled with the grant of an interest is irrevocable, the reason being that revocation would amount to a
derogation from the grant1.
HR A[686]
1 Doe d Hanley v Wood (1819) 2 B & Ald 724 at 738; Wood v Leadbitter (1845) 13 M & W 838 at 845; James Jones & Sons Ltd v Earl of
Tankerville [1909] 2 Ch 440 at 442.
HR A[687]
The learning that has developed on the revocability of contractual licences is both abstruse and uncertain. The logical
and indeed the correct approach is that, as the licence is dependent on a contract, its revocability should depend on the
Page 137
terms of that contract. The starting point is to ask whether as a matter of construction of the contract the licence is
revocable at all and, if so, under what circumstances1.
HR A[688]
1 That was the approach taken in Winter Garden Theatre (London) Ltd v Millennium Products Ltd [1948] AC 173, [1947] 2 All ER 331,
HL and Norris v Checksfield [1992] 1 EGLR 159, CA.
HR A[689]
It seems that revocability will be most easily inferred in respect of a contractual licence where, as in the latter case,
periodical payments are reserved. In contrast there is a presumption against revocability in the case of a licence granted
in consideration of a capital sum, such as in Llanelly Rly & Dock Co v London & North Western Rly Co1, where it was
held that a grant of 'running powers' was irrevocable. Such a presumption may also arise where there is a licence on the
faith whereof the licensee is induced to incur expense2. Such cases should be distinguished from those cases whereby a
promise has been made which is not contractual in form or effect: once that promise has been acted on then, without
more, there is no right given to the promisee to continue enjoying the subject matter of the promise indefinitely and the
promisor may revoke his licence3.
HR A[690]-[700]
1 Llanelly Rly & Dock Co v London & North Western Rly Co (1875) LR 7 HL 550.
2 See Winter v Brockwell (1807) 8 East 308; Liggins v Inge (1831) 7 Bing 682 at 694; Davies v Marshall (1861) 10 CBNS 697 at 711.
3 Vaughan v Vaughan [1953] 1 QB 762, [1953] 1 All ER 209, CA, per Raymond Evershed MR, explaining his own judgment in Foster v
Robinson [1951] 1 KB 149, [1950] 2 All ER 342.
HR A[701]
In the case of reciprocal licences (eg a licence to A to discharge water into a manhole on B's land, and a licence to B to
discharge water from the manhole through a drain running in and under A's land) a person enjoying one part is not
entitled to revoke the other part which imposes a burden upon him1. In Australian Blue Metal Ltd v Hughes2 there was
a licence to enter on land and mine for magnesite which contained no express term defining the period for which it was
to run. The Judicial Committee opined that on a true construction of the licence it was recoverable at will, the licensee
having a period of grace to remove minerals already mined. It was also held that: (1) it is doubtful whether a licensor is
entitled to require from the licensee such information as was necessary to enable him to form an opinion as to the proper
length of reasonable notice; and (2) in the matter of a dated notice no distinction was to be drawn between cases in
which equity imposed the rule and those in which the common law implied the term; in either case it depended on what
was fair and reasonable between the parties3.
HR A[702]
Page 138
1 Hopgood v Brown [1955] 1 All ER 550, [1955] 1 WLR 213, CA.
2 Australian Blue Metal Ltd v Hughes [1963] AC 74, [1962] 3 All ER 335, PC.
3 See also Dorling v Honnor Marine Ltd [1964] Ch 560, [1963] 2 All ER 495; Diggle v Guardian Hotels Ltd [1965] EGD 141, CA.
HR A[703]
There are cases where the courts are prepared to go to great lengths to find a contractual licence and once this is done
the role of equity is said to be 'supportive and supplementary' in determining the question of its revocability. It has been
held that the occupation of a house by a man's former mistress was a contractual licence which was only determinable
upon 12 months' notice being given1. Per contra in Hardwick v Johnson2 the licence spelled out by the court was not
revocable. In Macclesfield v Parker3 a licence to occupy an ancestral home which came into existence during the course
of negotiating for a lease was determinable only upon two years' notice, that being the period the parties would have
agreed as sufficient time for the licensee to remove his chattels in an orderly manner4.
HR A[704]
1 Chandler v Kerley [1978] 2 All ER 942, [1978] 1 WLR 693.
2 [1978] 2 All ER 935, [1978] 1 WLR 683, CA.
3 [2003] NPC 94.
4 Reference was also made to the principle of respect for a licensee's home under art 8 of the European Convention on Human Rights.
HR A[705]
The Court of Appeal has also considered the circumstances in which an equitable licence would be revocable and what
equitable relief was available to a licensee whose licence had been wrongfully revoked1.
HR A[706]
1 Williams v Staite [1979] Ch 291, [1978] 2 All ER 928.
(b) Revocation in breach of contract
HR A[707]
Page 139
If the licence has been validly revoked in accordance with the terms of the contract, then cadit quaestio. The difficulties
that arise involve instances of purported revocations in breach of the contract. The old learning was that at common law
the licensor had a power to revoke the licence, albeit in breach of contract, but had no right to do so. Such terms arose
long before the rigorous analysis of Hohfeldian jurisprudence. What appears to have been meant is that the licensor
always had the power to revoke the licence, in the sense that the licence did end and the licensee became a trespasser.
However, as the licensor had no right to revoke the licensee had his remedy in damages for breach of contract. The
well-known case of Wood v Leadbitter1 is understandable on that principle. The purchaser of a ticket was forcibly
turned off a racecourse before the racing had ended. He sued in assault and failed, the reason being that his licence had
been ended so that he became a trespasser and might therefore be forcibly ejected. Had he sued in contract he would
have succeeded2. For an explanation of the technicalities of pleading that governed the decision in Wood v Leadbitte3,
see Winter Garden Theatre (London) Ltd v Millennium Productions Ltd4.
HR A[708]
1 Wood v Leadbitter (1845) 13 M & W 838.
2 Smart v Jones (1864) 15 CBNS 717; Kerrison v Smith [1897] 2 QB 445; cf Wilson v Tavener [1901] 1 Ch 578.
3 Wood v Leadbitter (1845) 13 M & W 838.
4 Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173 at 190, [1947] 2 All ER 331 at 336, HL, per
Viscount Simon.
HR A[709]
That doctrine has not fully survived the fusion of law and equity. It seems that today, at least as far as contracts that are
specifically enforceable are concerned, the licensor has neither the power nor the right to revoke the licence except in
accordance with the terms of the contract. In Hurst v Picture Theatres Ltd1 the plaintiff had bought a ticket for a cinema
and was forcibly ejected in the middle of a performance, it being mistakenly believed that he had not paid for his entry.
He sued in assault and succeeded. It was held that as a matter of construction of the contract it was not revocable during
the performance. The effect of the fusion of law and equity was that when the contract was specifically enforceable the
doctrine of the power of the licensor to revoke in breach of contract did not apply. The difficulty on the facts of Hurst v
Picture Theatres Ltd is to see how a contract such as existed there could have been specifically enforced, but the general
reasoning is to be welcomed and the decision was approved by the House of Lords2.
HR A[710]-[720]
1 Hurst v Picture Theatres Ltd [1915] 1 KB 1, CA
2 In Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173, [1947] 2 All ER 331, HL.
HR A[721]
Page 140
The Court of Appeal has refused1 to follow and earlier decision of that court2 in which it had been held that a licence
was too transient an interest to be protected by injunction and thus in the case of revocation the injured person's remedy
sounded in damages alone. The court's reasoning was that the earlier case could not stand with the later decisions of the
courts and in particular that of the House of Lords in the Winter Garden Theatre case. The plaintiff was thus held to be
entitled under RSC Ord 14 to specific performance of an agreement for the use for two days of conference facilities by
the National Front. Lord Denning MR said3:
'Since the Winter Garden case it is clear that once a man has entered under his contract of licence, he cannot be turned out. An
injunction can be obtained against the licensor to prevent his being turned out. On principle it is the same if it happens before he
enters3.'
HR A[722]
1 Verrall v Great Yarmouth Borough Council [1981] QB 202, [1980] 1 All ER 839.
2 Thompson v Park [1944] KB 408, [1944] 2 All ER 477.
3 Verrall v Great Yarmouth Borough Council [1981] QB 202 at 268, [1980] 1 All ER 839 at 844.
4 For a case where substantial damages were awarded for the revocation of a licence in breach of contract, see Tanner v Tanner [1975] 3
All ER 776, [1975] 1 WLR 1346, CA.
HR A[723]
The situation with contracts not specifically enforceable can only be described as uncertain. It appears that there may be
some move away from basing the effects of revocation in breach of contract upon the issue of specific enforceability.
The topic of the revocability of a contractual licence has been explored in depth1. There contractors under a building
contract, who were on the site as contractual licensees, refused to leave the site even though the employers had
purported to determine their employment under the terms of the contract. The employers sought an interlocutory
injunction to remove them. Assuming for the purposes of the argument that the licence had been revoked in breach of
the terms of the contract (whether the conditions precedent for a valid determination of the employment existed was a
disputed issue of fact), the stark question arose whether the revocation was valid so as to turn the contractors into
trespassers. Megarry J held that the building contract was specifically enforceable. Accordingly his decision can be
justified on the principle approved by the House of Lords in the Winter Garden case2. However, it is interesting that
Megarry J specifically said that he did not base his decision on the fact that the contract was specifically enforceable.
Having considered, inter alia, Hurst v Picture Theatres Ltd3, Winter Garden Theatre (London) Ltd v Millennium
Productions Ltd4 and Thompson v Park5 he said that he would not grant an injunction even if the contract was not
specifically enforceable.
HR A[724]
1 In the decision of Megarry J in Hounslow London Borough Canal v Twickenham Garden Developments Ltd [1971] Ch 233, [1970] 3 All
Page 141
ER 326.
3 Hurst v Picture Theatres Ltd [1915] 1 KB 1.
5 Thompson v Park [1944] KB 408, [1944] 2 All ER 477.
HR A[725]
If this is correct, it means that the old learning1 on a power to revoke a licence but no right to do so may no longer be
good law. It certainly seems to be the case that a court will not lend its assistance to a person who has broken his
contract in revoking a licence by granting him an injunction to remove a licensee even if that licensee has become a
trespasser by the breach of contract2. What the courts appear to be doing at present is to exercise a broad general
equitable jurisdiction based on the conduct of the parties. A party in flagrant breach of contract is likely to be enjoined3
and a party not in flagrant breach is likely to find the licence has not been determined4. But the courts lean against
irrevocable licencees at least where no payments are being made5. Per contra where there was a payment of a licence
fee and the licence spelled out by the court from a family arrangement was irrevocable6.
HR A[726]
1 Following Wood v Leadbitter (1845) 13 M & W 838.
2 See also Verrall v Great Yarmouth Borough Council [1981] QB 202, [1980] 1 All ER 839, CA.
3 See Verrall v Great Yarmouth Borough Council [1981] QB 202, [1980] 1 All ER 839, CA.
4 See Williams v Staite [1979] Ch 291, [1978] 2 All ER 928.
5 See Chandler v Kerley [1978) 2 All ER 942, [1978] 1 WLR 693 where 12 months' notice was held to be appropriate.
6 Hadwick v Johnson [1978] 2 All ER 935, [1978] 1 WLR 683.
HR A[727]
Despite decisions of the Court of Appeal1, it is not possible to say in advance whether a particular licence is revocable
and if so whether it has in any case been validly revoked and, if lawfully revoked, what remedy will be granted by the
courts. In particular, what is not made clear by Verrall or by any of the recent cases referred to above is how the court
distinguishes between those agreements which are and those which are not specifically enforceable.
HR A[728]
Page 142
1 In Williams v Staite [1979] Ch 291, [1978] 2 All ER 928; Chandler v Kerley [1978] 2 All ER 942, [1978] 1 WLR 693; and Verrall v
Great Yarmouth Borough Council [1981] QB 202, [1980] 1 All ER 839, CA.
(c) Summary of the present law
HR A[729]
Notwithstanding the evident difficulties it is submitted that it is possible to give a tentative summary of the present law
on the revocation of contractual licences:
(a) it is a matter of construction of the contract to determine whether or when the licence is revocable;
(b) if the licence is revoked in breach of contract in all cases the licensee has a remedy in damages for
breach of contract;
(c) if the licence is revoked in breach of contract, and it is a specifically enforceable contract, the
purported revocation is without effect and the licensee may remain without becoming a trespasser;
(d) if the licence is revoked in breach of contract, and it is not a specifically enforceable contract,
probably the revocation is valid and the licensee, if he does not leave within a reasonable time, becomes
a trespasser.
(d) The time of revocation
HR A[730]-[740]
As with revocability per se, whether a notice determining a licence revokes the licence immediately on service, or only
from the expiration of some period thereafter, is likewise a question of construction1. In Australian Blue Metal v
Hughes the Judicial Committee2 were of the opinion that, assuming that some notice was required to terminate the
licence, there was no fixed rule that a dated notice was required but rather that it all depended upon the terms of the
contract.
HR A[741]
2 Australian Blue Metal v Hughes [1963] AC 74, [1962] 3 All ER 335, PC.
HR A[742]
Equally, there is no universal rule that a notice is always required in order to effect the valid determination of a licence.
For example, a licence may be granted for a fixed period, or it may determine automatically in accordance with its terms
Page 143
on the happening of some event such as the termination of the employment of the licensee1. The question of whether a
requirement of reasonable notice is implied in a licence has to be answered in the light of all the circumstances existing
when the licence is created2. That general principle is, of course, subject to statutory provision to the contrary: it is for
example provided by statute that a notice by a licensor or a licensee to determine a periodic licence to occupy premises
as a dwelling is not valid unless it is in writing, contains certain prescribed information and is given not less than four
months before the date on which it is to take effect. See the Protection from Eviction Act 1977, s 5(1A)3. The statutory
requirements do not apply where the licence comes to an end automatically without service of a notice eg where a
licence terminates on the licensee ceasing to be employed by the licensor4. The meaning of a 'periodic licence' is not
defined in the legislation.
HR A[743]
1 Norris v Checksfield [1992] 1 EGLR 159, CA.
2 Australian Blue Metal Ltd v Hughes [1963] AC 74, [1962] 3 All ER 335, PC.
3 As inserted by the Housing Act 1988, s 32 and note that the provision does not apply to excluded licences as defined in s 3A of the Act.
The prescribed information is contained in the Notices to Quit etc (Prescribed Information) Regulations 1988, SI 1988/2201 at HR
C[3251]).
HR A[744]
In addition to the above, there is in all cases a supervening rule of law that the licensee is, in the absence of express
contract, allowed whatever is in the circumstances of the case a reasonable time to enable him to remove himself and his
possessions from the subject matter of the licence1. There is thus no necessity to specify any time for removal in the
licence, and if an unreasonably short time is specified, the licensee will still be allowed what is in fact reasonable,
although it is for the licensee to prove unreasonableness2. In the absence of any express or implied stipulation, he
cannot be compelled to remove buildings erected under the licence3; and if the revocation of the licence is a breach of a
contract, he can recover damages for the breach. Where a licensee remained in possession after the licence had been
terminated and the licensor continued to accept the payments of so-called rent, it was held that the licensee was there on
sufferance liable to be turned out whenever the licensor thought fit to exercise his right to do so, just as, in the old days,
a tenant by sufferance was. The licensee could not expect or demand another notice before being turned out4.
HR A[745]
1 Minister of Health v Bellotti [1944] KB 298, [1944] 1 All ER 238, CA explaining Cornish v Stubbs (1870) LR 5 CP 334, and
distinguishing Canadian Pacific Rly Co v R [1931] AC 414. See also Winter Garden Theatre (London) Ltd v Millennium Productions Ltd
[1948] AC 173, [1947] 2 All ER 331, HL; Mellor v Watkins (1874) LR 9 QB 400.
2 See Earl of Iveagh v Martin [1961] 1 QB 232, [1960] 2 All ER 668 and now Wallshire Ltd v Advertising Sites Ltd [1988] 2 EGLR 167,
[1988] 33 EG 51, CA.
Page 144
3 Never-Stop Railway (Wembley) v British Empire Exhibition (1924) Inc [1926] Ch 877.
4 Isaac v Hotel de Paris [1960] 1 All ER 348, [1960] 1 WLR 239, PC.
HR A[746]
If by his own act, as by an assignment of the subject matter of the licence1, or the act of some superior authority which
could not be presumed not to have been within the contemplation of the contracting parties, it becomes impossible for
the grantor of the licence to give facilities for its exercise, and the licence was given for valuable consideration, the
grantor will be liable in damages for breach of contract to the licensee2. In a further case3, where the grantor of a
licence was forced to sell the premises on which the licence was to be exercised to a local authority, and it was held that,
as such compulsory sale could not in the circumstances of the case be supposed not to have been within the
contemplation of the parties, the grantor was liable in damages to the licensee4.
HR A[747]
1 As occurred in Coleman v Foster (1856) 1 H & N 37.
2 King v David Allen & Sons Billposting Ltd [1916] 2 AC 54.
3 Walton Harvey Ltd v Walker and Homfrays Ltd [1931] 1 Ch 274, CA.
4 The adjustment of rights between parties to a frustrated contract is now governed by the Law Reform (Frustrated Contracts) Act 1943.
That Act does not, however, deal in any way with the general law as to impossibility of performance.
(e) Note on licences
HR A[748]
The space that has been taken up in the text and in the notes of the last two paragraphs on the subject of licences reflects
the practical importance and the theoretical uncertainty which has come to attach to the subject. The practical
importance in distinguishing between a lease and a licence lies in the wide field of the statutory codes which now
regulate wide areas of the law of landlord and tenant, since certain of these codes govern leases but not licences. A good
example is the Rent Act 1977 which applies to houses 'let', which excludes licences. Another example is Pt II of the
Landlord and Tenant Act 1954. The cardinal rule is to seek an objective assessment of the intention of the parties. The
parties cannot, by calling something a licence that has all the indicia of a tenancy, contract out of the Rent Act. The
correct course is to consider all the relevant circumstances and then to ask whether a reasonable onlooker would regard
the transaction as a lease or a licence.
HR A[749]
Clarity in the realm of academic theory depends on grasping the essential difference in English law between an interest
Page 145
in land and a mere interest under a contract which happens to have land as its subject matter. Interests in land are in
general binding on all persons whether parties to the original transactions creating the interest or not. Contractual
interests generally bind the parties to the contract and no one else. It was established under the medieval land law that
leases, together with the freehold estates, were interests in land in the above sense. Notwithstanding the recent
developments discussed above1, licences have not achieved the status.
HR A[749.1]
1 See in particular paras HR A[89], HR A[629] and HR A[641].

Page 146
tenant/D Licences/6 Lodgers
6 Lodgers
(a) The nature of the occupancy
HR A[750]-[760]
A person in the position of what is commonly termed a lodger is generally a licensee and not a tenant. A lodger who has
no separate apartment is obviously such, because there can be no tenancy without exclusive possession1. A lodger who
does have the occupancy of a single room in a house may however be a tenant or a licensee depending primarily on the
nature and quality of that occupancy. If it was intended that he should have some interest in the room, he will generally
be a tenant. If it was intended that he should merely have a personal permission to occupy the room, he will generally be
a licensee.
HR A[761]
1 See eg Appah v Parncliffe Investments Ltd [1964] 1 All ER 838, [1964] 1 WLR 1064, CA; Diggle v Guardian Hotels Ltd [1965] EGD
141, CA.
HR A[762]
The many old cases on the subject of the status of a lodger must now be read in the light of a decision of the Court of
Appeal1 in which it was held that the occupation of a single room in a 'self-catering residential hotel for single men'
created a licence and not a tenancy. In the light of Street v Mountford2, however, care must be taken when considering
the words of Lord Denning MR at 1185 where he states:
'Gathering the cases together, what does it come to? What is the test to see whether the occupier of one room in a house is a tenant
or a licensee? It does not depend on whether he or she has exclusive possession or not. It does not depend on whether the room is
furnished or not. It does not depend on whether the occupation is permanent or temporary. It does not depend on the label which
the parties put on it. All these factors which may influence the decision but none of them is conclusive. All the circumstances have
to be worked out. Eventually the answer depends on the nature and quality of the occupancy. Was it intended that the occupier
should have a stake in the room or did he have only permission for himself personally to occupy the room, whether under a contract
or not, in which case he is a licensee?'
HR A[763]
1 Marchant v Charters [1977] 3 All ER 918, [1977] 1 WLR 1181, explained in Street v Mountford [1985] AC 809, [1985] 2 All ER 289.
Page 147
2 Street v Mountford [1985] AC 809, [1985] 2 All ER 289. See the comments of Lord Templeman [1985] AC 809 at 825.
HR A[764]
Accordingly, whether or not a person is a tenant or a lodger will depend upon the circumstances of each individual case
and will largely be a question of fact and degree. It seems that where the owner of a house provides board and
attendance for a person residing in his house, such a providing bedding and cleaning services, that person will usually
be a lodger, not having the exclusive possession necessary to be a tenant1. That is not, however, an invariable rule and it
may be concluded that the occupancy and attendance are the subject of separate agreements so that provision of the
latter does not prevent the creation of a tenancy2.
HR A[765]
1 Street v Mountford [1985] AC 809, [1985] 2 All ER 289.
2 Vandersteen v Agius (1992) 65 P&CR 266, CA.
(b) Rights and liabilities relating to lodgings
HR A[766]
Lodgers are not generally protected by the provisions of the Rent Act 1977 relating to protected and statutory tenants.
Primarily this is because there is no tenancy but it is also because it is often inherent in the position of someone
described as a lodger that he should be provided with board or attendance and a tenancy where the rent includes
payment in respect of either of those items is not a protected tenancy for the purposes of that Act: see the Rent Act
1977, s 7(1). A lodger may, however, be protected by the 'restricted contract' provisions of the Rent Act 1977 (formerly
a 'Pt VI contract' under the Rent Act 1968) which apply to contracts granting a right to occupy as a residence whether or
not they amount to a tenancy1.
HR A[767]
1 See R v Battersea, Wandsworth, Mitcham and Wimbledon Rent Tribunal, ex p Parik [1957] 1 All ER 352, [1957] 1 WLR 410; Luganda
v Service Hotels Ltd [1969] 2 Ch 209, [1969] 2 All ER 692.
HR A[768]
In the absence of express stipulation a lodger is entitled to the use of the general conveniences of the house1. He is also
entitled to expect a certain standard of care from those providing him with lodgings. The keeper of lodgings or of a
boarding house is bound to take reasonable care of the property of his lodger or guest 2; and it is his duty to take
reasonable care to keep the door of the premises hut to prevent the ingress of thieves3.
Page 148
HR A[769]
1 Underwood v Burrows (1835) 7 C & P 26.
2 Scarborough v Cosgrove [1905] 2 KB 805 at 811 following Dansey v Richardson (1854) 3 E & B 144, and questioning Holder v Soulby
(1860) 8 CBNS 254; Caldecutt v Piesse (1932) 49 TLR 26.
3 Paterson v Norris (1914) 30 TLR 393; Cayle's Case (1584) 8 Co Rep 32a; Clench v D'Arenburg (1883) Cab & El 42.
HR A[770]-[780]
It appears that the lodger lacking exclusive possession in law is not rateable, although this has been said by Lord Russell
of Killowen1 to be largely based upon practical considerations, ie the rule:
'purports to be based upon the paramountcy of the landlord's occupation, arising from his control of the front door and his general
control over and right of access to the lodger's rooms for the proper conduct of the lodging house...I cannot but feel that the position
of a lodger in relation to rateability is an exceptional one, and is largely the product of practical considerations.'
In such a case the landlord retains a concurrent right for the purpose of management: see Cory v Bristow2. Further, a
guest at an inn is in the same position: Smith v St Michael, Cambridge, Overseers3.
HR A[781]
1 Westminster City Council v Southern Rly Co [1936] AC 511, [1936] 2 All ER 322.
2 Cory v Bristow (1877) 2 App Cas 262 at 276.
3 Smith v St Michael, Cambridge, Overseers (1860) 3 E & E 383 at 390.

Page 149
tenant/D Licences/7 Employees
7 Employees
(a) The distinction: service tenants and licensees
HR A[782]
An employee who occupies premises owned by his employer may be either a service tenant or a service licensee. An
employee who is a service tenant is in the same legal position as any other tenant. An employee who is a service
licensee holds a licence only1. The expression service occupier is often used and is synonymous with the term service
licensee used here2. It is sometimes said, especially in the older cases, that when there is a service tenancy 'occupation
is in the tenant' (eg per Bayley J in R v Kelstern3 and per Cockburn CJ, whereas if there is a service licence 'occupation
remains in the master'. It is submitted that occupation is a question of fact, that occupier or occupant is an expression
best used to denote the person in de facto possession be he tenant or licensee, and that to speak of occupation in the
master when the servant actually lives there may have some historical justification but is misleading today in this part of
the law of landlord and tenant. Of course the term 'occupation' may have specialised meanings in the law of rating, but
these meanings may cause confusion if imported into this branch of the law.
HR A[783]
1 Torbett v Faulkner [1952] 2 TLR 659 at 660, per Denning LJ.
2 See also Scrimgeour v Waller (1980) 257 Estates Gazette 61.
3 For example per Bayley J in R v Kelstern (1816) 5 M & S 136 at 138 and per Cockburn LJ in R v Spurrell (1865) LR 1 QB 72.
HR A[784]
The test to distinguish between the two categories of occupying employees is whether the employee is required to
occupy the premises for the better performance of his duties as employee1. If so, i.e. the occupation of the servant is for
the convenience of the master, no tenancy is created. If the occupation is merely incidental to the employment and not
required for the better performance of his duties the occupier will be a tenant provided always that the other essentials
of a tenancy, such as exclusive possession, are present.
HR A[785]
1 Glasgow Corpn v Johnstone [1965] AC 609, [1965] 1 All ER 730, HL; Norris v Checksfield [1992] 1 EGLR 159, CA.
Page 150
HR A[786]
Thus, a coachman placed in rooms of this master over the stable, a gardener who is put into a house in the garden, or a
porter who occupies a lodge at the park gate, does not occupy as tenant but as servant merely1. Any servant, workman,
agent, government or other official who is required as part of his contract of service to occupy a house belonging to his
master or principal for the more convenient performance of his duties, whether or not with less wages on that account, is
not a tenant and acquires no estate in the house, though he uses it to carry on his own business2. The Agricultural
Holdings Act 1986, s 1 recognising the rule that occupation for the mere purpose of service does not create a tenancy,
excludes from the benefit of the Act any holding let to a tenant during his continuance in any office, appointment, or
employment held under the landlord. However an occupant of a 'tied cottage' may nevertheless have the protection of
the Rent Act 1977 as a result of the Rent (Agriculture) Act 1976. As to the deduction of the value of the benefit from
occupation of a holding from the wages of an agricultural worker, see now the Agricultural Wages Act 1948, s 7 and see
Jones v Harris3; Bomford v South Worcestershire Assessment Committee4, both being decisions under the repealed
Agricultural Wages (Regulations) Act 1924. As to the value which may be deducted where the servant occupies a house
subject to a demolition or clearance order for the temporary occupation whereof a licence specifying a maximum rent
has been granted under the Housing Act 1957, s 34, see sub-s (3) of that section.
HR A[787]
1 Dobson v Jones (1844) 13 LJCP 126, per Tindal CJ.
2 See eg Dobson v Jones (1844) 13 LJCP 126; Hughes v Chatham Overseers (1843) 5 Man & G 54; Doe d Hughes v Derry (1840) 9 C&P
494; White v Bayley (1861) 10 CBNS 227; Bertie v Beaumont (1812) 16 East 33; Mayhew v Suttle (1854) 23 LJQB 372; 24 LJQB 54; Fox v
Dalby (1874) LR 10 CP 285; R v Spurrell (1865) LR 1 QB 72.
3 Jones v Harris [1927] 1 KB 425.
4 Bomford v South Worcestershire Assessment Committee [1946] KB 442, [1946] 2 All ER 80.
HR A[788]
The requirement of occupation may be expressly contained in the contract of employment, or it may be implied from
the general circumstances of the employment. Where an express term is relied upon, the question whether the test of
requirement to occupy has been satisfied must always be determined by a consideration of the substance of the
agreement and not by use of particular terms2. An express requirement of residence must be a reality, ie the employee's
occupation of the premises in question must actually and materially assist the performance of his duties3.
HR A[789]
1 See eg R v Spurrell (1865) LR 1 QB 72; Wall v Gibbs [1920] WN 187.
2 Thompsons (Funeral Furnishers) Ltd v Phillip [1945] 2 All ER 49.

Page 151
3 Glasgow Corpn v Johnstone [1965] AC 609, [1965] 1 All ER 730.
HR A[790]-[800]
The courts have distinguished between those cases in which the servant is permitted to occupy premises as part
remuneration or for the more convenient performance of the service and those in which the servant is required to occupy
the premises1. In Crane v Morris2 Lord Denning MR said that permission was enough to create a service occupancy.
But where there was an agreement in writing which stated that the letting was for the sole purpose of the tenant being
more conveniently situated in the employment of the landlord, and that the occupation of the cottage by the tenant was a
condition of such employment and on the determination thereof this tenancy should also determine forthwith, it was
held by the Court of Appeal in an unreported case3 that this was not sufficient to create a service occupancy where the
other parts of the agreement were those usual in a tenancy agreement. The court found that the document construed as a
whole created a tenancy. Facchini v Bryson4 was a similar case where the Court of Appeal held that the terms of the
document were such as to create a tenancy although one of its terms was that no tenancy was to be created thereby.
HR A[801]
1 Cf Marsh v Estcourt (1889) 24 QBD 147; Dover v Prosser [1904] 1 KB 84; Wray v Taylor Bros & Co Ltd (1913) 109 LT 120, 6 WCC
529, CA; Ramsbottom v Snelson [1948] 1 KB 473, [1948] 1 All ER 201 (stockman required to live in house so as to be available night and
day); Bomford v South Worcestershire Assessment Committee [1946] KB 442, [1946] 2 All ER 80.
2 Crane v Morris [1965] 3 All ER 77, [1965] 1 WLR 1104.
3 Three D's Co Ltd v Burrow (1949) 12 April; see 99 L Jo 239 at 240.
4 Facchini v Bryson [1952] 1 TLR 1386.
HR A[802]
Where there is no express term, the requirement of occupation will be implied only if it is necessary to do so1. It should,
however, be noted that the test of requirement to occupy does not mean that the employee, to satisfy the test, must be in
such a position that he could not carry out his duties if he lived elsewhere, merely that it would be materially less
convenient for him to do so if he lived elsewhere. It has been said that a court must discover what were the duties that
an employee was required to perform and, then, having regard to the nature of those duties, ask itself whether or not it
was really practical for the duties to be carried out if the employee did not live at the premises in question2. The actual
work of a service licensee may be anything, though persons such as caretakers3 or housekeepers4 fall most obviously
into the category of those required to occupy particular premises and who are thus licensees.
HR A[803]
1 Hughes v Greenwich London Borough Council [1994] 1 AC 170, HL.
2 Surrey County Council v Lamond [1999] 1 EGLR 26 per Lord Woolf MR at 35.
Page 152
3 Ashway (AL) v French [1952] CPL 806.
4 Snell v Mitchell [1950] NZLR 1.
HR A[804]
It is sufficient to constitute a licence that the requirement of occupation is for the better performance of duties which it
is anticipated the employee will carry out during a subsequent stage of his employment as opposed to his initial duties.
Thus, for example, a service licence was created in the case of an employee who was required to occupy premises in
anticipation that he would drive coaches for his employer when he obtained a public service vehicle licence1.
HR A[805]
HR A[806]
In many cases the right to occupy is not required for the better performances of the employee's duties but is in reality a
part of the remuneration for his services, in which case a tenancy is prima facie created1.
HR A[807]
1 See eg Hughes v Chatham Overseers (1843) 5 Man & G 54; Dobson v Jones (1844) 5 Man & G 112.
(b) Termination of employment
HR A[808]
Where an employee is a servant tenant, the tenancy may be expressly made determinable on the cessation of the tenant's
employment but, absent an express term to that effect, such a term will not be implied1. Statute may, however, make
provision for the landlord to recover possession in the event of cessation of employment. When the tenant is a service
tenant the Rent Act 19772 provides the landlord with a special ground on which the court may order possession. A
similar discretion is found in the Housing Act 19883. Special provisions for the protection of agricultural employees are
to be found in the Rent (Agriculture) Act 1976, and Protection from Eviction Act 1977, s 4. Note however that Part I of
the Landlord and Tenant Act 1927, which confers a right to compensation for improvements on the termination of
tenancies of business premises does not apply to any holding let to the tenant during his continuance in any office,
appointment, or employment from the landlord4.
HR A[809]
Page 153
1 Rokewood Nurseries v Burrell [1955] EGD 304, CA.
2 Schedule 15, Pt I, case 8.
3 Schedule 2 Pt II, ground 16.
4 See LTA 1927, s 17(2).
HR A[810]-[820]
Where an employee is a service licensee it seems that the right to occupy ceases immediately the service is determined,
no notice to quit being necessary1. That has been held to be so in a number of cases2. A more recent case indicates,
however, that the right to determine without notice to quit may depend upon an express term to that effect being
included in the licence3. It was further held by the Court of Appeal in the latter case that the provisions of the Protection
from Eviction Act 1977, s 5(1A) do not apply to determination of a service licence.
HR A[821]
1 Moreover, as the servant takes no estate in the land he cannot maintain an action for trespass against the master: White v Bayley (1861)
10 CBNS 227 and Hemmings v Stoke Poges Golf Club [1920] 1 KB 720. See also Ivory v Palmer [1975] ICR 340, CA.
2 See eg Rokewood Nurseries v Burrell [1955] EGD 304, CA; R v Cheshunt Inhabitants (1818) 1 B & Ald 473; R v Kelstern (1816) 5
M&S 136; and Hemmings v Stoke Poges Golf Club [1920] 1 KB 720.
HR A[822]
It also appears that possession can be required at any moment as against a service licensee irrespective of whether the
employment is lawfully determined, though the employee will have a remedy on the contract of service if it is
terminated improperly1. A similar point that arises is whether, in a document granting a service occupancy, the master
can reserve a right to determine the occupancy without determining the contract of service (eg because the servant was
not keeping the premises properly cleaned and was taking in lodgers or friends). It is submitted that it is difficult to say
why such a term cannot be included, but the Stamp Duty Office has insisted that such a clause rendered the document
liable to lease duty.
HR A[823]-[900]
1 Mayhew v Suttle (1854) 23 LJ QB 372; White v Bayley (1861) 10 CBNS 227. See also Ivory v Palmer [1975] ICR 340, CA.
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Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 2 Leases and agreements for leases
Chapter 2 Leases and agreements for leases
Editor
Wayne Clark
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Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 2 Leases and agreements for leases/A
Agreement for lease
A
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Agreement for lease/1 Introduction
1 Introduction
HR A[901]
A tenancy, unless created by statute, comes into existence as a result of a lease or an agreement for a lease. A lease
strictly means a species of conveyance; but the word 'lease' can describe not only the grant, but also that which is
granted, namely, the term1. As generally understood today a lease is a document creating an interest in land for a fixed
period of certain duration usually in consideration of the payment of rent. The payment of rent is not, however, an
essential prerequisite to the creation of a lease2.
HR A[901.1]
1 Chelsea Investments Pty Ltd v Federal Cmmr of Taxation (1966) 115 CLR 1 at 8.
2 Ashburn Anstall v Arnold [1989] Ch 1, CA. See paras HR A[24]-[26].
(a) Creation of a term of years
HR A[902]
A term of years1 may be brought into existence either by statute2, as the result of a lease, or by an agreement for a
lease. An oral lease suffices to create a legal term of years provided that it is to take effect in possession, that it reserves
the best rent obtainable, and that it is not to last for longer than three years3. All leases of land or of any interest therein
for over three years must be by deed, otherwise they are void for the purpose of creating a legal estate4, but a lease
which ought to have been made by deed but has been created otherwise, may take effect as an agreement for a lease5. A
lease not under seal of an incorporeal hereditament is subject to the same considerations6.
HR A[903]
1 For meaning of 'term of years', see paras HR A[6]-[8]. It is important to bear in mind that a term of years as defined by the Law of
Property Act 1925, includes a term for less than a year or for a year or years. For the distinction between a lease and an agreement for a
lease, see para HR A[906].
2 See paras HR A[49] and [50].
3 An oral lease not exceeding three years creates a legal term: see Law of Property Act 1925, s 54, re-enacting in effect a portion of the
Statute of Frauds 1677; and see paras HR A[1161]-[1164].
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4 Lease for more than three years must be by deed. See paras HR A[1161]ff.
5 But an invalid lease may operate as an agreement for a lease. See para HR A[908].
6 Invalid lease of incorporeal hereditaments subject to same considerations. See para HR A[1164].
(b) Subject matter of leases
HR A[904]
Real property comprises corporeal and incorporeal hereditaments. Corporeal hereditaments consist of land, buildings,
minerals and trees and all other things which are part of or affixed to land. An incorporeal hereditament consists of
rights rather than physical things1. Thus, an easement or profit à prendre2, which respectively involve the right to use or
extract a benefit from land are incorporeal hereditaments. A lease may be granted of corporeal or incorporeal
hereditaments. The use of the expression 'land' as a description of the property demised will include both corporeal and
incorporeal hereditaments3. This is reflected in the definition of land within the Law of Property Act 1925, s 205(1)(ix),
which provides that 'land' includes:
'...land of any tenure, and mines and minerals whether or not held apart from the surfaces buildings or parts of buildings (whether
the division is horizontal, vertical or made in any other way) and other corporeal hereditaments; also a manor, an adrowson, and a
rent and other incorporeal heriditaments and an easement, right, privilege or benefit in, over, or derived from land; but not an
undivided share in land; and "mines and minerals" include any strata or seam of minerals, or substances in or under any land, and
powers of working and getting the same but not an undivided share thereof; and "manor" includes a lordship and reputed manor or
lordship; and 'hereditament' means any real property which on an intestacy occurring before the commencement of this Act might
have devolved upon an heir.'
A lease may be granted of land or any part thereof. Consequently, a lease may be granted of the surface of the land4; of
minerals and strata only5 or of part of buildings6. In modern commercial parlance, hiring agreements in respect of
furniture, television sets, motor cars and other chattels are often styled 'leases'. However, a lease in its proper sense
means a dealing with land, tenements or hereditable subjects7. The right to hold an office or appointment and dignities
and honours are incapable of being leased8.
HR A[905]
1 See, simply by way of example Bryan v Whistler (1828) 8 B & C 288 (grant of an exclusive right of burial in a vault) and Newmarch v
Brandling (1818) 3 Swan 99 (use of waggon-way in colliery).
2 Eg sporting rights (Bird v Great Eastern Railway Co (1865) 19 CBNS 268; Bird v Higginson (1837) 6 Ad & El 824 Ex Ch; Gearns v
Baker (1875) 10 Ch App 355, CA; West v Houghton (1879) 4 CPD 197, DC); a several fishery (Duke of Somerset v Fogwell (1826) 5 B & C
875; Grove v Portal [1902] 1 Ch 727); rights of common (Sury v Brown (1625) Lat 99); estovers (Shep Touch 222); tolls (Bridgland v
Shapter (1839) 5 M & W 375; Harris v Morrice (1842) 10 M & W 260; Shepard v Horsman (1852) 18 QB 316).
3 2 Black Com 17, 18, 19; and see Co Litt, 4a.

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4 Thus, the surface, vesture or herbage may be let; Co Litt, 47a and Masters v Green (1888) 20 QBD 807, DC (exclusive right to enable
cattle to feed or grass on the land for four weeks).
5 See Jegon v Vivian (1865) LR 1 CP 9 at 18; on appeal (1868) LR3 HL 285. As to mining leases, see paras HR A[1491.1]ff.
6 The lease of part of an office building is commonplace. The old authority of Leader v Moody (1875) LR 20 Eq 145 provides an
interesting example of a lease of boxes at a theatre. For instances of licences dealing with theatres and 'front of house rights' see para HR
A[581].
7 Jones v IRC, Sweetmeat Automatic Delivery Co v IRC [1895] 1 QB 484 at 493 DC; Sheffield Waggon Co v Stratton (1878) 48 LJQB 35,
CA.
8 Reynel's Case (1612) 9 Co Rep 95a; Howard v Wood (1679) 2 Lev 245.
(c) Distinction between lease and agreement for lease
HR A[906]
A lease is a conveyance of a legal estate in land. It is a conveyance, by demise1, by the landlord of an estate less than
that which he himself possesses in hereditaments2. An agreement for lease is a legally enforceable agreement3 whereby
the parties bind themselves, one to grant and the other to accept, a lease. A lease, in proper form4 takes effect from the
date fixed for commencement, whether it be immediate, or at a future date, without the necessity of actual entry by the
lessee5. Where the form is expressed to commence from a past day, the lessee's actual interest commences only on the
date of grant and his liability is limited accordingly6. Under an agreement for lease, the relation of landlord and tenant
is not created notwithstanding entry by the lessee7. Entry into occupation of land under an agreement for lease in the
absence of express provision7 dealing with the occupied status will give rise to a tenancy at will8. However, entry into
possession and payment of rent on a yearly basis may give rise to a tenancy from year to year on the same terms and
conditions as are contained in the agreement so far as they are consistent with a yearly periodic tenancy9. Where the
tenant enters and pays rent upon a weekly, monthly or other periodic basis, it seems that he acquires only a weekly,
monthly or other periodic tenancy, regardless of the intended term of the proposes lease10.
HR A[907]
1 'Demise' is the technical term for 'let' or 'lease'; thus, a lease may be referred to as a 'demise' and the premises in question as the 'demised
premises'.
2 If the landlord conveys his whole estate it is an assignment by operation of land of his estate: Milmo v Carreras [1946] KB 306.
3 As to the requirements for an enforceable agreement, see para HR A[928].
4 As to the form of leases see para HR A[116].
6 Bradshaw v Pawley [1980] 1 WLR 10. The parties may, however, by agreement make an obligation or liability enforceable in respect of
matters arising before the date of grant: see Bradshaw v Pawley [1980] 1 WLR 10 at 15.
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7 In modern commercial practice it is now rare to find an agreement for lease which does not make express provision as to the status of
the prospective lessee who has entered into occupation pending completion of the contract. Contracts often expressly provide that if the
purchaser is allowed into possession in advance of completion, he takes possession as the vendor's licensee. Thus National Conditions of
Sale (20th edn), Condition 8 and the Standard Conditions of Sale (3rd edn), Condition 5.2, both provide that the purchaser is to occupy as
licensee and not as tenant pending completion. If the agreement is one in respect of which the court could grant specific performance, the
parties may in equity, under the doctrine of Walsh v Lonsdale (1882) 21 Ch D 9, be in much the same position as if the relation of landlord
and tenant had been created: see paras HR A[908]ff.
9 Mann v Lovejoy (1826) Ry & M 355; Richardson v Gifford (1834) 1 Ad & E1 52: Joel v Montgomery & Taylor Ltd [1967] Ch 272. See
para HR A[202] as to the implication of periodic tenancies by the payment and acceptance of rent.
10 Adler v Blackman [1953] I QB 146, CA (a case of holding over, as opposed to entry).

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Agreement for lease/2 The doctrine of Walsh v Lonsdale
2 The doctrine of Walsh v Lonsdale
HR A[908]
Although in law, under an agreement for lease, the relation of landlord and tenant is not created, the parties may in
equity under the doctrine in Walsh v Lonsdale1 be in much the same position as they would be if that relation had been
created. In equity the principle is 'equity looks on that as done which ought to be done'. Thus, parties under an
agreement for lease which is one of which specific performance will be granted are, for most but not all purposes, in the
same legal position as regards each other and as regard third parties as if the lease had been granted2. Consequently, the
lessor is entitled to distrain, and the lessee, on the other hand, is entitled to hold for the agreed term3. When the
equitable doctrine applies the relation between the parties is sometimes described as being an equitable lease4. A
number of matters need to be noted in relation to the doctrine.
(a) The doctrine applies equally to a lease which has not been granted in accordance with the proper
formalities. Thus, a lease which is ineffective at law to create a legal estate may take effect in equity as
an equitable lease5.
(b) The doctrine depends upon the agreement for lease being one in respect of which the court could or
would grant specific performance6. If specific performance could not be granted the tenant must stand or
fall by his rights (if any) at law. The county court has limited jurisdiction to award specific performance
to a plaintiff7. The county court has unlimited jurisdiction to grant specific performance to a defendant8.
The doctrine does not apply to a case in which the right to enforce the agreement has become barred9.
(c) A lease creates a legal estate in land10. A specifically enforceable agreement for lease creates an
equitable interest in land. Thus, as an equitable interest it will not be good against a bona fide purchaser
for value of a legal estate without notice. Where the land is unregistered the agreement should be
protected by registration as an estate contract in Class C(iv) of the Land Charges Act 197211. An estate
contract is void as against a purchaser for money or money's worth of a legal estate in the land affected
unless registered in the appropriate register before completion of the purchase12, even though the third
party has notice of the agreement13. Where the land is registered land under the Land Registration Act
2002 the agreement for lease will be protected against third parties if the tenant is in actual occupation of
the land14. In the absence of actual occupation the contract should be protected by a notice or caution.
(d) An assignment of a lease passes to the assignee not only the lessees rights but also his obligations
as to the observance of the covenants. As a contract for a lease creates no legal estate there is no estate
with which the burden of the tenant's covenants can run, ie there is no 'privity of estate'. Thus, in the
context of an equitable lease the rule is that the benefit but not the burden passes on an assignment of the
contract. The lessee is therefore able to assign the benefit of his right to specific performance of the
agreement15 and the assignee can sue the landlord to enforce the landlord's covenants. However, the
landlord cannot sue the assignee for breach of any of the tenant's obligations16. This limitation on the
doctrine applies only in respect of leases which were granted before 1 January 199617. Under a new
tenancy within the meaning of the Landlord and Tenant (Covenants) Act 1995 the assignee, upon an
assignment by the tenant of the new tenancy, is bound by the tenant covenants18. 'Tenancy' is defined by
the 1995 Act to include an agreement for a tenancy19.
(e) An agreement for lease is not a 'conveyance' within the meaning of the Law of Property Act 1925,
s 62 so as to pass all the appurtenant rights therein mentioned20.
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(f) An agreement for lease entitles the landlord to 'the usual covenants'; an executed lease in proper
form implies no such covenants21.
(g) The doctrine is not limited to cases where there is only one agreement, nor to cases where there is a
direct contractual relationship between the lessee and the person in whom the legal estate is vested22.
HR A[909]
1 Walsh v Lonsdale (1882) 21 Ch D 9, CA.
2 It has been often said that 'a contract for a lease is as good as a lease': see Re Maughan (1885) 14 QBD 956 at 958; Allhusen v Brooking
(1884) 26 Ch D 55 at 565; Lowther v Heaver (1889) 41 Ch D 248 at 264. R v Tower Hamlets London Borough Council, ex p Von Goetz
(1998) 30 HLR 950, QBD (equitable lessee holding under a non-executed deed of a term of ten years allowed to apply for judicial review of
local authority's refusal to sanction a renovation grant, the court holding that the equitable lease constituted an 'owner's interest' within s
104(2) of the Local Government and Housing Act 1989).
4 Tottenham Hotspur Football and Athletic Company Ltd v Princegrove Publishers Ltd [1974] 1 All ER 17 [1974] 1 WLR ll3; (where an
agreement for lease was conditional upon an order of the court excluding the security of tenure provisions of Pt II of the Landlord and
Tenant Act 1954, the equitable lease--there being no formal execution of the lease after the court order was obtained--was excluded from the
security of the Act) and Re A Company (No 00792 of 1992), ex p Tredegar Enterprises Ltd [1992] 2 EGLR 39 (surety having equitable lease
as soon as landlord served a notice requiring surety to take new lease in accordance with surety covenant).
5 Walsh v Lonsdale (1882) 21 Ch D 9, CA, where the lease being a term of seven years ought to have been by deed.
6 IRC v Earl of Derby [1914] 3 KB 1186; Cornish v Brook Green Laundry Ltd [1959] 1 QB 394, CA (agreement subject to a condition
precedent which had not been performed); Coatsworth v Johnson (1886) 55 LJQB 220 (where tenant in breach of one of the terms of the
agreement); Warmington v Miller [1973] QB 877 (claim to an underlease which could only be granted in breach of a covenant against
subletting in the head lease); Swain v Ayres (1888) 21 QBD 289, CA.
7 See County Courts Act 1984, s 23. The value of the property must not exceed £30,000. The 'value of the property' is apparently that of
the fee simple: Angel v Jay [1911] 1 KB 666. This limit of the jurisdiction of the county court is unaffected by the High Court and County
Courts Jurisdiction Order 1991.
8 Kingswood Estates Co Ltd v Anderson [1963] 2 QB 169.
9 Ariff v Rai Jadunath Majumdar Bahadur (1931) 47 TLR 238.
10 Law of Property Act 1925, s 1(1)(b).
11 Land Charges Act 1972, s 2.
12 LCA 1972, s 4(6).
13 Coventry Permanent Economic Building Society v Jones [1951] 1 All ER 901 at 904; Hollington Bros Ltd v Rhodes (1951) 2 TLR 691
at 696; Stratton (RJ) Ltd, v Wallis Tomlin & Co Ltd [1986] 1 EGLR 104, CA.
14 This was the position under the Land Registration Act 1925, s 70 (1)(g). An overriding interest will bind a subsequent purchaser of the
land: see Ashburn Anstalt v Arnold (No 2) [1988] 1 EGLR 64, CA. This remains the position under the Land Registration Act 2002, subject
Page 162
to the limitations provided for in Schedule 3 to the 2002 Act: see sections 29 and 30 ibid.
15 Manchester Brewery Co v Coombs [1901] 2 Ch 608 at 616.
16 The assignee may be liable to forfeiture, or for non-observance of restrictive covenants. Of course this difficulty will be overcome if, as
usual, the assignee, as a condition of the lessor's consent to the assignment to him of the equitable lease, covenants directly with the lessor to
observe and perform the lessee covenants.
17 The coming into force of the Landlord and Tenant (Covenants) Act 1995.
18 Landlord and Tenant (Covenants) Act 1995, s 3. Tenancies granted on or after 1 January 1996 are governed by the statutory code for
enforceability of covenants contained in ss 3-16 of the 1995 Act. The common law principles of privity of contract and privity of estate are
overridden and Law of Property Act 1925, ss 78, 79, 141 and 142 have no application to new tenancies. See paras HR A[1929]-[2001].
19 Landlord and Tenant (Covenants) Act 1995, s 28.
20 Borman v Griffith [1930] 1 Ch 493.
22 Industrial Properties (Barton Hill) Ltd v Association Electrical Industries Ltd [1977] QB 580, CA. In this case family property was to
be vested in a company as part of the tax saving arrangements. The legal estate was not vested in the company in order that stamp duty might
be saved. Nevertheless, the company purported to grant a lease of the property. It was held that the doctrine of Walsh v Lonsdale (1882) 21
Ch D 9 operated so that both the uncompleted transfer of the freehold and the imperfect lease could be regarded as having been completed.
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Agreement for lease/3 Indications of intention
3 Indications of intention
HR A[910]-[920]
In modern practice it is generally very clear whether the instrument is to be construed as a lease or an agreement for
lease. An instrument is usually construed as a lease if it contains words of present demise. The words 'demise' or 'let' are
the most usual words of present demise1. Other words are, however, effectual if they impart an immediate letting2. The
question in all cases depends on the intention of the parties gathered from the language of the instrument as a whole3.
The description accorded to the instrument is an indication of their intention but it is not conclusive and may be
outweighed by other factors. Thus, an instrument may be the grant of a lease notwithstanding it is called an 'agreement',
and contains a stipulation for the subsequent granting of a formal lease4. The essential terms must be agreed. The
essential terms are the identification of the parties, the premises to be demised, the rent and mode of payment, the
commencement and duration of the term and the covenants5. Thus, for instance, 'the covenants' are agreed if the
instrument specifies the covenants to be contained in it6 whether by defining them by reference to another lease7 or
providing for the application of 'the usual covenants'8, but not if the covenants are so referred to that further inquiry is
necessary to ascertain them, as to where they are to be covenants usual in a particular district9 or of a particular class10.
HR A[921]
1 Barry v Nugent (1782) 3 Doug KB 179 (doth 'demise'); Baxter d Abrahall v Browne (1775) 2 Wm B1 973 ('set and let').
2 Maldon's case (1584) Cro Eliz 33 ('you shall have a lease'); cf Doe d Jackson v Ashburner (1793) 5 Term Rep 163 ('shall enjoy'). Words
expressed in the form of a covenant have been held sufficient: Harrington v Wise (1596) Cro Eliz 486 (covenant that the landlord 'doth let');
Tisdale v Essex (1616) Hob 34; Drake v Munday (1631) Cro Car 207.
3 Wright v Trezevant (1828) Mood & M 231: Sidebotham v Holland [1895] 1 QB 378 at 385, CA; Gore v Lloyd (1844) 12 M & W 463.
4 Doe d Pearson v Ries (1832) 8 Bing 178; Pinero v Judson (1829) 6 Bing 206; Warman v Faithfull (1834) 5 B & Ald 1042. See also
Maldon's case (1584) Cro Eliz 33; Harrington v Wise (1596) Cro Eliz 486.
5 Chapman v Towner (1840) 6 M & W 100.
6 Pinero v Judson (1829) 6 Bing 206 and Warman v Faithful (1834) 5 B & Ald 1042.
7 Wilson v Chisholm (1831) 4 C & P 474; Doe d Pearson v Ries (1832) 8 Bing 178; Hancock v Caffyn (1832) 8 Bing 358.
8 Barry v Nugent (1782) 3 Doug KB 179: Chapman v Bluck (1838) 4 Bing NC 187: Doe d Phillip v Benjamin (1839) 9 Ad & EL 644;
Curling v Mills (1843) 6 Man & G 173. As to what are 'usual covenants', see para HR A[1208].
9 Morgan d Dowding v Bissell (1810) 3 Taunt 65; Chapman v Towner (1840) 6 M & W 100.
10 Doe d Morgan v Powell (1844) 7 Man & G 980 (mining lease).

Page 164
HR A[922]
The circumstance that the tenant is to have immediate possession under the instrument is a strong indication that it is a
present demise1; and so, too, is the fact that the tenant is already in possession2 and the covenants are to be binding at
once3.
HR A[923]
1 Doe d Pewson v Ries (1832) 8 Bing 178; Hancock v Caffyn (1832) 8 Bing 358; Doe d Morgan v Powell (1844) 7 Man & G 980 at 991;
Jones v Reynolds (1841) 1 QB 506 at 516. As to the position where there is entry under an agreement for lease, see para HR A[202].
2 Doe d Phillip v Benjamin (1839) 9 Ad & EL 644; Lovelock v Franklyn (1846) 8 QB 371. It favours the construction of the instrument as
a lease if the term is to commence before the execution of the formal lease: Alderman v Neate (1839) 4 M & W 704; Doe d Walker v Groves
(1812) 15 East 244.
3 A provision in the agreement that the rent shall be paid and the covenants observed until the execution of the lease tells strongly in
favour of its being a present demise; Pinero v Judson (1829) 6 Bing 206; Wilson v Chisholm (1831) 4 C & P 474; Hancock v Caffyn (1832) 8
Bing 358; Doe d Bailey v Foster (1846) 3 CB 215 at 226; and since payment of rent would, if the agreement is executory, create a yearly
tenancy, the argument for continuing it as a lease is strengthened if the covenants are unsuitable for a yearly tenancy: Pinero v Judson (1829)
6 Bing 206. See n 6 to para HR A[202].
HR A[924]
The instrument will be construed as an executory agreement, notwithstanding that it contains words of present demise,
if the provisions to be inserted in the lease are not finally ascertained1, and if from other indications it appears it was not
intended to take effect as a lease2; where, for example, it is expressly provided that it shall not operate as a lease3; or
where it is in the form of an agreement to grant a lease, and there are none of the indications above referred to that it is
to operate as a demise4; or where the lessor is not yet in a position to demise5; or where certain things have to be done
by the lessor before the lease is granted, such as the completion6, or repair7, or improvement8 of the premises, or by the
lessee, such as the obtaining of sureties9; or where possession10 or the commencement of the rent11, is postponed until
a future date in order to allow for the preparation of the lease.
HR A[925]
1 Where eg the rent is to be subsequently ascertained (Morgan d Dowding v Bissell (1810) 3 Taunt 65; John v Jenkins (1832) 1 Cr & M
227; cf M'creesh v McGeogh (1873) IR 7 CL 236); or where, in an agreement for mining lease, the mode of working the minerals is not
sufficiently defined (Jones v Reynolds (1841) 1 QB 506; Doe d Morgan v Powell (1844) 7 Man & G 980); or the terms of the lease are in
other respects left indefinite, eg as to the commencement or duration of the term (Dunk v Hunter (1822) 5 B & Ald 322; Clayton v
Burtenshaw (1826) 5 B & C 41; Gore v Lloyd (1844) 12 M & W 463 at 476; Doe d Wood v Clarke (1845) 7 QB 211). As to the lives not
being ascertained in an agreement for a lease for lives, see Pentland v Stokes (1812) 2 Ball & B 68; and see para HR A[250].
2 Gore v Lloyd (1844) 12 M & W 463 at 478, per Alderson B. Specific performance will be ordered of a further instrument required to
carry out the intention of the parties (Fenner v Hepburn (1843) 2 Y & C Ch Cas 159).
3 Perring v Brook (1835) 7 C & P 360; Brook v Biggs (1836) 2 Bing NC 572 at 574; Anderson v Midland Rly Co (1861) 3 E & E 614.
Page 165
4 Hegan v Johnson (1809) 2 Taunt 148; Phillips v Hartley (1827) 3 C & P 121; Rawson v Eicke (1837) 7 Ad & El 451; Bicknell v Hood
(1839) 5 M & W 104; Brashier v Jackson (1840) 6 M & W 549; Doe d Bailey v Foster (1846) 3 CB 215 (all cases where the lessor agreed
that he would 'by indenture demise' or agreed 'to grant a lease', or 'to make and execute a valid lease'): Regnart v Porter (1831) 7 Bing 451.
5 Where for example, the lessor is not at the time of the agreement entitled to grant a lease (Doe d Coore v Clare (1788) 2 Term Rep 739;
Doe d Pearson v Ries (1832) 8 Bing 178; Hayward v Haswell (1837) 6 Ad & El 265); or where he has not acquired the necessary land (Doe
d Jackson v Ashburner (1793) 5 Term Rep 163 at 168); or where a necessary licence or consent has not been obtained (Doe d Walker v
Groves (1812) 15 East 244 at 247; Doe d Bailey v Foster (1846) 3 CB 215; Rollason v Leon (1861) 7 H & N 73).
6 Eg completion Regnart v Porter (1831) 7 Bing 451.
7 Hamerton v Stead (1824) 3 B & C 478; Rawson v Eicke (1837) 7 Ad & El 451; Doe d Wood v Clarke (1845) 7 QB 211.
8 Gore v Lloyd (1844) 12 M & W 463.
9 When certain things have to be done by lessee, eg obtaining sureties John v Jenkins (1832) 1 Cr & M 227.
10 Tempest v Rawling (1810) 13 East 18.
11 Goodtitle Estwick v Way (1787) 1 Term Rep 735; cf Poole v Bentley (1810) 12 East 168 at 170 per Lord Ellenborough CJ.
HR A[926]
A lease for three years of less is usually made in the form 'agrees to let' and is styled an agreement. These words operate
as a demise1. Where a demise is made by an oral agreement2 or by an informal instrument, the resulting lease is often
described as a 'tenancy agreement'. This is especially the case in respect of periodic tenancies of residential premises or
agricultural holdings. In general that term is a misnomer since the instrument takes effect as a lease.
HR A[927]
1 Poole v Bentley (1810) 12 Est 168; Staniforth v Fox (1831) 7 Bing 590; Doe d Pearson v Ries (1832) 8 Bing 178; Doe d Phillip v
Benjamin (1839) 9 Ad & E1 644 at 651; Alderman v Neate (1839) 4 M & W 704; Tarte v Darby (1846) 15 M & W 601; Furness v Bond
(1888) 4 TLR 457.
2 As to the circumstances in which a lease may be created orally, see paras HR A[1161]ff.
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Agreement for lease/4 Requisites for agreement for lease
4 Requisites for agreement for lease
HR A[928]
An agreement for a lease is created when, subject to the statutory requirements as to the form of the contract1, the
parties are of one mind as to the essential terms of the agreement and as to any particular terms which are part of the
particular bargain. An agreement for a lease is an ordinary contract, and in accordance with the general principles of
contract law it will not be binding on the parties until one is able to identify an offer 2 by the lessor to let, and an
unconditional assent by the lessee to take, the property to be demised or on certain terms. The essential terms of an
agreement for a lease are3:
(a) the identification of the lessor and lessee4;

(b) the premises to be leased5;
(c) the commencement6 and duration of the term; and
(d) the rent or other consideration to be paid7.
HR A[929]
1 Ie the Law of Property (Miscellaneous Provisions) Act 1989, s 2 at paras HR A[1002]ff.
2 There must be an offer capable of acceptance. Thus, an acceptance of a letter offering a monthly letting 'on terms laid down by the
valuers' did not create a binding agreement as the letter amounted to no more than an expression of willingness to make an offer to let the
premises on a monthly basis when the valuers had decided what the appropriate terms were to be; Brent London Borough Council v O'Bryan
(1992) 65 P & CR 258, CA.
3 These were the terms which were essential for a memorandum in writing to satisfy the Law of Property Act 1925, s 40 (repealed) in
relation to agreements made before 27 September 1989 (the date of the coming into force of the Law of Property (Miscellaneous Provisions)
Act 1989; and they are equally the essential terms of a contract made on or after that date.
5 Lancaster v De Trafford (1862) 31 LJ Ch 554.
6 See para HR A[941.1].
7 Dolling v Evans (1867) 36 LJ Ch 474.
HR A[930]-[940]
The agreement must identify both contracting parties1. By itself, a reference to 'the landlord' is too indefinite2. If the
Page 167
tenant deceives the landlord as to the tenant's identity and that identity is a vital element the lease is void.
HR A[941]
1 Warner v Willington (1856) 3 Drew 523; Williams v Jordan (1877) 6 Ch D 517.
2 Coombs v Wilks [1891] 3 Ch 77.
HR A[941.1]
It has been said that there must be a certain beginning and a certain ending to a lease, otherwise it is not a perfect lease,
and a contract for a lease must contain these elements1. Thus, in order to have a valid agreement for a lease, it is
essential that the day on which the term is to commence should appear, either in express terms or by reference to some
writing which would make it clear, or by reasonable inference from the language used2. Where no date for the
commencement of the term is stipulated there is no valid agreement3. The court will not cure the invalidity by implying
a term that the lease is to commence within a reasonable time or at the date of the agreement4. Where the habbendum to
the draft lease annexed to the agreement failed to specify a date of commencement5, it was held that on a true
construction of the agreement a commencement date coinciding with the execution of the lease was more likely and
supported by other terms of the draft lease6.
HR A[941.2]
1 Lush LJ in Marshall v Berridge (1881) 19 Ch D 233 at 245, in a passage cited and applied by the Court of Appeal in Harvey v Pratt
[1965] 1 WLR 1025 at 1026 and 1027.
2 Harvey v Pratt [1965] 1 WLR 1025.
3 Harvey v Pratt [1965] 2 All ER 786, [1965] 1 WLR 1025; Lowenthal v Riardon Heating Co [1966] EGD 387; Fitzmaurice v Bayley
(1860) 9 HL Cas 78; Trustees of National Deposit Friendly Society v Beatties of London Ltd [1985] 2 EGLR 59.
4 Marshall v Berridge (1881) 19 Ch D 233; Edwards v Jones (1921) 124 LT 740. Cp Wesley v Walker (1878) 38 LT 284, where in a brief
memorandum occurred the phrase 'Ground rent commencing on 25 March now ensuing term 99 years', and the court inferred that the 99
years commenced on the same date as the ground rent.
5 It provided that the tenant was 'To Hold the premises to the Lessee during the term of 999 years from and including the ...day of
...199...'.
6 Liverpool City Council v Walton Group plc [2002] 1 EGLR 149, Ch D, Neuberger J. There was a strong argument for saying that the
court should lean in favour of 'saving' the agreement. The lease was one to be granted pursuant to a detailed development agreement which
was going to involve the prospective tenant in substantial expenditure which could only be justified if he had an enforceable, if conditional,
agreement for a lease. Further, the point was one of exceptional technicality: the lease was to be for a term of 999 years at no rent
whatsoever and no complaint could have been made if instead the freehold had been agreed to be transferred but without specifying a date
for completion, for the court would in those circumstances have implied a term that completion would be within a reasonable time (Harvey v
Pratt). In Ahmed v Wingrove [2006] EWHC 1918, Ch D, it was held that where an option was entered into providing for planning
permission to be obtained within 12 months, but without specifying the date from which the 12-month period was to commence, the date
would, in default of agreement, commence from the date of the execution of the agreement by the grantor of the option.
Page 168
HR A[942]
There must be an offer capable of acceptance. A response to a request for information is not an offer but an invitation to
treat; that is to say, it is an intimation that offers by the other party will be entertained. Thus, stating the price of
property at which the owner might be prepared to sell is not an offer1. Similarly, a monthly letting 'on terms laid down
by valuers' is merely an expression of willingness to make an offer to let when valuers have decided what the
appropriate terms will be2. The distinction between an offer and an invitation to treat depends on intention3.
HR A[943]
1 Harvey v Facey [1893] AC 552, HL; Gibson v Manchester County Council [1979] 1 All ER 972, [1979] 1 WLR 294. Cp Biggs v Boyd
Gibbons [1971] 1 WLR 913 ('for a quick sale I would accept £26,000', held to amount to offer).
2 Brent London Borough Council v O'Bryan (1992) 65 P & CR 258, CA.
3 Storer v Manchester City Council [1974] 3 All ER 824, [1974] 1 WLR 1403.
HR A[944]
New terms may be added to the offer1, as the offer may be withdrawn at any time, as long as it has not been accepted2.
No reason for withdrawal need be given3. Although the withdrawal of the offer must be communicated to the offeree4,
an offer may be withdrawn without express notice being given to the other party. For example, if matters are brought to
his attention from a reliable source which make it clear that the offeror is no longer intending to contract with the
offeree5. Thus, an offer to sell land would not be accepted after the offeror had, to the knowledge of the offeree, decided
to sell the land to a third party6. An offer may lapse owing to the death of the offeror or offeree7. An offer may be made
in the alternative. An acceptance of either alternative will conclude a contract8. If no time is specified within which the
offer should be accepted9, the offer is capable of acceptance only within a reasonable time after the offer has been
made10. What is a reasonable time depends on such circumstances as the nature of the subject matter and the means
used to communicate the offer.
HR A[945]
1 Warner v Willington (1856) 3 Drew 523; Honeyman v Marryatt (1855) 21 Beav 14.
2 Dickinson v Dodds (1876) 2 Ch D 463.
3 Brewer Street Investments Ltd v Barclays Wollen Co Ltd [1954] 1 QB 428, CA.
4 Byrne & Co v Leon Van Tienhoven (1880) 5 CPD 344.
5 Adams v Lindsell (1818) 1 B & Ald 681; Stevenson, Jaques & Co v McLean (1880) 5 QBD 346; Dickinson v Dodds (1876) 2 Ch D 463;
Cartwright v Hoogstoel (1911) 105 LT 628.
Page 169
6 Dickinson v Dodds (1876) 2 Ch D 463. There may be an element of uncertainty as to (i) the reliability of the source of the information
and (ii) identifying exactly when the offer was withdrawn. Thus, in Dickinson v Dodds the date of withdrawal could be (a) the date of sale to
the third party, or (b) the commencement of negotiations with the third party, or (c) when the offeror decided not to sell to the third party.
7 Dickinson v Dodds (1876) 2 Ch D 463 at 475 where the view was expressed that the death of either party terminates the offer; Reynolds
v Atherton (1921) 125 LT 690; affd (1922) 127 LT 189, where a purported acceptance by the personal representatives of the offeree was held
to be ineffective. On this topic see Chitty on Contracts (27th edn, 1994) paras 2.070ff.
8 Lever v Koffler [1901] 1 Ch 543.
9 Williams v Williams (1853) 17 Beav 213; Ramsgate Victoria Hotel Co v Montefiore (1866) LR 1 Ex ch 109. Cemco Leasing SpA v
Rediffusion Ltd [1987] FTLR 201.
10 An acceptance beyond the stipulated time is ineffective; Saunders v Dence (1885) 52 LT 644.
HR A[946]
There must be an unqualified and final expression of assent to the terms of the offer for a concluded contract to arise1.
Thus, an offer to sell a leasehold interest was not accepted where the letter of acceptance stated that the offer was
accepted on the basis that vacant possession was to be given on completion and that the sale price was to include
curtains, carpets and kitchen fittings, which items had not been mentioned in the terms of the offer. Although the
requirement for vacant possession would not prevent correspondence of offer and acceptance, for vacant possession was
to be implied, the requirement for the specified chattels and fixtures to be included in the sale did2. Where there are
lengthy negotiations it may be difficult to say exactly when an offer has been made and accepted. However, the court
will look at the whole correspondence to decide whether on its true construction, there was an agreement to the same
terms. The court is likely to be more liberal in its approval in order to render the arrangement enforceable if one party
has executed performance3.
HR A[947]
1 Acceptance may be by conduct: Sykes v Ranken (1971) 218 EG 1005, CA.
2 Bircham & Co Nominees (2) Ltd v Worrell Holdings Ltd [2001] EWCA Civ 775, [2001] 22 EG 153 (CS), CA (Scott VC at first
instance, there being no appeal on this finding).
3 British Bank for Foreign Trade Ltd v Novinex Ltd [1949] 1 KB 623 CA; Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444;
Trustees of National Deposit Friendly Society v Beatties of London Ltd [1985] 2 EGLR 59, where tenants, who for 75 years had carried on
business on two floors of a shop, moved out, acting in pursuance of terms as to a new tenancy thought to have been agreed in letters passing
between the parties. The court rejected attacks on the validity of the agreement on the ground of uncertainties in regard to the date of
commencement of the term, the amount of rent and the covenants and conditions. The suggestion that the court should lean more favourably
in its approach to construction in respect of an agreement where one party has executed performance has been criticised by Neuberger J in
Liverpool City Council v Walton Group plc [2002] 1 EGLR 149, Ch D: see para HR A[965], FN 5.
HR A[948]
As long as the essential terms have not been agreed to, or any additional terms have been mentioned on one side and not
unconditionally accepted on the other, the matter rests in negotiation and there is no concluded contract1. An offer
Page 170
cannot be accepted after it has been rejected2 revoked3 or has lapsed4.
HR A[949]
1 Lucas v James (1849) 7 Hare 410; Forster v Rowland (1861) 7 H & N 103; Clarke v Fuller (1864) 16 CBNS 24; Cayley v Walpole
(1870) 39 LJ Ch 609; Nesham v Selby (1872) 7 Ch App 406; Crossley v Maycock (1874) LR 18 Eq 180; Stanley v Dowdeswell (1874) LR 10
CP 102; Cartwright v Miller (1877) 36 LT 398 (acceptance accompanied by suggestion as to covenants to be inserted in lease; no concluded
contract); Wilcox v Redhead (1880) 49 LJ Ch 609; Wood v Scarth (1855) 2 K & J 33; Cavaleiro v Puget (1865) 4 F & F 537; Holland v Eyre
(1825) 2 Sim & St 194.
2 Hyde v Wrench (1840) 3 Beav 334.
3 Watson v Davies [1931] 1 Ch 455.
HR A[950]-[960]
An acceptance which introduces new terms, not contained in the offer, is not an acceptance but a counter offer which
the original offeror may accept or reject1. There need not be precise correspondence between the offer and acceptance.
Thus, making express a term which the law implies will be an effective acceptance2. If the offer lays down conditions
for its acceptance these must be complied with. Thus, stipulations as to time or the method of acceptance must generally
be adhered to3.
HR A[961]
1 Hyde v Wrench (1840) 3 Beav 334. The defendant offered to sell a farm for £1,050. The plaintiff offered £950. When that was rejected
the defendant purported to accept the original offer. The court held that there was no contract; Dencora v Norfolk County Council [1995]
NPC 173, CA. Cp Gibson v Manchester City Council [1979] 1 All ER 972, [1979] 1 WLR 294, an inquiry whether the vendor was prepared
to reduce the price was not a rejection of the offer. See also Routledge v Grant (1928) 3 C & P 267 (counter-proposal as to date from which
possession was to be taken held not to be an acceptance). Warner v Willington (1856) 3 Drew 523 (refusing draft lease with additional
provisions not an acceptance); Jones v Daniel [1894] 2 Ch 332 ('acceptance' of offer by sending draft contract which contained terms not
referred to in the offer was ineffective); Ball v Bridges (1874) 30 LT 430; Cartwright v Miller (1877) 36 LT 398 (acceptance accompanied
by a suggestion as to covenants to be inserted in leases ineffective); Vale of Nanth Colliery Co v Furness (1876) 45 LJ Ch 276.
2 Lark v Outhwaite [1991] 2 Lloyd Rep 132 at 139; Frank v Knight (1937) OQPD 113; Financings Ltd v Stimson [1962] 1 WLR 1184;
Holwell Securities Ltd v Hughes [1974] 1 WLR 157.
3 Manchester Diocesan Council for Education v Commercial and General Investments [1970] 1 WLR 241; Yates Building Co v Pulleyn
(RJ) & Sons (York) [1976] 1 EGLR 157. In both cases the court permitted a departure from the prescribed method for communicating the
acceptance.
HR A[962]
In considering whether there is a binding agreement for lease arising out of correspondence regard should be had to the
Page 171
following matters:
(a) the need to identify a correspondence between offer and acceptance1;

(b) the existence of words negating contractual intention, such as 'subject to contract'2;
(c) the fact that in respect of an agreement to grant a lease in excess of three years no binding contract
can arise by an exchange of offer and acceptance in correspondence3.
(d) that where parties are proceeding directly towards the exchange of lease and counterpart, without
formal contract, there is a presumption that the parties are proceeding 'subject to lease' and are not
contractually bound until formal exchange of lease and counterpart and so do not intend to be bound by
correspondence4.
HR A[963]
2 See paras HR A[966]-[1000].
3 Commission for the New Towns v Cooper (Great Britain) Ltd [1995] 2 WLR 677 CA; McCausland v Duncan Lawrie Ltd [1996] 4 All
ER 995, [1996] Ch 259, CA. See para HR A[1028].
4 Leveson v Parfum Marcel Rochas (England) Ltd (1966) 200 Estates Gazette 407 at 408; Hollington Bros Ltd v Rhodes [1951] 2 All ER
578n; Fletcher v Davis (1980) 257 Estates Gazette 1149; Longman v Viscount Chelsea (1989) 58 P & CR 189, CA. Cf R J Stratton Ltd v
Wallis Tomlin & Co Ltd [1986] 1 EGLR 104, CA, where the ordinary expectation referred to in Leverson v Parfum was held to have been
rebutted.
(a) Certainty of terms
HR A[964]
The parties' agreement on all the essential terms must not be uncertain so as to be incapable of enforcement1. Where
there was an agreement for a lease to contain 'such other covenants and conditions as shall reasonably be required by the
lessor', this was held to be sufficiently certain1. But contracts for sale 'subject to answers to preliminary enquiries and
subject to searches'2 or 'subject to a satisfactory mortgage'3 have been held too uncertain to be enforceable. A lease
which contained a covenant by the landlord 'to erect in the position shown edged blue on the plan herewith a permanent
office building in accordance with the specification contained in the letter .... signed by the parties ... annexed hereto'
was held to be too uncertain when there was no signed letter annexed to the lease or indeed any letter of specification in
existence4. The court will, however, strive to uphold an agreement which the parties intended to have legal effect5.
Thus, a sale conditional upon the purchaser obtaining an offer of mortgage upon terms satisfactory to himself was held
not to be void for uncertainty as the reference to the purchaser's satisfaction imported a requirement, by necessary
inference that such satisfaction should not be unreasonably withheld6.
HR A[965]
Page 172
1 Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699.
2 Smith and Olley v Townsend (1949) 1 P & CR 28.
3 Lee-Parker v Izzet (No 2) [1972] 2 All ER 800, [1972] 1 WLR 775.
4 UYCF Ltd v Forrester [2001] EGCS 2, CA.
5 There are a number of authorities which suggest that, when faced with the contention that a document, which was executed by two
parties who clearly intended it to have commercial effect, is in fact void or unenforceable on the grounds of uncertainty or some similar
principle, the court will lean in favour of upholding the document, provided, of course, it can properly do so: Brown v Gould [1972] Ch 53 at
56-57 Megarry J. In Trustees of National Deposit Friendly Society v Beatties of London Ltd [1985] 2 EGLR 59, Goulding J said:
'That it is a very broad principle, that the court leans against uncertainty, but, of course, a
document may be so obscure and vague that the court cannot save it.'
A little later he suggested that the court would more readily seek to uphold an agreement which had been
acted upon by the parties:
'It may be a matter of degree how far the court is to strive to avoid uncertainty, having regard to
the extent to which an agreement had already been executed on one side or the other. I take the
view that there has here been such a performance on the tenant's side as to justify the court taking
a much more liberal approach to the validity of the document than in the case of a purely
executory option where nothing but perhaps a nominal consideration had been given on either
side.'
However, this passage has recently been the subject of criticism by Neuberger J in Liverpool City
Council v Walton Group plc [2002] 1 EGLR 149, Ch D. He said:
'At any rate as a matter of strict principle, there are difficulties with that approach, however much
it accords with commercial common sense and broad justice. It seems to me that, on analysis, it
can be said to conflate two very different concepts, namely construction and estoppel. As a matter
of construction, it is well established that a contract cannot change its meaning because of
subsequent events, even if those events involve the conduct of the parties. Accordingly, if, as a
matter of construction, an agreement is void for uncertainty at the date of its execution, it cannot,
as it were, become valid, as a matter of construction, by virtue of the subsequent acts of the
parties, however much those subsequent acts render the void argument unattractive or worse.
However, the subsequent acts of the parties may well enable the court to conclude that, as a result
of their actions, the parties have so conducted themselves that one or both of them is or are
estopped from contending that the agreement is unenforceable or, which may often be the same
thing, have so conducted themselves that an essential aspect which was uncertain as a matter of
construction has been rendered certain.'
In that case the agreement for lease failed to specify a term commencement date. However, the learned
judge upheld the agreement finding that on a true construction of the agreement the lease was to
commence on the date of grant. There was a strong argument for saying that the court should lean in
favour of 'saving' the agreement. The lease was one to be granted pursuant to a detailed development
agreement which was going to involve the prospective tenant in substantial expenditure which could only
be justified if he had an enforceable, if conditional, agreement for a lease. Further, the point was one of
Page 173
exceptional technicality: the lease was to be for a term of 999 years at no rent whatsoever and no
complaint could have been made if instead the freehold had been agreed to be transferred but without
specifying a date for completion, for the court would imply a term that completion would have to be
within a reasonable time (Harvey v Pratt).
6 Janmohamed v Hassam [1977] 1 EGLR 142.
(b) Subject to contract
HR A[966]
Negation of intention to create legal relations
An agreement 'subject to contract' or 'subject to lease' negates an intention to create legal relations1. Negotiations for the
sale of land which are expressed to be 'subject to contract' cannot mature into a concluded agreement unless and until
there is an exchange of contracts in accordance with ordinary conveyancing practice, before which either party can
withdraw and no recompense for costs incurred will be recoverable2. Exchange of an agreed draft but without execution
will not give rise to a binding agreement3.
HR A[967]
1 Winn v Bull (1877) l7 Ch D 29; Wilson v Balfour (1929) 45 TLR 625; Eccles v Bryant & Pollock [1948] Ch 93; D'Silva v Lister House
Development Ltd [1971] Ch 17; Longman v Viscount Chelsea (1989) 58 P & CR 189 CA; Salomon v Akiens [1993] 1 EGLR 101, CA.
2 Regalian Properties plc v London Docklands Development Corpon [1995] 1 WLR 212.
3 Salomon v Akiens [1993] 1 EGLR 101, CA.
HR A[968]
Qualifications having similar effect
Other words may have a similar qualifying effect1. Thus, it has been held that there was no binding contract where the
agreement was expressed to be subject to the terms of a draft lease being reasonable in the estimation of the tenant2;
subject to the execution of a proper contract3; subject to suitable agreements being arranged between solicitors4; subject
to the terms of a lease5; subject to a lease being drawn up by our clients' solicitors6; subject to formal agreement to be
prepared7. However, an agreement 'subject to survey' is a binding agreement subject to a suspensory condition8. There
may, however, be a binding contract between the parties notwithstanding the fact that the parties have expressly
stipulated for the execution of a formal document incorporating the terms of their agreement9. It is a question of
construction whether the execution of the further contract is a condition of or term of the bargain or whether it is a mere
expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go
through10. Thus, it has been held there was a binding agreement where the letter of acceptance informed the recipient
that the author of the letter had requested his solicitors 'to forward the agreement for purchase'11; where the agreement
was subject to proper lease to be approved12; where the agreement was subject to a lease to be approved in the
customary way by solicitors13. A stipulation for a formal contract cannot be waived by one party alone14.
Page 174
HR A[969]
1 See in addition to cases referred to in the notes to the text following: Bromet v Neville (1909) 53 Sol Jo 321; Chillingworth v Esche
[1924] 1 Ch 97; George Trollope & Sons v Martyn Bros [1934] 2 KB 436; Brilliant v Michaels [1945] 1 All ER 121; Eccles v Bryant [1948]
Ch 93.
2 Wilcox v Redhead (1880) 49 LJ Ch 539.
3 Bromet v Neville (1909) 53 Sol Jo 321.
4 Lockett v Norman-Wright [1925] Ch 56.
5 Raingold v Bromley [1931] 2 Ch 307.
6 Berry Ltd v Brighton & Sussex Building Society [1939] 3 All ER 217.
7 Spottiswoode, Ballantyne & Co Ltd v Doreen Appliances Ltd [1942] 2 KB 32.
8 Ee v Kakar [1980] 2 EGLR 137.
9 Rossiter v Miller (1878) 3 App Cas 1124 & 1151; Bonnewell v Jenkins (1878) 8 Ch D 70; Branca v Cobarro [1947] KB 854; Oxford v
Provand (1868) LR 2 PC 135; Skinner v M'Douall (1848) 2 De G & Sm 265; Cayley v Walpole (1870) 39 LJ Ch 609.
10 Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284 at 288, per Parker J.
11 Rossiter v Miller (1878) 3 App Cas 1124 & 1151.
12 Eadie v Addison (1882) 52 LJ Ch 80.
13 Chipperfield v Carter (1895) 72 LT 487.
14 Lloyd v Nowell [1895] 2 Ch 744.
HR A[970]-[980]
The subject to contract qualification inserted into correspondence between solicitors acting for the parties will not
negate any existing binding agreement made between them1. Alternatively an agreement subject to contract may be
superseded by an unconditional agreement2. The words may also be ignored as meaningless3. Thus it was held to be
inapplicable to part of a letter which contained an agreement as to abortive costs if the proposed lease did not
materialise4. Similarly, the words were ignored, where they were found at the end of an acceptance letter of tender
documents which contained full particulars and special conditions of sale, incorporating the National Conditions of
Sale, 18th edition, with amendments, such that the court was able to hold that the tender documents set out all the terms
of the contract such that nothing remained to be negotiated and thus there was no need or scope for a further formal
contract5. It has been said that one would expect to find the words 'subject to contract' at the preliminary stage of
negotiations and not in a detailed and conscientiously drawn document6. Thus, where negotiations were prolonged and
Page 175
the documents setting out the terms of the agreement between the parties was a detailed and conscientiously drawn
document, this provided a strong and exceptional context in which the words 'subject to contract' were not to be given
their primie facie meaning. The document was neither preliminary, nor primitive, but was the product of lengthy
negotiations preceded by an earlier binding agreement6.
HR A[981]
1 Law v Jones [1974] Ch 112, CA; Daulia Ltd v Four Millbank Nominees Ltd [1978] Ch 231 at 250. In relation to contracts made before
27 September 1989 a document headed subject to contract cannot constitute a sufficient note of the contract to which it relates for the
purposes of the Law of Property Act 1925, s 40: Tiverton Estates Ltd v Wearwell Ltd [1975] Ch 146, CA. Section 40 has been repealed by
the Law of Property (Miscellaneous Provisions) Act 1989. See para HR A[1101], n 2.
2 Griffith v Young [1970] Ch 675, CA (subject to contract negotiations held to be superseded by a subsequent unconditional offer and
acceptance over the telephone). ProForce Recruit Ltd v The Rugby Group Ltd [2005] EWHC 70 (QB), [2005] All ER (D) 22 (Feb) (where
the parties performed the terms of the 'subject to contract' agreement they were to be taken as having entered into an implied binding
agreement on the same terms).
3 Michael Richards Properties Ltd v St Saviour's Wardens [1975] 3 All ER 416; Alpenstow Ltd v Regalian Properties plc [1985] 2 All ER
545, [1985] 1 WLR 721; Westway Homes Ltd v Moores [1991] 63 P & CR 480. Kelly v Park Hall School Ltd [979] 1R 340. In Munton v
Greater London Council [1976] 1 WLR 649, CA it was said that Michael Richards Properties Ltd v St Saviour's Wardens [1975] 3 All ER
416 was an exceptional case on its facts and was not to be regarded as throwing any doubt upon the well established and well settled sanctity
of the words 'subject to conduct', per Goff LJ.
4 Farah v Moody [1998] EGCS 1, CA.
5 Michael Richards Properties Ltd v St Saviour's Wardens [1975] 3 All ER 416.
6 Alpenstow Ltd v Regalian Properties plc [1985] 2 All ER 545, [1985] 1 WLR 721.
HR A[982]
Duration of the subject to contract qualification
Once used the expression 'subject to contract' qualifies all subsequent correspondence and negotiations between the
parties, irrespective of the omission of the phrase on subsequent letters, unless and until, the qualification is expressly or
impliedly expunged1. A request by a solicitor to pay rent in advance of execution of the lease 'to secure the tenancy' was
insufficient to take negotiations for the grant of a tenancy out of the context of the previous 'subject to contract'
relationship because, in the absence of special authority, it was not within the ordinary authority of a solicitor acting for
the party to negotiations for the acquisition of an interest in land to conclude a contract on behalf of the client2.
HR A[983]
1 Sherbrooke v Dipple (1980) 41 P & CR 173 CA; Cohen v Nessdale [1982] 2 All ER 97, CA; Griffiths v Young [1970] Ch 675, CA;
Central Street Properties Ltd v Mansbrook Rudd & Co Ltd [1986] 2 EGLR 33.
2 James (Administratrix of the Estate of Thomas Hopkin) v Evans [2000] 3 EGLR 1, [2000] 42 EG 173, CA following D'Silva v Lister
Page 176
House Development Ltd [1971] Ch 17.
HR A[984]
Estoppel
It is unlikely that a party to negotiations subject to contract will be estopped from withdrawing albeit the other party has
altered his position in the expectation that contracts were to be exchanged1. Thus, where a party agreed, 'subject to
contract', with the prospective tenant to grant him a ten-year tenancy of a farm, together with the sale to him of a flock
of 300 sheep, no estoppel operated to prevent that party from refusing to execute the tenancy and withdraw from the
transaction, notwithstanding the fact that the prospective tenant had entered into occupation of the farm, paid six
months' rent in advance, paid an agreed valuation for the sheep, paid one half of the valuation fee for valuing the sheep
and had arranged for the worming, dipping and marking of the sheep2. Similarly, where heads of terms for a lease to be
granted to the claimant by a local authority of a nursery school were headed 'subject to contract', the fact that the
claimant entered into and had been in occupation for a period of two years and incurred considerable expense in fitting
out the premises in the belief that she had the security of a ten-year lease, did not prevent the authority from terminating
the arrangement and obtaining vacant possession. As all discussions regarding the lease had been made 'subject to
contract', this negated the creation of any lease or any agreement for lease or any form of estoppel. The claimant held
the premises as a tenant at will3. The use of the expression 'subject to contract' would not necessarily preclude a party
from raising a proprietary estoppel if the claimant established that the defendant had made a representation and had
encouraged, on the part of the claimant, a belief or expectation that he would not withdraw from the 'subject to contract'
agreement or rely on the 'subject to contract' qualification4.
HR A[985]
1 A-G of Hong Kong v Humphreys Estate [1987] AC 114 (Lord Templeman said at 127H that:
It is possible but unlikely that in circumstances at present unforeseeable a party to negotiations

set out in a document expressed to be "subject to contract" would be able to satisfy the court that
the parties had subsequently agreed to convert the documents into a contract or that some form of
estoppel had arisen to prevent both parties from refusing to proceed with the transactions
envisaged by the document'.);
Salomon v Akiens [1993] 1 EGLR 101, CA; Brent London Borough Council v O'Bryan (1992) 65 P &
CR 258, CA; Edwin Shirley Production Ltd v Workspace Management Ltd [2001] 2 EGLR 16 (no
proprietary estoppel where occupation of prospective lessee during 'Subject to Contract' negotiations
notwithstanding expenditure on improvements); Adegbulu v Southwark London Borough Council [2003]
EWHC 1930 (Ch), [2003] PLSCS 218; Loubatieres v Mornington Estate (UK) Ltd [2004] EWHC 825
(Ch), [2004] PLSCS 105, Ch D (expense incurred by purchaser in seeking planning permission could not
estop the vendor from denying compliance with s 2 of the Law of Property (Miscellaneous Provisions)
Act 1989 with respect to a variation in the date for completion, where at the time the payment was made
the negotiations between the parties were 'subject to contract'). Cf Salvation Army Trustees Co Ltd v
West Yorkshire Metropolitan County Council (1980) 41 P & CR 179.
2 James (Administratrix of the Estate of Thomas Hopkin) v Evans [2000] 3 EGLR 1, [2000] 42 EG
173.
Page 177
3 Adegbulu v Southwark London Borough Council [2003] EWHC 1930 (Ch), [2003] PLSCS 218.
4 Yeoman's Row Management Ltd v Cobbe [2006] EWCA Civ 1139, per Mummery LJ at [57]. This
comment would appear to remain good notwithstanding the fact that the actual decision in the case (that
a proprietary estoppel did arise) was reversed by the House of Lords: [2008] UKHL 55, HL.
HR A[986]
Collateral contracts
The words 'subject to contract' do not prevent the possibility of a collateral contract arising between the parties1. Thus,
the parties may validly contract to enter into a lock out agreement, ie an agreement whereby the vendor agrees not to
consider any further offers usually on the basis of an exchange within a specified time, notwithstanding the fact that the
parties' negotiations for the sale of the property is subject to contract2. In order to be enforceable, the lock out
agreement must be supported by consideration and limited to a specified time. Where no time limit is specified, the
agreement is one amounting to an agreement to negotiate, which is unenforceable for uncertainty3. Although an
agreement to use best endeavours in the performance of a contract is enforceable4, an agreement to use best or
reasonable endeavours to agree is equally unenforceable for uncertainty5.
HR A[986.1]
1 Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622; [2007] 32EG 90, CA. Briggs J at first instance
said:
If a party makes a promise in "subject to contract" negotiations, the consideration for which or
reliance upon which consists of the promisee making the very contract being negotiated, then the
proviso becomes enforceable, either by way of collateral contract or promissory estoppel,
regardless of the parties' use of the "subject to contract" label. Putting it another way, it is a
necessary implication from what they have done that the promise is not deprived by that label of
legal effect.
2 Pitt v PHH Asset Management Ltd [1993] 4 All ER 961, CA. Such an agreement would appear not
to be enforceable by injunction as damages are an adequate remedy: Tye v House [1997] 2 EGLR 171.
3 Walford v Miles [1992] AC 128, HL.
4 Lambert v HTV Cymru (Wales) Ltd [1998] FSR 874; Bluzwed Metals Ltd v Trans-World Metals Ltd
[2005] EWHC 143.
5 Little v Courage (1995) 70 P&CR 469 at 475 per Millett LJ.
HR A[986.2]
Liability for anticipated expenditure
There may also be collateral liability in quasi-contract in respect of expenditure incurred in anticipation of exchange.
Thus, where a request was made for the vendor to undertake work outside the anticipated contract which was
subsequently undertaken but the contract 'went off', the court implied a promise for the purchaser to pay the vendor a
Page 178
reasonable sum for the work1. Where a prospective contracting party has incurred expenditure without request and for
their own benefit for the purpose of putting themselves in the position to obtain and then to exploit a contract which had
been hoped for but which could not be demanded the claimant will have no right to recoup the expenditure from the
other party to the negotiations2. In general anticipated expenditure will be irrecoverable if no contract materialises3.
HR A[987]
1 Lacey (William)(Hounslow) Ltd v Davis [1957] 2 All ER 712, [1957] 1 WLR 932; Brewer Street Investments Ltd v Barclays Woolen Co
Ltd [1954] 1 QB 428.
2 Regalian Properties plc v London Dockland Development Corpn [1995] 1 WLR 212; Adegbulu v Southwark London Borough Council
[2003] EWHC 1930 (Ch); [2003] PLSCS 218. In the Regalian Properties decision, Rattee J, in commenting on a dictum of Goff J in British
Steel Corpn v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504, said:
'I can well understand why Goff J concluded that where one party to an expected contract
expressly requests the other to perform services or supply goods that would have been
performable or suppliable under the expected contract when concluded in advance of the contract,
that party should have to pay a quantum meruit if the contract does not materialise. The present
case is not analogous. The costs for which Regalian seeks reimbursement were incurred by it not
by way of accelerated performance of the anticipated contract at the request of LDDC, but for the
purpose of putting itself in a position to obtain and then perform the contract.'
3 Regalian Properties plc v Londons Dockland Development Corpn [1995] 1 All ER 1005. In Sabemo
Ltd v North Sydney Municipal Council [1977] 2 NSWLR 880, Sheppard J said:
'In my opinion, the better view of the correct application of the principle in question is that, where
two parties proceed upon the joint assumption that a contract will be entered into between them,
and one does work beneficial to the project, and thus in the interests of the two parties, which
work he would not be expected, in other circumstances, to do gratuitously, he will be entitled to
compensation or restitution, if the other party unilaterally decides to abandon the project, not for
any reason associated with bona fide disagreement concerning the terms of the contract entered
into, but for reasons which, however valid, pertain only to his own position and do not relate at
all to that of the other party.'
Rattee J said in Regalian Properties plc v Londons Dockland Development Corpn [1995] 1 All ER 1005
that this did not represent English law. In a non-property context, Regalian Properties plc has been
distinguished in two subsequent decisions: Countrywide Communications Ltd v ICL Pathway Ltd [2000]
CLC 324, [1999] All ER (D) 1192; Easat Antennas Ltd v Racal Defence Electronics Ltd [2000] All ER
(D) 845.
HR A[988]
Implication of subject to contract qualification
It is to be noted that there are two situations where the words 'subject to contract' will be implied.
Page 179
(a) Although parties may not expressly use the phrase 'subject to contract' their negotiations are treated
as being such where the circumstances of the transaction necessarily imply that the parties contemplated
approval and exchange of formal contracts eg where in transactions relating to residential property the
purchaser has a mortgage to arrange or the vendor is also looking for a property1.
(b) It will ordinarily be expected that the intended landlord and tenant are proceeding 'subject to lease'
if no formal contract is intended to proceed execution and exchange of lease and counterpart2.
HR A[989]
1 Hussey v Horne-Payne (1879) 4 App Cas, 311, HL; Damm v Heritage (1974) 234 Estates Gazette 365 at 371; Mens v Wilson (1973) 231
Estates Gazette 843; Jones v Morgan (1973) 231 Estates Gazette 1167. See also Tevanan v Norman Brett (Builders) Ltd (1972) 223 Estates
Gazette 1945; Tiverton Estates Ltd v Wearwell Ltd [1975] Ch 146 at 163.
2 See Leveson v Parfum Marcel Rochas (England) Ltd (1966) 200 Estates Gazette 407 at 408 and see para HR A[963], n 4.
HR A[990]-[1000]
Law of Property (Miscellaneous Provisions) Act 1989
The provisions of the Law of Property (Miscellaneous Provisions) Act 19891 which require agreements for lease to be
in writing to be enforceable and signed by both parties to the contract2 has made it less important to ensure that
correspondence is headed 'subject to contract' to avoid an exchange of correspondence giving rise to a binding
contract3.
HR A[1001]
1 Which came into force on 27 September 1989.
2 Subject to limited exceptions, see para HR A[1048].
3 See paras HR A[1002]ff.
(c) Entire agreement clause
HR A[1001.1]
The agreement may contain an entire agreement clause1. Such a clause precludes any claim as to the existence of a
collateral agreement2. It constitutes a binding agreement between the parties that the full contractual terms are to be
found in the document containing the clause and not elsewhere, and that, accordingly, any promises or assurances made
in the course of the negotiations (which, in the absence of such a clause, might have effect as a collateral warranty) shall
Page 180
have no contractual force, save in so far as they are reflected and given effect in that document3. The operation of the
clause is not to render evidence of the collateral warranty inadmissible in evidence; it is to denude what would
otherwise constitute a collateral warranty of legal effect4.
HR A[1001.2]
1 Entire agreement clauses come in different forms. In the leading case of Deepak Fertilisers and Petrochemical Corpn v Davy McKee
(London) Ltd [1998] 2 Lloyds Rep 139 at p138; affd [1999] 1 Lloyd's Rep 387, the clause read as follows:
'10.16 Entirety of Agreement

This contract comprises the entire agreement between the PARTIES... and there are not any
agreements, understandings, promises or conditions, oral or written, express or implied,
concerning the subject matter which are not merged into this CONTRACT and superseded
thereby...'.
Rix J and the Court of Appeal held in that case (in particular focusing upon the words 'promises or
conditions') that the language was apt to exclude all liability for a collateral warranty.
2 In Inntrepreneur Pub Co v East Crown Ltd [2000] 3 EGLR 31, Ch D; see also para HR A[1001.4].
Lightman J said:
'The purpose of an entire agreement clause is to preclude a party to a written agreement from
threshing through the undergrowth and finding, in the course of negotiations, some (chance)
remark or statement (often long-forgotten or difficult to recall or explain) upon which to found a
claim...to the existence of a collateral warranty. The entire agreement clause obviates the
occasion for any such search, and the peril to the contracting parties posed by the need that may
arise in its absence to conduct such a search.'
In Inntrepreneur Pub Co v Sweeney [2002] EWHC 1060, [2002] 26 LS Gaz R 36, Park J confirmed that
the word 'threshing' in the judgment of Lightman J was an error for 'thrashing' (para 46). It was said that
Lightman J's reference to 'thrashing around in the undergrowth' was not intended to mean that entire
agreement clauses prevented reliance on collateral statements which arose only from obscure statements.
His words were intended also to prevent reliance where the pre-contractual statements were clear and
obvious: Park J not following Popplewell J in 1406 Pub Company Limited v Hoare, 2.3.01 (unreported).
Park J was also of the view that the dicta of Denning MR in Brikom Investments Ltd v Carr [1979] QB
467 at 480, CA were not to be read as authority for the proposition that entire agreement clauses could
not exclude arguments based on the formation of a collateral contract in pre-contract negotiations. Lord
Denning said:
'The cases are legion in which such a clause [an entire agreement clause] is not effect in the face
of an express promise or representation on which the other side has relied ... At any rate when the
circumstances are such that it would not be fair or reasonable to allow the landlord to rely on it:
see section 3(b) of the Misrepresentation Act 1967.'
Park J said that he was wholly convinced by the reasons of Lightman J that an entire agreement clause
does rule out a collateral contract argument.
3 Inntrepreneur Pub Co v East Crown Ltd [2000] 3 EGLR 31, Ch D, per Lightman J, where the
Page 181
relevant clause provided: '14.1 Any variations of this Agreement which are agreed in correspondence
shall be incorporated in this Agreement where that correspondence makes express reference to this
Clause and the parties acknowledge that this Agreement (with the incorporation of any such variations)
constitutes the entire Agreement between the parties.'
4 Inntrepreneur Pub Co v East Crown Ltd [2000] 3 EGLR 31, Ch D, per Lightman J.
HR A[1001.3]
An entire agreement provision does not preclude a claim in misrepresentation, for the denial of contractual force cannot
affect the status of a statement as a misrepresentation. The same clause in an agreement may contain both an entire
agreement provision and a further provision designed to exclude liability, eg for misrepresentation or breach of duty1.
Whether such a provision is legally effective for this purpose may turn on the question of its reasonableness as required
by section 3 of the Misrepresentation Act 19672: but section 3 has no application to an entire agreement clause defining
where the contractual terms between the parties are to be found3.
HR A[1001.4]
1 Inntrepreneur v East Crown [2000] 3 EGLR 31, Ch D. In that case the relevant clause provided:
'14.2 Before executing this Agreement the Tenant and Guarantor have:
14.2.1 received independent professional advice about its terms; or
14.2.2 been advised of the wisdom of taking independent professional advice but have chosen not
to do so and accordingly they have not relied upon any advice or statement of the Company or its
solicitors.'
2 See eg Inntrepreneur Estates (CPC) Ltd v Worth [1996] 1 EGLR 84.

3 McGrath v Shah (1987) 57 P & CR 452, Ch D; Inntrepreneur v East Crown [2000] 3 EGLR 31, Ch
D.
HR A[1001.5]
The fact that the agreement between the parties contains an 'entire agreement' clause does not prevent the court from
ordering rectification1.
HR A[1001.6]
1 JJ Huber (Investments) Ltd v Private DIY Co Ltd [1995] NPC 102, [1995] EGCS 112.
Page 182
Agreement for lease/5 Formalities
5 Formalities
(a) Formal contract - Law of Property (Miscellaneous Provisions) Act 1989
HR A[1002]
A contract for the sale or other disposition of or interest in land made on or after 27 September 1989 can only be made
in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where
contracts are exchanged, in each1. It is not possible, in consequence of the abolition of the doctrine of part
performance2, for there to be a valid, but unenforceable, oral contract for the sale of land. Subject to the possibility of
rectification3, unless an agreement is made in writing in accordance with the statutory provisions, the agreement is
void4. An acceptance of an offer made pursuant to CPR 36 for the purposes of settling proceedings and which offer of
settlement involves the disposition of an interest in land may be enforced, albeit it fails to comply with the section 2
requirements, as the court has power to order the parties to the settlement to sign a single document incorporating the
terms of their settlement5.
HR A[1003]
1 Law of Property (Miscellaneous Provisions) Act 1989, s 2.
2 Although there is no express abolition of the doctrine of part performance it can no longer apply: First Post Homes Ltd v Johnson [1995]
1 WLR 1567 at 1571. Nothing can be partly performed in relation to a non-existent contract.
4 In Pabari v Secretary of State for Works and Pensions [2004] EWCA Civ 1480, [2005] 1 All ER 287, Dyson LJ said:
'[53] "Necessary" is a somewhat protean word whose meaning depends on the context in which it
is used. In some contexts, it means "indispensable" or "essential". Thus, for example, s 2(1) of the
Law of Property (Miscellaneous Provisions) Act 1989 provides that a contract for the sale of an
interest in land "can only be made in writing". To say that it is "necessary" for such a contract to
be in writing is to use the word in its strongest sense. It is indispensable that such a contract be in
writing. There is no contract unless it is in writing.'
5 Orton v Collins [2007] EWHC 803 (Ch), 151 Sol Jo LB 608..
[1003.1]
Contract for sale

Page 183
As a matter of ordinary English usage, for a contract to be one 'for' selling or disposing of land, it must have been part
of the parties' purposes, or the purposes to be attributed to them, in entering into such a contract that the contract should
achieve a sale or other disposition of land1. Accordingly, a boundary agreement which simply 'demarcates' the
boundary rather than conveys land does not fall within the statutory wording. However, even where the contract is one
where the parties consciously intended to give up some land the statutory provisions do not apply to a trivial transfer or
transfers of land pursuant to a boundary agreement, the intention of which is to demarcate the boundary between
neighboring properties. In deciding what is trivial, the court should not 'net' the transfers by either side but aggregate all
the conscious transfers involved of either party, if more than one. It is to be presumed, until the contrary is shown, that
any transfer of land effected by a boundary agreement of the demarcating kind is trivial for this purpose2.
[1003.2]
1 Joyce v Rigolli [2004] EWCA Civ 79, (2004) 148 Sol Jo LB 234 following the approach of Megarry J in Neilson v Poole (1969) 20
P&CR 909 as to the meaning of 'a contract ... to convey or create a legal estate' for the purposes of s 10(1) of the Land Charges Act 1925.
See more recently Styles v Smith [2005] All ER (D) 167, Ch D, Park J. In Neilson, Megarry J said:
'Now a boundary agreement may constitute a contract to convey land. The parties may agree that
in return for a concession by A in one place, straightening the line of division, B will make a
concession in another place; and the agreement may thus be one for the conveyance of land. But
there is another type of boundary agreement. This does no more than identify on the ground what
the documents describe in words or delineate on plans. Nothing is transferred, at any rate
consciously; the agreement is to identify and not to convey. In such a case, I do not see how the
agreement can be said to constitute a contract to convey land.... In this case, the boundary on the
conveyance, as I have construed it, coincides with the boundary on the agreement, and so the
agreement is not registrable. If the two boundaries had not coincided, because, for example, the
true construction of the conveyance yields a different boundary, then the agreement would have
been an agreement whereby in fact it was agreed that land belonging to one should thenceforward
belong to the other. Nevertheless, even in those circumstances, I should not hold that the
agreement was registrable: for, in my judgment, it is not a "contract ... to convey" within clause
C(iv). A contract merely to demarcate and confirm is not a contract to convey.'
In Joyce v Rigolli, Arden LJ at para 19 said:
'Megarry J's approach to the words "contract ... to convey" in section 10(1) of the Land Charges
Act 1925 was essentially that, for a contract to be a contract to do something, the parties had to
have as one of their purposes the intention to do that thing. Similar reasoning in my judgment
applies to the words "contract for the sale or other disposition of an interest in land" in section 2
of the 1989 Act. As a matter of ordinary English usage, for a contract to be one "for" selling or
disposing of land, it must have been part of the parties' purposes, or the purposes to be attributed
to them, in entering into such a contract that the contract should achieve a sale or other
disposition of land. The fact that the effect of their contract is that land or an interest in land is
actually conveyed, when that effect was neither foreseen nor intended nor was it something
which ought to have been foreseen or intended, is not the acid test. Indeed, it would be a
surprising result if section 2 applied merely because the effect of the contract was that an interest
in land was transferred even if the parties had no intention to make any such transfer and could
not have foreseen or intended that that would be the effect.'
Page 184
2 Joyce v Rigolli per Arden LJ at para 21.
HR A[1004]
The provisions of s 2 of the Law of Property (Miscellaneous Provisions) Act 1989 apply to 'a contract for the sale or
other disposition of an interest in land'. Accordingly, the provisions of the Act do not apply to a mortgage executed as a
deed signed only by the mortgagor1. A disposition of a beneficial interest satisfying the requirements of s 53(1)(c) of
the Law of Property Act 1925 does not need to comply with the requirements of s 2 of the 1989 Act2. However, in
order to take effect as a disposition of a beneficial interest for the purposes of s 53(1)(c) of the Law of Property Act
1925, the disposition must be an unconditional disposition intended to take effect on signature. Thus, where the
disposition of the beneficial interest of the husband in the former matrimonial home was subject to various conditions so
as to be treated as a conditional disposition and the conditions were not satisfied prior to the death of the husband, the
disposition did not take effect for the purposes of the statutory provisions of s 53 so as to render the wife the sole
beneficial owner3.
HR A[1004.1]
1 Eagle Star Insurance Co Ltd v Green [2001] EWCA Civ 1389, CA. The provisions of s 2 would, however, apply to a contract to grant a
mortgage. It is now no longer possible to create an informal equitable mortgage by the deposit of the title deeds by way of security; there has
to be a written document: United Bank of Kuwait plc v Sahib [1997] Ch 107. However, it has been said that the decision in United Bank of
Kuwait plc v Sahib did not hold that all liens were contract-based, but merely that any lien created by deposit of title deeds alone was, and
was therefore invalid unless the section 2 requirements were fulfilled: De Serville v Agree Ltd (26 April 2001, unreported) Ch D. Before
1989, the deposit of a document of title without writing, or indeed any form of oral confirmation, created an equitable charge (see per Lord
MacNaghten in Bank of New South Wales v O'Connor (1889) 14 App Cas 273, 282), which was presumed in the absence of evidence to the
contrary to be a charge and not merely a lien (see Re Wallis & Simmonds (Builders) Ltd [1974] 1 WLR 391). The deposit of documents of
title by itself cannot now take effect either as a charge or as a lien. However, where there is a letter which governs the position between the
parties it is necessary to consider whether the document, on its proper construction having regard to relevant background, creates an
immediately effective disposition of an interest in land in accordance with s 53(1)(a) of the Law of Property Act 1925: De Seville v Agree
Ltd; see also the unreported decision of Lightman J in Murray v Guinness (29 April 1998, unreported) in which he held that a valid equitable
charge could be created by a document which complied with s 53 of the Law of Property Act 1925. The Court of Appeal in Kinane v
Mackie-Conteh [2005] EWCA Civ 45, [2005] 6 EG 140 (CS), made it clear that an equitable chargee does obtain a security interest and that
an agreement to create an equitable charges falls within s 2. Murray v Guinness ibid was considered but distinguished on the basis that the
documents in that case were held to create an immediate charge. The form of words is decisive: any form of words which, on their proper
construction, are apt to create an immediate security will suffice: see Cradock v Scottish Provident Union (1893) 69 LT 380; affd (1894) 70
LT 718; National Provincial and United Bank of England v Charnley [1924] 1 KB 431 at 440, 445, 459.
2 Chandler v Clark [2002] EWCA Civ 1249, [2003] 1 P & CR 239.
3 Chandler v Clark EWCA Civ 1249, [2003] 1 P & CR 239.
HR A[1005]
A 'contract for sale' within the meaning of the statutory provisions must be one by which both parties undertake
obligations. A letter from the vendor which stated that the vendor agreed to sell an area of land for a stated sum but
which was not headed 'contract of sale', made no reference to obligations on the part of the purchaser, contained no
obligation on the part of the purchaser to purchase and provide consideration and which made no reference to the
purchaser other than being addressed to him, was not a contract for the sale of an interest in land1. Thus, it has been
Page 185
held that two separate pages of a diary kept by the prospective purchaser, each of which was signed by both parties, did
not give rise to a binding contract, nothwithstanding the fact that the first recorded the vendor's intention to sell to the
purchaser and the second recorded the purchaser's intention to buy. The documents failed to comply with the Law of
Property (Miscellaneous Provisions) Act 1989 as neither document contained mutal obligations to buy and sell: the first
document did not record that the purchaser was to buy and the second did not record that the vendor was to sell2. An
agreement embodied in mutual non-revocable wills containing a bequest of land is a contract for the disposition of land
for an undertaking not to revoke a testamentary disposition is the same in effect as a promise to make that disposition3.
HR A[1005.1]
1 Firstpost Homes Ltd v Johnson [1996] 1 EGLR 175, CA.
2 Ruddick v Ormston [2005] EWHC 2547, Ch D. The Learned Judge, Patten J, held that (i) the two documents could not be considered as
an exchange of contracts as the documents were prepared on the basis that they should stand as two self contained agreements; and (ii) even
if the two pages were to be treated as two pages or parts of a single document there was still a failure to comply with s 2(1) of the 1989 Act
as the document failed to refer to the date for completion which had been agreed between the parties to be seven days' later. As this term of
the contract was not contained within either of the two diary entries, the provisions of s 2(1) were not complied with.
3 Healey v Brown [2002] PLSCS 105, Ch D. David Donaldson QC, sitting as a deputy Judge of the High Court, Chancery Division said:
'There can be no doubt, as a matter of both principle and authority, that the agreement embodied
in mutual non-revocable wills containing a bequest of land is a contract for the disposition of
land. An undertaking not to revoke a testamentary disposition is the same in effect as a promise to
make that disposition. As was said by Lord Camden in Duforur v Pereia: "There is no difference
between promising to make a will in such a form and making his will with the promise not to
revoke it" (1769) 2 Harg Jurid Arg 304 at 309. In Horton v Jones [1935] 53 CLR 475, the High
Court of Australia dismissed a claim by the Plaintiff against the personal representatives of her
ex-employer for breach of an oral agreement by him to make a will leaving her property which
would include interests in land on the ground that it fell within the New South Wales equivalent
of section 40 of the English 1925 Act. Not long after, in Birmingham v Renfrew [1937] 57 CLR
666, the same Court held that the equivalent statute in Victoria was in principle engaged in a case
where husband and wife made mutual wills. The statute was held inapplicable and the claim
succeeded only on the basis that the will (and therefore the promise) referred simply to the
entirety of the testator's estate on death, and therefore it could be said that the date of the
agreement that it concerned an interest in land, even if in the event at the time of death the estate
turned out to include such an interest. No such obstacle to the application of the statute exists in
the present case, where the bequest of the survivor is explicitly of land.'
HR A[1005.2]
An agreement to exchange contracts for the sale of land is a contract which is required to comply with s 2 of the 1989
Act1.
HR A[1005.3]
Page 186
1 Sharif v Sadiq [2004] EWHC 1913 (Ch), [2004] 148 Sol Jo LB 665. It was said that an agreement to exchange contracts for the sale of
land or the disposition of an interest in land could only be made in a form that complied with the Law of Property (Miscellaneous
Provisions) Act 1989, s 2(1), as an agreement to exchange contracts gave rise to an equitable interest in land, following the pre 1989 Act
decision Daulia Ltd v Four Millbank Nominees Ltd [1978] Ch 231 concerning s 40 of the Law of Property Act 1925.
HR A[1006]
Executory contracts
Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 is of relevance only to executory contracts. It has
no relevance to contracts which have been completed. If parties choose to complete an oral land contract or a land
contract that does not in some respect or other comply with s 2 of the Law of Property (Miscellaneous Provisions) Act
1989, they are at liberty to do so. Once they have completed such a contract it is irrelevant that the contract they have
completed is not in accordance with s 21. Thus, where there was an agreement for lease together with a separate
supplementary agreement (to which the agreement for lease did not refer by incorporation) whereby the landlord agreed
to contribute £30,000 to the tenant's costs of fitting out the demised premises, the question whether s 2 of the Law of
Property (Miscellaneous Provisions) Act 1989 rendered the agreement for lease unenforceable (because not all of the
terms of the contract had been incorporated into the agreement for lease) became irrelevant on completion of the
agreement for lease by the grant of the lease. The supplemental agreement by itself was not a contract for the sale of an
interest in land1.
HR A[1007]
1 Tootal Clothing Ltd v Guinea Properties Management Ltd (1992) 64 P & CR 452, CA applied in Redwell Investments Ltd v 1-3 Cuba
Street Ltd [2005] EWHC 946. This decision does not cover the case of a contract which, at its inception, falls within s 2 and which is said to
escape from s 2 only because of a subsequent variation of it. If a contract falls within s 2 at its inception, any material variation of it must
itself comply with s 2: Kilcarne Holdings Ltd v Targetfollow (Birmingham) Limited [2004] EWHC 2547 (Ch), [2004] All ER (D) 132 (Nov)
per Lewison J at para [198].
HR A[1007.1]
A contract does not escape the application of s 2 of the 1989 Act by reason of the fact that some other step has to be
taken or condition fulfilled before the vendor is obliged to transfer the interest in question1.
HR A[1007.2]
1 Singh v Beggs (1995) 71 P&CR 120; The Representative Body of the Church in Wales v Newton [2005] EWHC 631 (QB), [2005] 16 EG
145 (CS).
HR A[1008]
Page 187
Disposition
A 'disposition' of land includes a conveyance and also a devise, bequest or an appointment of property obtained in a
will; and 'conveyance' includes a mortgage, charge, lease, assent, vesting declaration, vesting instrument, disclaimer,
vehicle and every other assurance of property or for interest therein by any instrument, except a will1.
HR A[1009]
1 Law of Property (Miscellaneous Provisions) Act 1989, s 2(6), applying Law of Property Act 1925, s 205(1)(ii).
HR A[1010]-[1020]
Interest in land
By the terms of the Law of Property (Miscellaneous Provisions) Act 1989, s 2(6), as originally enacted, an 'interest in
land was defined as meaning' any estate, interest or charge in or over land or in or over the proceeds of sale of land'1. As
a result of the amendments made by the Trusts of Land and Appointment of Trustees Act 1996, the words 'in or over the
proceeds of sale of land' are repealed2. However, the 1996 Act abolished the doctrine of conversion and thus undivided
shares in land now rank as 'land'3. The statutory provision thus comprises all proprietary interests in land, whether legal
or equitable4. It has been held that a contract for the sale of an interest in land exists in respect of:
(a) an agreement relating to fixtures5;

(b) an agreement for the sale and removal of building materials on the demolition of a house6;
(c) an agreement for the sale of the beneficial interest of a co-owner7;
(d) an agreement for the grant of a lease and for the sale of chattels, where the agreement was
indivisible8;
(e) an agreement pursuant to The Town and Country Planning Act 1990, s 106, requiring a developer
to transfer an affordable-housing site to a third party nominated by the planning authority9; and
(f) an agreement to create a floating charge over land10.
However, it is considered that the following are not contracts for the sale or disposition of an interest in land:
(a) a contractual licence to occupy11;

(b) the grant of a right of pre-emption12;
(c) a lock-out agreement, whereby the vendor of land agrees for a consideration that he will not, during
a specified period, negotiate with anyone other than the prospective purchaser13;
(d) a contract of guarantee where the guarantor agrees with the landlord to guarantee the tenant's
performance14;
(e) an oral agreement, by way of compromise of a dispute between vendor and purchaser, to sell a
property (the subject matter of the dispute) and distribute the proceeds of sale15;
(f) a compromise of matrimonial proceedings where one of the terms may be that the husband will
submit to a transfer of property in respect of the matrtimonial home16;
(g) an agreement between quasi husband and wife that upon sale of her property the wife would, when
her other property was sold, bring in proceeds of sale of that other property, in which she was
Page 188
beneficially interested, to reduce the principal money owing on the mortgage on the quasi-matrimonial
home17.
HR A[1021]
1 Law of Property (Miscellaneous Provisions) Act 1989, s 2(6).
2 Trusts of Land and Appointment of Trustees Act 1996, s 25, Sch 4.
3 TLATA 1996, s 3.
4 In IRC v John Lewis Properties plc [2001] STC 1118, Lightman J held that an assignment of the right to receive rent was the transfer of
an interest in land. This issue was not the subject of appeal to the Court of Appeal: see [2002] EWCA 1869, [2003] STC 117 (rent factoring
scheme, where the one-off payment received for the assignment of the right to receive the rent for a period of six years was held to be capital
in the hands of the recipient). The decision in IRC v John Lewis Properties plc was concerned with an 'old lease' within the meaning of the
Landlord and Tenant (Covenants) Act 1995, ie one which was granted before 1 January 1996. In respect of a new lease, ie one granted on or
after 1 January 1996, it has been held by the Special Tax Commissioners in Property Co v Inspector of Taxes (SpC) 433, [2004] SWTI 2300,
that the right to receive rent payable in the future could not be severed from the reversion in light of the terms of the Landlord and Tenant
(Covenants) Act 1995 and thus a purported retention of the right to receive such rent by the assignor of the reversion was void.
5 Jarvis v Jarvis (1893) 63 LJ Ch 10; Morgan v Russell & Sons [1909] 1 KB 357, DC (both decided under previous legislation).
6 Lavery v Pursell (1888) 39 Ch D 508 (decided under previous legislation).
7 Wright v Stavert (1860) 2 E&E 721 at 728 (decided under previous legislation). But see fn 16.
8 Wright v Robert Leonard Developments Ltd [1994] EGCS 69, [1994] NPC 49, CA (a decision upon the provisions of the Law of
Property (Miscellaneous Provisions) Act 1989. See para HR A[1042]ff.
9 Jelson Ltd v Derby County Council [1999] 1 EGLR 91, [1999] 19 EG 149.
10 Driver v Broad [1893] 1 QB 744; Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd [2004] EWHC 2547 per Lewison J at para
[194].
11 A licence does not give rise to a proprietary interest in land: Ashburn Anstalt v Arnold [1989] Ch 1, CA.
12 Pritchard v Briggs [1980] Ch 338, [1980] 1 All ER 294, CA suggests that until the event upon which it hinges occurs, a right of
pre-emption does not create an interest in land. See also Kling v Keston Properties (1985) 49 P&CR 212, where, applying Pritchard v
Briggs, Vinelott J held that a right of pre-emption matured into an option no later than the moment when the landowner contracted to sell to
a third party. Where the pre-emption provides that the offer is to remain open for acceptance for a specified time an equitable interest arises
as soon as the grantor chooses to offer the land to the grantees; it is indistinguishable from an option: Chadwick LJ, Bircham & Co Nominees
(2) Ltd v Worrell Holdings Ltd [2001] EWCA Civ 775, [2001] 22 EG 153 (CS), CA. The equitable interest will lapse if the offer is not
accepted within the specified period for which the offer is to remain open. If the offer is accepted the grantee must be able to establish that it
is able to compel the grantor to transfer the property. This is dependent on the grantor being under a contractual obligation to do so. Such a
contract must be one which complies with s 2: per Staughton LJ infra. The Land Registration Act 2002 has reversed the effect of Pritchard v
Briggs ibid in the context of registered land. The 2002 Act provides that a right of pre-emption in relation to registered land created on or
after 13 October 2003 creates an interest binding successors in title with effect from the time of its creation: LRA 2002, s 115.
13 Pitt v PHH Asset Management Ltd [1993] 4 All ER 961, [1994] 1 WLR 327, CA. The agreement must specify a period of time or
otherwise it is void for uncertainty.
Page 189
14 Johnsey Estates (1990) Ltd v Newport Marketworld Ltd [1996] NPC 81 (a case under s 2 of the Law of Property (Miscellaneous
Provisions) Act 1989).
15 Nweze v Nwoko [2004] EWCA Civ 379, CA, [2004] PLSCS 74 (distinguishing Jelson Ltd v Derby County Council above).
16 Xydhias v Xydhias [1999] 2 All ER 386, CA; Cox v Cox [2006] EWHC 1077 (Ch), [2006] All ER (D) 256 (Apr), HCt. In the former
decision, Thorpe LJ said (pp 396j-397a) that an agreement to compromise ancillary relief proceedings, if concluded, was not one for the
disposition of an interest in land but an agreement as to the terms which the parties themselves considered fair, with the object of avoiding
the expense and stress of a contested hearing, albeit one of the terms of the agreement may be that the husband would submit to a transfer of
property order in respect of the final matrimonial home and such an order, once made, would require the husband's signature to a transfer.
However, it was said that if he declined to sign the document, the district judge would sign in his stead.
17 Young v Lauretani [2007] EWHC 1244, [2007] All ER (D) 389. It was also said by Lindsay J that the agreement neither created nor
disposed of an interest in land nor declared a trust with respect to any land or interest in land, nor represents the disposition of an equitable
interest or trust subsisting at the time of the disposition. Thus neither the formalities required by s 53 of the Law of Property Act 1925 nor of
s 2 of the 1989 Act were required of the agreement.
HR A[1022]
Documents
The terms agreed between the parties may be incorporated in a document either by being set out in it or by reference to
some other document1. It is unclear in what circumstances several pieces of paper will be treated as one document. A
plan signed by the prospective purchaser and included with a letter setting out the terms agreed was held to be a separate
document2. Two pages of a diary entry signed by both the vendor and the purchaser, the first recording that the vendor
was to sell (but not that the purchaser was to buy) and the second recording that the purchaser was to buy (but not that
the vendor was to sell), were held to be two documents3. The contract of sale must refer to the other document; it is
insufficient simply for the other document to refer to the contract of sale. The document referred to need not itself be
signed, but it has to be identified in the document which is signed4. There is no requirement for the parties to have seen
or read the other terms which are incorporated by reference. Thus, a letter signed by the parties confirming the provision
of a secured loan by the lender and which was said to be subject to the standard terms and conditions of the lender was a
valid contract and binding, albeit the borrower may not have seen or read the terms and conditions to which reference
was made and may not have known what the terms were or what they meant5.
HR A[1023]
2 Firstpost Homes Ltd v Johnson [1996] 1 EGLR 175, CA. 'I do not find it particularly helpful to go into an extended analysis of the
circumstances where one or more papers can together constitute a single document. Like the proverbial elephant, a document may be
difficult to determine but is easy to recognise.' Balcome LJ at 178F-G.
3 Ruddick v Ormston [2005] EWHC 2547, Ch D. The Learned Judge, Patten J, held that evn if the two pages were to be treated as two
pages or parts of a single document, there was still a failure to comply with s 2(1) of the Law of Property (Miscellaneous Provisions) Act
1989 as the document failed to refer to the date for completion which had been agreed between the parties to be seven days' later. As this
term of the contract was not contained within either of the two diary entries, the provisions of s 2(1) were not complied with.
4 Record v Bell [1991] 4 All ER 471, [1991] 1 WLR 853.

Page 190
5 Courtney v Corp Ltd [2006] EWCA Civ 518, [2006] All ER (D) 16 (Mar), CA.
HR A[1024]
Signature
The document incorporating the terms, or where contracts are exchanged, one of the documents incorporating them but
not necessarily the same one, must be signed by or on behalf of each party to the contract1. For the purposes of s 2 of
the Law of Property (Miscellaneous Provisions) Act 1989 a document is signed by a party only if it is written with the
party's own hand and placed in such a manner as to have the effect of authenticating the document2. Although the
signature of a party need not be placed in any particular part of a written instrument it must be inserted in the document
in such a manner as to govern the whole agreement2. Thus, a signature at the foot of a plan attached to the document
incorporating the terms agreed (it being assumed that the plan and the document incorporating the same were one
document for the purpose of s 2 of the 1989 Act) may be insufficient to authenticate the whole agreement3. The
document is not signed by typing or printing the name of the party4. The endorsement on a document of a party's initials
may constitute a sufficient signature provided it is clear that the signatory is thereby intending to authenticate all of its
terms. Thus, the mere initialing of a correction in the margin of a document did not constitute the signing of the
document for the purposes of s 2(3) of the 1989 Act5. It is only the parties to the contract who must sign the relevant
document6. Thus one would expect that, if the contract contains an entitlement upon the part of the purchaser to transfer
the property to a nominated third party or, alternatively, if the purchaser is under an obligation to transfer to a
nominated third party, the nominated third party need not be a signatory to the document7. A contract for the sale of
land signed by a firm of solicitors on behalf of a company yet to be incorporated satisfied the provisions of the 1989
Act, as by reason of the provisions of the Companies Act 1985, s 36C(1) the contract had effect as one made with the
person (the firm) purporting to act for the unincorporated company8.
HR A[1025]
1 Law of Property (Miscellaneous Provisions) Act 1989, s 2(3). Thus an agreement for lease signed by one of three prospective tenants
under an agreement for lease did not comply with the Act: Enfield London Borough Council v Arajah [1996] 2 EGLR 21, [1995] EGCS 164,
CA. Similarly, an agreement between husband and wife who were joint beneficial tenants of the former matrimonial home to transfer the
husband's beneficial interest entirely to the wife was of no effect where the agreement was signed only by the husband and not the wife:
Chandler v Clark [2002] EWCA Civ 1249, [2003] 1 P & CR 15, 239.
2 Caton v Caton (1867) LR 2 HL 127, followed in Firstpost Homes Ltd v Johnson [1995] 1 WLR 1567 CA.
3 Firstpost Homes Ltd v Johnson [1995] 1 WLR 1567 CA.
4 McCausland v Duncan Lawrie [1996] 4 All ER 995, CA.
5 Newell v Tarrant [2004] EWHC 772, [2004] PLSCS 93, Ch D.
6 Law of Property (Miscellaneous Provisions) Act, s 2(3), which requires that the document 'must be signed by or on behalf of each party
to the contract' (italics supplied).
7 The contrary has been found in Jelson Ltd v Derby County Council [1999] 3 EGLR 91, [1999] 19 EG 149, where the learned judge held
that, in the context of a planning agreement made under the Town and Country Planning Act 1990, s 106, which contained a clause requiring
the developer to transfer land to a housing association to be nominated by the planning authority, the provisions of the 1989 Act required
signature by the third party. As the section 106 agreement did not contain any signature by the housing association, the learned judge held
Page 191
that the obligation to transfer to the nominated third party was ineffective. This case appears to give no effect to the words emphasised in s
2(3).
8 Braymist Ltd v Wise Finance Co Ltd [2002] EWCA Civ 127, [2002] Ch 273, CA.
HR A[1026]
Variations
An amendment of an agreement for lease must, unless the amendment is of an immaterial term, comply with the
provisions of s 2 of the Law of Property (Miscellaneous Provisions) Act 19891. Thus, an oral variation or an agreement
in correspondence is insufficient to comply with the requirements of s 22. The original contract survives intact a
purported variation which is ineffective because not made in writing satisfying s 2 of the Law of Property
(Miscellaneous Provisions) Act 1989. An alteration of the date for completion by advancing the date for completion is
an amendment of a material term2. Equally, the variation in an open contract (which contained no provision for the date
of completion) to provide for a date of completion, the payment of a deposit and the application of the National
Conditions of Sale, 20th edn were amendments which were required to comply with the provisions of s 2 of the 1989
Act3. A variation may be effected by the solicitors for the vendor and purchaser signing the same document expressly
incorporating the terms of the original contract and setting out the agreed variation2. An oral variation of a mortgage is
not caught by s 2 for the mortgage is not a contract for the disposition of an interest in land but is itself a disposition4.
There is nothing stopping a party waiving a term in a contract which was incoroporated for his benefit only without the
need to comply with the 1989 Act; such a waiver is not an agreement to vary5. Thus, where a lender had agreed to
provide a secure loan and it was a condition of the loan that the monies were to be made available by the lender by a
specified date, the lender was free to waive that requirement as the condition as to the availability of the monies was
made soley for lender's benefit and the expression of intent of the lender to make the monies available after the agreed
date was not an agreed variation of the contract6.
HR A[1027]
1 Morrall v Krause [1994] EGCS 177, CA. If a contract falls within s 2 at its inception, any material variation of it must itself comply
with s 2: Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd [2004] EWHC 2547 per Lewison J at [198]. In Wadlow v Samuel [2007]
All ER (D) 370, CA, Toulson LJ said that
"[39]...it may not be easy to determine whether the parties "intended" that the original contract
should continue to exist as a matter of legal analysis but in varied form, or whether as a matter of
legal analysis it was intended to be discharged and replaced, since the distinction is one of legal
theory which might have little commercial meaning for the parties."
2 McCausland v Duncan Lawrie [1996] 4 All ER 995, CA. Loubatieres v Mornington Estate (UK) Ltd
[2004] EWHC 825 (Ch), [2004] PLSCS 105, Ch D.
3 Campbell v Haynes [1998] PLSCS 86, Ch D. As the variation did not comply with the 1989 Act the
original open contract remained.
4 Target Holdings Ltd v Priestley (1999) 79 P & CR 305.
5 Courtney v Corpn Ltd [2006] EWCA Civ 518, [2006] All ER (D) 16 (Mar), CA.
6 Courtney v Corpn Ltd.
Page 192
HR A[1028]
Exchange
Most agreements for lease will be by way of formal contract. An exchange of letters cannot give rise to an enforceable
contract for the purposes of s 2 of the Law of Property (Miscellaneous Provisions) Act 19891. An 'exchange of
contracts' has a technical meaning and has the following features:
'(1) Each party draws up or is given a document which incorporates all the terms which they have agreed, and is intended to record
their proposed contract. (2) The documents are called "contracts" or "parts of a contract". They are intended to take effect as formal
documents of title and must be capable, on their face, of being fairly described as contracts having that effect. (3) Each party
executes his part in the expectation that the other party has executed or will execute a corresponding part incorporating the same
terms. (4) At the time of execution neither party is bound by the terms of the document which he has executed, it being their mutual
intention that neither will be bound until the executed parts are exchanged. (5) The act of exchange is a formal delivery by each
party of its part into the actual or constructive possession of the other with the intention that the parties will become mutually
bound when the exchange occurs.'2
It was held that a simple offer and acceptance made by post or fax will not satisfy the requirements of s 2 because there
can be no exchange of contracts unless the parties have reached a prior written or oral agreement3. The parties may,
however, incorporate terms which have been agreed in pre-contract correspondence into the contract, by providing in
the contract, which satisfies the requirements of s 2, that there shall be incorporated into it the terms and conditions (if
any) expressly agreed and set out in the written correspondence between the parties4. Two pages of a diary entry signed
by both the vendor and the purchaser, the first recording that the vendor was to sell (but not that the purchaser was to
buy) and the second recording that the purchaser was to buy (but not that the vendor was to sell), were held not to give
rise to a binding contract as there was no formal exchange of the two documents5.
HR A[1029]
1 Commission for the New Towns v Cooper (Great Britian) Ltd [1995] Ch 259, CA.
2 Evans LJ in Commission for the New Towers v Cooper (Great Britain) Ltd [1995] Ch 259, CA.
3 Commission for the New Towns v Cooper (Great Britain) Ltd [1995] Ch 259, [1995] 2 All ER 929, CA; Valentine v Allen [2003]
EWCA Civ 915. The agreement was, however, binding pursuant to the doctrine of estoppel by convention, as the parties had acted on the
common assumption that the scheme shown on the plan could be carried into effect and had acted in reliance upon it.
4 Jones v Forest Fencing Ltd [2001] EWCA Civ 1700, [2001] PLSCS 249, CA. In that case the contract provided that:
'In order to satisfy the requirements of section 2 of the Law of Property (Miscellaneous
Provisions) Act 1989 it is hereby agreed between the parties hereto that there shall be
incorporated into this Agreement the further terms and conditions (if any) expressly agreed and
set out in the written correspondence between the parties' solicitors relating to this transaction.'
Page 193
The written correspondence referred to the land to be sold comprising only the land and empty buildings
with all fixtures and fittings to be removed. Reference was made to the agent's memorandum of sale
which described the property and the equipment and apparatus within the buildings to be removed. The
removal of that equipment in accordance with the terms set out in that correspondence was held not to
constitute a breach of contract.
5 Ruddick v Ormston [2005] EWHC 2547, Ch D. The Learned Judge, Patten J, held the documents
failed to comply with the Law of Property (Miscellaneous Provisions) Act 1989Act as (i) neither
document contained mutal obligations to buy and sell: the first document did not record that the
purchaser was to buy and the second did not record that the vendor was to sell; and (ii) even if the two
pages could be treated as a single document, the document failed to refer to the date for completion
which had been agreed between the parties to be seven days' later. As this term of the contract was not
contained within either of the two diary entries, the provisions of s 2(1) were not complied with.
HR A[1030]
Terms agreed
All terms agreed between the parties must be contained in the contract of sale. However, terms which are implied by
law into the parties' agreement need not be so contained. A contract collateral to the contract of sale may not be caught
by the provisions of s 2 of the Law of Property (Miscellaneous Provisions) Act 1989. If a term which it is alleged is a
term of the arrangement between the parties is not to be found within the written agreement, the relevant enquiry, in
order to determine whether the arrangement complies with the provisions of the 1989 Act, is to ask not whether the
terms of their composite bargain can be hived off into separate contracts1, but to ask:
(a) upon what terms did the parties agree that the land, or the interest in land, was to be sold; and
(b) are all those terms incorporated in the document that the parties have signed?
Or, to elide the two stages of the enquiry: did the terms upon which the parties agreed that the land was to be sold
include a term (or terms) that have not been incorporated in the document that they have signed2? Thus, if the promise
said to be binding as a collateral contract is in truth one of the terms for the sale or other disposition of land, it will be
unenforceable. It has been said that in a normal conveyancing transaction in a commercial context with both parties
represented by experienced solicitors, the usual course of dealing is to ensure that all agreed terms are put into the
contract and conveyance, transfer or lease. Accordingly, those who assert a collateral contract in relation to a term not
so contained must show that it was intended to have contractual effect separate from the normal conveyancing
documents. Otherwise, it will be invalidated by section 2 of the 1989 Act, even if evidence as to its existence is
admitted3
HR A[1031]
1 Grossman v Hooper [2001] EWCA Civ 615, [2001] 27 EG 135, CA. In Total Clothing Ltd v Guinea Properties Management Ltd (1992)
64 P & CR 452, CA, Scott LJ said:
'If the parties choose to hive off part of the terms of their composite bargain into a separate
Page 194
contract distinct from the written land contract that incorporates the rest of the terms, I can see
nothing in section 2 that provides an answer to an action for the enforcement of the land contract,
on the one hand, or of the separate contract, on the other hand. Each has become, by the
contractual choice of the parties, a separate contract.'
This dictum was doubted by Staughton LJ in Grossman v Hooper [2001] EWCA Civ 615, [2001] 27 EG
135, CA.
2 Grossman v Hooper [2001] EWCA Civ 615, [2001] 27 EG 135, CA, per Chadwick LJ. In Kilcarne
Holdings Ltd v Targetflow (Birmingham) Ltd [2004] EWHC 2547 (Ch), [2004] All ER (D) 132 (Nov),
Lewison J at para [189] said:
The first task is to identify the putative contract, before asking whether it is a contract for the sale
or other disposition of an interest in land. Although it may be possible for parties to hive off parts
of their arrangements into separate and distinct contracts (Total Clothing Ltd v Guinea Properties
Management Ltd ... the court should be wary of artificially dividing what is in truth a composite
transaction (Grossman v Hooper [2001] 2 EGLR 82). If part of a composite transaction is a
contract for the sale or other disposition of an interest in land, then the contract as a whole must
satisfy the statutory requirements (Godden v Merthyr Tydfil Housing Association (1997) 74 P &
CR DI).
The view of Lewison J was followed in Dolphin Quays Development Ltd (in Adminstrative Receivership)
v Mills [2006] EWHC 931 (Ch), [2006] All ER (D) 190 (Apr), Leaver QC sitting as a Deputy of the High
Court, at [45].
Morgan J has said that "the true question is whether the arrangements are such that the matters are
independent in the sense that it is not a term of the contract for the sale of land that the second contract
must also be performed": Oun v Ahmad [2008] EWHC 545 (Ch) at [33].
3 Business Enviroment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622; [2007] 19 EG
166, CA.
HR A[1032]
The relevant enquiry may be illustrated by an example1. Suppose that A wishes to purchase a house from B, and wishes
also to purchase the carpets and curtains that are in the house. Before anything is put in writing, A and B negotiate a
price for the house, say £500,000, and a separate price for the carpets and curtains, say £50,000. But the negotiation for
the sale of the house is made subject to contract, and it is implicit that neither A nor B intends to become bound to a
purchase and sale of the carpets and curtains (if at all) until after the terms for the sale of the house have been put in
writing and signed. A contract for the sale of the house at a price of £500,000 is drawn up and is signed by both A and
B. The document contains no reference to the sale of carpets or curtains. Whether it was a term of the contract for the
sale of the house that A would purchase and B would sell the carpets and curtains is a question of fact. It would have
been open to A and B to agree that the sale of the house was independent of any sale of the carpet and curtains, so that
A was to buy the house whether he bought the carpets and curtains as well. It would, equally, have been open to A and
B to agree that the sale of the house was conditional upon a sale of the carpets and curtains, so that A would not be
obliged to buy the house, nor B to sell it, unless the carpets and the curtains were sold also. In the first case, the
requirements of the Law of Property (Miscellaneous Provisions) Act 1989, s 2(1) would be satisfied. In the second case
those requirements would not be satisfied. The requirements would not be satisfied in the second case because, on a true
understanding of the bargain between the parties, it was a term of the contract for the sale of the house that A would
purchase and B would sell the carpets and curtains, and that term was not incorporated in the document signed by the
parties. The question of fact is not answered by asking whether the agreement to sell the carpets and curtains was 'a
collateral contract', unless, by that term, it is intended to refer only to a contract the existence, or non-existence, of
Page 195
which has no effect upon the efficacy of the principal contract. The question is whether the contract for the sale of the
house is conditional upon the sale of the carpets and curtains.
HR A[1033]
1 This example is taken from the judgment of Chadwick LJ in Grossman v Hooper [2001] EWCA Civ 615, [2001] 27 EG 135, CA.
HR A[1034]
Where contracts were exchanged on terms (agreed in correspondence) that the office copy entries would reveal the
vendor and that there were no other entries on the register other than financial charges, the terms so agreed form the
subject matter of a collateral contract between the parties which was independent of the contract for sale and outside the
provisions of the Law of Property (Miscellaneous Provisions) Act 1989, s 21. Similarly, where the landlord agreed in a
side letter to undertake certain repairs to the demised premises the collateral arrangement was not caught by the Act2.
HR A[1035]
1 Record v Bell [1991] 4 All ER 471, [1991] 1 WLR 853.
2 Lotteryking v Amec Properties Ltd [1995] 2 EGLR 13, Jacob J holding that the arrangement in relation to repairs was not a contract for
the sale of an interest in land. This decision was overruled on a different point in Edlington Properties Ltd v JH Fenner & Co Ltd [2006]
EWCA Civ 403,CA.
HR A[1036]
Where the terms represent a single unified agreement it is unreal to attempt to separate it into two or more discreet, or
even distinct, agreements-one involving the disposition of land, and the other not. Rather, all the obligations between
the parties will be viewed as integral to each other, part and parcel of a single scheme. Thus, where a written agreement
for lease complying with the Law of Property (Miscellaneous Provisions) Act 1989, s 2 was preceded by an oral
agreement whereby the prospective tenant was to acquire all of the contents of the premises, it was held that there was
one agreement albeit with two elements, that is to say, the grant of a lease and a contract for the sale of chattels. Since
the Law of Property (Miscellaneous Provisions) 1989, s 2(1) required all the terms of the contract for the sale of land to
be in writing, including even those which did not relate to land, the agreement would, but for its rectification, have been
void1. Where the parties had lived together as man and wife and, upon separation, agreed that the property was to be
transferred to one of them, with an undertaking, which did not find its way into the written agreement, that the
purchaser was to pay off an unsecured loan, the undertaking to pay the unsecured loan was not to be treated as a term of
the contract to dispose of the interest in land. The loan was not a charge or incumbrance on the property; it had always
been accepted by the purchaser that she would discharge the liability. The undertaking, which had previously been
contained in an earlier draft had been deliberately omitted from the signed document and the most obvious explanation
for that was that the discharge of the loan was not a term of the bargain upon which the property was to be transferred.
Thus, the discharge of the loan was simply a matter of concurrence common to them both. They were in agreement that
it would happen and there was no need for a contractual term about it and no such term was created2. A written
agreement under which the debtor's creditor agreed to purchase the debtor's flat was unenforceable when the parties had
Page 196
agreed in a letter written a day before the agreement was entered into, the terms of which were held to be an integral
part of their agreement, that (i) the purchase price was in fact to be paid by the debtor not the creditor; and (ii) the flat
was being transferred to the creditor in part satisfaction of the amount owed to the debtor. The letter could not be
viewed as a separate collateral contract3.
HR A[1037]-[1041]
1 Wright v Robert Leonard (Developments) Ltd [1994] NPC 49, [1994] EGCS 69. See also Godden v Merthyr Tydfil Housing Association
(1997) 74 P & CR D1 at D2 per Simon Brown LJ.
2 Grossman v Hooper [2001] 27 EG 135.
3 Dolphin Quays Development Ltd (in Adminstrative Receivership) v Mills [2006] EWHC 931 (Ch), [2006] All ER (D) 190 (Apr), Leaver
QC sitting as a Deputy of the High Court.
HR A[1042]
It may not always be easy to hive off part of the parties bargain into separate land and non land contracts. Thus, where a
written agreement for lease complying with s 2 of the Law of Property (Miscellaneous Provisions) Act 1989 was
preceded by an oral agreement whereby the prospective tenant was to acquire all of the contents of the premises, it was
held that there was one agreement albeit with two elements, that is to say, the grant of a lease and the contract for the
sale of chattels. Since s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 required all the terms of the
contract for the sale of land had to be in writing, including even those which did not relate to land, the agreement would
but for its rectification have been void1.
HR A[1043]
1 Wright v Robert Leonard Developments Ltd [1994] NPC 49, [1994] EGCS 69, CA.
HR A[1043.1]
The agreement may contain an entire agreement clause1. Such a clause precludes any claim as to the existence of a
collateral agreement2.
HR A[1043.2]
1 See the leading case of Deepak Fertilisers and Petrochemical Corpn v Davy McKee (London) Ltd [1998] 2 Lloyd's Rep 139 at 138; affd
[1999] 1 Lloyd's Rep 387.
2 In Inntrepreneur v East Crown [2000] 3 EGLR 31, Ch D; see para HR A[1001.1].

Page 197
HR A[1043.3]
The written contract in order to be binding must, it is considered, contain particulars of the matters referred to in HR
A[928]. This will include a requirement for the property to be described with sufficient certainty1. A contract (being a
compromise of court proceedings) which described the land as being "at the rear of 122 Old Woolwich Road in the
[vendor's] ownership to the north of the boundary of the new fence to be erected as shown between points X and Y on
the attached plan" was held to be sufficiently certain to indentify the land2.
HR A[1043.4]
1 Morden College Trustees v Mayrick [2006] EWHC 574 (Ch) (being an appeal from the county court). The judge at first instance, whose
view was upheld on appeal, said:
It must be remembered that what s 2 requires is for the written contract to contain all the terms
agreed between the parties. That of course includes an identification of the property to be
conveyed. But the section does not provide how that identification is to be made. Conveyancers
have (probably so long as there have been conveyancers) had to struggle with the question of
whether the property offered can be sufficiently identified with the property contracted for. The
1989 Act has not changed any of that.
2 Morden College Trustees v Mayrick [2006] EWHC 574 (Ch). The issue of lack of certainty over the
indentification of the land was not before the Court of Appeal: Trustees in the Charity of Morden v
Mayrick [2007] EWCA Civ 4, CA.
HR A[1044]
Options
In relation to an option it is sufficient that the grant of the option complies with the statutory requirements1. It does not
matter, therefore, that the notice exercising the option is signed only by the person entitled to the benefit of the option.
This proposition applies whether the option is a 'put option' (where it is the potential grantor or lessor who is to exercise
it) or a 'call option' (where it is the potential purchaser or lessee who is to exercise it)2.
HR A[1045]
1 Spiro v Glencrown Properties Ltd [1991] Ch 537 approved in Bircham & Co Nominees (2) Ltd v Worrel Holdings Ltd [2001] EWCA
Civ 775, [2001] 22 EG 153 (CS) CA. Hoffmann J in the Spiro decision said:
Apart from authority, it seems plain enough that section 2 was intended to apply to the agreement
which created the option and not to the notice by which it was exercised... The language of
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section 2 places no obstacle in the way of construing the grant of the option as the relevant
contract. An option to buy land can properly be described as a contract for the sale of that land
conditional on the exercise of the option.
2 Active Estates Ltd v Parness [2002] EWHC 893 (Ch), [2002] 36 EG 147.
HR A[1046]
Rectification
If a term is omitted from the contract of sale by mistake rectification of the contract may be possible. It is provided that
where a contract for the sale or other disposition of an interest in land satisfies the statutory conditions as to formalities
by reason only of the rectification of one or more documents in pursuance of an order of a court, the contract shall come
into being, or be deemed to have come into being, at such time as may be specified in the order1. If, therefore, an
agreement for lease otherwise satisfying s 2 of the Law of Property (Miscellaneous Provisions) Act 1989 is preceded by
an oral agreement providing for the sale of chattels within the demised premises and the oral agreement cannot be hived
off as a collateral agreement so that all the terms of the contract are not contained in writing the court may rectify the
written agreement so as to make provision for the sale of the chattels2. Rectification will not be granted where the
parties have expressly agreed that certain terms in their land contract should remain unrecorded and the mistake made is
one in thinking that a binding contract exists notwithstanding the failure to record the additional terms3.
HR A[1047]
2 Wright v Robert Leonard Developments Ltd [1994] NPC 49, [1994] EGCS 69, CA.
3 Oun v Ahmad [2008] EWHC 545 (Ch).
HR A[1048]
Exceptions to s 2
The statutory formalities do not apply in relation to a contract:
(a) to grant such leases as are mentioned in LPA 1925, s 54(2), ie ones taking effect in possession for a
term not exceeding three years (whether or not the lessee is given power to extend the term) at the best
rent which can be reasonably obtained without taking a fine1;
(b) made in the course of a public auction2;
(c) a contract regulated under the Financial Services Act 19863.
Nothing in LPA 1925, s 2 affects the creation or operation of resulting, implied or constructive trusts4.
Page 199
HR A[1049]
1 LP(MP)A 1989, s 2(5)(a). The decision of Long v Tower Hamlets London Borough Council [1997] 1 EGLR 78 ought to be noted. A
lease for the purposes of LPA 1925, s 54(2) must take effect immediately; it does not sanction the grant of reversionary leases. See n 9 to
para HR A[1163].
2 LP(MP)A 1989, s 2(5)(b).
3 LP(MP)A 1989, s 2(5)(c).
4 LP(MP)A 1989, s 2(5).
HR A[1050]
Estoppel
Where there has been a failure to comply with the requirements of s 2 of the Law of Property (Miscellaneous
Provisions) Act 1989 a party may, nevertheless, be estopped from denying the existence of a valid agreement1. Thus, a
tenant was estopped from resiling from an oral agreement to surrender where the landlord had acted in reliance upon it2.
Similarly a mortgagee was estopped from denying the validity of an agreement to vary a mortgage where the mortgagor
had acted in reliance upon the variation3. A transaction is not rendered illegal by there being no compliance with
LP(MP)A 1989, s 2 and public policy does not require the court to refuse to allow estoppel to save the transaction4.
HR A[1051]
1 United Bank of Kuwait plc v Sahib [1997] Ch 107, [1996] 3 All ER 215, CA; McCausland v Duncan Lawrie Ltd [1996] 4 All ER 995,
CA.
2 King v Jackson [1998] 1 EGLR 30, CA.
3 Target Holdings Ltd v Priestley [1999] NLD 33, [1999] NPC 51, Ch D. The learned judge in this case held that the variation of the
mortgage was not in fact caught by the Law of Property (Miscellaneous Provisions) Act 1989, s 2 as the agreement was not an agreement
relating to the disposition of an interest in land. See para HR A[1026].
4 Bankers Trust Co v Namdar [1997] NPC 22, CA, disapproving of and not following Godden v Merthy Tydfil Housing Association
[1997] NPC 1, CA.
HR A[1052]
In order for an estoppel to modify or counteract the effect of the Law of Property (Miscellaneous Provisions) Act 1989,
s 2 so as to maintain the validity of an otherwise invalid agreement due to non-compliance with s 2 of the 1989 Act, the
facts must justify the imposition of the species of constructive trust based on 'common intention', ie an agreement,
arrangement or understanding actually reached between the parties, and relied on and acted on by the claimant1. The
essential difference between a proprietary estoppel which does not also give rise to a constructive trust and one that does
Page 200
is the element of agreement, or at least expression of common understanding, exchanged between the parties as to the
existence or intended existence of a proprietary interest in the latter type of case2. Although it was unclear whether on
the authorities it was open to a claimant to avoid the consequences of s 2(1) of the 1989 Act if he could establish only a
proprietary estoppel and not a trust3, it has been held, obiter, that proprietary estoppel cannot be prayed in aid in order
to render enforceable an agreement that the statute has been declared to be void4.
HR A[1053]
1 Yaxley v Gotts [1999] 3 WLR 1217, CA. The species of constructive trust referred to here is that considered by Lord Bridge in Lloyds
Bank plc v Rosset [1991] 1 AC 107 at 132, where he said:
The first and fundamental question which must always be resolved is whether, independently of
any inference to be drawn from the conduct of the parties in the course of sharing the house as
their home and managing their joint affairs, there has at any time prior to acquisition, or
exceptionally at some later date, been any agreement, arrangement or understanding reached
between them that the property is to be shared beneficially. The finding of an agreement or
arrangement to share in this sense can only, I think, be based on evidence of express discussions
between the partners, however imperfectly remembered and however imprecise their terms may
have been. Once a finding to this effect is made it will only be necessary for the partner asserting
the claim to a beneficial interest against the partner entitled to the legal estate to show that he or
she has acted to her detriment or significantly altered his or her position in reliance on the
agreement in order to give rise to a constructive trust or a proprietary estoppel.
In Kinane v Mackie-Conteh [2005] EWCA Civ 45, [2005] 6 EG 140 (CS), CA (estoppel giving rise to
security interest for a loan), Arden LJ said:
[25] I have summarised the facts in Yaxley v Gotts in paragraph 21 above. Those facts gave rise
to proprietary estoppel, which is in point where a person acts to his detriment in reliance on a
belief permitted or encouraged by the defendant that he is to obtain an interest in land in
circumstances where it is unconscionable for the defendant to refuse to confer that interest.
Robert Walker LJ held that, where constructive trust and proprietary estoppel overlap, the
claimant can rely on section 2(5). The overlap exists where the claimant, to the knowledge of the
legal owner, acts to his detriment in reliance on the belief that he has or will obtain an interest in
property (see page 177 of the judgment of Robert Walker LJ, citing Grant v Edwards [1986]
Ch.638, 656 per Sir Nicolas Browne-Wilkinson VC).
2 Neuberger LJ in Kinane v Mackie-Conteh [2005] EWCA Civ 45, [2005] 6 EG 140 (CS), CA, para
[51].
3 Walker LJ in Yaxley v Gotts [1999] 3 WLR 1217, CA said that a constructive trust of the sort so
described by Lord Bridge is closely akin to, if not indistinguishable from, proprietary estoppel. In James
(Administratrix of the Estate of Thomas Hopkin) v Evans [2000] EGCS 95, CA, it was suggested by
Wright J, with whom the other members of the court agreed, that the other Lord Justices of Appeal in
Yaxley, Beldam LJ and Clarke LJ, were prepared to accept that the strict provisions of the LP(MP)A
1989, s 2(1) might be displaced on a somewhat wider basis in that, in their view, circumstances giving
rise to a proprietary estoppel could be sufficient to have that effect, notwithstanding that the same might
not bring about the creation of a constructive trust, provided that those circumstances did not run
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contrary to the public policy underlying the Act. It was unnecessary to consider this matter further in
James (Administratrix of the Estate of Thomas Hopkin) in light of the court's finding that the
circumstances in that case did not give rise to a proprietary estoppel, let alone one which would also
create a constructive trust.
In Kinane v Mackie-Conteh [2005] EWCA Civ 45, [2005] 6 EG 140 (CS), CA Neuberger LJ said:
[46] There are observations in the speeches of Robert Walker and Beldam LJ (with both of whom
Clarke LJ agreed) in Yaxley v Gotts [2000] Ch 162, to the effect that facts giving rise to an
estoppel, could be sufficient (even if they do not give rise to a trust) to enable a claimant to avoid
the rigours of Section 2(1) of the 1989 Act: see at 174F-G and 188F-9G. It is unnecessary to
decide in this case whether those observations can survive in light of the reasoning of the House
of Lords in Actionstrength [Ltd v International Glass Engineering SpA [2003] UK HL 17, [2003]
2 AC 541]. For the purposes of this appeal, I am content to assume, in favour of Mr
Mackie-Conteh, that it would not be open to Mr Kinane to avoid the consequences of Section
2(1) of the 1989 Act if he could only establish a proprietary estoppel, and not a trust.
In Actionstrength Ltd, the House of Lords held that where a guarantee was not in writing as required by s
4 of the Statute of Frauds Act 1677, the beneficiary of the invalid guarantee could not set up an estoppel
simply on the basis of the giving of the guarantee.
3 Yeoman's Row Management Ltd v Cobbe [2008] UKHL 55, HL per Lord Scott at [29], reversing
[2006] EWCA 1139, CA. The view of Lord Scott, with whom Lord Hoffmann, Lord Brown and Lord
Mance agreed, was obiter as there was no complete agreement capable of being enforced in any event.
4 It has been said in the Court of Appeal that it was clear from the Law Commission Report, especially
paras 5.4 and 5.5, that the continued availability of proprietary estoppel was contemplated in order to
enforce a complete agreement which did not comply with s 2, as was explained by Bedlam LJ in Yaxley v
Gotts [2000] Ch 162 at 188E-190H. Mummery LJ in Cobbe in the Court of Appeal said at [66]:
Its availability does not infringe the public policy underlying s 2(1) by either directly or indirectly
enforcing the agreement so as to frustrate the purpose of s 2.
Lord Scott in the House of Lords said at [29]:
The proposition that an owner of land can be estopped from asserting that an agreement is void
for want of compliance with the requirements of section 2 is, in my opinion, unacceptable. The
assertion is no more than the statute provides. Equity can surely not contradict the statute.
Examples
HR A[1054]
(i) The claimant orally agreed with the house owner that in consideration for carrying out building
work on the house the claimant would have the ground floor of the house. It was held that the claimant
was entitled to a 99-year lease free of rent notwithstanding the fact that the oral agreement did not
comply with the statutory requirement1.
(ii) The claimant orally agreed to purchase land for an agreed sum and in reliance thereon obtained
planning permission for its development. It was held that the claimant had no arguable case for
Page 202
establishing that the owner held the land on constructive trust in favour of the claimant as the court could
not be satisfied that that result accorded with the claimant's expectation as manifested by the steps it had
taken2.
(iii) The claimant agreed to take a tenancy of a sheep farm for ten years. The negotiations were subject
to contract. The claimant entered into occupation and looked after the sheep paying a sum for the sheep
and six month's rent in advance. Two years later the landowner brought a claim for possession. It was
held that no proprietary estoppel arose let alone one which gave rise to a constructive trust3.
(iv) An agreement providing for the redefinition of boundaries to land contained only in an exchange
of letters was not in a form capable of satisfying the requirements of s 2. However, the agreement was
binding pursuant to the doctrine of estoppel by convention as the parties had acted on the common
assumption that the scheme shown on the plan could be carried into effect and had acted in reliance upon
it4.
(v) A proprietary estoppel arose in favour of a property developer entitling him to an interest in a
property where he had been induced to spend time and money obtaining planning permission in reliance
on the terms of an agreement, in principle, relating to development of the property in circumstances
where the court held that the owner had acted unconscionably in refusing to implement the agreement
after planning permission had been obtained5.
(vi) On the divorce, the husband was ordered to pay maintenance and was granted an equitable charge
to protect a one-third beneficial interest in the former matrimonial home. An oral agreement whereby the
husband agreed to give up his beneficial interest in exchange for the wife not pursing him for
maintenance was enforceable. The husband was held to hold his one-third interest on constructive trust
for the wife. It would have been unconscionable for the husband to seek to enforce the charge when he
had been freed from paying maintenance6.
HR A[1055]
1 Yaxley v Gotts [1999] 3 WLR 1217, CA. In fact, the oral agreement was between the claimant and the house owner's father. The fact
that the father was not the owner was unknown to the claimant until after the claimant had undertaken a substantial amount of work to the
property. Both Walker and Beldam LJJ considered that the son (the house owner) had not adopted the father's agreement although the facts
would give rise to a proprietary estoppel. Thus, on this analysis, the question of compliance with LP(MP)A 1989, s 2 did not strictly arise.
2 Ravenocean Ltd v Gardner [2001] PLSCS 200, Ch D.
3 James (Administratrix of the Estate of Thomas Hopkin) v Evans [2000] 42 EG 173, [2000] EGCS 95, CA.
4 Valentine v Allen [2003] EWCA Civ 915, [2003] All ER (D) 79 (Jul).
5 Cobbe v Yeoman's Row Management [2005] EWHC 266 (Ch), [2005] 2 P & CR D2 (Etherton J), [2006] EWCA Civ 1139, CA. This
decision has now been reversed by the House of Lords: [2008] UKHL 55, HL (see para HR A[1053], fn 4).
6 S v S (M intervening) [2006] EWHC 2892 (Fam). See also Oates v Stimson [2006] EWCA Civ 548, CA, where an agreement by O, one
of two joint purchasers, that he would transfer his beneficial interest to S in consideration of payment of the sum of £2,500 and for S to take
on full responsibility for the payment of the mortgage, was enforceable notwithstanding the fact that the agreement was made orally and did
not comply with s 2. Pursuant to the agreement, O had moved out and S had in fact paid all the outgoings on the property. On the evidence it
was held that the court was entitled to conclude that O's conduct, in reliance on which S acted to his detriment and/or changed his position,
gave rise to a constructive trust in favour of S, rendering it unconscionable not to permit him to enforce the oral agreement.
HR A[1056]
Page 203
A party seeking to reply on proprietary estoppel as a basis for disapplying s 2(1) of the 1989 Act is not prevented from
relying in support of his case on the agreement which s 2(1) would otherwise render invalid. Thus, the requirement that
the defendant encouraged (or allowed) the claimant to believe that he would acquire an interest in land may, depending
on the facts, consist in the defendant encouraging the claimant (by words or conduct) to believe that the agreement for
the disposition of an interest in land was valid and binding1.
HR A[1057]-[1089]
1 Kinane v Mackie-Conteh [2005] EWCA Civ 45, [2005] 6 EG 140 (CS), CA. The proprietary estoppel gives rise to rights enforceable on
their owner. The doctrine is not being used to side step the enforcement of a contractual claim. Thus it must be questionable whether reliance
can be placed on estoppel by convention to uphold a contract which would otherwise fail for s 2 non-compliance, as such an estoppel seeks
to uphold the very contract rendered void by statute. In Actionstrength Ltd v International Glass Engineering SpA [2003] 2 AC 541, the
House of Lords held that where a guarantee was not in writing as required by s 4 of the Statute of Frauds Act 1677, the beneficiary of the
invalid guarantee could not set up an estoppel simply on the basis of the giving of the guarantee. This decision was distinguished as there
was no saving in the 1677 statute comparable with s 2(5) of the 1989 Act. Furthermore, the courts have never permitted an exception to s 4
as regards guarantees in the same way that (from the early eighteenth century) they allowed part performance to be used as a means of
enforcing a contract for the sale of land which did not comply with the formalities in s 4 of the 1677 Act. Parliament confirmed the doctrine
of part performance when it re-enacted s 4 as respects contracts for the sale of land in s 40 of the 1925 Act, as it expressly preserved the
doctrine of part performance in s 40(2) of that Act. Part performance was abolished by s 2 of the 1989 Act, but the presence of s 2(5) clearly
demonstrates that Parliament intended a party to be relieved from the consequences of s 2(1) in the circumstances specified in s 2(5): per
Arden LJ at [27].
(b) Formal contract - agreements for lease prior to 27 September 1989 - Law of Property
Act 1925, s 40
HR A[1090]-[1100]
In the case of agreements for lease made prior to the coming into force of the Law of Property (Miscellaneous
Provisions) Act 1989 with effect from 27 September 19891 no action may be brought to enforce an agreement for a
lease unless either: (a) there is an agreement in writing of the agreement signed by the person against whom the action
is brought; or (b) there has been part performance of the agreement2. An agreement in writing must contain: (a) the four
essential terms of the agreement; and (b) any other terms which are part of the agreement between the parties or it must
incorporate them by reference to some other document. An act of part performance is sufficient if: (a) it has been
performed by the party seeking to enforce the agreement; and (b) it is unequivocably referable to the agreement.
HR A[1101]
1 Nothing in the provisions of the Law of Property (Miscellaneous Provisions) Act 1989 applies in relation to contracts made before 27
September 1989: Law of Property (Miscellaneous Provisions) Act 1989, ss 2(7), 5(3), (4)(a). As to the 1989 Act, see paras HR A[1002]ff.
2 Law of Property Act 1925, s 40 repealed by the Law of Property (Miscellaneous Provisions) Act 1989, ss 2(8), Sch 2 and superseded by
ss 2(1) of that Act.
HR A[1102]
Page 204
The statutory requirements apply to 'any contract for the sale or other disposition of land or any interest in land'. A
'disposition' includes a 'conveyance' and a conveyance a lease1. An agreement for lease is a contract for an interest in
land2. The discussion on the provisions of s 40 is retained for the time being as questions may arise as to the
enforceability of agreements made before 27 September 1989.
HR A[1103]
1 Law of Property Act 1925, s 205(1)(ix).
2 Evans v Roberts (1826) 5 B & C 829 at 839; Earl Falmouth v Thomas (1832) 1 Cr & M 89; Sanderson v Graves (1875) L R 10 Exch
234.
HR A[1104]
Memorandum in writing
The signature required may consist of initials and it matters not in what part of the instrument the signature is to be
found if it is inserted in such a manner as to authenticate the relevant parts of the instrument1. An agent need not be
authorised in writing2. It is not necessary that the person seeking to enforce the agreement has signed it3. The practice
prior to the Civil Procedure Rules required the defence of the statute to be specifically pleaded4, and if the defendant
has omitted to raise the defence in an action brought on the agreement, he could not raise it in a subsequent action5.
HR A[1105]
1 Hill v Hill [1947] Ch 231.
2 Clinan v Cooke (1802) 1 Sch & Lef 22.
3 Consequently, if there is an agreement between X and Y, signed by Y only, X can enforce it against Y, but not vice versa.
4 See RSC Ord 18, r 8. This provision is not replicated in the CPR.
5 Humphries v Humphries [1910] 2 KB 531, CA; Cooke v Rickman [1911] 2 KB 1125.
HR A[1106]
All stipulations which are substantially part of the agreement for lease must also be reduced to writing, even though by
themselves they are not within the statute. If any term of the actual agreement is omitted from the memorandum the
effect is that the agreement is unenforceable1. If a term, which is omitted from the memorandum, benefits one party
exclusively that party may waive the term and enforce the contract apart from it2. Where the existence of a written
agreement and its subsequent loss are satisfactorily proved by the ordinary rules of evidence, secondary evidence as to
the contents of the lease may be given3. An agreement which is merely collateral to the agreement for a lease, and
which is not by the statute required to be in writing, may be made orally. Such agreements must be entirely collateral to
Page 205
the written agreement. Thus, the following have been held to be collateral agreements: a parol agreement by a landord
to destroy rabbits made on the granting of a lease of grassland4; a parol representation that the drains are in good
order5; a parol agreement to put premises in repair6. But a previous parol agreement to let more than that provided for
by the letting was inadmissible7; likewise a stipulation by the landord to sell more furniture and make improvements8.
The collateral agreement must not contradict the written agreement9. The contract, though itself required to be in
writing, may be completely rescinded orally; but it cannot be varied orally, even though the part affected by the
variation would not by itself require to be in writing10. The purported oral variation does not have the effect of
rendering the agreement as a whole unenforceable; the variation is itself ignored and the agreement remains enforceable
in its unvaried form11.
HR A[1107]
1 Burgess v Cox [1951] Ch 383. Oral evidence may be given to show that the memorandum does not contain all the terms of the oral
agreement: Beckett v Nurse [1948] 1 KB 535.
2 Burgess v Cox [1951] Ch 383; North v Loomes [1919] 1 Ch 378; Hawkins v Price [1947] Ch 645. However, where the term omitted
from the memorandum is solely for the benefit of the defendant the plaintiff cannot concede the term and enforce the agreement with it
Burgess v Cox [1951] Ch 383; cf Martin v Pycroft (1852) 2 de GM 7 G 785.
3 Barber v Rowe [1948] 2 All ER 1050, CA (lease lost, contents proved by production of counterpart).
4 Morgan v Griffith (1871) LR 6 Exch 70; Erskine v Adeane (1873) 8 Ch App 756.
5 De Lassalle v Guildford [1901] 2 KB 215, CA.
6 Mann v Nunn (1874) 43 LJCP 241; but this case has been doubted: see Angell v Duke (1875) 32 LT 320.
7 Angell v Duke (1875) 32 LT 320; Crawford v White City Rink (Newcastle-on-Tyne) Ltd (1913) 29 TLR 318; Miller v Cannon Hill
Estates Ltd [1931] 2 KB 113; Jameson v Kinmell Bay Land Co Ltd (1931) 47 TLR 593, CA.
8 Mechelan v Wallace (1837) 7 Ad & El 49.
9 New London Credit Syndicate Ltd v Neale [1898] 2 QB 487, CA; Hitchings and Coulthurst Co v Northern Leather Co of America and
Doushkess [1914] 3 KB 907 De Lassalle v Guildford [1901] 2 KB 215 was applied in Brikom Investments Ltd v Carr [1979] QB 467, [1979]
2 All ER 753, in which the landlord was held to its earlier promise that roof repairs would be carried out free of charge. The case was also
decided on the basis of a waiver by the landlord of its right to claim the cost of repairs under the lease.
10 Harvey v Grabham (1836) 5 AD & El 61 (variation); and see Sanderson v Graves (1875) LR 10 Exch 234 (rescission). A draft lease
subsequently prepared cannot be used to explain the contract: Haywood v Cope (1858) 25 Beav 140.
11 Morris v Baron & Co [1918] AC 1.
HR A[1108]
What memorandum is necessary
A memorandum to satisfy the statute need be in no particular form, nor made at the time of the contract1, nor contained
Page 206
in a single document, nor delivered by one of the parties to the other. It may be made at any time2, provided that the
action on the contract has not been commenced or, when the party setting up the statute is added later, at the time which
that party is added3; it may be contained in several documents, provided that these refer to each other or can be
connected by reasonable inference4. Thus, when the defendant in a letter referred to an arrangement with the plaintiff,
and it was shown that there was no other arrangement except a contract contained in a memorandum signed by the
plaintiff, it was held there was a sufficient memorandum5. Similarly in a case where a memorandum of agreement
signed by the vendor omitted to mention the property sold, but a letter acknowledging the receipt of the money and
describing the property was also written by him, it was held that evidence was admissible to show the circumstances
under which the letter was written so as to connect it with the memorandum6. There must be certainty as to the
document referred to7. Parol evidence is admissible to identify a written document referred to in another written
document8. The document may be addressed by the party to be charged to his agent9. The memorandum relied on must
contain not only the terms of the contract, but also an express or implied recognition that a contract had in fact been
entered into. Therefore a document setting out the terms of a contract for the sale of land and expressed to be 'subject to
contract' cannot constitute a sufficient memorandum for the purposes of LPA 1925, s 40(1) because it does not
acknowledge the existence of a contract10. The memorandum must contain the following essential terms of the
contract11.
(a) The parties to the agreement12, either by name, or by such terms as will enable them to be
identified by verbal evidence independent of the contract. Thus, the term 'lessor' is not sufficient, since it
depends for its meaning on the contract13, but 'owner' is sufficient14. It is not essential that the names
should be in the body of the document; the signature may be a sufficient statement of the name15. Where
an agent enters into a contract upon which he himself is not liable, the principal cannot sue on it unless
there is a reference, either express or by necessary implication, to him in the documents constituting the
memorandum of the contract16; but if the agent is personally liable on the contract, then the principal
can sue17 and it is immaterial that the party knows that he is contracting with an agent18. In such a case
either the agent or the principal can sue on the agreement. The description 'tenant' does not negative
agency since all it means is 'the person' who by this contract becomes liable to the obligations and
entitled to the rights which this contract allots to the 'tenant'19. The court will be reluctant to admit
evidence which might tend to show that a tenant entered into a lease on behalf of an undisclosed
principal.20.
(b) The premises to be demised must be described in such a manner as to enable them to be identified,
and for this purpose extrinsic evidence is admissible, including oral evidence21.
(c) The commencement of the term22, and its duration23, It is sufficient if the term is ascertainable
with certainty. On an agreement for an underlease with a nominal reversion, the length of the reversion
must be stated24. Where the lease is to be for lives it is not essential that the lives should be named in the
agreement, since in the absence of a stipulation to the contrary, it is for the tenant to nominate them25.
An option for a lease for seven, 14, or 21 years is an agreement for a lease for 21 years determinable at
seven or 14 years at the option of the lessee26 and so also an option to renew for seven or 14 years is an
option to renew for 14 years with a break at seven years27; but as to the commencement of the term, it is
sufficient if this is expressed by reference to a contingency which actually occurs before the contract is
sought to be enforced28 or otherwise appears by reasonable inference from the circumstances stated in
the memorandum29. If the date of commencement is not expressly fixed, but the rent is made payable
from a certain date, this is treated as the date for commencement of the term30, and usually the date
when possession is given is the date of commencement31; and so, if possession is to be given on a future
event, such as the payment of money, the occurrence of the event fixes the date of commencement32. In
the absence of circumstances showing the date of commencement, it will not be presumed that the term
is to commence at the date of the agreement33.
(d) The amount of the rent to be reserved; or the memorandum must state circumstances from which it
can be ascertained34, and also the amount of any fine or other consideration35.
Page 207
HR A[1109]
1 Shippey v Derrison (1805) 5 Esp 190 at 193, per Lord Ellenborough CJ; and for a fuller statement of the requisites for a memorandum
under the statute, see 42 Halsbury's Laws (4th edn) para 27ff; as to signature see at 40; as to signature by an agent, see at 42. Signature by
the agent's clerk is not sufficient; Potter v Peters (1895) 72 LT 624. A bare entry by a steward in his employer's contract book is not
evidence by itself of an agreement for a lease between the employer and the tenant: Charlewood v Duke of Bedford (1738) 1 Atk 497. As to
signature on behalf of a firm, see Evans v Curtis (1826) 2 C & P 296; Partnership Act 1890, s 6.
2 There must, it is said, be a concluded contract when the memorandum is made; see Munday v Asprey (1880) 13 Ch D 855; Powell v
Dillon (1814) 2 Ball & B 416, but it has been repeatedly held that a written offer orally accepted is sufficient within the statute: see eg Watts
v Ainsworth (1862) 1 H & C 83; Parker v Clark [1960] 1 All ER 93, [1960] 1 WLR 286.
3 Lucas v Dixon (1889) 22 QBD 357, CA: Grindell v Bass [1920] 2 Ch 487 (memorandum contained in a pleading where a party was
added after that pleading was delivered); Farr, Smith & Co Ltd v Messers Ltd [1928] 1 KB 397 (where after delivery of a pleading
containing the memorandum the action was reconstituted by substituting a new plaintiff).
4 Verlander v Codd (1823) Turn & R 352 at 357; Warner v Willington (1856) 3 Drew 523; Ridgway v Wharton (1857) 6 HL Cas 238;
Baumann v James (1868) 3 Ch App 508, CA (surveyor's report); Long v Millar (1879) 4 CPD 450, CA; Cave v Hastings (1881) 7 QBD 125;
Wylson v Dunn (1887) 34 Ch D 569 at 575; Chaproniere v Lambert [1917] 2 Ch 356, CA (unsigned memorandum of agreement and receipt
for rent paid in advance held to be unconnected and insufficient to satisfy the statute); Horner v Walker [1923] 2 Ch 218; Hill v Hill [1947]
Ch 231, [1947] 1 All ER 54, CA (option in lease to renew on same terms, notice exercising option and entry in rent book 'Renewed lease',
followed by date, and initialled by landlord, held to be sufficient).
5 Cave v Hastings (1881) 7 QBD 125.
6 Oliver v Hunting (1890) 44 Ch D 205.
7 Price v Griffith (1851) 1 De GM & G 80.
8 Morris v Wilson (1859) 5 Jur NS 168; Hodges v Horsfall (1829) 1 Russ & M 116 (parol evidence admitted to identify plan referred to);
Jones v Victoria Graving Dock Co (1877) 2 QBD 314, CA (resolution in minute book). An envelope and a letter may be connected together
by parol evidence to supply the name of one party written on the envelope and not contained in the letter: Pearce v Gardner [1897] 1 QB
688, CA; Last v Hucklesby (1914) 58 Sol Jo 431, CA.
9 Gibson v Holland (1865) LR 1 CP 1.
10 Tiverton Estates Ltd v Wearwell Ltd [1975] Ch 146, [1974] 1 All ER 209, CA. The Court of Appeal in the Tiverton Estates case
declined to follow the decision of the Court of Appeal in Law v Jones [1974] Ch 112, [1973] 2 All ER 437 on the effect of a 'without
prejudice' qualification.
11 See para [536]; and see Williams v Lake (1859) 2 E & E 349 at 354; Clarke v Fuller (1864) 16 CBNS 24.
12 Williams v Lake (1859) 2 E & E 349; Warner v Willington (1856) 3 Drew 523; Donnison v People's Cafe Co (1881) 45 LT 187, CA;
see Williams v Jordan (1877) 6 Ch D 517.
13 Donnison v People's Cafe Co (1881) 45 LT 187 at 189; cf Potter v Duffield (1874) LR 18 Eq 4 ('vendor' held insufficient); Coombs v
Wilkes [1891] 3 Ch 77 ('landlord' held insufficient). It must be possible to identify the parties quite apart from the position they hold in the
contract sought to be enforced.
14 Sale v Lambert (1874) LR 18 Eq 1; Rossiter v Miller (1878) 3 App Cas 1124 ('the proprietors').
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15 Stokell v Niven (1889) 61 LT 18, CA.
16 Lovesy v Palmer [1916] 2 Ch 233.
17 Filby v Hounsell [1896] 2 Ch 737.
18 Basma v Weeks [1950] AC 441, [1950] 2 All ER 146, disapproving Smith-Bird v Blower [1939] 2 All ER 406.
19 Danziger v Thompson [1944] KB 654, [1944] 2 All ER 151.
20 Hanstown Properties Ltd v Green (1977) 246 Estates Gazette 917.
21 Sheers v Thimbleby & Son (1897) 13 TLR 451 at 453, CA. The following descriptions have been held sufficient, parol evidence being
admissible to show to what they referred: 'this place' (Waldron v Jacob and Millie (1870) IR 5 Eq 131); 'property' the date of the sale being
given (Shardlow v Cotterell (1881) 20 Ch D 90, CA); 'my house' (Cowley v Watts (1853) 17 Jur 172); 'Mr Ogilvie's house' (Ogilvie v
Foljambe (1817) 3 Mer 53); 'the house, etc, in Newport', coupled with a reference to the deeds being in the possession of a named individual
(Owen v Thomas (1834) 3 My & K 353); 'the intended new public house at Putney' (Wood v Scarth (1855) 2 K & J 33); 'twenty-four acres of
land freehold and all appurtenances at Totmanslow' (Plant v Bourne [1897] 2 Ch 281, CA). But the words 'the property' were held an
insufficient description of colliery plant and stock (Vale of Neath Colliery Co v Furness (1876) 45 LJ Ch 276). The agreement is not
enforceable if the premises to be demised are altogether uncertain (Lancaster v De Trafford (1862) 31 LJ Ch 554); but it is enforceable
where they are substantially ascertained, but the boundaries are left for future determination (Haywood v Cope (1858) 25 Beav 140); Wesley
v Walker (1878) 26 WR 368 ('land at Forest Gate' sufficient when explained by oral evidence); and see the statement of expressions which
have been held sufficiently definite in Sheers v Thimbleby & Sons (1897) 13 TLR 451 at 453, CA, per Chitty J. It seems that the maxim that
there is certain which can be rendered certain is much more readily applied to the premises than to the parties.
22 Blore v Sutton (1817) 3 Mer 237; Clarke v Fuller (1864) 16 CBNS 24 at 37; Nesham v Selby (1872) 7 Ch App 406; Cartwright v
Miller (1877) 36 LT 398; Edwards v Jones (1921) 124 LT 740, CA. The date, if agreed at the time of the contract, though omitted therefrom,
may be ascertained from subsequent correspondence: White v Hay (1895) 72 LT 281.
23 Clinan v Cooke (1802) 1 Sch & Lef 22; Clarke v Fuller (1864) 16 CBNS 24; Gordon v Trevelyan (1814) 1 Price 64; Cox v Middleton
(1854) 2 Drew 209; Bayley v Fitzmaurice (1857) 8 E & B 664, Ex Ch; affd (1860) 9 HL Cas 78; Gilbert v Hall (1831) 1 LJ Ch 15.
24 Dolling v Evans (1867) 36 LJ Ch 474.
25 Fitzgerald v Vicars (1839) 2 Dr & Wal 298; cf Pentland v Stokes (1812) 2 Ball & B 68; Lord Kensington v Phillips (1817) 5 Dow 61.
26 Hersey v Giblett (1854) 18 Beav 174.
27 Gardner v Blaxill [1960] 2 All ER 457, [1960] 1 WLR 752.
28 Brilliant v Michaels [1945] 1 All ER 121.
29 Phelan v Tedcastle (1884) 15 LR Ir 169, CA; Re Lander and Bagley's Contract [1892] 3 Ch 41; Trustees of National Deposit Friendly
Society v Beatties of London Ltd (1985) 275 Estates Gazette 54. Under an agreement for an extension or renewal of an existing term, the
commencement of the new term is from the expiration of the old term: Verlander v Codd (1823) Turn & R 352; Wood v Aylward (1887) 58
LT 662, CA.
30 Wesley v Walker (1878) 26 WR 368.
31 Re Lander and Bagley's Contract [1892] 3 Ch 41. But the words 'immediate possession if required' do not fix the commencement of
the term (Rock Portland Cement Co v Wilson (1882) 52 LJ Ch 214).
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32 Erskine v Armstrong (1887) 20 LR Ir 296, CA.
33 Marshall v Berridge (1881) 19 Ch D 233, CA (overruling Jaques v Millar (1877) 6 Ch D 153); Wyse v Russell (1882) 11 LR Ir 173;
White v M'Mahon (1886) 18 LR Ir 460; Humphrey v Conybeare (1899) 80 LT 40, CA; Edwards v Jones (1921) 124 LT 740, CA; Harvey v
Pratt [1965] 2 All ER 786, [1965] 1 WLR 1025 (considered in Trustees of National Deposit Friendly Society v Beatties of London Ltd
(1985) 275 Estates Gazette 54).
34 Baumann v James (1868) 3 Ch App 508, CA.
35 Dear v Verity (1869) 38 LJ Ch 486.
HR A[1110]-[1120]
Doctrine of part performance
Although there is no memorandum of an agreement for a lease such as to satisfy the statute1, yet if the agreement has
been partly performed, parol evidence of it may be given in an action for specific performance. Parol evidence is not
admissible to contradict or vary a written document; but it is admissible in order to show the external circumstances
which enable its effect to be ascertained, such as the condition of the property at the time when the lease is granted2.
The evidence must establish that there is in fact a concluded agreement3, and that the terms of such agreement are
certain and definite4, and that there has been part performance by the party seeking to enforce the contract of a kind
recognised as proper to exclude the defence of the statute. The performance on one side must be such as to make it
inequitable for the other side to set up the statute5. Another way of putting it is to say that the acts must be such as to
render it a fraud on the part of the other party to take advantage of the absence of writing6. The original purpose of the
Statute of Frauds (1677) was to prevent oral agreements being set up as a method of fraud. The doctrine of part
performance was developed by equity soon after the passing of the statute to prevent the statute itself from being used
as an engine of fraud. The rule that the part performance must be by the party seeking to enforce the agreement7 is
referable to the above principle; if the party against whom the agreement is sought to be enforced has performed acts of
part performance there is no fraud in his being entitled to ignore them. It follows that, like a memorandum signed by
one party only, part performance can make an agreement enforceable on one side only. For this purpose the acts relied
upon must be unequivocably referable to some contract between the parties and be consistent with the contract alleged8.
If these matters are proved, and if the agreement is such that, if it were in writing, the plaintiff would be entitled to
specific performance of it, he is entitled to specific performance, notwithstanding the absence of writing9, since the
effect of part performance, once proved is to enable the party seeking to enforce the agreement to adduce evidence as to
all its terms10. The doctrine applies to parol agreements to grant easements11.
HR A[1121]
2 Doe d Freeland v Burt (1787) 1 Term Rep 701; Baird v Fortune (1861) 4 Macq 127 at 149, HL. As to admitting evidence of custom: see
Brown v Byrne (1854) 3 E & B 703 at 715, per Coleridge J; Gibson v Small (1853) 4 HL Cas 353 at 397, per Parke B; Meyer v Dresser
(1864) 16 CBNS 646 at 660, per Erle CJ. As to collateral parol agreements see para HR A[1106] and as to the meaning of technical words
see Shore v Wilson (1842) 9 Cl & Fin 355 at 511, per Erskine J: 'If the terms are technical terms of art, their meaning must...be ascertained
by the evidence of persons skilled in the art to which they refer.'
3 Mortal v Lyons (1858) 8 1 Ch R 112; see Pilling v Armitage (1805) 12 Ves 78; Morphett v Jones (1818) 1 Swan 172; Reynolds v Waring
(1831) You 346; Nunn v Fabian (1865) 1 Ch App 35 at 39. See, further Lady E Thynne v Earl Glengall (1848) 2 HL Cas 131 at 158;
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Faulkner v Llewellin (1862) 31 LJ Ch 549; Price v Salusbury (1863) 32 Beav 446 at 459; affd (1866) 14 LT 110, HL; Howe v Hall (1870) 4
IR Eq 242; Richards v North London Rly Co (1871) 20 WR 194; Phillips v Alderton (1875) 24 WR 8; Bertel v Neveux (1878) 39 LT 257.
4 Clinan v Cooke (1802) 1 Sch & Lef 22 at 40; Cooth v Jackson (1801) 6 Ves 12 at 38 Price v Salusbury (1863) 32 Beav 446; Richards v
North London Rly Co (1871) 20 WR 194.
5 Mundy v Jolliffe (1839) 5 My & Cr 167 at 177; Maddison v Alderson (1883) 8 App Cas 467 at 475.
6 Chaproniere v Lambert [1917] 2 Ch 356 at 361 CA, per Warrington LJ; Rawlinson v Ames [1925] Ch 96 at 114, per Romer J.
7 See eg Williams v Evans (1875) LR 19 Eq 547.
8 Cooth v Jackson (1801) 6 Ves 12 at 38; Ex p Hooper (1815) 19 Ves 477 at 479; Morphett v Jones (1818) 1 Swan 172; Alderson v
Maddison (1881) 7 QBD 174 at 178; CA; affd sub nom Maddison v Alderson; Frame v Dawson (1807) 14 Ves 386 at 388; Dale v Hamilton
(1846) 5 Hare 369; Kingswood Estate Co Ltd v Anderson [1963] 2 QB 169, [1962] 3 All ER 593; Wakeham v Mackenzie [1968] 2 All ER
783, [1968] 1 WLR 1175; Steadman v Steadman [1976] AC 536, [1974] 2 All ER 977, [1974] 3 WLR 56; Sutton v Sutton [1984] Ch 184,
[1984] 1 All ER 168. Frame v Dawson (1807) 14 Ves 386 at 388; Dale v Hamilton (1846) 5 Hare 369.
9 Nunn v Fabian (1865) 1 Ch App 35; Chaproniere v Lambert [1917] 2 Ch 356, per Warrington LJ.
10 Brough v Nettleton [1921] 2 Ch 25.
11 McManus v Cooke (1887) 35 Ch D 681.
HR A[1122]
Acts of part performance
The following acts or circumstances are sufficient evidence of part performance:
(a) entry into possession and expenditure of money in improvements in pursuance of the agreement1,
or entry into possession alone2;
(b) expenditure of money in alterations by a tenant already in possession where the expenditure is not
obligatory on the tenant under his existing lease3;
(c) payment of rent by a tenant in possession at an increased rate4. Thus, it has been held that an oral
'package deal' made between spouses, containing arrangements for maintenance, payment of arrears, and
the transfer of one spouse's interest in the matrimonial home, may be a contract for the disposition of an
interest in land within the Law of Property Act 1925, s 40, and payment off of such arrears may be
sufficient part performance to enable an action to be brought on the agreement5.
HR A[1123]
1 Lester v Foxcroft (1701) Colles 108, HL; Gregory v Mighell (1811) 18 Ves 328; Mundy v Joliffe (1839) 5 My & Cr 167; Surcome v
Pinniger (1853) 3 De GM & G 571; Shillibeer v Jarvis (1856) 8 De GM & G 79; Benecke v Chadwicke (1856) 4 WR 687; Farrall v
Davenport (1861) 3 Giff 363; affd 8 Jur NS 1043; Reddin v Jarman (1867) 16 LT 449; Phillips v Alderton (1875) 24 WR 8; see Chappel v
Gregory (1863) 34 Beav 250. Re Sullivan's Estate (1889) 23 LR Ir 255; Ariff v Rai Jadunath Majumdar Bahadur (1931) 47 TLR 238. The
case for specific performance is stronger where the lessor has acquiesced in the expenditure: see Dann v Spurrier (1802) 7 Ves 231 at 236;
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Ramsden v Dyson (1866) LR 1 HL 129; Plimmer v Wellington Corpn (1884) 9 App Cas 699, PC; Civil Service Musical Instrument
Association Ltd v Whiteman (1899) 68 LJ Ch 484. See also Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1981] 1 All ER 897,
[1981] 2 WLR 576.
2 Wills v Stradling (1797) 3 Ves 378 at 381; Boardman v Mostyn (1801) 6 Ves 467 at 470; Morphett v Jones (1818) 1 Swan 172; Pain v
Coombs (1857) 1 De G & J 34; Wilson v West Hartlepool Rly Co (1865) 2 De GJ & Sm 475 at 485; Jones v Joseph (1918) 87 LJKB 510 at
512; Brough v Nettleton [1921] 2 Ch 25.
3 Sutherland v Briggs (1841) 1 Hare 26; see Wills v Stradling (1797) 3 Ves 378 at 381; Frame v Dawson (1807) 14 Ves 386. Expenditure
by a sublessee, with the lessee's knowledge and approval, has the same effect: Williams v Evans (1875) LR 19 Eq 547.
4 Wills v Stradling (1797) 3 Ves 378; Nunn v Fabian (1865) 1 Ch App 35; Howe v Hall (1870) 4 IR Eq 242; Humphreys v Green (1882)
10 QBD 148 at 156, CA (but see per Brett LJ (1882) 10 QBD 148 at 160); Connor v Fitzgerald (1883) 11 LR Ir 106; Miller and Aldworth
Ltd v Sharp [1899] 1 Ch 622; though, in general, payment of money is not an act of part; Frame v Dawson (1807) 14 Ves 386; Maddison v
Alderson (1883) 8 App Cas 467; Thursby v Eccles (1900) 49 WR 281; Chaproniere v Lambert [1917] 2 Ch 356, CA).
5 Steadman v Steadman [1976] AC 536, [1973] 3 All ER 977, following Wakeham v Mackenzie [1968] 2 All ER 783, [1968] 1 WLR
1175.
HR A[1124]
In the first act or circumstance referred to above, the part performance is referable to an original agreement for a
tenancy; in the second and third cases, the part performace is referable to an agreement for a new tenancy. But mere
retention of possession is not in itself sufficient1; in order that it may operate as part performance there must be special
circumstances showing that it is necessarily referable to an agreement for a lease2; nor is the expenditure of money by
the intending lessor a sufficient act of part performance3. The acts must be in furtherance of the contract and not merely
a recognition of its existence or its contemplation4.
HR A[1125]
1 Wills v Stradling (1797) 3 Ves 378 at 381, 382; Morphett v Jones (1818) 1 Swan 172; Brennan v Bolton (1842) 2 Dr & War 349; Re
National Savings Bank Association, Brady's Case (1867) 15 WR 753; Alderson v Maddison (1881) 7 QBD 174 at 178, per Baggallay LJ; on
appeal sub nom Maddison v Alderson (1883) 8 App Cas 467; but see Lanyon v Martin (1884) 13 LR Ir 297, where continuance in possession
and payment of rent were held to be acts of part performance.
2 Dowell v Dew (1842) 1 Y & C Ch Cas 345 (referable to contract for renewal); Hodson v Heuland [1896] 2 Ch 428, and Biss v Hygate
[1918] 2 KB 314 (both cases of continuation after parol contract of possession taken before the contract); see White and Wontner v
Whitewood (1897) 13 TLR 409.
3 Whittick v Mozley (1883) Cab & El 86; and see Tofield v Roberts (1894) 10 TLR 437, where putting an electrician into the house to fix
electric light without the authority of the prospective tenant was held not to constitute part performance; but expenditure on alterations at the
request of the lessee may be sufficient; see Dickinson v Barrow [1904] 2 Ch 339; Rawlinson v Ames [1925] Ch 96, and even where it is not
sufficient the intending lessor may be able to recover such expenditure from the prospective lessee (Brewer Street Investments Ltd v
Barclays Woollen Co Ltd [1954] 1 QB 428, [1953] 2 All ER 1330, CA). As to recovery of expenditure, see para HR A[986].
4 Elsden v Pick [1980] 3 All ER 235, [1980] 1 WLR 898, CA.
(c) Protection of agreements for lease

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HR A[1126]
An agreement for lease is an estate contract within the meaning of the Land Charges Act 1972, s 2(1), Class C(iv) and
registrable as such, and this applies not only to separate documents which are such agreements but also to clauses in any
document in which an agreement to grant a tenancy is contained (eg, an option to renew). It would appear that an
agreement operating as a present demise is not so registrable, and in any event, if possession is taken under such an
agreement, there is no point in registering it. Although the safer course is to register every executory agreement for
lease, it is not the practice to do so where the lease is to be granted shortly after the agreement, but only in cases where
it is anticipated there will be some delay in granting the lease or it is necessary to secure priority over a pending
transaction1. The registration is against the name of the estate owner or the person entitled at the date of the agreement
to have a legal estate conveyed to him2 and a tenant from year to year3 is an 'estate owner' within the meaning of the
provision. Any agreement not so registered is void against a purchaser for value4 and there is no requirement that the
purchaser must take in good faith or that the money paid must not be nominal5. An error in the name registered does not
invalidate the registration if the name given may fairly be called a version of the name; but a person who searches in the
correct name is protected even if it fails to reveal an entry6.
HR A[1127]
1 See Coventry Permanent Economic Building Society v Jones [1951] 1 All ER 901.
2 Land Charges Act 1972, s 2(1), Class C(iv).
3 Sharp v Coates [1949] 1 KB 285, [1948] 2 All ER 871 (where the agreement was that a tenant from year to year would, if he acquired
the fee simple, grant a lease for ten years).
4 Land Charges Act 1972, s 4(6). A purchaser for value includes a mortgagee or a lessee (s 17(1)) and see Sharp v Coates [1949] 1 KB
285, [1948] 2 All ER 871; Coventry Permanent Economic Building Society v Jones [1951] 1 All ER 901. The party who under the
agreement is to be granted a lease or tenancy has a claim in damages against the other party thereto, although the agreement is not so
registered; Wright v Dean [1948] Ch 686, [1948] 2 All ER 415; and see Hollington Bros Ltd v Rhodes [1951] 2 All ER 578n). When the land
is registered the agreement may be enforceable against a purchaser even without registration as a charge: Webb v Pollmount [1966] Ch 584,
[1966] 1 All ER 481.
5 Midland Bank Trust Co Ltd v Green [1981] AC 513, [1981] 1 All ER 153, HL.
6 Oak Co-Operative Building Society v Blackburn [1968] Ch 730.
HR A[1128]
Any agreement which is not registered is void against a purchaser of a legal estate for money or moneys worth1. The
purchaser is not required to act in good faith2. Thus the contract has been held not to be binding on a purchaser where
he did not diligently investigate title3; had knowledge of the contract4; deliberately intended to defeat it5 and or where
the land was expressly conveyed subject to the contract6. The party who under the agreement is to be granted a lease
has a claim in damages against the other party thereto, albeit the agreement was not registered7.
HR A[1129]
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1 Land Charges Act 1972, s 4(6).
2 Land Charges Act 1972, s 17(1) defines 'purchaser' as any person (including a mortgagee or lessee) which, for valuable consideration,
takes any interest in land or is a charge on land'.
3 Sharpe v Coates [1949] 1 KB 285, [1948] 2 All ER 871 (owner of interest in possession and therefore purchaser had constructive notice
of it).
4 Coventry Permanent Economic Building Society v Jones [1951] 1 All ER 901; Hollington Bros Ltd v Rhodes [1951] 2 TLR 691 at 696.
5 Midland Bank Trust Co Ltd v Green [1981] AG 513.
6 Hollington Bros Ltd v Rhodes [1951] 2 All ER 578n. It may be possible in these circumstances to impose a constructive trust upon the
purchaser; Lyus v Prowsa Developments Ltd [1982] 2 All ER 963, [1982] 1 WLR 1044. It may also be possible for the purchaser to be
estopped from asserting that the unregistered charge is ineffective: Taylor Fashions Ltd v Liverpool Victoria T/ees Co Ltd [1982] QB 133.
7 Wright v Dean [1948] Ch 686; Hollington Bros Ltd v Rhodes [1951] 2 All ER 578n.
HR A[1130]
Where the agreement for lease relates to registered land, the agreement may be protected by entry of a unilateral
notice1. The rights of persons in actual occupation are overriding interests and the agreement will be binding on any
purchaser of the land albeit not protected by the entry of a unilateral notice2.
HR A[1130.1]
1 Land Registration Act 2002, ss 34(2)(b) and 35.
2 Land Registration Act 2002, Sch 3, para 2. The agreement will not, however, constitute an overidding interest if (i) it belongs to a
person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition, and (ii)
of which the person to whom the disposition is made does not have actual knowledge at that time: Sch 3, para 2(c) ibid.
(d) Agency
HR A[1130.2]
An agreement for lease may be entered into by an agent, but he must be properly authorised for that purpose. Thus, a
solicitor has no authority to make a contract in the absence of special authority for this purpose1. Similarly, the making
of a contract for sale is no part of an estate agent's business2. A solicitor is not entitled to exchange contracts with a
purchaser using a signed contract prepared for an earlier sale3. Authority to find a purchaser or to procure an offer does
not imply authority to enter into a contract4. Even if an agent is definitely instructed to sell at a defined price an
authorisation to make a binding contract and to sign an agreement will not be lightly inferred5. Nor does an estate agent
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have any authority to let an intending tenant into possession6. He is, however, prima facie authorised to describe the
property and state to an intending purchaser circumstances which may affect its value7; but not to accept a deposit on
such terms as will make the prospective vendor liable in respect of if8, nor to receive payment9 nor to warrant that the
property may legally be used for a particular purpose10. However, if the agent is instructed to enter into an agreement
or to grant a licence the principal will be bound if as a matter of constriction the legal effect of the agreement is to grant
a tenancy11. An owner ratifies an unauthorised agreement if he lets the tenant into possession under it12. A general
authority of a steward or land agent is similarly limited. He cannot grant leases13. But a land agent specially
empowered to manage and superintend estates has implied authority to grant the usual and customary leases14, and to
give and receive notice to quit from tenants15. Unusual terms require the sanction of the principal16.
HR A[1130.3]
1 D'Silva v Lister House Development Ltd [1971] Ch 17 followed in James (Administratrix of the Estate of Thomas Hopkin) v Evans
[2000] EGCS 95, CA; Smith v Webster (1876) 3 Ch D 49; H Clark (Doncaster) v Wilkinson [1965] Ch 694 at 702.
2 Wragg v Lovett [1948] 2 All ER 968.
3 OPM Property Services Ltd v Venner [2004] PLSCS 63, Ch, distinguishing Domb v Isoz [1980] Ch 548, [1980] 1 All ER 942 where the
authority was to exchange a contract (by whatever means) with a particular purchaser.
4 Hamer v Sharp (1874) LR 19 Eq 108; (Hall V C: '...when instructions are given to an agent to find a purchaser of a landed property, he,
not being instructed as to the conditions to be inserted into the contract as to title, is not authorised to sign a contract on the part of the
vendor.') (agent requested to 'procure a purchaser for £2,800' implied no authority to enter into open contract). Chadburn v Moore (1892) 61
LJ Ch 674; Prior v Moore (1887) 3 TLR 624; Wilde v Watson (1878) 1 LR Ir 402 (instruction to procure offer of £2,900 by certain date did
not imply authority to enter into open contract). Thuman v Best (1907) 97 LT 239 ('Estate agents as such have no general authority to enter
into contracts for their employers. Their business is to find offers and submit them to their employers for acceptance' per Parker J); Carney v
Fair (1902) 54 ILT 61; Lewcock v Bromley (1920) 127 LT 116; Yallop v Fosh (1953) 161 EG 603 (no authority to grant new lease to
existing tenant).
5 Wragg v Lovett [1948] 2 All ER 968; Jawara v Gambia Airways [1992] NPC 61; [1992] EGCS 54; Chadburn v Moore (1892) 61 LJ Ch
674; Lewcock v Bromley (1920) 127 LT 116. Cf Rosenbaum v Belson [1900] 2 Ch 267; Keen v Mear [1920] 2 Ch 574. But even if an
authority to make a contract can be implied it may be that the agent has power only to enter into an open contract: Wragg v Lovett [1948] 2
All ER 968.
6 Slack v Crewe (1860) 2 F & F 59.
7 Mullens v Miller (1882) 22 Ch D 194. But cf Overbrooke Estates Ltd v Glencombe Properties Ltd [1974] 3 All ER 511, [1974] 1 WLR
1335.
8 Sorrell v Finch [1977] AC 728.
9 Mynn v Joliffe (1834) 1 Mod & R 326; cf Butwick v Grant [1924] 2 KB 483.
10 Hill v Harris [1965] 2 QB 601.
11 Walsh v Griffiths-Jones [1978] 2 All ER 1002 (agent held to have ostensible authority).
12 Powell v Smith (1872) LR 14 Eq 85. As to ratification see 1(2) Halsbury's Laws (Reissue) para 56.
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13 Collen v Gardner (1856) 21 Beav 540; Mortal v Lyons (1858) 8 I Ch R 112 at 117; Ridgway v Wharton (1854) 3 De GM & G 677 at
688.
14 Peers v Sneyd (1853) 17 Beav 151; Firman v Lord Ormonde (1829) Beat 347.
15 Papillon v Brunton (1860) 5 H & N 518; Jones v Phipps (1868) LB 3 QB 567; Townsends Carriers Ltd v Pfizer Ltd (1977) 33 P & CR
361; Peel Developments (South) Ltd v Siemens plc [1992] 2 EGLR 85.
16 Turner v Hutchinson (1860) 2 F & F 185; Re Pearson and l'Anson [1899] 2 QB 618.
HR A[1130.4]
As a general rule, any contract made by an agent with the authority of his principal may be enforced by or against the
principal where his name or existence was disclosed to the other contracting party at the time when the contract was
made1. Where the principal is undisclosed, the authorised contract of the agent may also as a general rule be enforced
by or against the principal2. If, however, the agent contracts in such terms as to imply that he is the real and only
principal, evidence to contradict the terms of the contract will not be admitted3. The expression 'the tenant' in an
agreement does not, however, negate agency and oral evidence is admissible to show that a person described in a
tenancy agreement as the tenant in fact entered into the agreement as agent for another4.
HR A[1130.5]
1 Skinner v Stocks (1821) 4 B & Ald 437; Hornby v Lacy (1817) 6 M & S 166.
2 Edmunds v Bushell and Jones (1865) LR 1 QB 97; Watteau v Fenwick [1893] 1 QB 346
3 Humble v Hunter (1848) 12 QB 310; Formby Bros v Formby [1910] WN 48, CA
4 Danziger v Thompson [1944] KB 654; Hanstown Properties Ltd v Green [1978] 1 EGLR l85, CA.
HR A[1130.6]
A contract which purports to be made by or on behalf of a company at a time when the company has not been formed
has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as
agent for it, and he is personally liable on the contract accordingly1. Thus, where a contract for sale of land was signed
by a firm of solicitors on behalf of an unincorporated company, the contract satisfied the provisions of the Law of
Property (Miscellaneous Provisions) Act 1989 as the contract had effect as one made with the person (the firm)
purporting to act for the company2.
HR A[1130.7]
1 Companies Act 1985, s 36C(1).

Page 216
2 Braymist Ltd v Wise Finance Ltd [2001] EGCS 35, Ch D. Etherton J held that the agreement was, by virtue of the provisions of the
Companies Act 1985, s 36C(1) enforceable not only against the party who signed the contract but, as well, enforceable by that party. This
view was upheld by the Court of Appeal: [2002] EWCA 127, [2002] 09 EG 220 (CS).
HR A[1130.8]
The agent's authority to enter into the contract may be conferred orally notwithstanding the fact that the contract is one
which is required to be in writing to be enforceable1. However, an agent's authority to execute a lease required to be by
deed must be conferred by deed2. Authority to deliver a deed need no longer be given by deed3. Where a solicitor or
licenced conveyancer, or an agent or employee of a solicitor or licenced conveyancer, in the course of or in connection
with a transaction involving the disposition or creation of an interest in land, purports to deliver an instrument as a deed
on behalf of a party to the instrument, it shall be conclusively presumed in favour of a purchaser that he is authorised so
to deliver the instrument4.
HR A[1130.9]
1 Coles v Trecothick (1804) 9 Ves 234; Cave v Mackenzie (1877) 46 LJ Ch 564.
2 Steiglitz v Egginton (1815) Holt NP 141; Berkeley v Hardy (1826) 5 B & C 355; Powell v London and Provincial Bank [1893] 2 Ch
555; Harmer v Armstrong [1934] Ch 65.
3 Law of Property (Miscellaneous Provisions) Act 1989, s 1(1)(c), reversing Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961]
Ch 88.
4 LP(MP)A 1989, s 1(5).
HR A[1130.10]
The authority of the agent is terminated by the death of the principal or the agent1.
HR A[1130.11]
1 Houstoun v Robertson (1816) 6 Taunt 448; Carr v Levingston (1865) 35 Beav 41; Farrow v Wilson (1869) LR 4 CP 744; Phillips v
Jones (1888) 4 TLR 401. The death of the principal in respect of an irrevocable authority will not terminate the agent's authority; Lepard v
Vernon (1813) 2 Ves & B 51; Spooner v Sandilands (1842) 1 Y & C Ch Cas 390; Carter v White (1883) 25 Ch D 666.
HR A[1131]
A land or estate agent must exercise reasonable care to ascertain the general solvency and fitness of proposed tenants1.
HR A[1131.1]
Page 217
1 Heys v Tindall (1861) 1 B & S 296; Brutton v Alfred Savill, Curtis & Henson (1971) 218 Estates Gazette 1417 (agent negligent in
allowing prospective tenant to take possession without payment of a deposit of rent in advance); Faruk v Wyse [1988] 2 EGLR 26 (failure to
ensure letting to a company or embassy). Contrast Cunningham v Herbert Fulford & Chorley (1958) 171 Estates Gazette 285 (agents not
liable for accepting tenant who appeared wealthy but had no bank account); Bradshaw v Press [1983] 2 EGLR 16 (agents not obliged to
check tenant's references, but only to obtain them); Berkowitz v MW (St John's Wood) Ltd [1993] 2 EGLR 39 (agents negligent in failing to
deal with fax from landlord requesting references for the assignee of the lease). As to the agent's ordinary duty to use care and skill see also
1(2) Halsbury's Laws (Reissue) para 92ff.
(e) Agency--misrepresentation
HR A[1131.2]
The principal is liable for fraudulent or negligent misrepresentations made by the agent within the scope of his actual or
imputed authority1.
HR A[1131.3]
1 S Pearson & Son Ltd v Dublin Corp [1907] AC 351 at 354.
HR A[1131.4]
The principal underlying liability for misrepresentation by an agent acting in the course of his employment is that the
principal and agent are one and it does not signify which of them makes the misrepresentation or which of them
possesses the guilty knowledge1.
HR A[1131.5]
1 Mullens v Miller (1882) 22 Ch D. 194; Wauton v Coppard [1889] 1 Ch 92; Gosling v Anderson (1972) 223 Estates Gazette 1743.
HR A[1131.6]
Thus, if a builder deliberately covers up dry rot in a flat which the principal is about to let, the principal is not
responsible for it is not within a builders express or implied authority to make statements1 about the property2.
However, if the managing agents have knowledge of what the builder has done the principal is liable since the making
of statements about the property falls within the usual authority of a managing agent2.
HR A[1131.7]
Page 218
1 A deliberate concealment of defects is regarded in law as a 'statement' that none exist.
2 Gordon v Selico Co Ltd [1986] 1 EGLR 71.
HR A[1131.8]
An agent who makes an innocent misrepresentation is not liable nor is the principal for fraudulent misrepresentation if
the principal knows the truth but is unaware that the agent has made the statement1.
HR A[1131.9]
1 Cornfoot v Fowke (1840) 6 M & W 358; Armstrong v Strain [1952] 1 KB 232.

Page 219
Agreement for lease/6 Breach of agreement for lease
6 Breach of agreement for lease
HR A[1132]
The remedies for breach of an agreement for a lease are: (a) specific performance; (b) damages. Specific performance is
a discretionary remedy which will be granted in accordance with certain fixed principles. When specific performance is
available damages may be awarded in addition or in lieu of specific performance. When specific performance is not
available damages will only be awarded if the agreement is enforceable at law.
(a) Specific performance
HR A[1133]
Upon the refusal or omission of either party to an agreement for lease to perform the agreement on his part, the other is
usually entitled to maintain an action for specific performance. The remedy is discretionary. The court's discretion is
not, however, to be exercised arbitrarily but according to fixed principles in accordance with previous authority1. The
grant of specific performance in respect of a sale of land is almost as of right2. The contract must be unconditional to
enable specific performance to be granted. If the agreement is conditional the condition must be fulfilled for the
agreement to be enforced3. Thus if the agreement is conditional upon repairs being effected by the landlord the tenant
can resist specific performance notwithstanding he has taken possession unless he is barred by acquiescence4. A party
may seek specific performance of an agreement albeit he is unable to procude the original at court. The court must, in
order to act on secondary evidence, be satisfied that the document existed, that it has been lost or destroyed and that a
reasonable explanation has been given for this5.
HR A[1134]
1 R. Hallett's Estate, Knatchbull v Hallett (1880) 13 Ch D 696, CA; Holliday v Lockwood [1917] 2 Ch 47 at pp 56-57; Lindgren v L & P
Estates Ltd [1968] Ch 572, CA.
2 Hall v Warren (1804) 9 Ves 605 at 608; Hexter v Pearce [1900] 1 Ch 341 at 346; Rudd v Lascelles [1900] 1 Ch 815 at 817; Amec
Properties Ltd v Planning Research & Systems plc [1992] 1 EGLR 70, CA (a decree of specific was issued against a company which was
hopelessly insolvent, in administrative receivership and likely to go into liquidation) 'the remedy of specific performance, although
expressed as a discretionary one, is by now granted in accordance with well established principles. One of those principles is that a contract
for the grant of an interest in land will normally be specifically enforced.': Per Mann LJ.
3 Abbot v Blair (1860) 8 WR 672; Modlen v Snowball (1861) 4 De GF & J 143 (a condition to the taking of the lease of a public house
that the lessor should use his best endeavours to obtain a licence and that a licence should be obtained); Williams v Brisco (1882) 22 Ch D
441, CA; Beech Properties Ltd v G E Wallis & Son Ltd [1977] 1 EGLR 142.
4 Lamare v Dixon (1873) LR 6 HL 414; Jones v Joseph (1918) 87 LJKB 510.

Page 220
5 Park Lane Ventures Ltd v Locke [2006] EWHC 1578, Ch D.
HR A[1134.1]
The Court may, in exercising its equitable jurisdiction to order specific performance, make such orders as are just and
equitable in the circumstances then existing, to give practical effect to the order it has made. It may provide a
mechanism to give the claimant what he bargained for and is not limited, in working out the order for specific
performance, to the strict and precise terms of the contract1. Thus, where the contract required the vendor to provide to
the purchaser a letter from the landlord of the sums due under the lease up to the date of completion, an order which
deleted the requirement for the letter to be obtained and instead ordered an enquiry as to the amount that should be paid
to the purchaser by way of equitable compensation and an abatement of the purchase price otherwise due to the vendor,
was said to be entirely appropriate to give effect to the terms of the contract; it was a matter which was within the
Court's equitable jurisdiction in ensuring that the order for specific performance gave effect to the original contract2.
Where residential property was to be sold free of any long leasehold interest but subject to assured shorthold tenancies,
the Court granted specific performance with an abatement of the price where two flats rather than being let on assured
shorthold tenancies were subject to long leases, holding that if that form of order did not provide complete relief, then
damages could be awarded in addition to specific performance3.
HR A[1134.2]
1 Gill v Siu-May Tsang (10 July 2003, unreported), Voss QC sitting as a Deputy Judge of the High Court, Chancery Division.
2 Gill v Siu-May Tsang (10 July 2003, unreported).
3 Le Mesuirer v Glenn International Ltd [2003] PLSCS 78 Ch D.
HR A[1135]
Specific performance will be refused in the following cases although the contract is valid.
(a) If the agreement is uncertain in any material respect1. Thus an agreement under which a drawing
room was to be 'handsomely decorated according to present style' was too uncertain to be enforced2. But
an agreement under which the lessor was to put the house in decorative repair was not too uncertain3;
nor was an agreement under which the lessee was to 'do all repairs, painting, papering, decorating, etc'4
or an agreement to take a house when 'complete and fit for habitation'5. An agreement by the tenant to do
certain specified 'and other' work at a stated expense was not uncertain as long as the work cost the stated
sum6.
(b) If the order for specific performance would impose hardship on the other party. It is only in
extraordinary and persuasive circumstances that hardship will justify the refusal of performance of a
contract for the sale of immovable property7. Thus a mistake as to the legal effect of an agreement does
not prevent specific performance8. But a tenant who has taken possession and insisted on repairs being
done cannot refuse to accept an undertaking because it contains covenants taken from the headlease of
which he was unaware9. Financial hardship may result in the refusal of specific performance. Where the
covenants of the lease involved the lessee in expenses which he did not anticipate as a result of the
Page 221
lessor's default specific performance was not ordered10. A landlord's financial inability to 'provide and
maintain a lift' for the use of the tenants in compliance with his covenant did not operate to frustrate his
obligation under it, nor constitute a defence to a claim for specific performance11. Hardship may arise if
the order would prejudice the rights of third parties12, for instance, if the order results in a breach of
covenant in the head lease resulting in the ejectment of tenants in possession13. As a general rule the
relevant time for establishing hardship is the date of the contract of sale, so that hardship arising
subsequently is irrelevant14.
(c) Specific performance will not be granted if it can have no beneficial result, where, for instance, the
agreed term has already expired15. However, specific performance may be granted if the lessees would
benefit by being granted legal rights under the lease. It has been said that what the court would be doing
in such a case would not be the specific performance of an agreement for lease, but merely that the lessee
should make himself a speciality debtor in respect of past benefits received16. It was formerly the view
that specific performance would not be granted of a purely transient interest, such as a lease for a single
day17. Recent authority has established that the court does, however, have jurisdiction to grant specific
performance of an agreement for lease or licence for a period of a very short duration18. There is no
objection to a claim under an agreement for lease which is specifically enforceable for rent due before
the expiry of the term albeit tried after the expiry of the term19. If the lessee appear to be unable, through
insolvency, to perform the covenants of the lease, specific performance is unlikely to be granted20. But
where the tenant company was in receivership but not in liquidation, this was not accepted as an
exceptional factor justifying refusal of specific performance21. A trustee in bankruptcy is entitled to a
grant of the lease on entering into personal covenants22.
(d) Specific performance will, in general, not be granted if it involves the performance of work the
execution of which the court cannot superintend23. It is only in exceptional circumstances that specific
performance of a covenant to keep open for business will be granted.
(e) There must not be a want of mutuality. In other words the remedy of specific performance must be
potentially available for and against each of the parties to the contract. The question of mutuality is to be
tested, not at the date of the agreement but at the date of the hearing before the court24. Lack of
mutuality is merely one factor to which the court will have regard in deciding how to exercise its
discretion.
(f) Performance of a contract which would be illegal will not be enforced. However, if the illegal
element is severable an order may be made in respect of the remaining, legal, provisions of the
contract25. Thus specific performance of an agreement to assign a lease was granted even though the
agreement required the payment by the purchaser of a premium made unlawful by the Rent Act 1968, s
86 (now the Rent Act 1977, s 120). The order of the court was for specific performance of the agreement
to assign26.
(g) Specific performance will not be ordered if it is inequitable to grant the party seeking the relief
claimed because he has been guilty of some act or default27. Thus a tenant who has gone into possession
under the agreement loses his right to specific performance if he commits breaches of the covenants
which would be inserted in the lease, so that the landlord, if the lease had been granted, would have a
right of re-entry28. Similarly as to an intending underlessee who has committed acts which would be a
forfeiture of the headlease29. In such cases the tenant is not entitled to relief under the Law of Property
Act 1925, s 14630. An apprehended breach is not an answer to a claim for specific performance31.
Specific performance will not be ordered if it will enable the plaintiff to take advantage of his own
breach of contract32. A defect in the title may prevent a lessor from obtaining specific performance33. If
the lessor cannot make title to the whole of the property, the lessee is entitled to a lease of so much as the
lessor can demise, with an abatement of rent34.
HR A[1136]
Page 222
1 Price v Assheton (1835) 1 Y & C Ex 441; Price v Griffith (1851) 1 De GM & G 80; Jeffrey v Stephens (1860) 8 WR 427; Oxford Corpn
v Crow (1893) 69 LT 228. In the following cases the objection of uncertainty was not sustained: Powell v Lovegrove (1856) 8 De GM & G
357; Parker v Taswell (1858) 2 de G & J 559; Oxford v Provand (1868) LR 2 PC 135.
2 Taylor v Portington (1855) 7 De GM & G 328.
3 Samuda v Lawford (1862) 4 Giff 42.
4 Dear v Verity (1869) 38 LJ Ch 486.
5 Faulkner v Llewellin (1863) 11 WR 1055; affd 12 WR 193.
6 Baumann v James (1868) 3 Ch App 508, CA; cf Thellusson v Lord Rendlesham (1846) 11 Jur 29; Gardner v Fooks (1867) 15 WR 388.
7 Patel v Ali [1984] Ch 283 at 288 per Goulding J.
8 Powell v Smith (1872) LR 14 Eq 85.
9 Nash v Cochrane (1839) 3 Jur 973.
10 Tildes v Clarkson (1862) 30 Beav 419. But it is otherwise where the lessor is not in default: Cook v Waugh (1860) 2 Giff 201; aff 2 LT
784.
11 Francis v Cowlcliffe Ltd (1976) 33 P & CR 368.
12 Thames Guaranty Ltd v Campbell [1985] QB 210 (court refused to order specific performance of an agreement for an equitable charge
on the defendant's beneficial interest in the matrimonial home where such an order would have prejudiced the defendant's wife by enabling
the plaintiff to apply for an order for sale pursuant to the LPA 1925, s 30 (as amended) and thereby deprive her of her home and only asset);
cf Midland Bank plc v Pike [1988] 2 All ER 434.
13 Deverell v Milne (1918) 34 TLR 576; Warrington v Miller [1973] QB 877, CA; Peacock v Penson (1848) 11 Beav 355; Paxton v
Newton (1854) 2 SM & G 437 at 440. Cf Helling v Lumley (1858) 3 Dc G & J 493.
14 Adams v Weare (1784) 1 Bro CC 567; Francis v Cowcliffe (1976) 33 P & CR 368; Roberts v O'Neill [1983] IR 47.
15 Walters v Northern Coal Mining Co (1855) 5 De GM & G 629 at 638; De Brassac v Martyn (1863) 11 WR 1020; Western v Perrin
(1814) 3 Ves & B 197; Nesbit v Meyer (1818) 1 Swan 223; Stocker v Wedderburn (1857) 3 K & J 393; McMahon v Ambrose [1987] VR 817
(Supreme Court of Victoria). Cf Callaghan v Pepper (1840) I Eq R 399.
16 Walters v Northern Coal Mining Co (1855) 5 De GM & G 629 at 639 per Lord Cranworth LC.
17 Glasse v Woolgar & Roberts (No 2) (1897) 41 Sol Jo 573.
18 Verrall v Great Yarmouth Borough Council [1981] QB 202, [1980] 1 All ER 839, CA (specific performance of a licence to occupy hall
for two days).
19 Gilby v Cossey (1912) 106 LT 607.

Page 223
20 Neal v Mackenzie (1837) 1 Keen 474 at 485; Buckland v Hall (1803) 8 Ves 92.
21 Amec Properties Ltd v Planning Research & Systems Ltd [1992] 1 EGLR 70, CA. The order for specific performance was made on
condition that the lease should specifically provide that the receivers were not in any circumstances to be personally liable for the
performance of the obligations under it.
22 Powell v Lloyd (1828) 2 Y & J 372; Crosbie v Tooke (1833) 1 My & K 431.
23 Thus it is commonly said that the court will not normally grant specific performance of a building contract, but see Co-operative
Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1997] 1 EGLR 52, HL.
24 Price v Strange [1978] Ch 337; Sutton v Sutton [1984] Ch 184.
25 Ailion v Spiekermann [1976] Ch 158. Whether the court will sever the unlawful part from the lawful part of the agreement and order
specific performance of the latter depends on all the circumstances.
26 Ailion v Spiekermann [1976] Ch 158.
27 This is merely an example of the general principle that the claimant must come to quity with clean hands. Moody v Cox and Hatt
[1917] 2 Ch 71. Scrutton LJ said (at pp 87-88) that:
'...equity will not apply the principle about clean hands unless the depravity, the dirt in question
on the hand, has an immediate and necessary relation to the equity sued for.'
It is a matter of judgement for the trial judge as to whether the conduct of the person who seeks the
equitable remedy does have an immediate and necessary relation to the equity sued for. The mere
commission of a criminal offence does not bar the claimant. However, if a claimant seeks to enforce an
interest in land, and if the claimant has sworn to another court that he has no such interest in the land,
then that latter step may disentitle him from seeking equitablerelief to establish a position different from
that which he has previously sworn to. The claimant in such circumstances has abused the facilities of
the court in relation to the very matter in respect of which he seeks relief: see Wilkie v Redsell [2003]
EWCA Civ 926, [2003] All ER (D) 154 (Jan), CA.
28 Hill v Barclay (1811) 18 Ves 56, 63; Tunno v Lewis (1831) 1 LJ Ch 177; Gregory v Wilson (1852)
9 Hare 683; Pain v Coombs (1857) 3 SM & G 449 at 469; Carrington Manufacturing Co Ltd v Saldin
(1925) 133 LT 432.
29 Lewis v Bond (1853) 18 Beav 85.
30 Swain v Ayres (1888) 21 QBD 289, CA.
31 Williams v Cheney (1796) 3 Ves 59.
32 Alghussein Establishment v Eton College [1991] 1 All ER 267, [1988] 1 WLR 587, HL.
33 Baskcomb Phillips (1859) 29 LJ Ch 380; Reeves v Greenwich Tanning Co (1864) 2 Hem & M 54.
34 McKenzie v Hesketh (1877) 7 Ch D 675; Burrow v Scammell (1881) 19 Ch D 175.
HR A[1137]
The remedy of specific performance must be claimed promptly1. Although the time limits of the Limitation Act 1980
do not apply to a claim for specific performance of a contract, if the plaintiff has been guilt of laches the court may
refuse to order specific performance. Prompt action has usually been taken to mean that the action must be commenced
within one year2. An order has been made despite a period of delay of time years before issue of the writ3. Where a
Page 224
defendant to proceedings instituted by the claimant contesting the validity of an option granted to the defendant waited
two and a half years before making a counterclaim for specific performance of the option, it was held the the delay was
not a material one as from the outset there was a dispute about the validity of the option4. The claim will not be barred
by delay if, during the period for delay, the tenant has been in possession pursuant to the landlord's consent5. The
purchaser's right to possession must have been under the contract of which enforcement is sought6. Specific
performance can be obtained by summary judgment under CPR 247. The precise terms of the lease ordered by the court
will often be settled in chambers8. Where an agreement is enforced against executors, the lease will be so framed as to
exempt them from personal liability9. Where a person enters into an agreement whereby he is to procure that the owner
of property grants a lease to a proposed tenant, he can obtain specific performance compelling the proposed tenant to
take the lease10.
HR A[1138]
1 Huxham v Llewellyn (1873) 28 LT 577; Ariff v Rai Jadunath Majumdar Bahadur (1931) 47 TLR 238.
2 Huxham v Llewellyn (1873) 28 LT 577 and see Jones & Goodhart, Specific Performance, 2nd ed (1996) p 110, fn 8.
3 Lazard Bros & Co Ltd v Fairfield Properties Co (Mayfair) Ltd (1977) 121 Sol Jo 793.
4 Ahmed v Wingrove [2006] EWHC 1918, Ch D.
5 Williams v Greatrex [1957] 1 WLR 31; Shephard v Walker (1875) LR 20 Eq 659; Molloy v Egan (1845) 7 1 Eq R 590; Burke v Smyth
(1846) 3 Jo & Lat 193; Cartan v Bury (1860) 10 1 Ch R 387; Norris v Jackson (1862) 3 Giff 396; Contra, Davenport v Walker (1876) 34 LT
168; Powis v Lord Dynevor (1877) 35 LT 940.
6 Mills v Haywood (1877) 6 Ch D 196.
7 See CPR 24 and the Practice Direction thereto, para 7.
8 It is normally for the judge and not counsel to alter what are 'the usual covenants' when ordering specific performance of an agreement
for lease. Charalambous v Ktori [1972] 1 WLR 951.
9 Phillips v Everard (1831) 5 Sim 1O2; Page v Broom (1840) 3 Beat 36 at 48; subsequent proceedings (1842) 6 Jur 308; Stephens v
Hotham (1855) 1 K & J 571.
10 AMEC Properties Ltd v Planning Research & Systems plc [1992] 1 EGLR 70, CA.
HR A[1139]
In an appropriate case, specific performance may be granted of two agreements in order to create an effective lease1. If
an agreement for lease has not been registered as an estate contract it will not be binding on an assignee of the reversion
and specific performance will accordingly not be decreed2.
HR A[1140]
Page 225
1 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580, CA, in which it was stated that the
doctrine in Walsh v Lonsdale (1882) 21 Ch D 9 need not be limited: (a) to a case where there was only one agreement; and (b) to a case
where there was a direct contractual relationship between the lessee and the person in whom the legal estate was vested.
2 See Sharpe v Coates [1948] 1 All ER 136. But it seems that there remains a right to damages against the assignor of the land: Wright v
Dean [1948] Ch 686. See also Webb v Pollmount [1966] Ch 584.
HR A[1141]
If an order for specific performance is made this governs the rights of the parties which can only be altered either by
agreement or obtaining a further order from the court1. However, it has been said that an order for specific performance
is a final order and that there has been no case where such an order has been varied or discharged, except where the
injuncted activity has been legalised by statute2.
HR A[1141.1]
1 GKN Distributors Ltd v Tyne Tees Fabrication Ltd (l985) 50 P & CR 403.
2 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1997] 1 EGLR 52, at 56F per Lord Hoffmann, HL. See, however,
Gill v Siu May Tsang, 10 July 2003, Ch D where it was said:
'There is not ... a stark choice between enforcing or dissolving the order. The court may, in my
judgment, make such orders as are just and equitable in the circumstances then existing, to give
practical effect to the order it has made. In making its order work in circumstances then arising,
the court is not re-writing or even varying the contract between the parties. It is providing a
mechanisim to give the claimant what he bargained for, namely the sale or purchase of land. Such
relief may be granted in a whole range of circumstances in which a defendant has failed to
perform both his original contract and the court's subsequent order.'
Page 226
Agreement for lease/7 Damages
7 Damages
(a) General
HR A[1142]
The party complaining of the breach of an agreement for a lease may, instead of suing for specific performance, bring
an action at law to recover damages. The plaintiff must prove readiness to perform the contract on his part1. In practice
it is sufficient if the plaintiff pleads that he is ready and willing to complete2.
HR A[1142.1]
1 Collnsr v Willmott (1864) 11 LT 340.
2 Lovelock v Franklyn (1846) 8 QB 371.
HR A[1143]
The general rule at common law is that damages are to be calculated on the basis that the injured party side be put in the
position in which he would have been in if the contract had been performed. The award of damages at law is to
compensate for loss not to deprive the defendant of any benefit gained by the breach of contract1. Thus the prima facie
measure of the plaintiff's loss is the loss of bargain assessed by reference to the difference between the contract price
and the true value of the property at the date of assessment2. It was formerly the rule that a tenant could not recover
damages for loss of bargain but only the expenses and liabilities which he had necessarily incurred if the contract was
not completed because of a defect in the landlord's title. This rule, known as the rule in Bain v Fothergill3 was
abolished in relation to contracts made on or after 27 September 19894. A resale of the property will be accepted as
prima facie evidence of its market value5. The damages to which the plaintiff may be entitled may include loss of
profits6. Damages are not intended to put the purchaser in a better position that he would have been in if the contract
had been completed; consequently he may not recover his conveyancing expenses in addition to his general damages7.
HR A[1144]
1 Surrey County Council v Bredero Homes Ltd [1993] 3 All ER 705, CA.
2 Beard v Porter [1948] 1 KB 321 (vendor failing to give VP). As to claims by a landlord see Marshall v Mackintosh (1898) 46 WR 580;
Foster v Wheeler (1888) 38 Ch d 130, CA; Noble v Edwardes (1877) 5 Ch D 378 at 393.
3 (1874) LR 7 HL 158. For a recent example of its application see Seven Seas Properties Ltd v Al-Essa [1989] 1 All ER 164.
Page 227
4 Law of Property (Miscellaneous Provisions) Act 1989, s 3.
5 Engell v Fitch (1869) LR 4Q & 659; Keck v Faber (1915) 60 Sol Jo 253.
6 If they fall within the second limit of the rule in Hadley v Baxendale (1854) 9 Exch 341; Cotterill v Steyning & Littlehampton Building
Society [1966] 2 All ER 295; Diamond v Campbell-Jones [1961] Ch 22; Seven Seas Properties Ltd v Al-Essa (No 2) [1993] 1 WLR 1083.
7 Re Daniel, Daniel v Vassall [1917] 2 Ch 405 & 412; Ridley v De Geerts [1945] 2 All ER 654.
HR A[1144.1]
The landlord's damages are likewise measured by the difference between the price to be paid and the market value. If
the landlord has resold he is entitled, in addition, to the expenses of the resale less any deposit1. Credit must be given
for the deposit notwithstanding any contractual provision for forfeiture of it2. The plaintiff may elect to claim reliance
loss rather than loss of bargain3. The plaintiff is entitled to recover wasted expenditure or damages only if he could
have recouped his expenses if the contract had been performed; the burden of proof is on the defendant to show that the
plaintiff's expenditure would not have been recouped4.
HR A[1144.2]
1 Noble v Edwardes (1877) 5 Ch D 378 at 393; Keck v Faber (1915) 60 Sol Jo 253.
2 Howe v Smith (1884) 27 Ch D 89; Shuttleworth v Clews [1910] 1 Ch 176.
3 Wallington v Townsend [1939] Ch 588; Anglia Television Ltd v Reed [1972] 1 QB 60; CCC Films (London) Ltd v Impact Quadrant
Films Ltd [1985] QB 16.
4 CCC Films (London) Ltd v Impact Quadrant Films Ltd [1985] QB 16.
HR A[1145]
The authorities do not provide any absolute rule as to the time for assessment of damages. The normal date of
assessment is the date of the breach; but if this would give rise to injustice the court may substitute some other date,
such as the date of judgment1 or the date on which the remedy of specific performance was either abandoned2 or
aborted3. Damages may be awarded for a delay in completion4. Breach of a contract to complete on a particular day is
not discharged by compliance with a notice to complete4. Thus damages may be claimed for the costs of a bridging loan
to complete a linked transaction5 or loss of profits6.
HR A[1146]
1 Wroth v Tyler [1974] Ch 30 (date of hearing); Malhoua v Choudhury [1980] Ch 52, CA (where, although it was accepted that the
assessment should be at the date of judgment, the date for valuing the property was moved back by one year to take account of the plaintiff's
delay in pursuing the claim); Forster v Silverwere Golf and Equestrian Centre Ltd (1981) 42 P & CR 255 (nearest date to date hearing to
Page 228
which evidence had been directed), Suleman v Shahsavari [1989] 2 All ER 460.
2 Domb v Isoz [1980] Ch 548, CA (date of assessment was date on which the plaintiff purchasers elected to pursue remedy for damages in
lieu of specific performance).
3 Johnson v Agnew [1980] AC 367, HL (date for assessment was the date on which the remedy of specific performance became aborted
because of the exercise of the power of sale by the vendors mortgagee).
4 Raineri v Miles [1980] 2 All ER 145, HL.
5 Wadsworth v Lydall [1981] 2 All ER 401.
6 Cochrane (Decorators) Ltd v Sarabandi (1983) 133 NLJ 558.
(b) Damages in lieu or in addition to specific performance
HR A[1146.1]
Where an agreement for lease is such that specific performance could be ordered, the court can award damages either in
lieu or in addition to specific performance1. Thus the court has awarded damages in addition to specific performance for
loss suffered as a result in the delay in completion2 and has awarded damages in lieu where specific performance was
refused, the land having been compulsorily acquired after the date of the contract but before judgment3. Equitable
damages cannot, however, be awarded if specific performance cannot be allowed or if a court would never under any
circumstances have contemplated its grant4.
HR A[1146.2]
1 Supreme Court Act 1981, s 50. The Chancery Amendment Act 1858, s 2, commonly known as Lord Cairns' Act provided for the award
of damages in lieu of or in addition to a specific performance. The 1858 Act was intended to extend the scope of the remedies which the
Court of Equity could award; it was not intended to transfer the jurisdiction of a Court of Law to a Court of Equity; Shelfer v City of London
Electric Lighting Co [1895] 1 Ch 287 at 311. Section 2 of the 1858 Act was repealed in 1885 (Statute Law Revision and Civil Procedure Act
1883) but it was assumed that the power to award equitable damages survived the repeal: Leeds Industrial Co-Operative Society v Slack
[1924] AC 851 at 863.
2 Raineri v Miles [1981] AC 1050.
3 E Johnson & Co (Barbados) v NSR Ltd [1996] 3 WLR 583, PC.
4 Jones and Goodhart, Specific Performance, 2nd Ed (Butterworths) pp 277-278.
HR A[1147]
Damages may be awarded in lieu or in addition albeit no claim for damages at law exists. Thus where at the date of the
writ the completion date had not been fixed so that there was no breach of contract and no claim at law for damages the
court held that damages could be awarded in equity in addition to the claim for specific performance for the delay in
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completion1.
HR A[1147.1]
1 Oakacre Ltd v Claier Cleaners (Holdings)Ltd [1982] Ch 197; Price v Strange [1978] Ch 337 at 369.
HR A[1148]
Damages in equity are prima facie measured on the same basis as those at law1. In equity the court may award damages
based on the benefit gained by the defendant from the breach. Thus, in the context of breaches of restrictive covenants
the court has in lieu of an injunction granted damages based on the sum which the plaintiff could reasonably have
expected to receive by way of payment for a waiver or release of the covenant2. A distincition is to be drawn between
(i) awarding damages for breach of contract measured by the benefit gained by the wrongdoer from the breach in which
circumstance 'the wrongdoer must make a reasonable payment in respect of the benefit he has gained'3; and (ii) of
awarding by way of damages an account of profits, ie requiring the defendant to disgorge all profits made by reason of
the breach of contract. The former is not exceptional, the latter is4. The mere fact that the breach of contract is
deliberate is not of itself a reason of awarding an account of profits5.
HR A[1149]-[1149.1]
1 Johnson v Agnew [1980] AC 367, HL.
2 See by way of example Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798; Jaggard v Sawyer [1995] 1 WLR 269, CA;
AG v Blake [2001] 1 AC 268, HL; Experience Hendrix LLC v PPX Enterprises [2003] 1 All ER (Comm) 830, CA; WWF-World Wildlife
Fund for Nature v World Wrestling Federation Entertainment Inc [2007] EWCA Civ 286, CA. For an application of this model for assessing
damages to a claim at common law for damages for trespass, see Sinclair v Gavaghan [2007] EWHC 2256, HCt. In assessing the damages
by reference to the benefit gained by the defendant the learned judge (Patten J) said that the proper approach was to consider (i) what the acts
of trespass were;(ii) what were their purpose and effect in relation to what D was seeking to undertake (in that case the development of land)
and (iii) what alternatives did D have to using C's land in order to carry out the works of which complaint was made.
3 Per Lord Nicholls in AG v Blake ibid at pp 283-284.
4 The difference is made explicit in the following passages at p 285B-C and F-G:
'The state of the authorities encourages me to reach this conclusion, rather than the reverse. The
law recognises that damages are not always a sufficient remedy for breach of contract. This is the
foundation of the court's jurisdiction to grant the remedies of specific performance and injunction.
Even when awarding damages, the law does not adhere slavishly to the concept of compensation
for financially measurable loss. When the circumstances require, damages are measured by
reference to the benefit obtained by the wrongdoer. This applies to interference with property
rights. Recently, the like approach has been adopted to breach of contract. Further, in certain
circumstances an account of profits is ordered in preference to an award of damages. Sometimes
the injured party is given the choice: either compensatory damages or an account of the
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wrongdoer's profits. Breach of confidence is an instance of this. If confidential information is

wrongfully divulged in breach of a non-disclosure agreement, it would be nothing short of
sophistry to say that an account of profits may be ordered in respect of the equitable wrong but
not in respect of the breach of contract which governs the relationship between the parties. With
the established authorities going thus far, I consider it would be only a modest step for the law to
recognise openly that, exceptionally, an account of profits may be the most appropriate remedy
for breach of contract. It is not as though this step would contradict some recognised principle
applied consistently throughout the law to the grant or withholding of the remedy of an account
of profits. No such principle is discernible...
An account of profits will be appropriate only in exceptional circumstances. Normally the
remedies of damages, specific performance and injunction, coupled with the characterisation of
some contractual obligations as fiduciary, will provide an adequate response to a breach of
contract. It will be only in exceptional cases, where those remedies are inadequate, that any
question of accounting for profits will arise.'
5 In Experience Hendrix ibid, the defendant, in breach of an agreement, licensed recordings of Jimi
Hendrix other than those permitted by the terms of the agreement. The estate of Jimi Hendrix, the
claimant, sought an account of the profits in respect of the contractual breach. The Court of Appeal
refused that relief holding that the case was not exceptional and in the circumstances the remedy would
be confined to payment of a reasonable sum for the defendant's use of the material in breach of the
agreement; that sum would be such sum as might reasonably have been demanded by the claimant for
agreeing to permit the licences with respect to the recordings into which the defendants had entered in
breach of the agreement. Mance LJ distinguished the Blake case saying:
'[37] ... there are obvious distinctions from Blake's case. First, we are not concerned with a
subject anything like as special or sensitive as national security. The state's special interest in
preventing a spy benefiting by breaches of his contractual duty of secrecy, and so removing at
least part of the financial attraction of such breaches, has no parallel in this case. Second, the
notoriety which accounted for the magnitude of Blake's royalty - earning capacity derived from
his prior breaches of secrecy, and that too has no present parallel. Third, there is no direct analogy
between PPX's position and that of a fiduciary...'
Mance LJ concluded:
'[44] ... I do not regard this case as exceptional to the point where the Court should order a full
account of all profits which have been or may be made by PPX by its breaches. I have already
drawn attention to significant features of Blake's case have no counterpart in this case (see [37],
above). Here, the breaches, though deliberate, took place in a commercial context. PPX, though
knowingly and deliberately breaching its contract, acted as it did in the course of a business, to
which it no doubt gave some expenditure of time and effort and probably the use of connections
and some skill (although how much is evidently in issue, and is not a matter on which we can at
this stage reach any view). An account of profits would involve a detailed assessment of such
matters, which, as is very clear from Blake's case, should not lightly be ordered.'
Page 231
Agreement for lease/8 Title to be shown by lessor
8 Title to be shown by lessor
(a) Investigation of lessor's title
HR A[1149.2]
(a) The title to be shown by the lessor has long been regulated by statute, which precludes the
intending lessee from inquiring into the freehold title and severely limits his inquiries into a leasehold
title. But these statutory provisions apply only in the absence of an express stipulation to the contrary and
generally a lessee will be well advised to insist upon the grantor's title being shown1. At common law the
intending lessee was always entitled to investigate the title of the intending lessor. A defect in title will
prevent the lessor from obtaining specific performance2.
(b) At common law a person who agreed to grant a lease of land impliedly agreed to grant a valid
lease; and if, at the time when the lease fell to be granted3, he had no title to grant the lease, there was a
breach of the agreement, and he was liable to an action at the suit of the intending lessee4, though the
damages recoverable in such an action were limited by the rule in Bain v Fothergill 5. Formerly
rescission of an executed agreement for a lease could not be granted on the ground of innocent
misrepresentation6. The Misrepresentation Act 1967 provides7 that where a person has entered into a
contract after a misrepresentation had been made to him and the contract has been performed, then, if
otherwise he would be entitled to rescind the contract without alleging fraud, he shall be entitled to
rescind notwithstanding that the contract has been performed. Rescission after a fraudulent
misrepresentation is and always has been available after performance of the contract. But by agreeing to
let, the lessor does not impliedly undertake that the land can be used for any purpose without restriction8.
(c) It follows that, apart from statutory restrictions or special stipulations in the contract, an intending
lessee is entitled to call for and investigate the title of the intending lessor9. An intending lessee or assign
of a term of years is, however, precluded by statute from calling for the title of the freehold10 nor, where
the lease is derived out of a leasehold interest, with a leasehold reversion, can the intending sub-lessee
call for the title to the reversion11. Similarly, an intending assign cannot call for the title to the leasehold
reversion where the term of years is derived out of a leasehold interest12. The 'reversion' referred to is
the reversion immediately expectant upon the leasehold interest out of which the term of years contacted
to be sold or assigned was derived13. But these statutory provisions do not touch the immediate title of
an intending lessor who is himself a leaseholder, and, in accordance with the general rule, he is bound to
produce the lease under which he holds and if he is not the original lessee, to deduce his title to it. A
purchaser of a leasehold interest is entitled to an abstract or copy of it, however old, and fifteeen years'
title to it back from the date of purchase14. The effect is that an intending lessor who claims to demise as
freeholder need not show any title; if he proposes to demise as leaseholder, he is not bound to show the
title of his immediate or any superior lessor, but only to show his own title to the lease under which he
claims. This can be illustrated by an example. If A (the freeholder) leases to B, who grants an underlease
to C who assigns to D the effect of the statutory provisions if carried out under open contracts is as
follows:
(i) B cannot call on A to show any title15;

(ii) C could require B to supply a copy or an abstract of the lease granted by A but could not
require him to show A's title15;
Page 232
(iii) D is entitled to a copy or an abstract of C's underlease but not B's lease nor any
information about A's title.
(d) The statutory provisions only apply in the absence of a stipulation to the contrary in the contract16,
and they do not prevent the intending lessee from expressly stipulating that the lessor shall fully establish
his power to grant the lease. They are excluded by a stipulation that the lessor shall deliver an abstract,
and then the lessee is entitled to have the abstract verified in the usual way, and to have an
acknowledgment or covenant for production of any deeds which will be required to show his own title
subsequently17. Further, these statutory restrictions apply only to the paper title and do not prevent the
intending lessee from showing aliunde that the title to the freehold or leasehold reversion is bad18.
Where by statute an intending lessee or assign is precluded from calling for the title, he is not, in the case
of contracts made on or after 1 January 1926, deemed to be affected with notice of any matter of which,
if he had contracted that the title should be furnished, he might have had notice19. Thus, the onus of
proving that the lessee had notice of a restrictive covenant is on the plaintiff20. Where the restrictive
covenant is registered as a land charge this is notice to all the world21. As regards contracts made before
1926, the intending lessee was treated, for the purpose of notice, as if he had the ordinary right to
investigate title, and he was affected with constructive notice of matters which he would have
discovered, if he had made such investigation, ie his position was the same as if, before the statute, he
had agreed not to call for the title22; but the cases are overruled on this point by the statutory provisions.
In the case of registered land it has been held that a purchaser of a leasehold interest takes with notice of
a restrictive covenant noted on the register against the freehold title23.
(e) If the property to be demised is held under a lease which contains a covenant against
underletting24 without consent, the lessor's consent in writing must be obtained before the date when the
underlease is to be granted25. If this is not done, the intending underlessee can repudiate the
agreement26.
(f) In the case of registered land the lease still remains the essential root of title. The register replaces
the chain of title and the purchaser is to be given the usual notice of its contents. Where the registrar has
investigated and approved the title not only to the leasehold but also to the freehold and any intermediate
lease he will register the lease with absolute leasehold title27. In these circumstances the purchaser need
never concern himself with any superior titles. However, the purchaser will be interested with the
superior titles as in unregistered land if the leasehold has only been registered with a good leasehold
title28 for this means that the registrar has only investigated and approved the leasehold title itself. The
Land Registry is open to the public for inspection29. Thus, a grantee or assignee may investigate the
reversionary title provided it is registered30. But copies can be taken of leases or mortgages31.
HR A[1150]-[1160]
1 The principal reason for this is that, if the intending lessee should subsequently desire to mortgage his interest, the mortgagee may insist
on the superior title being shown, but, further than that, the court has held persons to be negligent, and refused relief from forfeiture, where a
leasehold title has been accepted without investigation: see Imray v Oakshette [1897] 2 QB 218; and Matthews v Smallwood [1910] 1 Ch
777.
2 Baskcomb v Phillips (1859) 29 L J Ch 380; Reeves v Greenwich Tanning Co (1864) 2 Hem & M 54.
3 De Medina v Norman (1842) 9 M & W 820.
4 Stranks v St John (1867) LR 2 CP 376; Hoare v Chambers (1895) 11 TLR 185, ch Gwillim v Stone (1811) 3 Taunt 433 (explained in
Stranks v St John (1867) LR 2 CP 376); Temple v Brown (1815) 6 Taunt 60; or the intending lessee could rescind and recover any deposit he
Page 233
had paid, and this he could do before the time for completion if the lessor refused to produce his title: Roper v Coombes (1827) 6 B & C
534.The lessee could not insist on the lessor getting in all equitable interests before granting the lease; it was sufficient if the equitable owner
concurred in the lease (Reeves v Gill (1838) 1 Beav 375), but this is now governed by the Law of Property Act 1925, s 42(1), and the lessor
cannot insist on such concurrence, though where no harm is done, it is common practice to accept such concurrence rather than increase
costs. Probably in the case of leases, this waiver of the statutory provisions should be confined to short tenancies.
5 (1874) LR 7 HL 158, see para HR A[1143]. The rule was abolished as from 27 September 1989: See Law of Property (Miscellaneous
Provisions) Act 1989, s 3.
6 Angel v Jay [1911] 1 KB 666.
7 Misrepresentation Act 1967, s 1. In effect Angel v Jay [1911] 1 KB 666 is overruled except as regards misrepresentations made before
the Act commenced (22 April 1967).
8 Jackson v Cobbin (1841) 8 M & W 790; cf Erskine v Adeane (1873) 8 Ch App 756.
9 Stranks v St John (1867) LR 2 CP 376 at 380, citing 2 Sugden's Vendors and Purchasers (10th edn) p 141, (14th edn) p 367, note); see
Keech v Hall (1778) 1 Doug KB 21; Fildes v Hooker (1817) 2 Mer 424 at 427; Purvis v Rayer (1821) 9 Price 488; cf Molloy v Sterne (1838)
1 Dr & Wal 585; Marchioness Londonderry v Baker (1860) 3 LT 546. Since it is not universally customary to call for the lessor's title, slight
circumstances will show that the right has been waived: Simpson v Sadd (1854) 3 WR 118.
10 Law of Property Act 1925, s 44(2). This provision applies to a lease of an easement, such as a right of way: Jones v Watts (1890) 43 Ch
D 574, CA.
11 LPA 1925, s 44(4).
12 LPA 1925, s 44(3).
13 Gosling v Woolf [1893] 1 QB 39 at 40.
14 Frend v Buckley (1870) LR 5 QB 213; Williams v Spargo [1893] WN 100.
15 LPA 1925, s 44(2).
16 LPA 1925, s 44(11).
17 Re Pursell and Deakin's Contract [1893] WN 152. In all cases where a premium is to be paid or a lessee is intending to spend a
substantial sum of money on the property, the statutory restriction on his right to call for the lessor's title should be excluded by express
stipulation in the agreement and his solicitor should make the usual searches required in the case of a purchase of land. See n 1. Where a
lease at a rack-rent for, say, seven, 14 or 21 years is intended it has been suggested that a satisfactory compromise would be for the tenant's
solicitor to require production of the conveyance to the lessor together with a letter from his solicitor stating that it is held solely on behalf of
the lessor and that he has no knowledge or notice of any mortgage or incumbrance upon the property.
18 Jones v Watts (1890) 43 Ch D 574, CA. If the objection to title is specific and litigation results, the lessee can require the production of
documents which are in the lessor's possession.
20 Shears v Wells [1936] 1 All ER 832.
21 Law of Property Act 1925, s 198

Page 234
22 Patman v Harland (1881) 17 Ch D 353 at 358; Mogridge v Clapp [1892] 3 Ch 382 at 397, CA; cf Imray v Oakshette [1897] 2 QB 218
at 225, CA; but these cases are overruled on this point by LPA 1925, s 44(5).
23 White v Bijou Mansions Ltd [1937] Ch 610, [1937] 3 All ER 269.
24 As to what covenants restrain underletting, see paras HR A[2525]FF.
25 If liquidated damages are fixed by the agreement in case the licence is refused, this does not give the underlessor the option of not
applying for the licence: Long v Bowring (1864) 33 Beav 585.
26 Forrer v Nash (1865) 35 Beav 167. If he has been in occupation he is under no liability to restore the premises to their original
condition: Fawkner and Rogers v Booth (1893) 10 TLR 83, CA.
27 Land Registration Act 1925, s 8(1), proviso (i).
28 LRA 2002, ss 10(1) and (3).
29 LRA 2002, s 66(1).
30 LRA 2002, s 66(1).
31 LRA 2002, s 66(1). This was not the position under LRA 1925, s 112 (1)(b). The right to inspect documents is subject to rules: see Part
13 to the Land Registration Rules 2003, rr 131-143.
Page 235
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 2 Leases and agreements for leases/B
Leases
B
Page 236
Leases/1 Requisites for creation of leases
1 Requisites for creation of leases
HR A[1161]
(a) A lease may be made orally, or in writing under hand only, provided: (i) it is for a term not
exceeding three years; (ii) it is not of an incorporeal hereditament; (iii) it is to take effect in possession;
(d) it is at the best rent reasonably obtainable without taking a fine.
(b) Subject to the provisions of s 1 of the Law of Property (Miscellaneous Provisions) Act 1989, all
leases granted for a term exceeding three years, or of an incorporeal hereditament, must be by deed.
(c) A lease which is invalid by reason of a failure to comply with these requirements is construed as an
agreement for a lease.
(a) Creation of lease for three years or less
HR A[1162]
A lease may be made orally1, or in writing under hand only, provided: (a) it is for a term not exceeding three years; (b)
it is not of an incorporeal hereditament; (c) it is to take effect in possession; (d) it is at the best rent reasonably
obtainable without taking a fine2. A 'fine' is defined as including 'a premium or foregift and any payment, consideration,
or benefit in the nature of a fine, premium or foregift'3. A fine has been held to include a discount in the purchase price
allowed by the vendor to the purchaser in consideration of the purchaser granting a rent-free lease for life back to the
vendor4. It seems that the fact that the whole rent is payable in a lump sum in advance will not prevent it from being
rent within the meaning of s 54(2)5. The distinction between what is a premium and what is rent paid as a lump sum in
advance is a narrow one. In practice factors such as the method of calculating the payment, eg if it is calculated as three
times an annual rental, may be decisive. A yearly or other periodic tenancy is considered to be a tenancy for not more
than three years notwithstanding that, unless determined by notice, it will continue beyond three years and it may,
therefore, be created by parol6. But a lease for a term of more than three years will not be taken as not exceeding that
period because it contains a provision for determination within that period7. The three years are computed from the day
of the making of the lease, and, if the term does not commence at once, it must expire, or be capable of expiring, within
three years from that day8. A distinction must be drawn between: (a) reversionary leases, that is leases to take effect in
reversion at the time of the grant, possession being postponed to a future date (which are outside the s 54(2) exception);
and (b) leases which take effect in possession at once but where the term is calculated from a future date (which are
within the exception). Thus, where a lease was granted on 23 September 1964 for a term to run from 29 September
1964 it was held to be a reversionary lease, taking effect in reversion on 23 September, ie, the former of the two above
alternatives9. A letting for three years or less made orally is not a 'conveyance' within the Law of Property Act 1925.
Therefore, it cannot by virtue of s 72(3) of that Act be made by a person to himself. Such a lease in writing, though a
conveyance within the subsection, is a highly artificial transaction since the grantor cannot covenant with himself and
seems for that reason to be invalid10. The exception which permits certain leases for three years or less to be made
orally or in writing without the necessity for a deed does not apply to the assignment of such leases which will only be
valid to pass the legal estate if made by deed11. A lease made under statutory powers by a tenant for life or by trustees
or personal representatives must be in writing although the lease does not exceed three years12.
Page 237
HR A[1163]
1 An oral lease may be made by any words showing the intent to give exclusive possession for the term. An agreement made after
obtaining a final order for possession under which the tenant remains in the premises upon payment of a sum equivalent to rent and towards
arrears results was held not to create a new tenancy: Burrows v Brent London Borough Council [1996] 4 All ER 577, HL.
2 Law of Property Act 1925, s 54(2). It matters not that the lessee is given power to extend the term: Hand v Hall (1877) 2 Ex D 355.
3 Law of Property Act 1925, s 205(1) (xxiii).
4 Skipton Building Society v Clayton (1993) 66 P & CR 223.
5 Grace Rymer Investments Ltd v Waite [1958] Ch 831, [1958] 2 All ER 777.
6 Re Knight, ex p Voisey (1882) 21 Ch D 442 at 458, CA; Hammond v Farrow [1904] 2 KB 332 at 335, per Wills J.
7 Kushner v Law Society [1952] 1 KB 264, [1952] 1 All ER 404 Re Knight, ex p Voisey (1882) 21 Ch D 442. But in the case of a lease for
three years or less the exception in the Law of Property Act 1925, s 54(2) applies even though the tenant has an option to extend the lease
beyond three years: Hand v Hall (1877) 2 Ex D 355.
8 Rawlins v Turner (1699) 1 Ld Raym 736; Foster v Reeves [1892] 2 QB 255 at 257, CA.
9 Northcote Laundry Ltd v Frederick Donnelly Ltd [1968] 2 All ER 50, [1968] 1 WLR 562; Long v Tower Hamlets London Borough
Council [1997] 1 EGLR 78.
10 Rye v Rye [1962] AC 496, HL. A futher reason is that the term may immediately merge in the reversion. A person may be landlord and
tenant in different capacities, for instance as personal representatives and on his own behalf: Rowley, Holmes & Co v Barber [1977] 1 WLR
371.
11 Crago v Julian [1992]1 All ER 744, CA.
12 Settled Land Act 1925, s 42(5)(ii).
(b) Operation of invalid lease as an agreement
HR A[1164]
A lease for a term exceeding three years or at a rent less than the best rent which can be reasonably obtained without a
fine, if created otherwise than by deed, is construed as an agreement for a lease1, and specific performance of the
agreement will be ordered, provided that it is in other respects capable of this remedy2; and where the lessee has
entered, the right to specific performance is sufficient to give the parties rights nearly equivalent to the respective legal
rights, and place them under obligations nearly equivalent to the respective legal obligations, of lessor and lessee3. In
equity the lease is deemed to have been effectively granted, and for practical purposes the parties are in much the same
position as if the lease were valid at law4. Where the above equitable doctrine does not apply, the effect of entry under
the void lease, if followed by payment of rent, is to create a tenancy from year to year upon the terms of the instrument
Page 238
so far as applicable to such a tenancy5 The House of Lords has held that a grant for an uncertain term or duration does
not create a lease since it is beyond the power of a landlord and tenant to create an uncertain term6. However, once the
tenant has entered and paid rent, he becomes a tenant from year to year; such tenancy is certain because either party has
the right to determine it on six months' notice. Thus, a lease subject to a condition that it was not to be determined
unless the land was required for road widening took effect as a tenancy from year to year and could be determined on
six months' notice 60 years later even though the land was not required for road widening6. A lease of an incorporeal
hereditament by an instrument other than by deed is subject to the same considerations, and operates as a valid lease in
equity, provided that the lessee has entered into enjoyment under it and that specific performance would be ordered7.
But apart from this doctrine, if the lessee has entered into enjoyment, and has thus received the consideration for his
bargain, he is bound by the stipulations of the instrument so far as they apply to the period of his enjoyment8.
HR A[1165]
1 Bond v Rosling (1861) 1 B & S 371; Tidley v Mollett (1864) 16 CBNS 298; Hayne v Cummings (1864) 16 CBNS 421.
2 Parker v Taswell (1858) 2 De G & J 559; Zimbler v Abrahams [1903] 1 KB 577, CA, explained in Lace v Chantler [1944] KB 368,
[1944] 1 All ER 305. Thus it must after 27 September 1989 comply with the requirements of the Law of Property (Miscellaneous
Provisions) Act 1989.
3 Walsh v Lonsdale (1882) 21 Ch D 9 at 14, CA. See generally para HR A[908].
4 The result is that to a considerable extent the statutory requirement of a deed, see paras HR A[1161]FF, has been nullified; see Furness v
Bond (1888) 4 TLR 457; but, as regards persons other than the lessor and lessee, the want of a legal estate in the lessee by reason of the
invalidity of the demise might be important since, for example, an agreement for a lease is void against a purchaser for value of the legal
estate unless registered as an estate contract. For a summary of the differences between a person holding under an agreement for a lease and
holding under an actual lease see para HR A[908].
5 Clayton v Blakey (1798) 8 Term Rep 3.
7 Lowe v Adams [1901] 2 Ch 598; Hurst v Picture Theatres Ltd [1915] 1 KB 1, CA.
8 Thomas v Fredricks (1847) 10 QB 775; Adams v Clutterbuck (1883) 10 QBD 403; and cf Wilkinson v Torkington (1837) 2 Y & C Ex
726 (as to recovery of rent).
Page 239
Leases/2 Contents and operation of lease
2 Contents and operation of lease
HR A[1166]
Though a lease by deed or under hand need not as a matter of law follow any prescribed form, such leases usually
contain the provisions outlined hereunder.
(a) Contents
HR A[1167]
The usual contents of a lease by deed are as follows.
(a) The date--a deed, however, takes effect from delivery and though the date expressed in the
instrument is prima facie to be taken as the date of delivery1, yet this does not exclude extrinsic evidence
of the actual date; and the actual date, when proved, prevails, in case of variance, over the apparent
date2.
(b) The names and descriptions of the parties--the full first and surnames of the parties with their
residence and profession or trade, are usually inserted; but any description is sufficient which clearly
distinguishes a party from all others. It has been held that a party need not be otherwise named than by
signing and sealing the deed3.
(c) When the consideration for the lease consists in the rent and lessee's covenants, it is usual, though
not necessary, to insert a reference to them before the operative words; where there is an additional
consideration such as a fine or premium it is essential that it should be stated4.
(d) The operative words--the usual words of demise are 'demise' or 'lease', but any words which are
sufficient to explain the intention of the parties, that the one shall divest himself of possession and the
other5.
(e) The parcels or that portion of the lease containing a description of the property demised6.
(f) Exceptions and reservations--an exception is a restriction by which the landlord retains to himself a
part of the parcel which would otherwise pass to the tenant under the general terms of the description7; a
reservation is a creation in the landlord's favour of something not part of the parcels, but issuing out of
them as a rent or services8.
(g) The habendum--which defines the commencement and duration of the term9.
(h) The reddendum--which defines the amount of the rent, to whom, at what time and how it is to be
paid. The usual words used are 'yielding and paying', but it may be in any form of words indicating that
rent is to be paid10.
(i) Covenants--these are merely promises or agreements by deed. Covenants are of two kinds, express
and implied, but an express covenant in a deed excludes an implied one relating to the same subject
matter. There are, however, certain covenants implied by statute which cannot be excluded11.
(j) Covenant for enjoyment. This is generally one of the covenants on the part of the landlord.
(k) Proviso for re-entry. In long leases, especially those at a ground rent, this is restricted to
non-payment of rent and breach of covenant, but in leases at a rack rent, it also extends to insolvency.
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The matters included before the habendum are called the 'premises'12. They may also include recitals, but are unusual in
a lease. If any reference is necessary to a power under which the lease is granted, this is inserted in the operative
words13. The contents of a lease by instrument under hand are in substance the same, but they are not usually so
formally expressed14. While the above-described contents are usual there is in principle no reason why any document,
however informal, should not operate as a lease15.
HR A[1168]-[1187]
1 Malpas v Clements (1850) 19 LJQB 435; Morgan v Whitmore (1851) 6 Exch 716 at 719. See Re Shaw, Public Trustee v Little (1914)
110 LT 924 (appointment of Public Trustee). Delivery need not today be formal, but may be inferred from any act which shows an intention
that the deed is to be operative.
2 Clayton's Case (1585) 5 Co Rep 1a. 'The rule uniformly acted upon from the time of Clayton's Case to the present date is that a deed or
other writing must be taken to speak from the time of the execution, and not from the date apparent on the face of the deed.' The date,
indeed, is to be taken prima facie as the true time of execution; but as soon as the contrary appears, the apparent date is to be utterly
disregarded: Browne v Burton (1847) 5 Dow & L 289 at 292, per Patteson J.
3 See Nurse v Frampton (1694) 1 Ld Raym 28. Since the coming into force of the Law of Property (Miscellaneous Provisions) Act 1989 it
is unnecessary for a document to be sealed to be a deed. See para HR A[1246].
4 This is necessary both to ensure the due operation of the deed and to ascertain the proper stamp duty. If a lease prepared in pursuance of
an agreement for a lease is tendered to the lessee for execution, he is not bound to execute it unless the consideration is truly stated:
Vonhollen n Knowles (1844) 12 M & W 602. The lessor has a lien on the land for unpaid premiums: see Shepheard v Beetham (1877) 6 Ch
D 597.
5 Harrington v Wise (1596) Cro Eliz 486 (A doth let); Doe d Pearson v Ries (1832) 8 Bing 178 (A agrees to let to B and B to take); Poole
v Bentley (1810) 12 East 168; Maldon's Case (1584) Cro Eliz 33 ('You shall have a lease of'); Duxbury v Sandiford (1898) 80 LT 552 ('We
agree to let you keep peaceable possession'); Wright v Trezevant (1828) Mood & M 231 (A agrees to pay B a certain rent for); or a covenant
that another should have, hold, and enjoy (Tisdale v Essex (1616) Hob 34; Drake v Munday (1631) Cro Car 207), followed by the entry of
the tenant would amount to a lease.
6 See Chapter 3.
9 As to the commencement and duration of leases, see paras HR A[224]-[245]. In case of contradiction between the habendum and
reddendum, the habendum prevails: Matthews v Smallwood [1910] 1 Ch 777.
10 As to the reservation of rent, see para HR A[24] and Chapter 6.
11 See para HR A[6421] as to the covenant for repair.
12 See Shep Touch, p 74, and for a modern consideration of the various meanings of 'premises' see Gardiner v Sevenoaks RDC [1950] 2
All ER 84; Hobhouse v Wall [1963] 2 QB 124, [1963] 1 All ER 701, CA.
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13 See 11 Encyclopaedia of Forms and Precedents (4th edn) 148. As to powers of leasing, see paras HR A[490]ff.
14 An oral lease may be made by any words which show an intent to give exclusive possession for the term; cf Maldon's Case (1584) Cro
Eliz 33.
15 In practice, most commercial leases tend to be in the landlord's standard form.

Page 242
Leases/3 Covenants and conditions
3 Covenants and conditions
(a) Covenants
HR A[1188]
A covenant is a promise under seal that something shall or shall not be done or that a certain state of facts exist.
Although the expression is in strictness confined to promises under seal, it is nowadays commonly used also in referring
to promises contained in leases which are not under seal. When the lease is created by deed the obligations in it,
whether of the landlord or the tenant, are, therefore, covenants1. Where on the fair construction of the language of the
lease an obligation is imposed on one party, this creates an express, and not merely an implied, covenant2. The tenant's
covenants are intended to provide for the payment of rent3, rates, and taxes4; for the maintenance5 and insurance6 of
the premises; for any suitable restraint on the user of them7; for the observance and performance of any statutory
provisions or regulations affecting the property or the user thereof8; for restraint on assigning and subletting9; and for
the yielding up of the premises at the determination of the lease10. The landlord's covenants provide for quiet
enjoyment11; and for the payment of rates and taxes, and for maintenance of the premises, so far as these obligations
are to be borne by him. While the above covenants provide for the chief obligations that arise as between landlord and
tenant there is no limit to the matters which may be regulated by covenants inserted in the lease, and special covenants
may be required to fit the particular circumstances of the parties or the property demised.. Damages may be awarded for
breach of covenant12; similarly in a suitable case a breach of covenant (not to cut or injure walls etc) may be enforced
by a mandatory injunction granted summarily13.
HR A[1189]
1 On the subjects of covenants generally, see 12 Halsbury's Laws (4th edn) para 1539; Randall v Lynch (1810) 12 East 179 at 182; Ellison
v Bignold (1821) 2 Jac & W 503 at 510; Brookes v Drysdale (1877) 3 CPD 52 at 57, 58, per Grove J. As to the effect of recitals, see 12
Halsbury's Laws (4th edn) para 1514, and Aspdin v Austin (1844) 5 QB 671 at 683, per Lord Denman CJ.
2 Re Cadogan and Hans Place Estate Ltd, ex p Willis (1895) 73 LT 387 at 390, CA, per Rigby LJ.
8 For example, the storage of petrol on the premises or the use of the premises as offices or shops.
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12 See by way of example, Costain Property Developments Ltd v Finlay & Co Ltd (1988) 57 P & CR 345, [1989] 1 EGLR 237.
13 See, by way of example, Viscount Chelsea v Muscatt [1992] 2 EGLR 48, 35 EG 63, CA.
(b) Conditions
HR A[1190]-[1200]
A condition is a qualification to the estate granted. It may be a condition precedent, ie a condition on the fulfilment of
which the grant takes effect, or a condition subsequent, ie a condition on the fulfilment of which the estate granted
determines1. Leases usually contain conditions, normally conditions subsequent. Such conditions include a power of
re-entry on non-payment of rent or breach of covenant2. It is necessary to distinguish between covenants and
conditions, though it seems that a provision may partake of the nature of both3. There is no theoretical difficulty
involved since a term of a lease may well be apt both to cast an obligation on the tenant and to determine the lease if
that obligation is not performed. The expressions 'provision' or 'term' of the lease are suitable general expressions to
denote either a covenant or a condition. Provisions for renewal of the lease4 and for an option for the tenant to
purchase5, are sometimes included among the conditions or provisos which follow the covenants but frequently take the
form of covenants by the landlord, while provision for determination of the lease during the currency of the term, if
desired, is usually inserted among the conditions6. A covenant by a tenant in a negative form, for example, a covenant
not to carry out alterations, or not to cut the main timbers of the demised premises, is not broken when the acts in
question are carried out by an independent contractor in breach of instructions and without the knowledge of the
tenant7.
HR A[1201]
1 A condition subsequent means something upon breach of which the interest may be determined before the appointed period: Taylor v
Martindale (1842) 1 Y & C Ch Cas 658 at 662.
3 See Bashir v Lands Comr [1960] AC 44, [1960] 1 All ER 117 at 119, per Lord Jenkins.
6 A condition subsequent means something upon breach of which the interest may be determined before the appointed period: Taylor v
Martindale (1842) 1 Y & C Ch Cas 658 at 662.
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7 Hagee (London) Ltd v Co-operative Insurance Society Ltd (1992) 63 P & CR 362, [1991] 07 EG 122. In such a case, the landlord may
have a direct claim in tort against the independent contractor.
(c) Construction of covenants
HR A[1202]
General approach
The principles which govern the construction of covenants and conditions in a lease are those which govern the
construction of deeds and contracts generally1. As with the construction of any contractual document the court is
seeking to ascertain what the mutual intentions of the parties were as to the legal obligations which each assumed by the
contractual words in which they sought to express them2. The intention of the parties is ascertained objectively. What
must be ascertained is the meaning which the document would convey to a reasonable person having all the background
knowledge which could reasonably have been available to the parties in the situation in which they were at the time of
the lease3. Subject to the requirement that it should have been reasonably available to the parties the background
knowledge to which the court shall have regard includes absolutely anything which would have affected the way in
which the language of the document would have been understood by reasonable men4. However, the law excludes from
the admissible background the previous negotiations of the parties and their declarations of subjective intent5. They are
admissible only in an action for rectification. The background may not merely enable the reasonable man to choose
between the possible meanings of words which are ambiguous but even to conclude that the parties must, for whatever
reason, have used the wrong words or syntax6.
HR A[1202.1]
1 See eg 12 Halsbury's Laws (4th edn) paras 1459ff; Lewison Interpretation of Contracts (3rd edn, 2004).
2 Pioneer ShippingLtd v BTP Tioxide Ltd [1982] AC 724 per Lord Diplock.
3 Prenn v Simmonds [1971] 3 All ER 237 HL; Reardon-Smith Line Ltd v Hansen-Tangen v Sanko SS Co [1976] 3 All ER 570, HL;
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98, at 114 per Lord Hoffmann, HL.
4 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98, HL; BCCI SA (in liquidation) v Ali [2001] 1
All ER 961, HL.
5 For a recent example see ProForce Recruit Limited v The Rugby Group Ltd [2005] EWHC 70 (QB), [2005] All ER (D) 22 (Feb) (a
cleaning contract contained a provision that 'Pro Force will hold preferred supplier status'. It was held by Field J that the statements made
prior to the contract as to the effect of that status were inadmissible as an aid to construction).
6 Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 3 All ER 352, HL.
HR A[1202.2]
Contra proferentem
Page 245
A source of particular confusion is the contra proferentem rule of construction, that is the rule that in cases of ambiguity
a provision in a contract is to be construed, or the ambiguity resolved, against the person for whose benefit the provision
was inserted1. The rule has been described as one of last resort in construction, and certainly only applies in the case of
real doubt and ambiguity as to meaning2. In principle, the rule operates in respect of leases3. The difficulty is to
ascertain in the case of leases who is the proferens against whom a provision is to be construed. This difficulty flows
from the different ways in which the rule has been formulated in the authorities. At least four such formulations may be
distinguished. The classic exposition of the rule is that deeds are to be construed against the grantor4. This would
suggest that the landlord as the grantor of the lease was always the proferens. A second formulation is that the document
must be construed against the party by, or on whose behalf, it has been drafted and offered to the other party5. It is
difficult to justify this formulation of the rule since it may be a matter of chance which party initially drafts a document,
or both parties may be involved in the drafting. A lease is normally drafted by, or on behalf of, the landlord and
presented to the tenant for his approval, so that this formulation of the rule would normally result in the lease being
construed against the landlord. It is possible that there may be a different proferens in respect of different parts of a
lease, and a third formulation is that the covenantor is the proferens in regard to any particular covenant6. Since most
covenants in leases are given by the tenants, this approach suggests that the rule of construction would generally operate
against the tenant. The fourth, and most satisfactory, formulation of the rule is that it applies so that any particular
provision is construed against the person for whose benefit the provision in question was inserted into the contract7.
This formulation of the rule can appositely be applied to the various complex provisions which make up modern leases.
The difficulties discussed above can be seen when the contra proferentem rule is sought to be applied as an aid to the
construction of rent review clauses. On one approach, the application of the rule means that the rent review provisions
are incidental to the tenant's covenant to pay rent and so must be applied against the tenant8. On the fourth approach
identified above, it can be said that most rent review clauses (particularly when upwards only in their effect) are inserted
to benefit landlords, and so should be construed against the landlord when the contra proferentem rule comes to be
applied. It has been held that, in relation to a tenant's covenant restricting the use to which the demised premises could
be put, the covenant should be construed against the landlord and afforded some indication that a wider meaning should
be given to that which was permitted9.
HR A[1203]
1 The rule is derived from the latin maxim verba chartarum fortius accipiuntur contra pro ferentem (all the words of a deed should be
taken most strongly against him that doth speak them, and most in advantage of the other party): Shep Touch 87; Co Litt 183a.
2 St Edmundsbury and Ipswich Diocesan Board of Finance v Clark (No 2) [1975] 1 All ER 772, [1975] 1 WLR 468, CA.
3 Justice Windham's Case (1589) 5 Co Rep 7a; Seaman's Case (1610) Godb 166; Manchester College v Trafford (1678) 2 Show 31; Dann
v Spurrier (1803) 3 Bos & P 399 at 403; Doe d Webb v Dixon (1807) 9 East 15 at 16.
4 See eg Johnson v Edgware etc Rly Co (1866) 35 Beav 480, per Romilly MR.
5 Eg a declaration prepared by an insurance company for signature by someone preparing to take out a policy of insurance with the
company: see Fowkes v Manchester and London Assurance Association and Loan Association (1863) 3 B & S 917 at 925, per Cockburn CJ.
6 See AMAX International Ltd v Custodian Holdings Ltd [1986] 2 EGLR 111 at 112, per Hoffmann J. The contrary view was adopted by
Knox J in Skillion plc v Keltec Industrial Research Ltd [1992] 1 EGLR 123 where it was said to be common ground between the parties that
in the case of a tenant's covenant restricting the permitted use of the premises the covenant had to be construed against the landlord who was
not the grantor or proferens of the lease as a whole.
7 In Burton v English (1883) 12 QBD 218, CA, Brett MR said: 'The general rule is that where there is any doubt as to the construction of
Page 246
any stipulation in a contract, one ought to construe it strictly against the party in whose favour it has been made.'
8 This was the approach adopted by Hoffmann J in AMAX International Ltd v Custodian Holdings Ltd [1986] 2 EGLR 111 at 112. The
application of the contra proferentem rule was not sufficient to displace the inferences drawn from the language of the rent review clause and
its overall commercial purpose. Indeed, it could be said that if the correct construction was apparent from those other considerations there
was no place at all for the application of a rule of last resort. In the context of a deed of priority conferring upon the second mortgagee
priority in respect of a capital sum 'together with interest thereon', the contra proferentem rule did not require one to assume that 'interest'
meant simple rather than compound interest: Whitbread plc v UCB Corporate Services Ltd [2000] 35 EG 136, CA.
9 Skillion plc v Keltec Industrial Research Ltd [1992] 1 EGLR 123. See n 6. In Gilje v Charlegrove Securities Ltd [2001] EWCA Civ
1777, CA, the service charge provisions of a lease were construed against the landlord in respect of an attempt to recover the notional cost to
the lessor of the provision of a caretaker's flat.
(d) Joint and several obligations
HR A[1204]
Where two or more persons become liable to the landlord in respect of the same obligation, they may be liable jointly,
or jointly and severally, or severally1. An example of joint, or of joint and several liability, would be that of two persons
who were jointly the tenant under a lease. An example of several liability in respect of the same debt would be the
liability of the original lessee and that of an assignee of the lease to pay the rent2. It is a general principle of the law of
contract that when two or more persons owe the same obligation to the same creditor, the release by the creditor of one
operates as the release of all3. The reason given for the general principle is that if it were otherwise, a further co-debtor
sued again after the release could claim a contribution from the debtor who was released. In that case, the release of a
co-debtor by the creditor would not, in truth, discharge him from all future liability arising from the existence of the
debt. The principle applies whether the obligation is owed jointly, or jointly and severally, or severally. The release may
be by deed or by accord and satisfaction. An accord and satisfaction is the purchase of a release from one obligation,
whether arising under contract or tort, by means of any valuable consideration, not being the actual performance of the
obligation itself. The accord is the agreement by which the obligation is discharged. The satisfaction is the consideration
which makes the agreement operative4. If there is no valuable consideration, the release must be by deed in order for it
to be effective. The general principle is displaced where the release is expressed not to affect the liability of the other
co-debtors, and such an intention may be inferred from the circumstances. In that case, the agreement between the
creditor and the debtor does not amount to a true release of the obligation but is a contract between them that the debtor
in question will not be sued5. The same general principle applies to obligations under covenants in leases. If a landlord
releases an assignee from his obligation to pay a particular instalment of rent, or some other liability under covenant, the
release will operate to discharge the liability of the original lessee to pay that rent or perform that other obligation Thus,
where A assigned the lease to B and B assigned it on to C. B gave a personal covenant to the landlord that he would
remain liable on the covenants in the lease notwithstanding any further assignment by him. It follows that while the
lease was vested in C, B and C were co-debtors, owing a several liability for the rent. When C failed to pay the rent, the
landlord and C entered into an agreement amounting to an accord and satisfaction, whereby C was released from
liability to pay the rent in return for his transferring certain chattels to the landlord and surrendering the lease. It was
held that the release operated to release B from his liability to pay the unpaid rent6. The same conclusion holds good as
regards the original lessee. The case illustrates the importance to a landlord of expressly confining the effect of such an
agreed release to the liability of the assignee in question. If the landlord wishes to preserve his ability to sue the original
lessee, for example, for the balance of the rent unpaid, his ability to do so should be expressly reserved in the
arrangement made with the assignee. The relevant question in each case is not whether the agreement between the
creditor, A, and one of the co-debtors, B, releases the debt which B owes to A. The relevant question is whether the
agreement between A and B precludes A from enforcing the debt owed by C. It is in B's interest that the agreement
should have that effect--because, if it does not, C will be in a position (if he pays the debt which he owes to A) to seek
Page 247
contribution from B. It is in A's interest that the agreement should not have that effect--because, prima facie, A will
wish to recover from C the balance of the indebtedness. Given the opposing interests of A and B, the question is what
have they agreed. That has to be determined having regard to the surrounding circumstances and taking into account not
only the express words used in the document but also any terms which can properly be implied7. Thus an individual
voluntary arrangement under the Insolvency Act 1986 releasing a debtor from an obligation did not affect any co-debtor
for the same obligation even though the creditor voted for it as the voluntary arrangement, construed in the light of the
proposals as a whole, was inconsistent with any intention to effect an immediate or absolute release of the debts of the
co-debtors owed to the creditors8. Similarly a release of an intermediate assignee by the landlord did not release the
original tenant where, on a consideration of the terms to the agreement, the intention could not be inferred that the
release was to affect the liability of other co-debtors9.
HR A[1205]
1 On joint obligations generally, see Chitty on Contracts (28th edn, 1999) ch 17.
2 The general nature of the liabilities of the original lessee and of assignees is discussed at paras HR A[2125]ff.
3 In Re EWA (A Debtor) [1901] 2 KB 642, CA; In Re Armitage, ex p Good (1877) 5 Ch D 46; Nicholson v Revill (1836) 4 Ad & El 675;
Ex p Gifford (1802) 6 Ves 805; Deanplan Ltd v Mahmoud [1993] Ch 151, [1992] 3 All ER 945.
4 See British Russian Gazette and Trade Outlook Ltd v Associated Newspapers Ltd [1933] 2 KB 616 at 643-644.
5 Watters v Smith (1831) 2 B & Ad 889 at 894, per Parke B. The reason for the exception is that, given the express or implied intention of
the parties, the debtor 'released' knows that a co-debtor may be sued and may seek a contribution against him.
6 Deanplan Ltd v Mahmoud [1993] Ch 151, [1992] 3 All ER 945.
7 Watts v Lord Aldington [1999] L&TR 578, CA, followed in Johnson v Davies [1998] 2 All ER 649 at 655J, CA.
8 Johnson v Davies [1998] 2 All ER 649 at 655J, CA.
9 Sun Life Assurance Society plc v Tantofex (Engineers) Ltd and Alpha Office Ltd (Third Party) [1999] 2 EGLR 135, [1999] L & TR 568,
Ch D.
HR A[1206]
Where in consequence of the Landlord and Tenant (Covenants) Act 19951 two or more persons are bound by the same
covenant, they are so bound both jointly and severally2. Where by virtue of the 1995 Act two or more persons are
bound jointly and severally by the same covenant and any of the persons so bound is released from the covenant the
release does not extend to any other of those persons3. However, the Act operates so that if the tenant assigns the whole
of the premises demised to him, he is released from the tenant covenants of the tenancy4. Where, by virtue of the
statutory provisions, a tenant is released from a tenant covenant of a tenancy, imposing any liability or penalty in the
event of a failure to comply with that tenant covenant then, as from the release, that other person is released from that
covenant to the same extent as the tenant is released5. The 1995 Act enables persons who, by virtue of the Act, are
bound jointly and severally by a covenant, to claim a contribution from each other under the provisions of the Civil
Liability (Contribution) Act 19786. Where two or more persons jointly constitute either the landlord or the tenant in
Page 248
relation to a tenancy, any reference in the 1995 Act to the landlord or the tenant is a reference to both or all of the
persons who jointly constitute the landlord or tenant, as the case may be, and nothing in the Act dealing with covenants
binding two or more persons7, applies in relation to the rights and liabilities of such persons between themselves8.
HR A[1206.1]
1 As to which see paras HR A[1929]ff.
3 LT(C)A 1995, s 13(2).
4 See paras HR A[2081]ff. As to the burden of the landlord's covenants see paras HR A[1967]ff.
6 LT(C)A 1995, s 13(3), subject to the modifications therein referred to.
7 LT(C)A 1995, s13.
8 LT(C)A 1995, s 28(4).
(e) Where liability under a covenant is joint
HR A[1206.2]
Whether the burden of a covenant entered into by two or more persons is joint or several or joint and several depends on
a consideration of the words used aided by the ordinary rules of construction. A covenant is joint, as regards the liability
of the covenantors, where two or more covenant for themselves, without any words of severance, that they will do
something or that they or one of them will do something, the covenant being imposed upon the covenantors simply1.
The effect is that while all are living, anyone who is sued can insist on the others being joined and upon the death of one
the entire liability devolves on the survivors or survivor2. The general rule is that if the liability is to be several, special
words of severance are at least advisable if not absolutely necessary3. A covenant or agreement, whether express or
implied entered into by a person with himself and one or more other persons is construed and capable of being enforced
as if it had been entered into with the other person or persons alone4. It is, however, enforceable under this provision
only so far as it would have been enforceable if entered into with the covenantors other than the covenantor5.
HR A[1206.3]
1 White v Tyndall (1888) 13 App Cas 263 (the covenantors or one of them or their executors administrators and assigns will pay the rent
and execute repairs); Copland v Laporte (1835) 3 Ad & El 517. Words purporting to make executors liable as well as the original obligor
jointly liable with other obligors have no effect. The liability of executors under a joint and several covenant is necessarily several only:
Page 249
Read v Price [1909] 1 KB 577; affd [1909] 2 KB 724; Anderson v Martindale (1801) 1 East 497.
2 Kendall v Hamilton (1879) 4 App Cas 504; White v Tyndal (1888) 13 App Cas 263.
3 White v Tyndall (1888) 13 App Cas 263 at 269; Kendall v Hamilton (1879) 4 App Cas 504.
5 See Ridley v Lee [1935] Ch 591 at 603, 604.
HR A[1206.4]
The effect of a covenant which, as regards the liability of the covenantors, is in form clearly joint depends on the words
themselves, and is not controlled by the circumstance that the covenantors have separate interests in the subject matter,
but if it is doubtful whether the covenant is joint or several, this point must be taken into consideration. In such case it is
permissible to look at other parts of the deed, the interests of the covenantors and any other circumstances appearing on
the face of the instrument aiding in the determination of the intention of the parties1. There is no principle of equity that
joint covenants are to be treated as joint and several2.
HR A[1206.5]
1 White v Tyndall (1888) 13 App Cas 263 at 276.
2 Sumner v Powell (1816) 2 Mer 30; Beresford v Browning (1875) LR 20 Eq 564; affd (1875) 1 Ch D 30; Levy v Sale (1877) 37 LT 709.
HR A[1206.6]
Where there are several covenantors and each undertakes only as regards his own acts or defaults, the covenant is
several and the effect is the same as if several separate covenants were entered into1.
HR A[1206.7]
1 Matthewson's Case (1597) 5 Co Rep 22b; Mills v Ladbroke (1844) 7 Man & G 218.
(f) Where liability is joint and several
HR A[1206.8]
In general a covenant is framed so as to be joint and several1 and then it is at the election of the covenantee whether to
charge all the covenantors together or the survivor alone on the joint covenant, or to charge one alone or his personal
Page 250
representative if he be dead with the entire liability on the several covenant2.
HR A[1206.9]
1 In leases and agreements for leases covenants should always be so drafted.
2 May v Woodward (1677) Freem KB 248. The words now used to introduce a joint and several obligation are invariably 'jointly and
severally' but other words may have the same effect: 'we and each of us': Robinson v Walker (1703) 1 Salk 393; Duke of Northumberland v
Errington (1794) 5 Term Rep 522, or 'A and B covenant for themselves and each of them' Robinson v Walker (1703) 1 Salk 393.
(g) Benefit of joint covenant
HR A[1207]
The benefit of a covenant differs from the burden of it. As regards the benefit, the covenant may be joint or it may be
several but it cannot be joint and several so as to leave it to the election of the covenantees whether to sue together or
separately1. If the covenant is joint, then so long as all the covenantees are living all must sue together2. Upon the death
of any one the action must be brought by the survivors, whether the breach occurred before the death3 or after4. A
covenant made with two or more jointly to do any act to them or for their benefit is deemed to include and by statute
implies an obligation to do the act to or for the benefit of the survivors of them and to or for the benefit of any other
person to whom the right to sue on the covenant devolves and where made after 1925 is construed as made with each of
them5.
HR A[1207.1]
1 Slingsby's Case (1587) 5 Co Rep 18b.
2 Sorsbie v Park (1843) 12 M & W 146; Lane v Drinkwater (1834) 1 Cr M & R 599 at 613.
3 Eccleston v Clipsham (1668) 1 Saund 153.
4 Foley v Addenbroke (1843) 4 QB 197.
5 Law of Property Act 1925, s 8(1); Josselson v Borst and Gliksten [1938] 1 KB 723, [1937] 3 All ER 722; this section applies only so far
as a contrary intention is not expressed.
(h) Construction affected by interests of covanantees
HR A[1207.2]
Page 251
The construction where there are several covenantees depends, as regards its being joint or several, very largely on their
interests in the subject matter. The intention of the parties, as expressed in the words of the covenant, prevails and by
clear words a covenant may be joint although their interests are several and vice versa. The court, however, leans
against this separation between the nature of the covenant and the nature of the interest and where the interest is joint
the covenant will be joint if the words are capable of that construction1. Where the interests are several, the covenant
will, if possible, be construed as several2. Express language will not be contradicted but it will be moulded to suit the
interests according as they are joint3 or several4.
HR A[1207.3]
1 Sorsbie v Park (1843) 12 M & W 146.
2 Sorsbie v Park (1843) 12 M & W 146.
3 Southcote v Hoare (1810) 3 Taunt 87; Wakefield v Brown (1846) 9 QB 209 at 223; Bradburne v Botfield (1845) 14 M & W 559;
Thompson v Hakewill (1865) 19 CBNS 713 at 726; Roberts v Holland [1893] 1 QB 665.
4 See Palmer v Mallet (1887) 36 Ch D 411.
(i) Covenant of executor or trustee
HR A[1207.4]
Whether such a covenantor is bound personally or liability is to be satisfied only out of the assets which he holds as
such personal representative or trustee is a matter for construction of the covenant1. It is competent for such a
covenantor to contract by apt words in such a manner as to bind only his trust estate; but whether in any particular case
the contract is one which binds him personally or is to be satisfied only out of the trust estate is a question of
construction to be decided with reference to the circumstances of the case2. A covenant which declared that the lessees
would not be bound personally except while acting as trustees did not limit their liability to the trust fund during the
time that the lessees remained trustees3. Since 1925 joint tenants and tenants in common hold land as trustees for sale
and no doubt as trustees their rights will be joint, but properly drawn leases will provide that so long as the reversion or
the term is held in tenancy in common at any rate and probably usually where the interest is held in joint tenancy the
liability will be joint and several.
HR A[1207.5]
1 Muir v City of Glasgow Bank (1879) 4 App Cas 337; Watling v Lewis [1911] 1 Ch 414; Re Robinson's Settlement, Gant v Hobbs [1912]
1 Ch 717.
2 Muir v City of Glasgow Bank (1879) 4 App Cas 337.
3 Perring v Draper [1997] EGCS 109

Page 252
(j) Usual covenants
HR A[1208]
An agreement for lease, in the absence of an express term as to the covenants to be inserted, contains an implied term
that the lease will be subject to the usual covenants. The usual covenants are: (a) certain covenants specified below
which are always usual; and (b) any additional covenants which may be usual in the special circumstances of the case.
In modern commercial and residential practice it is rare for the 'usual covenants' to be implied because of the almost
universal use of standard form leases and agreements which make express provision as to the parties' rights and
obligations. An agreement for a lease should specify the covenants and provisos which are to be inserted in the lease1;
if it does not do so, the parties can require the insertion in the lease of the usual and proper covenants and provisions,
there being an implied term of the agreement that the lease shall contain such covenants and provisions2. The other
instance in which it has to be ascertained what are the usual covenants is, of course, when the agreement expressly
provides that the lease shall contain these covenants. What they are is in each case a question of fact to be decided upon
an examination of the leading books of precedents3, or upon the evidence of conveyancers and others familiar with the
practice generally, or with the practice in the particular district4, or on the particular estate, having regard to the nature
of the property, the place where it is situated, and the purpose for which the premises are intended to be used5. The
covenants and provisos which may be regarded as usual in all cases are: covenants by the lessee to pay rent6; to pay
taxes, except such as are ultimately charged by statute on the landlord7; to keep and deliver up the premises in repair8;
and to allow the landlord to enter and view the state of repair9; the usual qualified covenant by the landlord for quiet
enjoyment10; and a proviso for re-entry on non-payment of rent11. In modern times this list cannot be regarded as
exclusive and the nature of other 'usual' covenants will depend on the particular circumstances of the case. In
determining what covenants were 'usual' in a commercial lease in 1971, regard was had to the nature of the premises,
their situation, the purpose for which they were being let, the length of the term, as well as the evidence of conveyancers
and precedent books. In addition to the traditional 'usual' covenants (see above) the following further covenants were
inserted on the ground that they were usually to be found in commercial lettings in 1971:
(a) a covenant that the tenant would not alter the plan, height, elevation or appearance of the building
without the landlord's consent;
(b) a covenant that the tenant would not obstruct windows or lights or knowingly permit any
encroachment or easement to be acquired against the demised premises;
(c) a covenant that the tenant would not alter the use of the demised premises without the landlord's
consent, such consent not to be unreasonably withheld;
(d) a covenant that the tenant would not suffer any part of the premises to be a nuisance or cause
annoyance;
(e) a proviso for re-entry by the landlord for breach of any covenant12.
It has been said in the case of a long lease at a moderate ground rent that a covenant by the lessee 'to pay all costs,
charges, and expenses (including solicitor's costs and surveyor's fees) incurred by the lessor for the purpose of or
incidental to the preparation and service of a notice under the Conveyancing Act 1881, s 14, requiring the lessee to
remedy a breach of any of the covenants on the part of the lessee...' was not an 'ordinary' or even reasonable one, but to
be an onerous covenant13. However, this is now a very common covenant to find in modern commercial lease and one
would expect that if decided today such a covenant would be said to be an ordinary covenant. It is normally for the
judge and not counsel to settle what are 'the usual covenants' when ordering specific performance of an agreement for a
lease14. Thus, in an agreement for a lease to contain 'all covenants usual and ordinary in farming leases', the local
Page 253
custom in respect of such leases may be regarded15. In leases of public-houses, where the brewers have their own form
of lease, 'usual covenants' would mean those always inserted in leases by the particular brewer16.
HR A[1209]
1 The agreement may be for a lease, subject to such clauses as the lessor chooses to insert, see Plunkett v Dease (1846) 10 I Eq R 124; or,
subject to conditions to be settled by a third person, see Gourlay v Duke of Somerset (1815) 19 Ves 429. As to clauses to be inserted in
renewal of leases, see Ricketts v Bell (1847) 1 De G & Sm 335; Vance v Earl of Ranfurley (1850) 1 I Ch R 321.
2 Church v Brown (1808) 15 Ves 258 at 271; Propert v Parker (1832) 3 My & K 280; Blakesley v Whieldon (1841) 1 Hare 176 at 181. As
to the meaning of 'proper covenants' see n 5, and para HR A[1210], n 5.
3 Hampshire v Wickens (1878) 7 Ch D 555 at 561; Flexman v Corbett [1930] 1 Ch 672 (covenant not to inconvenience neighbours held to
be unusual).
4 Hodgkinson v Crowe (1875) LR 19 Eq 591; Hart v Hart (1881) 18 Ch D 670 at 695; Flexman v Corbett [1930] 1 Ch 672. As the
practice changes, so may the usual covenants change (Hampshire v Wickens (1878) 7 Ch D 555 at 561, per Jessel MR), and it has been said
that in the case of residential houses in London the view as to what are usual covenants requires reconsideration in the light of the existing
practice: Flexman v Corbett [1930] 1 Ch 672 at 677.
5 Flexman v Corbett [1930] 1 Ch 672 at 679, where it was held that the word 'usual' in this connection means 'occurring in ordinary use';
see Canadian Pacific Rly Co v Toronto Corpn [1905] AC 33, PC; Church v Brown (1808) 15 Ves 258 at 267; Bennett v Womack (1828) 7 B
& C 627; Brookes v Drysdale (1877) 3 CPD 52; Hampshire v Wickens (1878) 7 Ch D 555. See also Chester v Buckingham Travel Ltd [1981]
1 All ER 386, [1981] 1 WLR 96, where these cases were reviewed in the context of a modern lease. If the lease is to contain 'proper
covenants'. those covenants only are to be inserted which will secure the full effect of the contract (Jones v Jones (1803) 12 Ves 186 at 189;
Blakesley v Whieldon (1841) 1 Hare 176). The question what are usual and proper covenants can be determined on a summons under the
Law of Property Act 1925, s 49 (which replaced the Vendor and Purchaser Act 1874, s 9): Re Anderton and Milner's Contract (1890) 45 Ch
D 476.
7 See Bennett v Womack (1828) 7 B & C 627 (where there was to be a 'net rent' with usual covenants); Parish v Sleeman (1860) 1 De GF
& J 326 at 332 (rent 'free of all outgoings'); Canadian Pacific Rly Co v Toronto Corpn [1905] AC 33, PC.
8 Doe d Dymoke v Withers (1831) 2 B & Ad 896 at 903; Sharp v Milligan (1857) 23 Beav 419 at 422 (lessee not entitled to insert the
words 'damage by fire or tempest only excepted').
9 And in a mining lease, reservation of liberty for the lessor and his agents to examine the workings: Blakesley v Whieldon (1841) 1 Hare
176.
10 See Colhoun v Trustees of Foyle College [1898] 1 IR 233, CA.
11 Hodgkinson v Crowe (1875) 10 Ch App 622 at 626. But a proviso for re-entry on the breach of another covenant has been held not to
be unusual: see para HR A[1210], n 8.
12 Chester v Buckingham Travel Ltd [1981] 1 All ER 386, [1981] 1 WLR 96.
13 Allen v Smith [1924] 2 Ch 308.
14 Charalambous v Ktori [1972] 3 All ER 701, [1972] 1 WLR 951.

Page 254
15 Bell v Barchard (1852) 16 Beav 8.
16 Hampshire v Wickens (1878) 7 Ch D 555.
(k) Unusual covenants
HR A[1210]-[1220]
A covenant or proviso which tends to abridge or qualify the estate vested by the lease in the lessee is not allowed to be
inserted as a usual covenant1 (notwithstanding earlier decisions to the contrary)2; and on this ground it has been held
that a covenant against assigning or underletting without consent is unusual3. The court has declined to include such a
covenant even in the context of a 1971 lease4. It makes no difference that the agreement does not mention 'assigns' of
the lessee5. Similarly, in a lease to contain 'proper covenants', a covenant against assigning or underletting will not be
inserted6. Similarly a proviso for re-entry on bankruptcy7 has been said not to be usual. Nowadays a proviso for
re-entry on breach of covenant generally is likely to be considered usual8. The following covenants and provisos have
also been held to be unusual9: A covenant by the lessee to rebuild and repair10; exception, from the covenant to repair,
of damage by fire or tempest11 and a covenant by the lessee to insure12. A covenant not to carry on a particular trade is
unusual13; certainly it is not usual in a neighbourhood where trade is usually carried on14. A stipulation in the
agreement that the premises should not be used except for a specified manufactory, and that usual covenants should be
inserted, did not authorise the insertion of an affirmative covenant by the lessee that he would carry on the
manufactory15. A covenant not to change the user of the premises without the landlord's consent, such consent not to be
unreasonably withheld, is nowadays likely to be considered usual16. A condition that assignments or under-leases shall
be registered with the lessor's solicitors and a fee paid to him17; and a covenant by the lessor to rebuild in case of
destruction by fire or tempest, with a condition that on default the rent should cease have also been held to be
unusual18.
HR A[1221]
1 Church v Brown (1808) 15 Ves 258 at 264; Blakesley v Whieldon (1841) 1 Hare 176, at 189; Hodgkinson v Crowe (1875) LR 19 Eq 591
at 625.
2 Originally it was a disputed point whether the covenant against assignment was 'usual' or not: Morgan v Slaughter (1793) 1 Esp 8;
Folkingham v Croft (1796) 3 Anst 700; Vere v Loveden (1806) 12 Ves 179; Browne v Raban (1808) 15 Ves 528; see Blakesley v Whieldon
(1841) 1 Hare 176 at 181. The covenant will be inserted where the lease is in substitution for one containing a restriction on assignment: Bell
v Barchard (1852) 16 Beav 8. The fact that the lessor agrees not to withhold his consent to an assignment or sublease save for strong and
good reasons does not entitle him to insist on the lease containing a covenant against assignment or subletting without consent: De Soysa v
De Pless Pol [1912] AC 194, PC.
3 Henderson v Hay (1792) 3 Bro CC 632; Church v Brown (1808) 15 Ves 258; Hampshire v Wickens (1878) 7 Ch D 555; Bishop v Taylor
& Co (1891) 60 LJQB 556.
5 Buckland v Papillon (1866) LR 1 Eq 477 at 482; affd (1866) 2 Ch App 67 at 71.
6 Eadie v Addison (1882) 52 LJ Ch 80.

Page 255
7 Hodgkinson v Crowe (1875) LR 19 Eq 591; Hyde v Warden (1877) 3 Ex D 72 at 82, CA. See Chester v Buckingham Travel Ltd [1981] 1
All ER 386, [1981] 1 WLR 96.
8 In Flexman v Corbett [1930] 1 Ch 672 at 682 Maugham J indicated that the former view that such a proviso was not usual 'might
usefully and properly be reconsidered in the light of modern evidence at some future time'. In Chester v Buckingham Travel Ltd [1981] 1 All
ER 386, [1981] 1 WLR 96 Foster J, confessing that he had never seen a right of re-entry in a lease limited to payment of rent only, had no
doubt that a right of re-entry for breach of covenant generally was usual for the purposes of a 1971 lease. Formerly, it was held that a proviso
for re-entry on bankruptcy (Haines v Burnett (1859) 27 Beav 500) was a usual proviso in a lease of a public house; and, though a proviso for
re-entry if any other business than a licensed victualler's is carried on is not 'usual' on the grant of a lease, yet it may be treated as usual for
the purpose of assignment: Bennett v Womack (1828) 7 B & C 627.
9 The word 'unusual' is used here in a technical sense, by way of contrast with what are in law usual covenants in the sense used in the last
paragraph. Such 'unusual' covenants may in fact be very common in leases.
10 Doe d Dymoke v Withers (1831) 2 B & Ad 896 at 903.
11 Sharp v Milligan (1857) 23 Beav 419; see Kendall v Hill (1860) 6 Jur NS 968. But in Doe d Ellis and Medwin v Sandham (1787) 1
Term Rep 705, a covenant to repair with such an exception was found as a fact to be usual. Cf Crosse v Morgan (1889) 60 LT 703 (where
the words 'or other casualty' were rejected as being uncertain although the exception of damage by fire or tempest was admitted by the
lessor).
12 See Cosser v Collinge (1832) 3 My & K 283.
13 Propert v Parker (1832) 3 My & K 280; Van v Corpe (1834) 3 My & K 269; and certainly it is not usual in a neighbourhood where
trade is usually carried on (Wilbraham v Livesey (1854) 18 Beav 206 at 210). In Doe d Marquis of Bute v Guest (1846) 15 M & W 160, a
stipulation in the agreement that the premises should not be used except for a specified manufactory, and that usual covenants should be
inserted, did not authorise the insertion of an affirmative covenant by the lessee that he would carry on the manufactory. A covenant not to
change the user of the premises without the landlord's consent, such consent not to be unreasonably withheld, is nowadays likely to be
considered usual: Chester v Buckingham Travel Ltd [1981] 1 All ER 386, [1981] 1 WLR 96.
14 Wilbraham v Livesey (1854) 18 Beav 206 at 210; Doe d Marquis of Bute v Guest (1846) 15 M & W 160.
15 Doe d Marquis of Bute v Guest (1846) 15 M & W 160; Brookes v Drysdale (1877) 3 CPD 52.
17 Brookes v Drysdale (1877) 3 CPD 52.
18 Doe d Ellis and Medwin v Sandham (1787) 1 Term Rep 705; see Medwin v Sandham (1789) 3 Swan 685.
(l) Third parties
HR A[1222]
The common law doctrine of privity of contract means that a person who is not a party to it cannot, as a general rule,
take the benefit of rights or be bound by obligations arising under it. By the Contracts (Rights of Third Parties) Act
19991, it is provided that a person not a party to a contract ('the third party') may enforce a term in the contract if the
contract expressly so provides, or the term purports to confer a benefit on him2. The benefit of the term may be
conferred upon the third party expressly or by the third party being referred to as a member of a class or as answering a
particular description3. Thus, where the landlord after an assignment of a lease subsequently agreed with the assignee
Page 256
that the latter's liability together with that of 'any previous tenant' was to be limited to the assets of the parternship of the
assignee, the original tenant could take advantage of the limitation on liability. The term 'any previous tenant' purported
to confer a benefit on the original tenant, albeit not expressly referring to him, and the expression sufficed as a particular
description to indentify the original tenant4. The right of the third party to enforce the term is subject to and must be in
accordance with the terms of the contract5. For the purpose of exercising his right to enforce a term of the contract,
there shall be available to the third party any remedy that would have been available to him in an action for breach of
contract if he had been a party to the contract (and the rules relating to damages, injunctions, specific performance and
other relief apply accordingly)6. Thus it would appear that a superior landlord will be able to enforce a restriction on
alienation contained within an underlease which expressly provides that the undertenant must not only obtain the
consent of his immediate landlord but also that of the superior landlord7.
HR A[1223]-[1245]
1 The Contracts (Rights of Thirds Parties) Act 1999 received assent on 11 November 1999. Although the Act came into force on that date
it does not apply, unless the contract otherwise expressly provides, to a contract entered into before the expiration of six months: the
Contracts (Rights of Third Parties) Act 1999, s 10(2).
2 Contracts (Rights of Third Parties) Act 1999, s 1(1).
3 Contracts (Rights of Third Parties) Act 1999, s 1(3)
4 Prudential Assurance Company Limited v Ayres and Grew [2007] EWHC 775, Ch D.
7 Cp Amsprop Trading Ltd v Harris Distribution Ltd [1997] 2 All ER 990, [1997] 1 WLR 1025, where it was held that the reference in the
underlease to the superior landlord did not entitle the superior landlord to enforce the covenant, not following Drive Yourself Hire Co
(London) Ltd v Strutt [1954] 1 QB 250, [1953] 2 All ER 1475, CA.
Page 257
Leases/4 Lease and counterpart
4 Lease and counterpart
(a) Execution of lease
HR A[1246]
The Law of Property (Miscellaneous Provisions) Act 1989 makes provision for the execution of deeds after 31 July
19901. There is no restriction as to the substances on which a deed may be written2. An instrument is not a deed unless
it makes it clear on its face that it is intended to be a deed by the person making it or, as the case may be, by the parties
to it, whether by describing itself as a deed or expressing itself to be executed and signed as a deed or otherwise3 and it
is validly executed by that person or, as the case may be, one or more of those parties4. In the case of individuals there
is no requirement that a seal is necessary for its valid execution5. An instrument shall not be taken to make it clear on its
face that it is intended to be a deed merely because it is executed under seal6.
HR A[1247]
1 Law of Property (Miscellaneous Provisions) Act 1989, s 1. See generally on the execution of deeds, the Land Registry Practice Guide
No 8 (September 2007).
2 LP(MP)A 1989, s 1(1)(a).
3 LP(MP)A 1989, s 1(2)(a).
4 LP(MP)A 1989, s 1(2)(b).
5 LP(MP)A 1989, s 1(1)(b).
6 LP (MP)A 1989, s 1(2A) (as inserted by art 8 of the Regulatory Reform (Execution of Deeds and Documents) Order 2005, SI 2005/1906
which was enacted on 23 June 2005 and came into force on 15 September 2005).
Execution of deed by individual
HR A[1248]
For an instrument to be validly executed as a deed by an individual, it must be signed by him (in the presence of two
attesting witnesses)1 and it must be delivered as a deed by or on behalf of the person executing it2. 'Signing' a deed
simply involves making one's mark on the instrument3. Attestation was legally unnecessary prior to 31 July 1990. Since
that date4, a deed is validly executed only if it is signed in the presence of a witness who attests the signature. A
document not signed by the signatory in the presence of the attesting witness is not a deed5. Failure to comply with the
Page 258
formality of attestation does not prevent a party into whose possession an apparently valid deed has come from alleging
that the signatory is estopped from relying on the absence of attestation in his presence6. An estoppel will not arise
where the party seeking to rely on the document is aware that the signatory's signature has not been properly
witnessed7. Where the signatures to a deed are not properly attested the deed may take effect in equity. Thus, where a
charge was signed but not validly witnessed, the charge was insufficient to pass a legal estate but it was capable of
operating as an acknowledgement of the chargor's indebtedness and created a valid equitable charge8. Attestation is not
necessary for a deed required or authorised to be made under the Seal of the County of Palentine of Lancaster, the Seal
of the Duchy of Lancaster or the Seal of the Duchy of Cornwall9; nor to the execution of the deed by a corporation10.
The landlord is not entitled to insist on witnessing by himself or his agent the execution of the counterpart by the
tenant11.
HR A[1249]
1 A party to a deed cannot be a witness; Seal v Claridge (1881) 7 QBD 516.
3 LP(MP)A 1989, s 1(4).
4 The coming into force of the SI of the LP(MP)A 1989.
5 Shah v Shah [2001] EWCA CIV 527, [2001] 3 WLR 31, CA.
6 Shah v Shah [2001] EWCA CIV 527, [2001] 3 WLR 31, CA.
7 Khan v Reham [2007] EWHC 439, Ch D.
8 Khan v Reham [2007] EWHC 439, Ch D.
9 LP(MP)A 1989, s 1(9).
10 LP(MP)A 1989, s 1(10).
11 Borradaile v Smart (1857) 5 WR 270.
Execution of deed by corporation/company
HR A[1250]
An instrument is validly executed by a corporation aggregate or a company as a deed for the purposes of s 1(2)(b) of the
Law of Property (Miscellaneous Provisions) Act 1989, if and only if (a) it is duly executed by the corporation; and (b) it
is delivered as a deed1. In favour of a purchaser, an instrument shall be deemed to have been duly executed by a
corporation aggregate if a seal purporting to be the corporation's seal purports to be affixed to the instrument in the
presence of and attested by (a) two members of the board of directors, council or other governing body of the
Page 259
corporation; or (b) one such member and the clerk, secretary or other permanent officer of the corporation or his
deputy2.
HR A[1251]
1 Law of Property Act 1925, s 74A(1) (in respect of corporations aggregate) (inserted by art 4 of the Regulatory Reform (Execution of
Deeds and Documents) Order 2005, SI 2005/1906) and s 36AA(1) of the Companies Act 1985 (in respect to companies) (inserted by art 6 of
the Regulatory Reform (Execution of Deeds and Documents) Order 2005). The provisions of the Companies Act 1985, s 36AA (as
modified) are repealed from a date to be appointed: Companies Act 2006, ss 1295, 1300(2) and Sch 16. See now Companies Act 2006, s
46(5).
2 Law of Property Act 1925, s 74(1) as substituted by Article 3 to the Regulatory Reform (Execution of Deeds and Documents) Order
2005, SI 2005/1906 which was enacted on 23 June 2005 and which came into force on 15 September 2005.
HR A[1252]
Where a solicitor, duly certificated notary public or licensed conveyancer, or an agent or employee of a solicitor, duly
certificated notary public or licensed conveyancer, in the course of or in connection with a transaction, purports to
deliver an instrument as a deed on behalf of a party to the instrument, it shall be conclusively presumed in favour of a
purchaser that he is authorised so to deliver the instrument1.
HR A[1253]
1 LP(MP)A 1989, s 1(5).
Presumption of due execution in favour of purchasers
HR A[1254]-[1260]
In favour of a purchaser, a document shall be deemed to have been duly executed by a company if it purports to be
signed by a director and the secretary of the company, or by two directors of the company1. In favour of a purchaser, an
instrument shall be deemed to have been duly executed by a corporation aggregate if a seal purporting to be the
corporation's seal purports to be affixed to the instrument in the presence of and attested by (a) two members of the
board of directors, council or other governing body of the corporation; or (b) one such member and the clerk, secretary
or other permanent officer of the corporation or his deputy2. Where the seal of the corporation has been affixed to a
deed and attested by persons, purporting to hold the offices referred to it shall be deemed to have been duly executed in
the presence of such persons3. Thus, a purchaser need not, if the deed has been executed in accordance with the
statutory requirements, inspect the articles of association or other authority to see how the seals ought to be affixed or to
satisfy himself that it has been properly affixed. The purchaser must, however, be in good faith. If he has actual
knowledge of an irregularity he cannot be said to be acting in good faith4. No duty rests upon the purchaser to
determine whether the affixing of the seal has been duly authorised by the minutes of the director, or that the secretary
or directors were properly approved if the seal appears to have been affixed in accordance with the articles of
Page 260
association or other authority for these are merely matters of internal management of the company with which a
purchaser has no concern5. The purchaser is concerned only with inspecting the articles of association or other authority
for ascertaining how the seal should be affixed and to see it has been affixed.
HR A[1261]
1 Companies Act 1985, s 36A(6) as modified by art 5 of the Regulatory Reform (Execution of Deeds and Documents) Order 2005, SI
2005/1906. The modification removed in favour of purchasers the irrebutable presumption contained within s 36A(6) of delivery of deeds
upon execution, as to which see HR A[1264]. The provisions of the Companies Act 1985, s 36A are replealed from a date to be appointed:
Companies Act 2006, ss 1295, 1300(2) and Sch 16. See now Companies Act 2006, s 44 where the provisions of s 36A are restated.
2 Section 74(1) of the Law of Property Act 1925, as amended by art 3 of the Regulatory Reform (Execution of Deeds and Documents)
Order 2005, SI 2005/1906.
3 LPA 1925, s 74(1).
4 Peffer v Rigg [1977] 1 WLR 285 at 294; Lord Waring v London and Manchester Assurance Co Ltd [1935] Ch 310 at 318.
5 Re Fireproof Doors Ltd, Umney v Fireproof Doors Ltd [1916] 2 Ch 142; Dey v Pullinger Engineering Co [1921] 1 KB 77; Parker v
Judkin [1931] 1 Ch 475.
HR A[1262]
A party who does not execute a deed will, nevertheless, be bound by it in equity if he takes the benefit of it1.
HR A[1263]
1 Webb v Spicer (1849) 13 QB 886.
(b) Delivery
HR A[1264]
Delivery does not mean physical delivery to the party1. Delivery occurs where the deed is signed with the intention of
being bound by its contents, albeit conditionally. Thus, a lease was held to have been delivered conditionally, as an
escrow, by a company although the counterpart was sent to the company's solicitors, and not exchanged for the lease2.
In the case of a lease the deed will not normally be treated as delivered unless and until the counterpart has been
exchanged3. As delivery of a deed can be effected without the original ever being given, the physical delivery of a mere
copy is sufficient4. The provisons of the Companies Act 1985 provided for an irrebutable presumption of delivery of a
deed executed by a company in favour of purchasers, where the instrument made it clear on its face that it was intended
by the person or persons making it to be a deed; it was deemed to have been delivered upon its being executed5. With
effect from 15 September 2005, an instrument executed by a corporation aggregate or a company as a deed shall be
Page 261
presumed to be delivered upon its being executed, unless a contrary intention is proved6. The effect is to create a
rebuttable presumption of delivery upon execution7.
HR A[1265]
1 Xenos v Wickham (1866) LR 2 HL 296 at 312 per Lord Blackburn:
'...[a] deed is binding on the obligor before it comes into the custody of the oblige, nay, before he
even knows of the it, though, of course, if he has not previoiusly assented to the making of the
deed, the oblige may refuse it.'
2 Vincent v Premo Enterprises (Voucher Sales) Ltd [1969] 2 QB 609, CA.

3 Longman v Viscount Chelsea (1989) 58 P & CR 189, CA. This is certainly the case with respect to
execution by individuals: Longman v Viscount Chelsea. In Bolton Metropolitan Borough Council v
Torkington [2003] EWCA Civ 1634, [2004] 2 WLR 426 this was held equally to be the case with regard
to execution by corporations unaffected by s 36A of the Companies Act 1985. As to Section 36A(6) see
fn 3.
4 Jones v Jones 9/10/06 Ch D.
5 Companies Act 1985, s 36A(6). This section (inserted by s 130(2) of the Companies Act 1989 as
from 31 July 1990) provided that a document executed by a company which made it clear on its face that
it was intended by the person or persons making it to be a deed had effect, upon delivery, as a deed; and
it was to be presumed, unless a contrary intention was proved, to be delivered upon its being so executed.
Section 36A(6) has been amended by Article 5 of the Regulatory Reform (Execution of Deeds and
Documents) Order 2005, SI 2005/1906, with respect to documents executed after 15 September 2005.
6 Law of Property Act 1925, s 74A(2) (as inserted by Article 4 of the Regulatory Reform (Execution
of Deeds and Documents) Order 2005, SI 2005/1906) and s 36AA(2) of the Companies Act 1985
(inserted by Article 6 of the Regulatory Reform (Execution of Deeds and Documents) Order 2005).
Section 74A(2) of the Law of Property Act 1925 provides a rebuttable presumption that an instrument is
delivered on being executed, and thereby makes the provision for corporations analogous to that
applicable to companies under the Companies Act 1985. The relevant provision in the 1985 Act is
re-enacted with modifications by Article 6.
7 In Bolton Metropolitan Borough Council v Torkington [2003] EWCA Civ 1634, [2004] 2 WLR 426,
the Court of Appeal had to consider the extent to which execution by a corporation aggregate (ie
unaffected by s 36A(6) of the Companies Act 1985) created a rebuttable presumpiotn of delivery. The
court first considered s 74(1) of the Law of Property Act 1925 which, prior to its amendment by the
Regulatory Reform (Execution of Deeds and Documents) Order 2005, SI 2005/1906, provided:
'In favour of a purchaser a deed shall be deemed to have been duly executed by a corporation
aggregate if its seal be affixed thereto in the presence of and attested by its clerk, secretary or
other permanent officer or his deputy, and a member of the board of directors, council or other
governing body of the corporation, and where a seal purporting to be the seal of a corporation has
been affixed to a deed, attested by persons purporting to be persons holding such offices as
aforesaid, the deed shall be deemed to have been executed in accordance with the requirements of
this section, and to have taken effect accordingly.'
It was held that this section was not to be interpreted as meaning that a document complying with its
Page 262
requirements was to be deemed to have been duly delivered. The same clearly holds true of s 74A(1) and
(2) of the 1925 Act as inserted by Article 4 of the Regulatory Reform (Execution of Deeds and
Documents) Order 2005.
The court made reference to Wills J in Mayor, Constables and Company of the Merchants of the Staple v
Bank of England (1887) 21 QBD 160 at 165-6 who said:
'The affixing the seal is not enough; there must be delivery of the deed also...Prima facie, putting
the seal imports delivery; yet, if it be intended otherwise, it is not so....'
Peter Gibson LJ expressed the view that at common law to describe the sealing by a corporation as
giving rise to a rebuttable presumption was going too far implying, as it did, that the burden of proof was
on the corporation affixing the seal. In the Bank of England case Wills J only says that prima facie
putting the seal imports delivery and that a contrary intention by the corporation may be proved. In
Longman v Viscount Chelsea, Nourse LJ rejected any presumption imposing a burden of proof in the
case of an individual who signed and sealed a lease, saying that the system would be unworkable if that
were so. However, on the facts of Bolton Metropolitan Borough Council v Torkington, it was held that it
was unnecessary to decide whether the sealing of an instrument by a corporation unaffected by s 36A(6)
of the Companies Act 1985 created a rebuttable presumption of delivery in the sense of casting a burden
of proof on the corporation. The parties' negotiations had been 'subject to contract' and accordingly,
following Longman, the signing and sealing of the lease in accordance with the normal conveyancing
practice in anticipation of exchange did not disclose an intention to deliver the deed as an escrow or
otherwise.
HR A[1266]
It has been said that a deed may be delivered in one of three ways1:
(a) by being delivered as an unconditional deed, being irrevocable and taking immediate effect;
(b) by being delivered conditionally, that is, as an escrow, but not taking effect unless and until the
conditions of the escrow are fulfilled;
(c) by being handed to an agent of the maker with instructions to deal with in a certain way in a certain
event, being revocable and of no effect unless and until it is so dealt with whereupon it is delivered and
takes effect2.
HR A[1267]
1 Longman v Viscount Chelsea (1989) 58 P & CR 189, CA.
2 Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961] Ch 88; on appeal [1961] Ch 375, CA.
(c) Delivery as an escrow
HR A[1268]
Page 263
Whether a deed was in fact executed as an escrow is a matter of intention1. The burden of establishing that the deed was
delivered as and escrow is on the party so alleging; in the absence of evidence of the intention with which the deed was
delivered it is, therefore, presumed to have been delivered unconditionally2. It does not appear to be necessary that the
other party to the deed should concur to the delivery in escrow3. The intention of the maker that the instrument is being
delivered in escrow must be made clear, at least where the instrument is physically handed to the other party, and the
court may judge the maker's true intention in the light of what he did and said at the time of delivery4. In the absence of
direct evidence whether or not a deed of conveyance was delivered as an escrow, the fact that only part of the purchase
price has been paid at the time of delivery justifies the inference that the deed had been delivered as an escrow pending
payment of the balance5.
HR A[1269]
1 Longman v Viscount Chelsea (1989) 58 P & CR 189; Rowley v Rowley (1854) Kay 242.
2 Glessing v Green [1975] 2 All ER 696 CA; Bentray Investments Ltd v Venner Time Switches Ltd [1985] 1 EGLR 39.
3 Bentray Investments Ltd v Venner Time Switches Ltd [1985] 1 EGLR 39.
4 Longman v Viscount Chelsea (1989) 58 P & CR 189.
5. Bank of Scotland plc v King [2007] EWHC 2747 (Ch), [2007] All ER (D) 376 (Nov). In that case a bank claimed that it had a legal
mortgage over the vendor's property, having advanced monies to the purchaser to complete the purchase. A transfer had been executed by
the vendors but only part of the purchase monies had been remitted by the purchaser to the vendor's solicitor. The judge in fact held that the
document had been delivered as a deed and not as an escrow. He held that in the absence of anything further he would, in light of the fact
that only part of the purchase price had been remitted, have had little hesitation in coming to the conclusion that the deed had been delivered
as an escrow. However, there was much more on the facts of that case to rebut that inference.
HR A[1270]-[1280]
A deed which is executed and delivered as an escrow cannot take effect as a deed pending the performance of the
condition subject to which it was so delivered; but1, once a deed is delivered as an escrow it may not be recalled and
upon the performance of the relevant condition the deed becomes binding2.
HR A[1281]
1 Longman v Viscount Chelsea (1989) 58 P & CR 189.
2 Beesly v Hallwood Estates Ltd [1961] Ch 105; Vincent v Premo Enterprises (Voucher Sales) Ltd [1969] 2 QB 609; D'Silva v Lister
House Developments Ltd [1971] Ch 17; Kingston v Ambrian Investments Co Ltd [1975] 1 All ER 120.
HR A[1282]
On performance of the relevant conditions the deed is deemed to have been executed retrospectively to the date of
Page 264
delivery as an escrow and the legal estate (if applicable) passed at that date1. However, on fulfilment of the condition
subject to which it was delivered as an escrow, a deed is not taken to relate back to the date of delivery for all purposes,
but only for such purposes as are necessary to give efficacy to the transaction2.
HR A[1283]
1 Alan Estates Ltd v WG Stores Ltd [1982] Ch 511, CA; Foundling Hospital v Crane [1911] 2 KB 367.
2 Security Trust Co v Royal Bank of Canada [1976] AC 503, PC.
HR A[1284]
Thus, the fact that a grantor has died before the condition of an escrow is fulfilled does not entail the consequence that
the disposition fails. If and when the condition is fulfilled the doctrine of relation back will save it, but notwithstanding
the relation back for that limited purpose the grantee is not entitled to the rents of the property during the period of
suspense or to lease it or to serve notice to quit1.
HR A[1285]
1 Security Trust Co v Royal Bank of Canada [1976] AC 503 at 517; Alan Estates Ltd v W G Stores Ltd [1982] Ch 511, CA. Thompson v
McCullough [1947] KB 447. If the grantee has purported to mortgage the property prior to the fulfilment of the condition, the mortgage
might be 'fed' later when title is acquired: Alan Estates Ltd v WG Stores Ltd [1982] Ch 511 at 898, per Denning MR.
HR A[1286]
The condition of an escrow is not free from any time limit. The condition must be fulfilled within a reasonable time. If
the conditions are not fulfilled at all, or are not fulfilled within a reasonable time the maker of the escrow can renounce
it1.
HR A[1287]
1 Alan Estates Ltd v W G Stores Ltd [1982] Ch 511, CA; Cp Kingston v Ambrian Investment Co Ltd [1975] 1 WLR 161 CA; Glessing v
Green [1975] 1 WLR 863, CA.
HR A[1288]
The execution of the lease by the landlord is a condition precedent to the tenant's liability under the covenants1 unless
the circumstances show that the tenant has assumed liability2.
Page 265
HR A[1289]
1 Cardwell v Lucas (1836) 2 M & W 111; Toler v Slater (1867) LR 3 QB 42; Cooch v Goodman (1842) 2 QB 580 at 598.
2 Babington v O'Connor (1887) 20 LR Ir 246.
(d) Alteration of deeds
HR A[1290]
An alteration in a deed is presumed to have been made before execution1. Alterations made before execution are part of
the instrument although they add to or change the provisions of the deed2; and similarly if the alteration is added after
signature, but before sealing and delivery3. An alteration made in the term before execution, as from a yearly tenancy to
a term of one year, will be treated as expunging covenants applicable only to the cancelled tenancy, unless perhaps, in
the event of the tenancy continuing beyond one year4.
HR A[1291]
1 Doc d Tatum v Catomore (1851) 16 QB 745; Re Spollon & Long's Contract [1936] Ch 713.
2 Griffin v Stanhope (1617) Cro Jac 454, 456; Goodright d Nicholls v Mark (1815) 4 M & S 30; cf Frogley v Lovelace (Earl) (1859) Johns
333.
3 Lyburn v Warrington (1816) 1 Stark 162: cf Frogley v Lovelace (Earl) (1859) Johns 333.
4 Strickland v Maxwell (1834) 2 Cr & M 539.
HR A[1292]
A material alteration made in a deed after its execution without the consent of the parties avoids the deed to the extent
that the covenants contained in it cannot be enforced by a party who made the alteration1. An alteration is material if it
affects the very nature and character of the instrument concerned2. Thus, an alteration to a guarantee by affixing seals to
it so as to give it the appearance of a deed is a material alteration, for the addition of the seals gives a different legal
character to the document and changes the nature of the parties' relations towards it and the remedies upon it3. To take
advantage of the rule, the would-be avoider should be able to demonstrate that the alteration is one which, assuming the
parties act in accordance with the other terms of the contract, is potentially prejudicial to his legal rights or obligations
under the instrument4. It is unnecessary to show that prejudice had in fact occurred5. The rule remains a salutary one
aimed at preventing fraud and founded upon inference of fraudulent or improper motive at the time of the alteration6.
Thus, an insertion in a deed of guarantee which had been left blank at the time of signature by the guarantor, who
resided abroad, of the name, address, telex and fax numbers of a nominated third party as agent of the guarantor for the
purposes of service in England (so as to avoid the potential difficulties of service out of the jurisdiction) was not a
material alteration, for the obligations of the guarantor under the instrument were in no way adversely affected, for
Page 266
although the service provisions covered not only proceedings, but also any notice, demand or other communication
under the guarantee, the alteration did not serve to alter or accelerate the guarantor's liability to make payment under
and in accordance with, the guarantee7. The correction of an obvious error is not a material variation, eg filling in the
date of the deed or the names of the occupiers of the property conveyed8. An addition which expresses only what the
law would imply is not necessarily treated as an alteration9. A material alteration effected with the consent of the parties
will not avoid the deed10. The deliberate back dating of the date upon which the deed was executed does not render the
lease void so as to prevent the landlord relying upon it in order to claim possession. Albiet the insertion of the false date
involved the parties in illegality, the date upon which the deed was in fact executed as opposed to the date which it bore
was not relevant to the landlord's claim for possession11.
HR A[1293]-[1301]
1 Pigot's Case [1614] 11 Co Rep 26B, where the matter was stated as follows:
When any deed is altered in a point material, by the plaintiff himself, or by any stranger, without
the privity of the obligee, be it by interlineation, addition, raising, or by drawing of a pen through
a line, or through the midst of any material word, that the deed thereby becomes void ... so if the
obligee himself alters the deed by any of the said ways, although it is in words not material, yet
the deed is void: but if a stranger, without his privity, alters the deed by any of the said ways in
any point not material, it shall not void the deed: Ellesmere Brewery Co v Cooper [1896] 1 QB
75.
2 Raiffeisen Zentralbank Osterreich AG v Crossseas Shipping Ltd [2000] 3 All ER 274, [2000] 1
WLR 1135, CA.
3 Davidson v Cooper (1844) 13 M & W 343.
WLR 1135, CA.
WLR 1135, CA.
WLR 1135, CA.
WLR 1135, CA.
8 Keane v Smallbone (1855) l17 CB 179; Aldous v Cornwell (1868) LR 3 QB 573; Re Howgate and
Osborn's Contract [1902] 1 Ch 451. The name 'William Gray' had been erased after execution, and the
words 'Edward Thomas Gray' inserted, and parol evidence was allowed to show that the name 'William
Gray' had been inserted in error and afterwards corrected.
9 Doe d Waters v Houghton (1827) 1 Man & Ry KB 208 (addition of 'house' and 'building' after
'farm').
10 Rudd v Bowles [1912] 2 Ch 60 (insertion of date for operation of demise); Cowne v Garment
(1834) 1 Bing NC 318 (alteration of commencement of term by a subsequent memorandum).
11 Thane Investments Ltd v Tomlinson [2006] EWHC 1182, HCt. A distinction is to be made between
a forgery the effect of which is to corrupt the whole instrument (such as a false signature), and forgery in
the more technical sense of making an unauthorised change to an instrument (such as changing the text
to correct a mistake): see Lombard Finance Ltd v Brookplan Trading Ltd [1991] 1 WLR 271, CA. In that
case, somebody had corrected an error of description in a guarantee after it had been executed and
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without the consent of the guarantor in a manner which sought to give the impression that the alteration
had been initialled by the guarantor. The issue before the Court of Appeal (Dillon LJ and Thorpe J) was
whether the alteration had the effect of avoiding the original instrument. Applying the judgment of
Devlin J in Kwei Tek Chao v British Traders & Shippers Ltd [1954] 2 QB 459, [1954] 2 WLR 365 (a
case involving the insertion of an incorrect date in a bill of lading), Dillon LJ held (at p 277) that: "In the
present case the alteration does not go to the whole or to the essence of the instrument. It is an immaterial
alteration. Therefore I do not see why the forgery should be treated as corrupting the whole of the
instrument so as to destroy it."
HR A[1302]
A lease under which the lessee has entered, but which has been rendered void by a material alteration, may be used to
show the terms of his occupation1.
HR A[1303]
1 Hutchins v Scott (1837) 2 M & W 809.
(e) Lease and counterpart
HR A[1304]
In order that each party may have access to the actual words of the lease it is usual for two copies to be executed1. If
each copy is executed by both lessor and lessee, the lease is said to be executed in duplicate, and each part is as
efficacious as the other2; and this is frequently done in the case of a lease otherwise than by deed. Where the lease is by
deed it is usual for one copy, called the lease, to be executed by the lessor alone and handed to the lessee; and for the
other, called the counterpart, to be executed by the lessee alone and handed to the lessor3. The counterpart thus
executed by the lessee is primary evidence of the lease as against the lessee and persons claiming through him4, and as
against strangers5; and as against all persons it is presumptive evidence of the execution of a lease6. If no counterpart
has been executed, or if the counterpart cannot be found, the lessor is entitled to inspect and take a copy of the lease in
the possession of the lessee7. The lease is regarded as the principal instrument, and, in case of discrepancy between the
lease and the counterpart, the provisions of the lease prevail, provided the lease contains no inconsistencies in itself; if it
is inconsistent, it can be corrected by reference to the counterpart8.
HR A[1305]
1 See Law of Property (Miscellaneous Provisions) Act 1989, s 1 (see para HR A[1246]) for the requirements for the execution of a valid
deed after 27 September 1989.
2 See YB 38 Hen 6, 25 pl 1; Littleton's Tenures, s 370; Co Litt 229 a; Shep Touch 52 at 53; Pearse v Morrice (1832) 3 B & Ad 396;
Burchell v Clark (1876) 2 CPD 88 at 96, CA; Colling v Treweek (1827) 6 B & C 394 at 398.
Page 268
3 During the continuance of the term the lease belongs to the lessee, and the counterpart to the lessor: Hall v Ball (1841) 3 Man & G 242
at 253. After the term has come to an end, whether by effluxion of time, or surrender, or forfeiture, the lessee is entitled to retain the lease if
it contains covenants by the lessor which have not been performed (Hall v Ball (1841) 3 Man & G 242 at 253); and also, apparently, whether
there are such covenants or not: Elworthy v Sandford (1864) 3 H & C 330; Knight v Williams [1901] 1 Ch 256.
4 Doe d West v Davis (1806) 7 East 363 at 364; Pearse v Morrice (1832) 3 B & Ad 396; see Munn v Godbold (1825) 3 Bing 292 at 294.
Provided the counterpart is properly stamped, the lessee cannot object that the lease is not properly stamped: Paul v Meek (1828) 2 Y & J
116.
5 Doe d Earl Egremont v Pulman (1842) 3 QB 622; Homes v Pearce (1858) 1 F & F 283.
6 Hughes v Clark (1851) 10 CB 905; Houghton v Koenig (1856) 18 CB 235; see Burleigh v Stibbs (1793) 5 Term Rep 465.
7 Doe d ----- v Slight (1832) 1 Dowl 163; Elworthy v Sandford (1864) 34 LJ Ex 42 at 44, per Martin B. Formerly this was not allowed
(Woodcock v Worthington (1827) 2 Y & J 4; Lord Portmore v Goring (1827) 4 Bing 152). Similarly, an occupier against whom an action of
ejectment for forfeiture is brought, and who has no copy of the lease, is entitled to an order for inspection of the counterpart and to take a
copy: Doe d Child v Roe (1852) 1 E & B 279, where, however, the report treats the lessors as holding the lease.
8 Shep Touch 53; Burchell v Clark (1876) 2 CPD 88 at 93, 97, CA. Matthews v Smallwood [1910] 1 Ch 777; Trusthouse Forte Albany
Hotels Ltd v Daejan Investments Ltd (No 2) [1989] 2 EGLR 113, CA. Where a lessee has been in receipt of rent from undertenants, and the
counterpart is produced, this may be admitted in evidence without accounting for the absence of the lease: Doe d Manton v Austin (1832) 2
Moo & S 107.
(f) When counterpart essential
HR A[1306]
Powers of leasing, whether arising under statute or contained in a settlement, usually require a counterpart of the lease
to be executed by the lessee. In the case of statutory powers it is generally also provided that the execution of the lease
shall be sufficient evidence of the execution of the counterpart1; where the power does not contain such provision, then,
since the execution of the counterpart is essential to the validity of the lease, a memorandum of such execution should
be indorsed on to lease and signed by the lessor2. The lease and the counterpart need not be executed at the same time,
but must be executed within a period which may fairly be considered as comprehended in the transaction3. It is normal
practice to complete the grant of a lease by exchange of the lease and counterpart4.
HR A[1307]
1 See Law of Property Act 1925, s 99(8); Settled Land Act 1925, s 42(2); Universities and College Estates Act 1925, s 7(2). As to powers
of leasing, see 462ff (mortgages); 488ff (settled land) and 547 (Universities and Colleges).
2 Sugden on Powers (8th edn) p 826.
3 Fryer v Coombs (1840) 11 Ad & El 403.
4 D'Silva v Lister House Developments [1971] Ch 17; Longman v Viscount Chelsea (1989) 58 P & CR 189.
Page 269
(g) Registration with superior landlords
HR A[1308]
Leases for a long term frequently contain a covenant by the lessee, to give notice to the lessor or his solicitor of any
assignment or underlease of the demised premises or any part thereof, with particulars of the assignee or underlessee,
and to produce the instrument of assignment or underlease and pay a fee for registration of it1; or the covenant may be
so framed as to apply to assignments only.
HR A[1309]
1 The covenant is not a 'usual covenant' (Brookes v Drysdale (1877) 3 CPD 52; and see [1220] note 17). But there is no objection to it in
regard to validity. It is not affected by the provision of the Law of Property Act 1925, s 144, with reference to exacting a fine for licence to
assign. As to the construction of a covenant held applicable to all underleases, see Portman v J Lyons & Co Ltd [1937] Ch 584, [1936] 3 All
ER 819.
(h) Land Registration Act 2002
HR A[1310]
The new Act came into force on 13 October 20031. All of the existing land registration law has been replealed2.
Registration of title at the Land Registry is compulsory in all areas3. The registration of individual titles is, however,
provided for only after certain specified transactions4.
HR A[1311]
1 The Land Registration Act 2002 received Royal Assent on 26 February 2002 and came into force with effect from 13 October 2003:
Land Registration Act 2002 (Commencement No 4) Order 2003, SI 2003/1725 (with the exception of s 98(1) and Sch 6, paras 5(4) and (5)
of the Act).
2 Subject to transitional provisions: LRA 2002, Sch 12.
3 The Land Registration Order 1989, SI 1989/1347, which came into force on 1 January 1990, extended compulsory registration to all
remaining districts in England and Wales by 1 December 1990.
4 LRA 2002, s 4. This section provides for the circumstances in which an unregistered estate must be registered. It reflects and expands
the provisions of the Land Registration Act 1925, s 123 (as substituted by the LRA 1997, s 1 effective from 1 April 1998, SI 1997/3036).
Section 4 may be expanded by order: LRA 2002, s 5.
(i) First registration of leasehold interests1

Page 270
HR A[1312]
The following leasehold interests must be registered2:
(a) the grant out of a qualifying estate3 of a term of years absolute not being less than seven years4
from the delivery date of the grant5. The grant must be for valua ble or other consideration or by way of
gift6 or in pursuance to a court order7;
(b) the grant out of a qualifying estate of an estate in land for a term of years absolute to take effect in
possession after the end of the period of three months beginning with the date of the grant8;
(c) the grant of a lease in pursuance of Part 5 of the Housing Act 1985 (the right to buy) out of an
unregistered legal estate in the land9.
(d) the grant of a lease out of an unregistered legal estate in land where s 171A of the Housing Act
1985 applies (disposal by landlord which leads to a person no longer being a secure tenant10);
(e) every assignment for valuable or other consideration, by way of gift11 or pursuant to a court order,
of leasehold (unregistered) land held for a term of years absolute having not less than seven years to run
from the date of the assignment12; and
(f) any transfer of unregistered land effected by an assent (including a vesting assent13) which is a
transfer of a term of years absolute which on the date of transfer has more than seven years to run14.
An assignment does not include an assignment of a mortgage term or an assignment or surrender of a lease to the owner
of the immediate reversion where the term is to merge in the reversion15.
HR A[1313]
1 We are concerned here with the requirement for first registration of grants, assignments or dispositions out of unregistered land. As to
dispositions of registered land, see para HR A[1316].
2 As to dispositions made prior to 13 October 2003 and not required to be registered under s 123 of the Land Registration Act 1925 but
which would require registration under the LRA 2002, see the Land Registration Act 2002 (Transitional Provisions) Order 2003 (SI
2003/1953), art 23. A lessee holding under an unregistered lease may voluntarily register his title where he has more than seven years
unexpired: LRA 2002, s 3(3).
3 A 'qualifying estate' is an unregistered legal estate which is (a) a freehold estate in land or (b) a leasehold estate in land for a term which,
at the time of the transfer, grant or creation, has more than seven years to run: LRA 2002, s 4(2).
4 This is a change from the previous requirement that only leases granted for more than 21 years were to be registered.
5 LRA 2002, s 4(1)(c)(i). The grant of a mortgage by way of lease or sub-demise does not fall within these provisions: LRA 2002, s 4(5).
The Land Registration Act 2002 contains provisions for aggregating the terms to determine whether the term (treated by the statute as one
continuous term) exceeds seven years: s 3(7). The effect of s 3(7) is that where a lease in possession and a reversionary lease to take effect in
possession upon or at any time within one month of the expiration of the first lease, are so held that the interest under both leases belongs to
the same person in the same right, such leases, so far as they relate to land comprised in both instruments, are deemed to create one
continuous term.
6 As to the meaning of which see LRA 2002, s 4(7).

Page 271
7 Section 4(1)(c)(ii).
8 LRA 2002, s 4(1)(d). This is intended to catch reversionary leases. The reversionary lease will not be an overriding interest under Sch 1,
para 1 (a leasehold estate in land granted for a term not exceeding seven years from the date of the grant, except for a lease the grant of
which falls within s 4(1)(d), (e) or (f)) or Sch 3, para 1 (a leasehold estate in land granted for a term not exceeding seven years from the date
of the grant, except for (i) a lease the grant of which falls within s 4(1)(d), (e) or (f), or (ii) a lease the grant of which constitutes a registrable
disposition).
9 LRA 2002, s 4(1)(e).
10 LRA 2002, s 4(1)(f).
11 As to the meaning of which see LRA 2002, s 4(7).
12 LRA 2002, s 4(1)(a)(i) and (2)(b).
13 Which has the same meaning as in the Settled Land Act 1925: LRA 2002, s 4(8).
14 LRA 2002, s 4(1)(a)(ii) and (2)(b).
15 LRA 2002, s 4(4).
(ii) Application for first registration
HR A[1314]
An application to register the title1 to a leasehold interest in land must be made by the responsible estate owner or his
successor in title2. The 'responsible estate owner' is the transferee or grantee of the estate which is transferred or
granted3. The application for registration must be made within two months beginning with the date on which the
relevant event occurs, or such longer period as the registrar may provide4. If the requirement of registration is not
complied with, the transfer, grant or creation becomes void as regards the transfer, grant or creation of a legal estate5.
However, it is provided that the ineffective grant takes effect as a contract to grant the lease6. Upon a failure to register
an assignment of a registrable lease the legal estate will revert to the assignor who will hold it on bare trust for the
assignee7.
HR A[1315]
1 As to the classes of title and the effect of first registration of leasehold estates, see LRA 2002, ss 10 and 12.
2 LRA 2002, s 6(1).
3 LRA 2002, s 6(3).
4 LRA 2002, s 6(4). The extension of time can be retrospective: s 7(3).

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5 LRA 2002, s 7(1).
6 LRA 2002, s 7(2)(b). This provision is disapplied if an extension of time for registration is granted under LRA 2002, s 6(5): s 7(3).
There are provisions for the grantee to indemnify the grantor with respect to costs of the retransfer of the legal estate: s 8.
7 LRA 2002, s 7(2)(a). This provision is disapplied if an extension of time for registration is granted under LRA 2002, s 6(5): s 7(3).
There are provisions for the assignee to indemnify the assignor with respect to costs of the retransfer of the legal estate: LRA 2002, s 8.
(iii) Dispositions of registered leases
HR A[1316]
An assignment of a registered lease must be completed by registration1. Where the registered estate is an estate in land
the following dispositions are required to be completed by registration:
(a) the grant of a term of years absolute for a term of more than seven years from the date of grant2;
(b) the grant of a term of years absolute to take effect in possession after the end of the period of three
months beginning with the date of grant3;
(c) the grant of a term of years absolute in which the right to possession is discontinuous4;
(d) the grant of a term of years absolute in pursuance to Part 5 of the Housing Act 1985 (the right to
buy)5; and
(e) the grant of a term of years absolute in circumstances where s 171A of the Housing Act 1985
applies (disposal by a landlord which leads to a person no longer being a secure tenant)6.
Where the registered estate is a franchise or manor, the grant of a lease must be completed by registration7.
HR A[1317]
1 LRA 2002, s 27(2)(a). The provisions of s 27 apply to dispositions by operation of law save those specified in s 27(5).
2 LRA 2002, s 27(2)(i).
3 LRA 2002, s 27(2)(ii).
4 LRA 2002, s 27(2)(iii).
5 LRA 2002, s 27(2)(iv).
6 LRA 2002, s 27(2)(v).
7 LRA 2002, s 27(2)(c).
(i) Overriding interests

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(i) Pre Land Registration Act 2002
HR A[1318]
A lease for a term not exceeding 21 years, granted at a rent without taking a fine, was an overriding interest1. However,
a 'lease' for this purpose did not comprehend an agreement not itself creating, and not effective to create, a term of
years, but only operating at best to give a right to specific performance of a contract to grant a lease2. Such an
agreement should be protected by lodging a caution3. A non-registrable lease which took effect as an overriding interest
operated as if it were a registered disposition immediately on being granted4. The lessee thus acquired a legal estate at
once. The lease took effect subject to incumbrances and entries on the lessor's title at the date of its creation and to
overriding interests then affecting it5.
HR A[1319]
1 LRA 1925, s 70(1)(k). The LRA 2002 replicates this in respect of leases for terms not exceeding seven years: Sch 3, para 1.
2 City Permanent Building Society v Miller [1952] Ch 840, [1952] 2 All ER 621, where it was held that the use of the word 'granted' in the
Land Registration Act 1925, s 70(1)(k) provided a context sufficient to exclude the expanded definition of the word 'lease' in LRA 1925, s
3(x).
3 LRA 1925, s 59. If the lessee was in occupation the agreement was protected as an overriding interest being a right of the person in
actual occupation: LRA 1925, s 70(1)(g). The LRA 2002 retains the concept of overriding interests: Sch 3, para 2.
4 LRA 1925, s 19(2).
5 LRA 1925, s 20(1); Freer v Unwins Ltd [1976] Ch 288.
(ii) Post Land Registration Act 2002: on first registration
[1320]
A lease granted for a term not exceeding three years from the date of grant takes effect as an overriding interest1. As
under the pre-2002 legislation, an agreement for lease unsupported by occupation2 will not be an overriding interest as
the term must be one which is 'granted' and this implies the actual creation of a term of years3. A lease which was an
overriding interest under s 70(1)(k) of the Land Registration Act 1925 remains an overriding interest4.
[1321]
1 LRA 2002, Sch 1, para 1. This does not include reversionary leases taking effect in possession more than three months after the date of
grant (ie leases within s 4(1)(d)) nor those within s 4(1)(e) and (f), as to which see para HR A[1312] above).
Page 274
2 If supported by occupation the interest will be overriding under LRA 2002, Sch 1, para 2.
3 City Permanent Building Society v Miller [1952] Ch 840, [1952] 2 All ER 621.
4 LRA 2002, Sch 12, para 12.
(iii) Post Land Registration Act 2002: on registered disposition
[1322]
A leasehold estate in land granted for a term not exceeding seven years from the date of grant overrides a registered
disposition1.
[1323]-[1341]
1 This does not apply to a lease which falls within s 4(1)(d), (e) or (f), nor does it apply a lease the grant of which constitutes a registered
disposition: LRA 2002, Sch 3, para 1.
(j) Cost of lease
HR A[1342]
The former custom for the lessee to pay the lessor's costs as well as his own1 has been excluded by statute and now,
unless the parties agree otherwise in writing, neither is under any obligation to pay the whole or any part of the other
party's solicitor's costs of the lease2. If the lessor requires a counterpart, he pays the costs of this himself3, unless the
lessee has agreed to pay the costs of both lease and counterpart4. Where the parties contract out of the statute and the
lessee agrees to pay the lessor's costs in accordance with the former custom the costs for which he will be liable will be
those which are properly incident to the preparation and execution of the lease by the lessor (including fees of
conveyancing counsel when properly employed5, and of surveyors in respect of the preparation of a plan to be placed
on the lease6) but not the lessor's costs of an agreement or of preliminary negotiations, or of any matters antecedent to
instructions for the lease, such as, in the case of a mining lease, the fees of a mining expert who has been consulted on
behalf of the intending lessor7, or in other leases, the fees of surveyors incurred by the lessor in negotiating the lease8.
Even where the lessee is liable for the lessor's costs the latter cannot in the absence of express agreement, charge against
the lessee the costs of third parties whose concurrence is necessary for the granting of the lease8. But under a covenant
by the lessor to renew the lease at the cost of the lessee at a rent to be determined by a reference to arbitration, the lessee
must pay the costs of the reference and award9.
HR A[1343]
1 Grissell v Robinson (1836) 3 Bing NC 10 at 15; Baker v Meryweather (1849) 2 Car & Kir 737; Re Gray [1901] 1 Ch 239 at 243. The
Page 275
custom that the tenant should pay costs did not extend to a tenancy agreement for less than three years. In the absence of special agreement
each party to such an agreement always had to pay his own costs, though it was a common practice for the tenant to pay (Leach v Bevan
(1904) Times, 6 February; Elton v Simpson [1904] LS Gaz R 193). For the former custom that the lessee pay the lessor's costs: see Lewis &
Peat Ltd v Regis Properties Co Ltd [1970] EGD 481.
2 Costs of Leases Act 1958, s 1(1). In this Act 'lease' includes an underlease and an agreement for a lease, underlease, tenancy or
subtenancy and 'costs' include fees, charges, disbursements (including stamp duty), expenses and remuneration (CLA 1958, s 2). The Costs
of Leases Act 1958 is repealed as to Northern Ireland by the Solicitors (Northern Ireland) Order 1976, SI 1976/582. The costs of an
agreement include the costs of an inventory of fixtures properly appended to it: Re Thomas (1844) 8 Beav 145.
3 Re Negus [1895] 1 Ch 73 at 81; Re Gray [1901] 1 Ch 239 at 244; see Jennings v Major (1837) 8 C & P 61. Where the scale fee applies,
a sum in respect of the costs of the counterpart must be deducted from the payment to the lessor's solicitor: Re Negus [1895] 1 Ch 73 at 81.
4 Re Newman (1867) 2 Ch App 707; and see too as to taxation of the costs at the instance of the lessee.
5 Re Gray [1901] 1 Ch 239 at 244.
6 See Re Fletcher and Dyson [1903] 2 Ch 688 at 694.
7 Re Gray [1901] 1 Ch 239.
8 Re Fletcher and Dyson [1903] 2 Ch 688.
9 Fitzsimmons v Lord Mostyn [1904] AC 46. The costs incident to the devolution of title to the reversion are payable by the lessor, see
Wortham v Lord Dacre (1856) 2 K & J 437; the costs occasioned by the state of the lessee's title to renewal are payable by the lessee, see
Barrett v Pearson (1812) 2 Ball & B 189.
(k) Solicitor's remuneration
HR A[1344]
The remuneration of solicitors in respect of non-contentious business is governed by the Solicitors' (Non-Contentious
Business) Remuneration Order 19941. Solicitors may charge for non-contentious business such sum as may be fair and
reasonable in all the circumstances2. Without prejudice to his right to have a bill taxed by the court3 a client may apply
to the Law Society for a certificate stating whether in their opinion the sum charged by the solicitor is fair and
reasonable or, as the case may be, what other sum would be fair and reasonable4. Before the solicitor brings
proceedings to recover costs on a bill for non-contentious business he must, unless the costs have been taxed, have
informed the client in writing of his right to require the solicitor to obtain a certificate from the Law Society and of the
provisions of the Solicitors Act 1957 relating to taxation of costs5.
HR A[1345]
1 SI 1994/2616, effective from 1 November 1994.
2 SI 1994/2616, art 3.
Page 276
3 Ie under the Solicitors Act 1974, ss 70, 71, 72.
4 SI 1994/2616, art 4(1), (2). This applies where the costs are not more than £50,000.
5 SI 1994/2616, art 6.
HR A[1346]
On the taxation of a bill it is the duty of the solicitor to satisfy the taxing officer as to the fairness and reasonableness of
the sum charged if the taxing officer allows less than one half of the sum charged he must bring the facts of the case to
the attention of the Law Society1.
HR A[1347]
1 SI 1994/2616, art 5.
HR A[1348]
Interest may be charged on the amount of the bill1 and security may be taken from the client for the payment of any
remuneration2.
HR A[1349]
1 SI 1994/2616, art 14.
2 SI 1994/2616, art 12(3).

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Leases/5 Mistake, rectification and rescission
5 Mistake, rectification and rescission
(a) Inconsistency in lease or between lease and counterpart
HR A[1350]-[1358]
If in a lease there is a discrepancy between the habendum and the reddendum, the habendum will prevail1. If the lease
and counterpart differ, the lease overrides the counterpart2 But the first rule does not apply where it appears upon the
face of the lease, construed with the counterpart, that the habendum is wrong; and the second rule does not apply where
the lease is inconsistent with itself, and the counterpart is consistent throughout3 Therefore, where the term mentioned
in the reddendum of a lease differed from that stated in the habendum, but the counterpart throughout stated the term as
in the reddendum, the habendum was corrected so as to agree with the reddendum4.
HR A[1359]
1 Shep Touch 52 at 53; and see para HR A[1168], FN 9.
2 Shep Touch 52 and 53; and see para HR A[1304].
3 Burchell v Clark (1876) 2 CPD 88; Matthews v Smallwood [1910] 1 Ch 777.
4 Matthews v Smallwood [1910] 1 Ch 777.
HR A[1360]
(b) Rectification as a matter of construction
A mistake in a written instrument can, in certain limited circumstances, be corrected as a matter of construction without
obtaining a decree in an action for rectification. Two conditions must be satisfied: first, there must be a clear mistake on
the face of the instrument; secondly, it must be clear what correction ought to be made in order to cure the mistake. If
those conditions are satisfied, then the correction is made as a matter of construction. If they are not satisfied, then
either the claimant must pursue an action for rectification or he must leave it to a court of construction to reach what
answer it can on the basis that the uncorrected wording represents the manner in which the parties decided to express
their intention1. Where a lease contained a mutual break clause and provided that the landlord could break the lease:
provided that up to the determination date in the case of a notice given by the landlord the tenant shall have paid the rents hereby
reserved and shall have duly observed and performed the covenants on the part of the tenant and the conditions herein contained ...,
Page 278
it was held that reference to the 'landlord' was an obvious mistake and that the word should be construed as a reference
to the 'tenant'2. Once the court has identified an obvious omission, and has found in admissible background materials an
obvious precedent for filling it, it should not be fatal to the claim that there may be more than one possible version of
the replacement, or more than one explanation of the change3. The admissible background to which the court can have
regard may include a draft of the lease annexed to the agreement for lease pursuant to which the lease was entered into,
albeit the form of lease subsequently entered into between the parties differs from the draft4.
HR A[1361]
1 Brightman LJ in East v Pantiles (Plant Hire) [1982] 2 EGLR 111 at 112. This topic is considered in the Blundell Lecture by Cheffings
and Dowding QC, Correction of Mistakes by Construction, July 2008.
2 Littman v Aspen Oil (Broking) Ltd [2005] EWCA 1579, [2005] All ER (D) 262 (Dec).
3 KPMG LLP v Network Rail Infrastructure Ltd [2007] EWCA Civ 363. See also JIS (1974) Ltd v MCP Nominees Ltd [2002] 2 P & CR
11, CA (considered in HR A [1362.10]).
4 KPMG LLP v Network Rail Infrastructure Ltd.
(c) Rectification on ground of common mistake
HR A[1362]
Where, owing to a common mistake, which must be clearly established by the claimant1, a lease as executed does not
embody the common intentions of the parties, it may be rectified by the court2. Rectification ensures the instrument
contains the provisions the parties intended and not those it would have contained if the parties had been better
informed3. To obtain rectification on the basis of common mistake the claimant must show4:
(a) a prior common intention as to the terms of the parties' agreement;

(b) by clear and unambiguous evidence5;
(c) which continued unaltered up to the date of execution of the instrument of which rectification is
sought;
(d) which instrument, by mistake, does not correspond to the common intention established.
HR A[1362.1]
1 Fowler v Fowler (1859) 4 De G & J 250 at 265; Seaton v Staniland (1862) 4 Giff 61.
2 The nature of the mistake and the cause of it must be considered in determining whether relief ought to be granted: Earl Beauchamp v
Winn (1873) LR 6 HL 223; Bell v Lever Bros Ltd [1932] AC 161.
3 Marquis Townshend v Stangroom (1801) 6 Ves 328 at 322.

Page 279
4 In Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, [2002] 2 EGLR 71, Peter Gibson LJ said:
'33. The party seeking rectification must show that:

(1) the parties had a common continuing intention, whether or not amounting to an agreement, in
respect of a particular matter in the instrument to be rectified;
(2) there was an outward expression of accord;
(3) the intention continued at the time of the execution of the instrument sought to be rectified;
(4) by mistake, the instrument did not reflect that common intention.'
5 Breadalbane v Chandos (1837) 2 My & Cr 711; Fowler v Fowler (1859) 4 De G & J 250; Scott v
Swansea City and County [2001] EGCS 9, Ch D (common mistake over terms of rent review clause
continuing up to the date of entry into lease; rectification ordered).
(i) Prior common intention
HR A[1362.2]
While there must be a prior completed agreement, going beyond mere negotiations1, it is not necessary that this should
be an enforceable agreement, eg in respect of an agreement before 27 September 1989 it may be unenforceable for want
of a written memorandum2.
HR A[1362.3]
1 Frederick E Rose (London) Ltd v William H Pim Jnr & Co Ltd [1953] 2 QB 450 at 461, per Denning LJ.
2 Shipley UDC v Bradford Corpn [1936] Ch 375; Crane v Hegeman-Harris Co Inc [1939] 1 All ER 662; affd [1939] 4 All ER 68, CA;
Joscelyne v Nissen [1970] 2 QB 86, [1970] 1 All ER 1213, CA; Co-operative Insurance Society Ltd v Centremoor Ltd (1983) 268 Estates
Gazette 1027 at 1027, CA.
HR A[1362.4]
There will be no rectification if the mistake is not common to all parties to the instrument1, eg where the provision
sought to be inserted would have brought the property within the Rent Acts which was clearly contrary to the intention
of the landlord2. Where the parties entered into an agreement which provided that the vendor had a right to re-purchase
upon the death of the survivor of joint purchasers, rectification was not granted so as to ensure that the option could be
exercised within the perpetuity period. Both parties had intended that the right of re-purchase was to be unlimited in
time and thus there was no case for rectification3. It is sufficient that the parties have a common intention as to the
substance of the agreement between them; there need be no common intention as to the form of words as to how that
common intention is to be expressed in the instrument which is intended to give effect to that common intention. Thus,
where the vendor of a block of flats intended to sell and the purchaser to buy the reversion subject to leases for terms of
99 years of each of the flats and had expressed the view to the purchaser that the vendor was to be treated as any other
tenant but failed prior to completion of the sale to reserve any rights in respect of two vacant flats, it was held that the
Page 280
vendor was entitled to rectification providing for the grant by the purchaser of leases of the vacant flats notwithstanding
the fact that there had never been any common intention that the transfer should contain specific provisions for the grant
of long leases back to the vendor and the transfer might have been in the form intended by the purchaser, the equitable
remedy enabled the court to change that form to give effect to the true intention of the parties4.
HR A[1362.5]
1 Murray v Parker (1854) 19 Beav 305; Earl Beauchamp v Winn (1873) LR 6 HL 223; Duke of Sutherland v Heathcote [1892] 1 Ch 475;
2 City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129, [1958] 2 All ER 733.
3 Wilson v Truelove [2003] EWHC 750 (Ch), [2003] 23 EG 136.
4 In Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, [2002] 23 EG 123, Peter Gibson LJ approved the dictum
of Dillon LJ in Co-operative Insurance Society Ltd v Centremoor Ltd [1983] 2 EGLR 52 at 54 to the effect that: 'While it must be shown
what was the common intention, the exact form of words in which the common intention is to be expressed is immaterial if, in substance and
in detail, the common intention can be ascertained'. See also HR A[1363].
(ii) Evidence of mistake
HR A[1362.6]
It has been said that parties who append their signature to a written instrument prima facie indicate, by the very fact of
their signatures, their assent to all the terms contained in it1. The courts have accordingly required clear evidence as to
the existence of the alleged common intention. This requirement has been expressed as necessitating 'strong irrefragable
evidence'2 which has been said to mean something more than the highest degree of probability3. However,
notwithstanding the requirement for convincing proof as to the common intention, the standard of proof required if the
court is to order rectification is the ordinary standard of the balance of probabilities4. The strength and force of that
evidential requirement is to a large degree dependent upon the quality and nature of the written instrument itself: the
greater the precision in the instrument the greater the requirement for 'cogent evidence' to dispel the evidence of their
intentions as reflected in that instrument itself. If the instrument itself be poorly drafted, or self-evidently on its face
conceptually unsound, the requirement for 'cogent evidence' is reduced pro tanto5.
HR A[1362.7]
1 Slade LJ in Agip SpA v Navigazione Alta Italia SpA [1984] 1 Lloyd's Rep 353 at 359.
2 Marquis Townshend v Stangroom (1801) 6 Ves 328 at 322; Frederick E Rose (London) Ltd v William H Pim Jnr & Co Ltd [1953] 2 QB
450 at 461, per Denning LJ; Shipley UDC v Bradford Corpn [1936] Ch 375; Crane v Hegeman-Harris & Co Inc [1939] 1 All ER 662; affd
[1939] 4 All ER 68, CA.
3 Fowler v Fowler (1859) 4 De G & J 250 at 265.

Page 281
4 Per Peter Gibson LJ in Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, [2002] 2 EGLR 71 (at [34]). The
learned judge cited with approval the words of Brightman LJ in Thomas Bates & Sons Ltd v Wyndham's (Lingerie) Ltd [1981] 1 WLR 505 at
521.
'But as the alleged common intention ex hypothesi contradicts the written instrument, convincing
proof is required in order to counteract the cogent evidence of the parties' intention displayed by
the instrument itself...'.
5 Sargeant v Reece [2007] All ER (D) 58, Ch D.
HR A[1362.8]
Parol evidence of the mistake may be given1. The fact that the agreement between the parties contains an 'entire
agreement' clause does not prevent the court from ordering rectification2.
HR A[1362.9]
1 Price v Ley (1862) 32 LJ Ch 530; Craddock Bros v Hunt [1922] 2 Ch 809; affd [1923] 2 Ch 136, CA; United States of America v Motor
Trucks Ltd [1924] AC 196; Dormer v Sherman (1966) 110 Sol Jo 171, CA.
2 JJ Huber (Investments) Ltd v Private DIY Co Ltd [1995] NPC 102, [1995] EGCS 112.
HR A[1362.10]
There are numerous examples in the cases of the evidence being sufficient or insufficient1. Often a claim will fail as a
matter of construction of the terms of the instrument but will succeed on rectification. Thus, where a break clause
provided for the tenant to deliver up vacant possession of the demised premises, the tenant failed to persuade the court
that the lease should be construed so as to exclude from compliance with the condition the delivery up of possession of
premises which had been lease back to the landlord on the landlord's purchase of the freehold. The court, however, held
that it was obvious that a mistake had been made in the drafting of the condition to the operation of the break. If
rectification were not permitted so as to enable the tenant to exercise the break without having to provide vacant
possession of those parts of the demised premises which had been underlet to the landlord, the landlord would be able to
frustrate the operation of the break clause by refusing to deliver up vacant possession of the underlet parts2.
HR A[1362.11]
1 See by way of example Lloyd v Stanbury [1971] 2 All ER 267, [1971] 1 WLR 535 (in which no common intention of the parties was
established as to the exclusion of a piece of land from a contract of sale) CA; Johnsons of London Ltd v Protec Trust Management [2000]
EGCS 114, Ch D (rectification of break clause in lease operable only after 'final determination' of rent review was not rectified, to enable the
break clause to be exercisable where the landlord did not implement the review, due to the lack of evidence of a common intention to this
effect); Cadogan v Escada AG [2006] EWHC 78, [2006] All ER (D) 143, Ch D (dispute as to the physical configuration of the premises to
be assumed on review. No evidence of alleged mistake where no draft clause, which the parties were said to have agreed but not reflected in
the written agreement, was presented to the court).
Page 282
2 JIS (1974) Ltd v MCP Nominees Ltd [2002] 2 P & CR 11, CA.
(iii) Outward expression of accord
HR A[1362.12]
The intention must be one that has been manifested in the words or conduct of the parties and must not be merely an
intention which has not been disclosed in the course of negotiations1. The trend in recent cases has been to treat the
expression 'an outward expression of accord' as an evidential factor rather than a strict legal requirement in all cases of
rectification2. It was not required where the party resisting rectification had in fact admitted that his true state of belief
when he entered into the transaction was the same as that of the other party and there was, therefore, a continuing
common intention which, be mistake, was not given effect in the relevant legal document3.
HR A[1362.13]
1 Joscelyne v Nissen [1970] 2 QB 86 at 98, CA. For a critique of this requirement see Bromley P, 'Rectification in Equity' (1971) 87 LQR
532, where the learned author suggests that the need for an outward expression of accord is not justified by the older authorities.
2 Munt v Beasley [2006] EWCA Civ 370, [2006] All ER (D) 29 (Apr), CA.
3 Munt v Beasley.
(iv) Mistake as to interpretation or as to the existence of a binding contract
HR A[1362.14]
A mistake as to the precise connotation of a technical term will not establish a right to rectification1. Thus, if there is an
oral agreement for 'horsebeans' and the written contract is for 'horsebeans', there can be no rectification merely because
the parties mistakenly believed that horsebeans were the same as feveroles2. Where the parties agreed the date for
completion under a sale contract by reference to a shared misunderstanding of the date of the expiry of statutory notices
served under the Landlord and Tenant Act 1987 (providing for the tenants' rights of first refusal), the completion date
was rectified albeit the parties intended to insert and did insert the mistaken date. The common intention was that the
expiry of the statutory notices was to define the date for completion and the insertion of the incorrect date, albeit
deliberate, did not give effect to the parties' common intention3.
HR A[1362.15]
1 Frederick E Rose (London) Ltd v William H Pim Jnr & Co Ltd [1953] 2 QB 450, [1953] 2 All ER 739.
2 See Frederick E Rose (London) Ltd v William H Pim Jnr & Co Ltd [1953] 2 QB 450, [1953] 2 All ER 739.
Page 283
3 Chinnock v Hocaoglu [2007] EWHC 2933 (Ch), [2008] 29 EG 92.
HR A[1362.16]
There is no basis for rectification where both parties intend the document in question to have the effect which it does
have but mistakenly believe that some other document has the same effect1. Thus, where both parties believed that a
rent review formula expressed in a lease was to the same effect as a formula in the agreement to grant the lease, whilst
in fact it was not, the formula in the agreement being more favourable to the tenant, the tenant unsuccessfully claimed
rectification2.
HR A[1362.17]
1 Contrast Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, [2002] 2 EGLR 71 considered in fn 1, HR A[1363]
below.
2 London Regional Transport v Wimpey Group Services Ltd [1986] 2 EGLR 41.
HR A[1362.17.1]
Rectification is not available where the parties have executed the document they intended to execute and the mistake is
as to the legal consequences of that document. Accordingly, rectification is not available where the parties intended to
create a discretionary trust in the mistaken belief that it would be a potentially exempt transfer for the purposes of
inheritance tax. Rectification of the trust to provide for the creation of an interest in possession was outside the ambit of
rectification1. Similarly, rectification was unavailable where the parties agreed that certain terms in their land contract
should remain unrecorded and the mistake made was one in thinking that a binding contract existed notwithstanding the
failure to record the additional terms2.
1 Allnutt v Wilding [2007] EWCA Civ 412, [2007] All ER (D) 41 (Apr), CA.
2 Oun v Ahmad [2008] EWHC 545, Ch. The parties had entered into a contract for the sale of land at a purchase price of £75,000. This
document was signed by both parties. A second document not incorporated by reference into the first document provided for an
apportionment of the purchase price and payment of an additional sum on completion of the contract. It was held that the first document did
not comply with s 2 of the Law of Property (Miscellaneous Provisions) Act 1989, as the terms of the contract for the sale of the land did not
incorporate all of the terms. The first document was not rectified as the parties deliberately chose not to refer to the apportionment in the first
document in the mistaken belief that the first document nevertheless gave rise to a binding contract. This was a mistake as to the legal
consequences of the document; there was no mistake as to the the way in which the transaction agreed between the parties was expressed.
(v) Continuation of intention
HR A[1362.18]
It must be shown that the completed instrument as executed failed to give effect to the prior common intention. The
Page 284
common intention of the parties must have continued unaltered up to the date of execution of the instrument1.Thus, an
executed instrument was not rectified to give effect to an antecedent intention where the words in the instrument sought
to be rectified were inserted consequent upon a deliberate change from the earlier wording2. Similarly, a purchaser of
land at an auction was refused rectification so as to provide for the incorporation of terms read out by the auctioneer
prior to bidding where he knew that the terms of the written contract which he ultimately signed differed from the
read-out terms3..
HR A[1362.19]
1 Joscelyne v Nissen [1970] 2 QB 86 at 99; Breadalbane v Chandos (1837) 2 My & Cr 711; Fowler v Fowler (1859) 4 De G & J 250.
2 Whiteside v Whiteside [1950] Ch 65, CA. In that case the claimant executed a deed in favour of his former wife after the dissolution of
marriage, to provide her with maintenance. As executed the deed obliged the claimant to pay her 'the sum of £1,000 per annum free of ...
income tax up to but not exceeding 7s. 6d. in the £'. These last words were substituted by the claimant's solicitor for the words 'such a sum
after deduction of income tax at the rate of not more than 7s. 6d. in the £ as shall represent £1,000 per annum', which had originally been
inserted in the draft as prepared by the wife's solicitor. The Crown at first allowed the deduction from the claimant's surtax on the footing
that he was liable to pay on that basis, but later refused to allow the deduction, and the claimant then asked for rectification of the deed by
substituting the words 'such an annual sum as after deduction of British income tax at the rate of 7s. 6d. in the £, will leave £1,000'. The
court was not satisfied that it was the intention of both parties at the date of the original deed that the wife should receive the £1,000 free of
tax, so as to enable the husband to claim a benefit from the point of view of surtax. Cohen LJ, stated ([1949] 2 All ER 913 at 918, [1950] Ch
65 at 77): '... there is no evidence that it was the common intention of the parties to secure him that benefit.' Furthermore, the plaintiff,
through the hand of his solicitor, quite deliberately altered the words originally suggested in the draft prepared by the wife's solicitor which
would in fact have given him the tax advantage which he was seeking by the application to rectify. It hardly lay in his mouth, therefore, to
say that the deed did not represent his intention at the time of signing it. See also Maralinga Pty Ltd v Major Enterprises Ltd (1972) 128
CLR 336 (HC of A).
3 Maralinga Pty Ltd v Major Enterprises Ltd.
(vi) Common intention as to result intended
HR A[1362.20]
It is sufficient that there is a common intention as to the result intended, albeit there may have been no common
intention as to the form of words intended to achieve that result1. Thus, where it was intended for there to be granted a
lease with a sub-lease for a term expiring one day earlier than the lease but, by mistake, both lease and sub-lease were
drafted for the same term, rectification was possible, albeit there may have been no common agreement or intention as
to the terms of the sub-lease; there was a clear common intention that a sub-lease was intended to be created and the
effect of granting the sub-lease for the same term as the lease would be for there to have been an assignment of the lease
which was not what was intended2. Similarly, where the vendor of a block of flats intended to sell and the purchaser to
buy the reversion subject to leases for terms of 99 years of each of the flats and had expressed the view to the purchaser
that the vendor was to be treated as any other tenant but failed prior to completion of the sale to reserve any rights in
respect of two vacant flats, it was held that the vendor was entitled to rectification providing for the grant by the
purchaser of leases of the vacant flats. This was so notwithstanding the fact that there had never been any common
intention that the transfer should contain specific provisions for the grant of long leases back to the vendor and the
transfer might have been in the form intended by the purchaser, for the equitable remedy enabled the court to change
that form to give effect to the true intention of the parties3. The fact that it is sufficient for the purposes of rectification
that there is an agreement as to the substance of what was intended does not render it permissible to order rectification
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to reflect those parts of the parties' respective intentions about matters which are the same, but which ignores those parts
which are not. Thus, where the parties had agreed that there should be the opportunity to break the lease on at least three
occasions, which right was dependent upon the initiation of a rent review but differed on whether the break should be
operable only where there was an increase in the rent on review, the fact that the parties may not have agreed about the
requirement for a review was not simply an uncertainty as to how legally to give effect to the parties' common
intention4, but was a difference of substance which could not be ignored5. Where the parties had made a common
mistake with respect to a right of pre-emption in a lease providing for the tenant to acquire the freehold, which right
provided for the freehold interest to be valued with vacant possession rather than, as was intended, to be valued subject
to the tenant's lease, it was not necessary in order for the tenant to succeed in its claim for rectification to show that the
parties had agreed upon a valuation formula for calculating the price of the freehold subject to the lease; it was
sufficient that there was a common intention that the freehold should be valued subject to the lease6.
HR A[1363]
1 Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, [2002] 2 EGLR 71, [2002] 23 EG 123. Peter Gibson LJ said
at para 34:
(2) While it must be shown what was the common intention, the exact form of words in which the
common intention is to be expressed is immaterial if, in substance and in detail, the common
intention can be ascertained: Co-operative Insurance Society Ltd v Centremoor Ltd [1983] 2
EGLR 52 at p 54, per Dillon LJ, with whom Kerr and Eveleigh LJJ agreed.
(3) The fact that a party intends a particular form of words in the mistaken belief that it is
achieving its intention does not prevent the court from giving effect to the true common intention:
see Centremoor at p 55A-B and Re Butlin's Settlement Trusts (Rectification) [1976] Ch 251 at p
260 per Brightman J.
2 Mace v Rutland House Textiles Ltd [1999] All ER (D) 1293.

3 Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, [2002] 2 EGLR 71. See
also: Crane v Hegeman-Harris Co Inc [1971] 1 WLR 1390n at 1399E; Grand Metropolitan plc v
William Hill Group Ltd [1997] 1 BCLC 390 at 395; Eason v Brownrigg [1998] CLY 3659, Ch D where
the court appears to have rectified a lease in favour of a landlord to include a guarantee clause
notwithstanding the fact that no form of guarantee had ever been agreed between the parties.
4 As in Swainland above, where there was a common intention as to the commercial effect of the
agreement and the only uncertainy was as to the legal mechanics for giving it effect.
5 KPMG LLP v Network Rail Infrastructure Ltd [2007] EWCA Civ 363, CA.
6 Hicklane Properties Ltd v Bradbury Investments Ltd [2008] EWCA Civ 691, CA.
(vii) Rectification is discretionary remedy
HR A[1364]
The court will not rectify a spent agreement1, nor must the applicant be guilty of unreasonable delay2. But on a
question of delay time is reckoned not from the date of execution of the document but from the date when the applicant
Page 286
discovers the mistake3. Although it has been said that the nature of the mistake and the cause of it must be considered in
determining whether relief ought to be granted4 it has been held that rectifiction may be granted albeit the mistake arose
due to the gross negligence of the plaintiff's solicitor5.
HR A[1365]
1 Caird v Moss (1886) 33 Ch D 22.
2 Bloomer v Spittle (1872) LR 13 Eq 427.
3 Beale v Kyte [1907] 1 Ch 564; Kent v Hartley (1966) 200 Estates Gazette 1027.
4 Earl Beauchamp v Winn (1873) LR 6 HL 223; Bell v Lever Bros Ltd [1932] AC 161.
5 Weeds v Blaney (1977) 121 Sol Jo 794, CA. Cp Hazell v Watson and Viney Ltd v Malverimi [1953] 2 All ER 58.
HR A[1366]
The court may in one and the same action order specific performance of the written contracts as rectified1.
HR A[1367]
1 Craddock Bros Ltd v Hunt [1923] 2 Ch 136; United States v Motor Trucks Ltd [1924] AC 196.
(viii) Successors in title
HR A[1368]
Landlords who are successors in title to the original landlords are entitled to the benefit of such interest or equity to
have the lease rectified that would have existed in their predecessors in title, the original landlords1. However,
rectification will not be granted at the instance of the tenant against a purchaser of the reversion if the purchaser is a
purchaser for value without notice2. But if the tenant is in occupation of the land and the tenant's leasehold interest is
registered at HM Land Registry, the claim to rectify the lease may be an overriding interest binding on the purchaser3.
HR A[1369]
1 Boots the Chemist Ltd v Street (1983) 268 Estates Gazette 817, where the court applied the Law of Property Act 1925, s 63.
Page 287
2 Smith v Jones [1954] 2 All ER 823, [1954] 1 WLR 1089 (rectification of tenancy refused as against a subsequent purchaser of the
reversion who had inspected and relied on the agreement); Taylor Barnard Ltd v Tozer (1983) 269 Estates Gazette 225 where it was said
obiter that an assignee of the lease would have been bound if the lease had been held to be rectifiable. The assignee had received notice of
the claim after contract but before completion and accordingly at the date of contract, the purchase price not having been paid, the assignee
was not a purchaser for value; Equity & Law Life Assurance Society Ltd v Coltners Group Ltd (1983) 267 Estates Gazette 949 (purchasers
bound as on facts not purchasers for value).
3 Blacklocks v JB Developments (Goldalming) Ltd [1982] Ch 183; Nurdin Peacock plc v D B Ramsden and Co Ltd [1999] 1 EGLR 119.
(d) Rectification on ground of unilateral mistake
(i) General
HR A[1370]
Rectification may be granted on the ground of unilateral mistake if the plaintiff shows that the instrument was intended
to contain a provision beneficial to himself, but that the defendant allowed it to be concluded without that provision,
knowing that the plaintiff was ignorant of the omission. In such circumstances the court may hold that it would be
inequitable to allow the defendant to resist, or he should be estopped from resisting, rectification of the instrument to
give effect to the common intention, despite the fact that the mistake was not at the time of execution a common
mistake but rather a unilateral mistake1. Where rectification may be granted on the ground of unilateral mistake, the
plaintiff does not have to show that the defendant has been guilty of 'sharp practice'2. Rectification may be granted on
the basis of unconscionable conduct in circumstances where one of the parties to a contract intended the other to be
mistaken as to the terms of their agreement and diverted his attention from discovering the mistake by making false and
misleading statements, with the result that he in fact made the very mistake intended, notwithstanding that the former
did not actually know but merely suspected that the latter was mistaken and that it could not be shown that the mistake
was induced by any misrepresentation3.
HR A[1371]
1 Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 All ER 1077, [1981] 1 WLR 505, CA, applying A Roberts & Co Ltd v
Leicestershire County Council [1961] Ch 555, [1961] 2 All ER 545 and Riverlate Properties Ltd v Paul [1975] Ch 133, [1974] 2 All ER
656, CA; Central and Metropolitan Estates Ltd v Compusave [1983] 1 EGLR 60, 266 Estates Gazette 900, Taylor Barnard Ltd v Tozer
[1984] 1 EGLR 21, 269 Estates Gazette 225; Kemp v Neptune Concrete (1988) 57 P & CR 369, [1998] 2 EGLR 87, CA.
2 Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 All ER 1077, [1981] 1 WLR 505, CA (a lease was prepared by landlords
who, by an oversight, omitted to include provision for the fixing of rent by arbitration in default of agreement on a rent review, and the rent
review clause merely stated that the rent for the rent review periods was to be 'such rents as shall have been agreed between the lessor and
the lessee'. It had not been agreed by the parties that the reference to arbitration should be omitted and the tenants, although aware of the
omission at the time they executed the new lease, did not bring it to the landlords' attention; rectification was granted).
3 Taylor Barnard Ltd v Tozer [1984] 1 EGLR 21, 269 Estates Gazette 225; Commission for the New Towns v Cooper (Great Britain) Ltd
[1995] Ch 259, [1995] 2 All ER 929, CA.
(ii) Knowledge of mistake

Page 288
HR A[1372]
Knowledge of a mistake may be proved affirmatively or inferred from circumstances. A party has knowledge of a
mistake not only if he knows of it but if he wilfully shuts his eyes to the obvious or he wilfully and recklessly fails to
make such inquiries as an honest and reasonable man would notice1. Honesty tempered with reasonableness does not
require a party to point out to the other where the latter's own best commercial interests lay2. One is looking for a
mistake on the claimant's part which the defendant is honour bound, despite his own legitimate business interests, to
point out to him3. An arm's length negotiation between parties of unequal competence and resources may well place
greater constraints of honest and reasonable conduct on the stronger party than on the weaker4. It has been held that a
defendant lessee had not wilfully shut his eyes to the obvious where a deed of variation with respect to a rent review
formula prepared by the landlord's solicitors was submitted to the lessee's for approval, albeit the lessee considered that
the revised formula was likely to more benefical to the lessee. The lessee had been informed that the landlord had
approved of the variation and it was not incumbent upon the lessee thereafter to go back to the landlord for confirmation
as to the lanldord's agreement as to the terms of the variation simply because the lessee considered that the formula was
more benefical to him; to impose such a duty in an arm length's negotiation was unduly onerous5. If the facts which
induce a party to believe that the relevant clause did not have a particular effect are undisclosed and unknown to the
other party, there is no reason why that other party should not proceed on the basis that both parties know and intend
exactly what the relevant clause provides6.
HR A[1372.1]
1 Commission for New Towns v Cooper (Great Britain) Ltd [1995] Ch 259, [1995] 2 All ER 929, CA. Followed and approved in George
Wimpey UK Ltd v VIC Construction Ltd [2005] EWCA Civ 77, CA, [2005] All ER (D) 37 (Feb). It is probably the case that albeit
dishonesty is not an actual ingredient of actual knowledge, it is an ingredient of anything less than actual knowledge. It was argued in
George Wimpey UK Ltd that as wilfully shutting one's eyes to the obvious and wilfully and recklessly failing to make such inquiries as an
honest and reasonable man would make (categories (ii) and (iii) of the classification of the various forms of knowledge made by Peter
Gibson J in Baden v Societe Generale pour Favoriser le Developpement du Commerce et de l' Industrie en France SA (Note) [1993] 1 WLR
509 and cited by Millett J in Agip (Africa) Ltd v Jackson [1990] Ch 265 at 293) were in law forms of actual knowledge, logically dishonesty
behaviour ought not to be required. Blackburne J said:
'First, as a matter of strict logic, it is difficult to disagree with [Counsel']r submission; if

dishonesty is not a necessary ingredient of actual knowledge, why should it have to be a
component of knowledge within categories (ii) and (iii)? Second, however, it is difficult to regard
as altogether honest the conduct of a person who allows another to enter into a contract with him,
knowing that that other is labouring under a mistake as to the contract's terms (the mistake being
one which is calculated to benefit the former) but saying nothing to alert that other to his mistake.
In short, by its nature, a successful rectification claim based upon unilateral mistake will usually,
if not always, call into question the probity of the defendant. Third, it is difficult to regard this
court's view in Commission for New Towns that "actual knowledge" for the purposes of
rectification includes knowledge in categories (ii) and (iii) as necessarily separate from and not
dependent upon the finding in that case of dishonesty.'
See also Peter Gibson LJ at para 45.

2 George Wimpey UK Ltd v VIC Construction Ltd [2005] EWCA Civ 77, CA, [2005] All ER (D) 37
(Feb), per Sedley LJ para 64. At para 60 he said:
Page 289
'The phrase "honest and reasonable" is not a term of art. It is a judicial attempt to sketch a line
beyond which conduct may be regarded as unconscionable or inequitable. Its duality, however, is
a recognition that honesty alone is too pure a standard for business dealings because it omits
legitimate self-interest; while reasonableness alone is capable of legitimising Machiavellian
tactics.'
3 George Wimpey UK Ltd v VIC Construction Ltd [2005] EWCA Civ 77, CA, [2005] All ER (D) 37
(Feb).
4 per Sedley LJ ibid at para 65.
5 Witney Golf Club v Parker [2006] All ER (D) 174 (Apr), HCt, Ch D (proposed variation to a lease;
landlords' solicitor confirmed to the tenant's solicitor that the landlords had approved the draft deed of
variation, subject to two minor alterations, and the deed of variation that was executed included a
proposed 'simpler formula' for calculating additional rent that had been included in a draft of the deed
sent to the tenant's solicitor; tenant applied for a declaration that the additional rent was to be calculated
by reference to the terms of the deed of variation and the landlords counterclaimed for rectification,
submitting that the tenant had wilfully shut its eyes to their mistake and had wilfully failed to make such
inquiries as a reasonable and honest person would make; held that it would place an unrealistic burden
on any party to an arm's length and commercial transaction to say that the tenant should have reverted to
the defendants for confirmation of their approval of the 'simpler formula' after it had been told that they
had approved the draft deed of variation; the counterclaim for rectification was dismissed). The party
seeking rectification must of course establish on the evidence that he entered into the agreement under a
mistake of which the other party had actual or shut-eye knowledge. In Ahmed v WIngrove [2006] EWHC
1918, Ch D, the grantee of an option entered into in January 2001, and which provided for planning
permission to be obtained within 12 months of that date, was required to reexecute the document in July
2001. He intended the 12-month period to run afresh. The court rejected a calim for rectification by the
grantor on the grounds of unilateral mistake as the grantor of the option was unable to establish on the
evidence that he mistakenly believed that the 12-month period for the July agreement would run from
January.
6 Rowallan Group Ltd v Edgehill Portfolio No 1 Ltd [2007] EWHC 32, Ch D. Summary judgment by
defendant with respect to claimant's claim for rectification on the basis of unilateral mistake successful,
where the facts which led the claimant's solicitor to believe that an amendment to a contract for sale
expressly providing for the vendor to make a payment had no effect were unknown to the defendant or
its solicitors.
(iii) Evidence of Knowledge
HR A[1372.2]
The fact that a contract has been negotiated by a person who is not the decision taker and has made an error is irrelevant
unless it can be shown that the decision taker shared the intention of the negotiator1. Thus, where the decision taker is
not called to give evidence, the likely inference is that the mistaken party intended to contract on the form of the
contract which was executed2. The knowledge of a solicitor will not found a claim for rectification where the conduct
of the principal was genuine and not unconscionable3.
HR A[1373]
Page 290
1 George Wimpey UK Ltd v VIC Construction Ltd [2005] EWCA Civ 77, CA, [2005] All ER (D) 37 (Feb).
2 Barnet London Borough Council v Barnet Football Club Holdings Ltd [2004] EWCA Civ 1191.
3 Kemp v Neptune Concrete (1988) 57 P & CR 369, [1988] 2 EGLR 87, CA.
(iv) Examples
HR A[1374]
(i) Where the lessors' solicitors prepared a draft lease failing to include a right of pre-emption
proposed by the lessors in negotiations, and the lessees' solicitors amended the document to provide for
an option to purchase, it was held that as all the amendments had been agreed by the lessors' solicitors no
rectification was to be granted as the lessees' solicitors were entitled to assume that their amendments
would be properly considered and either amended or agreed with the lessors' authority1.
(ii) Where the lease was agreed to be on the basis of a rent exclusive of rates and the lease as executed
was a rent inclusive of rates rectification was granted notwithstanding the negligence on the part of the
landlord or his agents in failing to spot the discrepancy as the tenant's advisers, albeit not dishonest, were
clearly suspicious that a mistake had been made and sought to take advantage of it2.
(iii) An overage provision with respect to a residential flat development provided for payment of
enhancements to individual flats. The formula was submitted to the purchaser, one of the country's
largest construction and development companies, after lengthy negotiations but omitting the value of the
enhancements. The agent who was dealing with the matter on behalf of the purchaser failed to notice the
omission. The contract was executed with the value of enhancements omitted. Rectification was refused.
The purchaser had made an error of judgment in failing to renegotitate the term back into the contract.
There was no duty upon the vendor to assist the purchaser in the commercial negotiation and point out
the omission3.
(iv) Where a landowner agreed with the developer purchaser for a claw back provision to enable the
landowner to share in the increase in the value of the land, and agreed a rate per square foot in a formula
designed to accommodate an inflation adjustment in prices for residential property, the mere fact that that
rate psf was in fact inappropriate having regard to the then market values did not enable the landowner to
claim rectification of the formula on the basis of unilateral mistake. The formula had been agreed
between the parties' agents and the case was one where, in truth, one party had subsequently come to
appreciate that it should not have agreed to the term in question. This did not found a claim for
rectification, being essentially an error of judgment in entering into the contract rather than being a case
where there had been a misunderstanding of some fact material to the proposed contract4.
HR A[1375]
1 Taylor Barnard Ltd v Tozer [1984] 1 EGLR 21, 269 Estates Gazette 225. See also Witney Golf Club v Parker and Strange referred to at
HR A[1372.1], fn 5.
2 Templiss Properties Ltd v Hyams [1999] EGCS 60, [1999] NLD 41.
3 George Wimpey UK Ltd v VIC Construction Ltd [2005] EWCA Civ 77, CA, [2005] All ER (D) 37 (Feb).
Page 291
4 Connolly Ltd v Bellway Homes Ltd [2007] EWHC 895, [2007] All ER (D) 182.
(v) Terms on which rectification may be ordered
HR A[1375.1]
The court may rectify on terms, eg where a lease was rectified in favour of the landlords so as to make provision for a
rent review on terms that provision should also be made for surrender of the lease by the tenants1.
HR A[1375.2]
1 Central and Metropolitan Estates Ltd v Compusave [1983] 1 EGLR 60, 266 Estates Gazette 900.
(e) Rescission
HR A[1376]
A lease granted under a common mistake as to a fundamental term is void for mistake under the general contractual
doctrine1. A contract void for mistake is void ab initio. The court has no discretion as to the consequences of such a
determination. There is no question of rescinding the agreement. It is void, with whatever consequences in law flow
from that finding. A contract which a party may rescind is valid unless and until rescinded. The court may rescind an
agreement which is voidable by reason of a common mistake. Thus where the parties entered into an agreement under a
common misapprehension that a right to occupy a caravan pitch did not include the chalet constructed upon it and thus
were under a misapprehension that the letting of the pitch did not include a letting of anything which could be described
as a dwelling house, so as to bring the letting within the Housing Act 1988, the mistake rendered the contract voidable
and the court rescinded the letting notwithstanding it created an assured tenancy2.
HR A[1377]
1 Cooper v Phibbs (1867) LR 2 HL 149; Bell v Lever Bros Ltd [1932] AC 161, HL; Bligh v Martin [1968] 1 All ER 1157, [1968] 1 WLR
804.
2 Nutt v Read (1999) 32 HLR 761, CA. The court expressed the view that the learned judge might have been entitled to take the view that
the letting was void on the basis of a fundamental common mistake.
HR A[1377.1]
The following elements must be present if common mistake is to avoid a contract1: (i) there must be a common
assumption as to the existence of a state of affairs2; (ii) there must be no warranty by either party that that state of
Page 292
affairs exists; (iii) the non-existence of the state of affairs must not be attributable to the fault of either party; (iv) the
non-existence of the state of affairs must render performance of the contract impossible; (v) the state of affairs may be
the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if
performance of the contractual adventure is to be possible3. Thus:
(i) where the parties under a salvage agreement were mistaken as to the proximity of the salvage ship
to the striken vessel, being 39 hours away rather than the 12 hours away which both parties had assumed
to be the distance at the date of entry in to the contract, the contract was not void for common mistake.
The mistake as to the distance between the two vessels had not rendered the services that the salvage
vessel was in a position to provide something essentially different from those which the parties had
agreed. The fact that the vessels were further apart than both parties had appreciated did not mean that it
was impossible to perform the contractual adventure4;
(ii) where parties entered into a compromise agreement in respect of monies outstanding on a loan, the
agreement was not void where the annual rate of interest which the parties had assumed was reflected in
the sum agreed to be paid by the lender under the compromise was in fact 3% lower than that assumed,
due to calculating interest from an erroneous draw down date referred to in the particulars of claim. The
parties had agreed to settle the interest element of the claim on the basis of the payment of an agreed sum
and not on the basis of a percentage rate of interest5.
HR A[1377.2]
1 The restrictions on the ability to set aside a contract on the ground of mistake apply equally to compromises or consent orders: Brennan
v Bolt Burden (a firm) [2004] EWCA Civ 1017, [2004] All ER (D) 551 (Jul). Maurice Kay LJ said, at para 17:
'In my judgment, the following propositions emerge:

(1) As with any other contracts, compromises or consent orders may be vitiated by a common
mistake of law.
(2) It is initially a question of construction as to whether the alleged mistake has that
consequence.
(3) Whilst a general release executed in a prospective or nascent dispute requires clear language
to justify an influence of an intention to surrender rights of which the releasor was unaware and
could not have been aware (Ali) [Bank of Credit and Commerce International SA v Ali [2001]
UKHL 8, [2002] 1 AC 251], different considerations arise in relation to the compromise of
litigation which the parties have agreed to settle on a give-and-take basis (Huddersfield Banking)
[Huddersfield Banking Co Ltd v Henry Lister & Son Ltd [1895] 2 Ch 273].
(4) For a common mistake of fact or law to vitiate a contract of any kind, it must render the
performance of the contract impossible (The Great Peace) [Great Peace Shipping Ltd v Tsavliris
Salvage (International) Ltd [2002] EWCA Civ 1407, [2002] 4 All ER 689].'
However, Kay LJ suggested that there may, as a matter of public policy, be scope for a substantive
exception to the ambit of the operation of a mistake of law vitiating a compromise of litigation: that a
compromise in the course of litigation, entered into on professional advice, should never be vitiated by a
subsequent judicial decision in a case to which the litigants to the compromise were not parties, unless
the compromise contained a suitable express provision to provide for this eventuality: ibid para 23.
2 The mistaken assumption which may vitiate the contract may be a mistake as to the law: Brennan v
Page 293
Bolt Burden (a firm) [2004] EWCA Civ 1017, [2004] All ER (D) 551 (Jul).
3 Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2002] 4
All ER 689 disapproving of Solle v Butcher [1950] 1 KB 671, CA, which was said to be inconsistent
with Bell v Lever Bros [1932] AC 161, HL. The requirement that the mistake be fundamental has gone;
the only mistake capable of rendering a contract void is one as to the possibility of performing the
contract: see (2003) 119 LQR 177.
4 Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2002] 4
All ER 689.
5 Champion Investments Ltd v Ahmed [2004] EWHC 1956 (QB), [2004] All ER (D) 28 (Aug).
HR A[1378]
The effect of a mistake at common law, if it operates at all, is to render the contract void ab initio. The court does not
have an equitable power to set aside a contract that is binding in law on the ground of common mistake1.
HR A[1379]-[1389]
1 Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2002] 4 All ER 689 disapproving of Solle v
Butcher [1950] 1 KB 671, CA. This result was achieved notwithstanding the decision of the Court of Appeal in West Sussex Properties Ltd v
Chichester District Council [2000] NPC 74, CA, in which the Court of Appeal in Great Peace pointed out proceeded on a concession that
Solle v Butcher was correct and notwithstanding the comment of Sir Christopher Staughton in West Sussex that:
'It is a matter of some satisfaction, in my view, that we can and do regard ourselves as bound by
the decision in Solle v Butcher [1950] 1 KB 671. That decision has now stood for over 50 years.
Despite scholarly criticism it remains unchallenged in a higher court; indeed there have been
remarkably few reported cases where it has been considered during that long period. As this case
shows, it can on occasion be the passport to a just result.' (para 42)
(f) Misrepresentation
HR A[1390]-[1400]
The law relating to misrepresentation is outside the scope of this work1. However, an agreement for a lease or an
executed lease may be rescinded on the ground that it was induced by a fraudulent or an innocent misrepresentation2.
The former rule that an executed lease could not be rescinded where the misrepresentation was innocent3 has been
abolished4. But a misrepresentation inducing the landlord's consent to an assignment will not render the assignment
liable to be set aside as the landlord was not a party to the assignment and rescission was unavailable to strangers to the
transaction5.
HR A[1401]
Page 294
1 See 31 Halsbury's Laws 31 (Reissue) generally.
2 Killick v Roberts [1991] 4 All ER 289, [1991] 1 WLR 1146; Cooper v Joel (1859) 1 De GF & J 240; Re Liverpool Borough Bank,
Duranty's Case (1858) 26 Beav 268; Torrance v Bolton (1872) 8 Ch App 118 at 124; Wauton v Coppard [1899] 1 Ch 92. It was at one time
considered that a fraudulent representation was necessary to found a suit for rescission. The misrepresentatee may have a claim for damages,
as well as or instead of his right to rescission, under the tort of deceit if the misrepresentation was fraudulent, and under the
Misrepresentation Act 1967, s 2(1) where the misrepresentation, albeit innocent, was negligently made.
3 Seddon v North Eastern Salt Co Ltd [1905] 1 Ch 326; Angel v Jay [1911] 1 KB 666.
4 Misrepresentation Act 1967, s 1(b).
5 Sanctuary Housing Association v Baker [1998] 1 EGLR 42, CA.

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Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 2 Leases and agreements for leases/C
Sporting rights
C
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Sporting rights/1 Leases of special properties
1 Leases of special properties
(a) Agricultural and business leases
HR A[1402]
The general principles of law, examined in this Division, apply in the main to leases of business premises. However, the
special provisions of Pt II of the Landlord and Tenant Act 1954 apply to tenancies where the premises are occupied by
the tenant for the purposes of a business carried on by him1. Further special statutory provisions in Pt I of the Landlord
and Tenant Act 1927 are applied to premises used for the carrying on of any trade or business2. These statutory
provisions are dealt with in Division B.
HR A[1403]
1 Landlord and Tenant Act 1954, s 23.
2 LTA 1927, s 17.
HR A[1404]
The statutory provisions concerning the law of agricultural holdings are now consolidated in the Agricultural Holdings
Act 1986 and the Agricultural Tenancies Act 19951.
HR A[1405]
1 See Division F.
(b) Sporting lease
HR A[1406]
A sporting lease authorises the lessee to enter upon land for the purpose of killing game or fishing, and to carry away
the game which he kills or the fish which he catches, and is in effect a licence coupled with a profit á prendre1. A grant
of shooting rights is a grant of interest in land2. The grant of a right to hunt or shoot is an incoporeal hereditament. A
right to shoot includes a right to take and carry away the game when shot3. Similarly, a right to fish includes a right to
Page 297
take away the fish4.
HR A[1407]
1 Wickham v Hawker (1840) 7 M & W 63; Ewart v Graham (1859) 7 HL Cas 331; Peech v Best [1931] 1 KB 1.
2 Webber v Lee (1882) 9 QBD 315, CA.
3 Lowe v Adams [1901] 2 Ch 598.
4 Fitzgerald v Firbank [1897] 2 Ch 96.

Page 298
Sporting rights/2 How created
2 How created
HR A[1408]
To create an effective legal right the lease must be by deed1, though on a verbal letting of lands the owner can reserve
the game to himself2; and an agreement for the grant of a sporting lease should comply with the requirements as to
writing contained in the Law of Property (Miscellaneous Provisions) Act 19893. If there has been actual enjoyment
under a parol grant of a right of shooting4 or fishing5, the rent can be recovered in an action for use and occupation, the
lessee is liable under the stipulations in the grant6 and can maintain an action for trespass7 Where the lease is by deed,
the benefit of a covenant by the lessee--such as a covenant to leave the land as well stocked with game as at the time of
the demise--runs with the reversion8. A yearly tenancy of sporting rights may be created by payment of rent, but the
tenant is only entitled to a reasonable notice to quit, and not to the six months' notice prescribed by the general law9.
HR A[1409]
1 Law of Property Act 1925, ss 52(1), (2), 205(1)(ix); Bird v Higginson (1837) 6 Ad & El 824, ExCh; Brigstocke v Rayner (1875) 40 JP
245; and see Mason v Clarke [1955] 1 All ER 914, HL. But an invalid lease may operate as an agreement for a lease under the doctrine of
Walsh v Lonsdale (1882) 21 Ch D 9, CA. And where there is an agreement for the letting of shooting rights, a landlord may be restrained
from interfering with the exercise of shooting rights pending the execution of a lease: Frogley v Earl of Lovelace (1859) John 333.
2 Jones v Williams and Roberts (1877) 36 LT 559.
4 Tomlinson v Day (1821) 2 Brod & Bing 680; Dawes v Dowling (1874) 22 WR 770.
5 Holford v Pritchard (1849) 3 Exch 793.
6 Adams v Clutterbuck (1883) 10 QBD 403.
7 Mason v Clarke [1955] AC 778, [1955] 1 All ER 914, HL.
8 Hooper v Clarke (1867) LR 2 QB 200. This is the position pre-1 January 1996. After the coming into force of the Landlord and Tenant
(Covenants) Act 1995, the position is now governed by that statute in relation to new leases as defined by that Act.
9 Lowe v Adams [1901] 2 Ch 598 (where a months' notice to determine a shooting tenancy given at the end of a season was held to be
sufficient).
Page 299
Sporting rights/3 Rights and liabilities of grantee and grantor
3 Rights and liabilities of grantee and grantor
(a) The exercise of sporting rights
HR A[1410]-[1420]
Under a demise of the exclusive right of sporting over land, the person exercising the right must do so in the usual and
reasonable way, and consequently he must not trample crops at an unusual or unreasonable time1, nor turn on game
bred elsewhere to the injury of the crops2, nor overstock his land with game bred elsewhere to the injury of his
neighbours3. Increase in the number of game or birds due to exceptional weather is not actionable so long as the rights
are exercised in a reasonable manner4.
HR A[1421]
1 Hilton v Green (1862) 2 F & F 821.
2 Birkbeck v Paget (1862) 31 Beav 403.
3 Farrer v Nelson (1885) 15 QBD 258.
4 Seligman v Docker [1949] Ch 53, [1948] 2 All ER 887. The tenant can claim only on his own behalf and cannot set up that the conduct
was unreasonable towards the public.
(b) Rights of shooting tenant
HR A[1422]
The shooting tenant may have obtained his right either:
(a) from an occupying owner; or

(b) from an owner who has let his land, but reserved his shooting rights. If the owner does not occupy
his own land but lets it to a tenant, the rights over game may or may not be reserved. Where they are not
reserved they pass in every case, with the possession of the land, to the tenant1. A tenant who acquires
his rights in this way is subject to the restriction that he cannot shoot ground game by night2. To this
extent, the tenant is in a worse position than a tenant who has shooting rights expressly granted to him by
the owner; or
(c) from an occupying tenant where the rights have not been reserved3. In all these cases the shooting
tenant may have either the right to shoot the game or else general shooting and sporting rights. Subject to
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this, he takes in cases (a) and (b) precisely those rights that the owner himself would have had. In case
(a), however, the owner retains his rights as occupier under the Ground Game Act 1880. An occupying
owner or tenant who infringes the rights of his shooting tenant by pursuing, killing, or taking the game,
commits an offence for which he may be prosecuted4; but an owner not in occupation who does do so is
merely liable to a civil claim for breach of contract5. The grantee of exclusive sporting rights has a right
of action against any one whose acts interfere with his enjoyment thereof6. Where an accident such as a
fire threatens damage to his shooting rights, the shooting tenant is entitled to adopt such means for the
preservation of his rights as are reasonably necessary7.
HR A[1423]
1 Anderson v Vicary [1900] 2 QB 287, CA.
2 Ground Game Act 1880, s 6; Saunders v Pitfield (1888) 58 LT 108.
3 Anderson v Vicary [1900] 2 QB 287, CA.
4 Game Act 1831, s 12.
5 The Game Act 1831 does not make interference by a non-occupying owner an offence.
6 Fitzgerald v Firbank [1897] 2 Ch 96, CA; Nicholls v Ely Beet Sugar Factory [1931] 2 Ch 84.
7 Cope v Sharpe (No 2) [1912] 1 KB 496, CA.
(c) Rights and liabilities of grantor
HR A[1424]
In the absence of any special covenant, the grantor is not precluded from using the land in the ordinary and accustomed
way having regard to its character at the date of the grant1. But any act done with the intention of injuring the rights
granted or any user of the land which does not fall within the ordinary course of its management or works a substantial
change in its character, is, if it substantially injures the rights granted, a derogation from the grant and a breach of the
usual covenant for quiet enjoyment2. Thus, it has been held that the erection of racing stables by a purchaser from the
grantor was an infringement of the sporting rights granted3.
HR A[1425]
1 Peech v Best [1931] 1 KB 1, CA (where all earlier cases are reviewed) as explained in Mason v Clarke [1955] AC 778, HL.
2 Peech v Best [1931] 1 KB 1, CA. Letting of shares in sheep grazing land is not a non-natural user: Mason v Clarke [1955] AC 778, HL.
Page 301
3 Peech v Best [1931] 1 KB 1, CA.
HR A[1426]
By apt words the grantor may, of course, retain concurrent sporting rights either contractually for his own life, or, by
re-grant of a profit à prendre, throughout the whole term1.
HR A[1427]
1 Re Vickers' Lease, Pocock v Vickers [1947] Ch 420.

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Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 2 Leases and agreements for leases/D
Building leases
(a) Definition
HR A[1428]
'Building lease' has been defined by statute1 as a lease for building purposes or purposes connected therewith, and such
a lease is one made in consideration of the tenant having erected or agreeing to erect new or additional buildings, or
having repaired or improved or agreeing to repair or improve buildings, or having executed or agreeing to execute an
improvement for or in connection with building purposes2. Thus, a lease under which the lessee covenanted to rebuild a
stock of chimneys and to effect other substantial repairs to the roof and framework of the building was a building lease
within the statutory definition3. However, the lease must impose an obligation to build; a mere repairing lease is not
within the statutory definition4.
HR A[1429]
1 Law of Property Act 1925, s 205(1)(iii). Cf the Leasehold Reform Act 1967, s 4(1)(d). See also the Landlord and Tenant Act 1927, s
19(1)(b).
3 In Re Daniell's Settled Estate [1894] 3 Ch 503, CA, a decision on the almost identical provisions of s 8(1) of the Settled Land Act 1882,
see now Settled Land Act 1925, s 44(1).
4 Hallett to Martin (1883) 24 Ch D 624.
(b) Covenants
HR A[1430]
Building leases usually contain stipulations for building within a definite period erections of a particular class, or of a
stipulated value, and for the observance of a given building line and similar covenants. Thus, a covenant on disposition
of a freehold 'to build' unlimited in time was said not to be a usual covenant1. The ordinary covenant with regard to
building, where a ground rent is reserved, is that the lessee shall build within a short period, generally two years at the
most, and the plans will be submitted for the approval of the lessor or his surveyor1. An agreement for a 'ground rent'
does not imply that the land is to be built on2.
HR A[1431]
Page 303
1 Andrew v Aitken (1882) 22 Ch D 218.
2 Wesley v Walker (1878) 38 LT 284.
HR A[1432]
A covenant to erect houses of a minimum value will be broken by the erection of a building which substantially forms
two houses unless each part of the building is of the required value1. Thus, where a double tenement house was erected
consisting of a ground floor tenement and a first floor tenement each distinct and complete in themselves with no
internal communication it was held that there was a breach of covenant not to build a house of a value less than £300,
for although the cost of each building was in excess of £300 the cost of each tenement was less than that amount2. The
'value' in the covenants under consideration refers to the value at the date of erection and thus the fact that as a result of
building costs houses in excess of the stated value to be built would not be of the type of houses indicated by the stated
value at the date of grant, the covenantee has still complied with the covenant3. A covenant that the value of a single
house should not be less £600 and a pair of semi-detached houses not less than £900 is not broken by erecting only one
of a pair where it was clear that a pair was planned, the house having been built as one of a pair, having footings and
chimney breasts made ready for the companion house and not having an exterior but a party-wall on the side where the
companion house was to be4.
HR A[1433]
1 Snow v Whitehead (1884) 53 LJ Ch 885.
2 Ilford Park Estates Ltd v Jacobs [1903] 2 Ch 522. Compare Kimber v Admans [1900] 1 Ch 412, where a block of flats constituted one
house within the meaning of a covenant not to erect more than a certain number of houses with a minimum value of each house to be £500.
3 Grant v Derwent [1928] Ch 902.
4 Knight v Simmonds [1896] 1 Ch 653; on appeal [1896] 2 Ch 294.
(c) Building line
HR A[1434]
A covenant to observe a building line is broken by the erection of anything amounting in law to a 'building' beyond the
stipulated limit. The meaning of 'building' varies with the particular context in each case. Thus, the erection of a screen
to prevent flats overlooking a churchyard obtaining rights of way was held not to be a breach of the Metropolitan Open
Spaces Act 1881 which imposed a condition that the open space should be held 'free from buildings'. However, an
erection along a boundary of an advertising hoarding of a permanent nature some 156 feet long and 15 feet high has
been held to be a breach of a covenant not to erect 'any building'1. The construction of a railway embankment consisting
substantially of compacted excavated material has similarly, held to be a breach of a covenant not to erect 'any building
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other than private dwelling houses'2. An open trellis-work screen of about 58 feet long and 12 feet high, which
interfered to some extent with the light flowing the ground floor windows of adjoining premises was held to constitute a
breach of the covenant not to 'erect or build save and except a stable and coach house'3. Where a hotel was constructed
3.9 metres beyond the building line, damages in lieu of an injunction were to be assessed by reference to such sum of
money that might reasonably have been demanded by the covenantee from the covenantor as a quid pro quo for
permitting the encroachment, each party being assumed to have been making reasonable use of their respective
bargaining positions without holding out for unreasonable amounts. The covenantee is not to be viewed as holding the
covenantor to ransom4.
HR A[1435]
1 Nussey v Provincial Billposting Co [1909] 1 Ch 734. Compare Foster v Fraser [1893] 3 Ch 158, where a covenant that any building
erected on land should be a certain height and have a stuccoed front and slated roof and be used only as a dwelling house was not broken by
an advertising hoarding.
2 Long Eton Recreation Grounds Co v Midland Rly Co [1902] 2 KB 574. Collins MR thought that the matter could be decided by
construing the covenant as meaning that nothing but private dwelling houses were intended to be constructed upon the land and, therefore,
the construction of an embankment was a breach of the covenant. He said, however, at p 581:
'If, however, it is necessary to say whether a railway embankment can be covered by the word
"building" I see no reason for saying that it cannot. A building is not necessarily limited to a
structure of bricks and mortar. There is nothing to negative this view, and it seems to me to be
obvious as it comes within the sense of the covenant, and that to hold otherwise would be to
defeat the object of the parties.'
Compare Shropshire County Council v Edwards (1982) 46 P & CR 270, where the judge refused to
decide whether the construction of a bank separating a road from a proposed gypsy caravan site would or
would not be a 'building or other erection'.
3 Wood v Cooper [1894] 3 Ch. 671. Romer J said:
'I come to the conclusion that this screen the Defendant has put up is a "building" within the
meaning of the covenant...This Screen is a very substantial erection and a firm one. It seems to
me that it is intended to be, and unless restrained, would remain, a permanent part of the wall,
close to or against which it is erected. At any rate it will act in the same way, as far as the
Plaintiff's house is concerned, as if it had been a wall added to a portion of the former existing
wall. I think undoubtedly, if it had been built of brick, it would have been admitted to have been a
breach of the covenant, and I do not think that the fact that it is made of wood makes any
difference under the circumstances. As I have said, it is a permanent erection, and a substantial
one, and intended to act as such.'
4 Amec Developments Ltd v Jury's Hotel Management (UK) Ltd [2001] 07 EG 163, Ch D following
Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 at 815D; Jaggard v Sawyer
[1995] 1 WLR 269, CA and explained further in A-G v Blake [2001] 1 AC 268, [2000] 4 All ER 385,
CA.
HR A[1436]
Page 305
A covenant not to erect a building beyond a line of frontage does not, however, prevent the erection of an ordinary
boundary wall1. Similarly, small projections of a house beyond the line of the boundary may be disregarded1. But
erection of houses which project, for example, by bay windows, over the building line will be a breach not to erect in
front of the building line2. Similarly, where bay windows are added subsequently to the erection of the houses3. The
construction of an underground urinal the use of which projected very slightly above the surface was held by the Court
of Appeal not to infringe the covenant that land 'should forever thereafter be kept open and unbuilt upon'4. It would,
however, be otherwise if the terms of the covenant prohibited building not merely 'upon' but 'upon or under' the land5.
A covenant to build to the satisfaction of the surveyor of the lessor imports an obligation that the lessee shall build in
any event, and to the satisfaction of the surveyor, if the lessor appoints one6.
HR A[1437]
1 Child v Douglas (1854) Kay 560.
2 Lord Manners v Johnson [1875] 1 Ch D 673.
3 Western v MacDermott (1866) LR 1 Eq 499; affd 2 Ch App 72; Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P & CR 183, CA.
4 Graham v Newcastle-upon-Tyne Corpn (1892) 67 LT 790.
5 R v Westminster County Council, ex p Leicester Square Coventry Street Association (1989) 59 P & CR 51 (intended construction of an
electricity sub-station under Leicester Square presumed to be an intended non-compliance with a covenant by the covenantor that he 'would
not erect any building except statues and pedestals for statues seats and fountains upon or under the same piece of ground').
6 Cannock v Jones (1849) 3 ExCh 233.
(d) Fees
HR A[1438]
In the absence of express provision or local custom the liability for costs incurred by the person whose approval is
required rests with him. Thus, a covenantor was not required to pay the vendor's surveyor's fee under a covenant not to
build otherwise in accordance with such drawings as might be previously approved by the vendor's surveyor where the
covenant contained no express provision for payment of the fees1.
HR A[1438.1]
1 Reading Industrial Co-op Society Ltd v Palmer [1912] 2 Ch 42.
(e) Limitations
Page 306
HR A[1439]
The covenants of the lessee may restrict the mode of development of the land, as by limiting the number of houses
which may be built. A covenant not to erect more than one house on a plot of land was held not to be broken by the
erection of a block of flats1. But a building containing two maisonettes each having their own separate external front
door and access without any internal means of communication or common staircase was held to constitute two houses
within the meaning of the covenant not to erect more than one house on the site2. Covenants may also limit the
buildings to private dwelling houses. There are a considerable number of authorities on this topic and reference should
be made to Scamell Land Covenants (1996) p 243ff. Other restrictions may include the construction of roads and
drains3, to leave open spaces4 or to leave lands undeveloped5.
HR A[1440]-[1445]
1 Kimber v Admans [1900] 1 Ch 412.
2 Ilford Park Estates Ltd v Jacobs [1903] 2 Ch 522.
3 Mason v Cole (1849) 4 Ex Ch 375.
4 Herbert v Maclean (1860) 12 I Ch R 84.
5 Mclean v Mckay (1873) LR 5 PC 327 and see Graham v Newcastle-upon-Tyne Corpn (1892) 67 LT 790.
(f) Alienation
HR A[1446]
By statute if the lease is for more than 40 years it is subject to a proviso that no consent is needed for alienation if
effected more than seven years before the end of the term1. This provision is applied to leases made in consideration
wholly or partially of the erection, or the substantial improvement, addition or alteration of buildings2.
HR A[1447]
1 Landlord and Tenant Act 1927, s 19(1)(b).
2 Landlord and Tenant Act 1927, s 19(1)(b). By virtue of s 19(1D) (introduced by the Landlord and Tenant (Covenants) Act 1995, s 22), s
19(1)(b) does not have effect in relation to any assignment of a 'qualifying lease' (as defined in LTA 1927, s 19(1E) by reference to LT(C)A
1995, s 1). A qualifying lease is one which is a new tenancy for the purposes of LT(C)A 1995, s 1 other than a residential lease, namely a
lease by which a building or part of a building is let wholly or mainly as a single private residence. The paragraph continues to apply to other
forms of alienation.
Page 307
(g) Surveyors and plans
HR A[1448]
A tenant who covenants to build to the satisfaction of a surveyor to be appointed by the landlord is not under an
obligation to build unless and until the surveyor has been appointed, for the appointment is a condition precedent to the
tenant's liability; but it has been held that where work is to be done subject to the superindents of specified persons, such
superintendents is not a condition precedent1. If the surveyor so appointed expresses dissatisfaction with the work, there
is no breach of covenant if in fact the surveyor ought to have been satisfied2.
HR A[1449]
1 Cannock v Jones (1849) 3 ExCh 233; affd sub nom Jones v Cannock (1850) 5 ExCh 713, Ex Ch. See also 4(2) Halsbury's Laws para
399.
2 Doe d Baker v Jones (1848) 2 Car & Kir 743; Finchbourne Ltd v Rodrigues [1976] 3 All ER 581, CA.
HR A[1450]-[1455]
It is often the case that the covenant is framed so that the tenant cannot build without first submitting plans for approval.
Although positive in form the covenant is restrictive in substance1. The problem of the person whose approval is
required being confined to the original covenantee2 ought not to arise in the context of leasehold covenants for it is
usually the case that the approval is that of the landlord's surveyor and the landlord is defined so as to include his
successors in title. It may be that, notwithstanding the absence of an express provision, a term will be implied that the
surveyor's approval to plans cannot be unreasonably refused3. However, there is no general principle of law that,
whenever a contract requires consent of one party to be obtained by the other, there is an implied term that such consent
is not to be unreasonably refused. It all depends upon the circumstances of the particular contract4. It may be that a
distinction has to be drawn between those cases where the requirement of consent relates to a general matter (such as a
covenant not without consent to carry on any trade) and covenants which require the approval of a specific matter, as
when plans of a building have to be submitted for approval and it is in respect of the latter covenants only that the court
will not permit the party whose approval is required to misuse the requirement by refusing to approve the plans which
are free from any tenable objection5. Where the covenant is subject to a qualification that the approval is not to be
unreasonably withheld, the landlord is entitled to know the true nature of the tenant's proposals. Plans which convey
little or no information as to the layout of the various facilities to be contained within the building and its appearance
are likely to be insufficient to enable the landlord to form any conclusion and may justify a refusal of approval6.
HR A[1456]
1 Powell v Hemsley [1909] 1 Ch 680 at 687-688; affd [1909] 2 Ch 252.
2 Mayner v Payne [1914] 2 Ch 555.

Page 308
3 Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P & CR 183, CA. See also Bower & Bower v Goodyear [1986] CLY 2827, CC. Kalford Ltd
v Peterborough City Council [2001] EGCS 42, Ch D where it appears to have been agreed that, under a covenant contained in a building
lease whereby the tenant was under an obligation to erect a hotel in accordance with plans and specifications having the written consent of
the landlord, the consent was subject to an implied qualification that it was not to be unreasonably withheld.
4 Price v Bouch (1986) 53 P & CR 257.
5 Clerical Medical & General Life Assurance Society v Fanfare Properties Ltd (2 June 1981, unreported) referred to in the judgment of
Slade LJ in Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P & CR 183, CA.
6 Kalford Ltd v Peterborough City Council [2001] EGCS 42, Ch D. The material must, therefore, be sufficient to enable a reasonable
landlord to be expected to form a conclusion upon it.
HR A[1457]
Any term which provides that a surveyor's decision is to be binding on a question of law is not void as being contrary to
public policy1. However, this is not to say that the surveyor's decision is free from review by the court. The decision of
the surveyor as expert can be reviewed on the basis that he has made a decision on the basis of an incorrect
interpretation or matters beyond his remit2. The surveyor will not have an exclusive power to determine questions of
law eg construing the lease unless the terms of the lease so provides3.
HR A[1458]
1 Nikko Hotels (UK) Ltd v MEPC plc [1991] 2 EGLR 103, not following Davstone Estates Ltd's Leases [1969] 2 Ch 378.
2 Mercury Communications Ltd v Director General of Telecommunications [1996] 1 All ER 575, [1996] 1 WLR 48; National Grid Co plc
v M25 Group Ltd [1999] 08 EG 169, CA.
3 National Grid Co plc v M25 Group Ltd [1999] 08 EG 169, CA.
HR A[1459]
The costs that have been incurred in seeking approval will lie where they fall unless there is an express provision or it is
the local custom to impose liability on the person seeking approval for the costs incurred by the person whose approval
is required1.
HR A[1460]-[1465]
1 Reading Industrial Co-op Society Ltd v Palmer [1912] 2 Ch 42.
(h) Remedies for breach of building stipulations

Page 309
HR A[1466]
Specific performance of a covenant to build forming the subject matter of a building lease may be the subject of a
decree of specific performance1. It has been said that in order for the court to grant specific performance of the building
lease it must be shown that: (a) the building work is sufficiently certain such that the court can be sure as to the exact
nature of the work of which it is asked to order the performance2; (b) that the plaintiff has a substantial interest in
having the contract performed which is of such a nature that he cannot adequately be compensated for breach of the
contract by damages2; (c) the defendant is in possession of the land on which the work is contracted to be done3.
HR A[1467]
1 See, in connection with enforcement of agreements for leases, para HR A[964].
2 Wolverhampton Corpn v Emmons [1901] 1 KB 515 at 525; Molyneux v Richard [1906] 1 Ch 34.
3 Carpenter Estates Ltd v Davies [1940] Ch 160 at 164.
HR A[1468]
The court may in its discretion refuse specific performance and grant damages in lieu1. The lessor may reserve a right
of re-entry for breach of the covenant. If the landlord by his conduct induces the tenant to believe the performance of a
covenant to build within a stipulated time will not be insisted on, the principles of equitable or promissory estoppel will
apply so that he may afterwards be prevented from treating the non-performance within the time as a ground for
forfeiture2. Forfeiture is not necessarily waived by allowing the lessee to proceed with the works3. In equity relief
against forfeiture was refused for non-completion of the building if not occasioned by default of the lessor4. However,
the lessee is now entitled to seek relief under statute5.
HR A[1469]
1 See, on damages, paras HR A[1142]ff. As to the calculation of damages for the infringement of the building line see para HR A[1435],
fn 4.
2 Birmingham and District Land Co v London & North Western Rly Co (1888) 40 Ch D 268; Hughes v Metropolitan Rly Co (1877) 2 App
Cas 439, HL. A discussion of equitable estoppel is beyond the scope of this work. For a lucid treatment see Treitel The Law of Contract
(1995) p 98ff.
3 Doe d Kensington v Brindley (1826) 12 Moore CP 37.
4 Croft v Goldsmid (1857) 24 Beav 312.

Page 310
HR A[1470]-[1475]
The agreement may provide that if the lessor re-enters on the default of the lessee to complete the building, he shall take
the material and plant brought upon the land for the purpose of the works as liquidated damages1.
HR A[1476]
1 As to the effect of such an agreement, see Tripp v Armitage (1839) 4 M & W 687.
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Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 2 Leases and agreements for leases/E
Leases of licensed premises
E
Page 312
Leases of licensed premises/1 Introduction
1 Introduction
HR A[1477]
Leases of premises licensed to sell alcohol usually contain covenants by the lessee which are intended to protect the
licence; also, if the lessor of the premises is a brewer, the lease will usually contain covenants by the lessee intended to
create a 'tie' to the brewery, by requiring the lessee to purchase drink only from the brewery1. Such a tie must comply
with art 85 of the Treaty of Rome and any European Community directives made pursuant to it if it is to be enforceable,
but where the tie does not comply it is severable from the other provisions in the lease, with the result that the lessee
remains liable to pay the rent reserved by the lease and perform his other covenants2.
HR A[1478]
1 However ties in respect of beer have been regulated by the Supply of Beer (Loan Ties, Licensed Premises and Wholesale Prices) Order
1989, SI 1989/2258 and the Supply of Beer (Tied Estate) Order 1989, SI 1989/2390.
2 Inntrepreneur Estates v Mason (1993) 68 P & CR 53; Inntrepreneur Estates (GL) Ltd v Boyes (1993) 68 P & CR 77, CA; Star Rider Ltd
v Inntrepreneur Pub Co [1998] 1 EGLR 53.
Page 313
Leases of licensed premises/2 Covenants to maintain licences
2 Covenants to maintain licences
HR A[1479]
If the lessee covenants that he will not do nor suffer to be done anything whereby the licence may be forfeited or the
renewal thereof withheld, this will render him and his assigns liable in respect of their own conduct of the premises; but
it will not render them liable if the licence is forfeited, or if renewal is withheld, by reason of offences committed by an
underlessee or his employee1. To render them liable in this event the covenant must either extend specifically to the
conduct of an underlessee or other occupier or must be an absolute covenant that the premises shall be so conducted that
the licence shall not be forfeited nor the renewal refused2. If the covenant extends to conduct whereby the renewal may
be imperilled, an entry of a conviction will constitute a breach3. The lessee usually covenants to keep open the premises
at all lawful hours4, and to apply for and use his best endeavours to obtain a renewal of the licence5, or to keep the
house open as a public-house. He commits a breach of the last covenant if, on a renewal being refused, he makes no
attempt to have the decision reversed6. Covenants relating to the management of the premises run with the reversion,
and hence the assignee of the reversion is entitled to take advantage of them7.
HR A[1480]-[1485]
1 Wilson v Twamley [1904] 2 KB 99, CA; see Bryant v Hancock & Co [1899] AC 442; Mumford v Walker (1901) 71 LJKB 19. A person
does not do or suffer that over which he has no control (Wilson v Twamley distinguished in Atkin v Rose [1923] 1 Ch 522); nor does he
permit a breach by not taking a covenant against it (Prothero v Bell (1960) 22 TLR 370).
2 See Bryant v Hancock & Co [1899] AC 442 (where the covenant relating to forfeiture of the licence was held to be absolute, but that
relating to non-renewal of the licence was held not to be absolute). A covenant to keep and conduct the demised premises in a proper manner
is absolute, and is broken if the licence is lost through the conduct of an underlessee (Palethorpe v Home Brewery Co Ltd [1906] 2 KB 5,
CA). But a covenant to transfer the licence at the end of the term is not broken if the licence has been lost through the conduct of an
underlessee, and the lessee has used his best endeavours to save it (Williamson v Issott (1909) 25 TLR 514). A covenant to insure against
loss of the licence and, in the event of the licence being lost or forfeited during the term, to pay to the lessor all moneys received under such
insurance, does not apply to a case where the licence is not renewed simply on the ground of redundancy (Wootton v Lichfield Brewery Co
[1916] 1 Ch 44, CA).
3 See Saunders v Young & Co's Brewery Ltd (1925) 134 LT 319.
4 On breach of this covenant the lessor may be entitled to the appointment of a receiver of the licence to secure its preservation:
Charrington & Co Ltd v Camp [1902] 1 Ch 386.
5 See Bryant v Hancock & Co [1899] AC 442. A tenant who covenants to use his best endeavours to extend the custom of a beerhouse
need not himself carry on the business (Moore v Robinson (1878) 48 LJQB 156).
6 Linder v Pryor (1838) 8 C & P 518.
7 Fleetwood v Hull (1889) 23 QBD 35. For covenants running with the reversion, see Chapter 4.
Page 314
Hill and Redman's Law of Landlord and Tenant/ Division A General Law /
Chapter 2 Leases and agreements for leases / E Leases of
licensed premises / 3 Tied house covenants
3 Tied house covenants
(a) Common law

position
HR A[1485.1]
A lessor may impose on his lessee the obligation to deal exclusively with a
particular person, and such covenants are not illegal as being in restraint of trade1; but they are subject to an implied
condition that the lessor is ready to supply to the lessee liquor such as he reasonably requires in kind and quality, and at
fair and reasonable prices2, and if this condition is not fulfilled the lessee may obtain his supplies elsewhere3. The court
will not now imply into a beer tie agreement terms requiring that beer be sold to a tenant at a reasonable price, or
preventing a supplier selling beer to non-tied houses at a lower price4. The covenant is sometimes enforced by reserving
an additional rent while it is broken or by allowing a reduction of rent while it is observed. However, this does not
prevent the covenant from being imperative - at any rate, where there is a proviso for re-entry on non-performance - and
the lessee does not have the option of paying the additional or the unreduced rent and of dealing with another brewer5.
The landlord is not with respect to the tie in a fiduciary postion to the tenant; the principal transaction between the two
of them is a letting of a property for a rent. One cannot in relation to that commercial relationship agreed between
parties at arm's length separate out one element of it and categorise the landlord as assuming with respect to it a
fiduciary obligation to the tenant6.
HR A[1485.2]
1Such covenants were at first viewed with

disfavour, as being prejudicial to the public welfare (Cooper v Twibill(1808) 3 Camp 286n (a); Thornton v Sherratt(1818) 8 Taunt 529); but
their validity has become well established. Such a covenant was capable of running with the land (Clegg v Hands(1890) 44 Ch D 503, CA),
and the benefit and burden may now be transmitted on assignment (see the Landlord and Tenant Act 1995, s 3 (as amended).
2
Noakes & Co Ltd v Day(1907) reported [1910] 1 Ch 270, n, CA; Courage & Co Ltd v Carpenter[1910] 1 Ch 262. A provision in a tied
house covenant that the lessor will supply at the 'fair market price' must be construed in the light of the context and the surrounding
circumstances; the words 'fair market price' have no fixed legal significance (Charrington & Co Ltd v Wooder[1914] AC 71, where it was
Page 315
held to mean the price applying to tenants of tied houses; and see Arnold, Perrett & Co v Radford(1901) 17 TLR 301). As to evidence of the
quality of the beer, see Manchester Brewery Co v Coombsas reported (1901) 82 LT 347.
3
Holcombe v Hewson(1810) 2 Camp 391; Thornton v Sherratt (1818) 8 Taunt 529; Edwick v Hawkes(1881) 18 Ch D 199; see Weaver v
Sessions(1815) 6 Taunt 154; Stancliffe v Clarke(1852) 7 Exch 439. Sometimes an express proviso to the same effect is inserted (see Doe d
Calvert v Reid(1830) 10 B & C 849 at 851; Clegg v Hands(1890) 44 Ch D 503, CA).
4
Courage Ltd v Crehan, Byrne v Inntrepreneur Beer Supply Co Ltd (formerly known as Courage Ltd), Inntrepreneur Beer Supply Co Ltd v
Langton, Greenalls Management Ltd v Smith, Walker Cain v McCaughey >
[1999] 2 EGLR 145 , CA.
5
Hanbury v Cundy(1887) 58 LT 155.
6
P & S Amusements Ltd v Valley House Leisure Ltd[2006] EWHC 99 (Ch), [2006] All ER (D) 25 (Feb), HCt. The position may be different if
the tenant was inexeperienced in the licensed trade and asked the landlord to help him in finding a brewery supplier and in negotiating terms
with the brewery on behalf of the tenant: Park J at para [46]. The landlord is not, by a mere provison in a lease providing for the tenant to
purchase beer from the landlord's nominated supplier, appointing himself as the agent to do something for or in the name of the tenant.
(b) European
anti-competition law
HR A[1485.3]
An exclusive supply clause may, however, be a breach of European Community

law and a lessor may be restrained from abusing his right to terminate a tenancy if it is shown that its purpose was to
procure a breach of community law1. The European Court of Justice has considered the compatibility of beer ties with
art 812 (previously art 85(1)3 of the Treaty of Rome) and has authoritatively stated that two cumulative conditions must
be met if the beer tie is to be prohibited. The first is that, having regard to the economic and legal context of the
agreement at issue, it is difficult for competitors who could enter the market or increase their market share to gain
access to the national market for the distribution of beer in premises for the sale and consumption of drinks. The fact
that, in the market, the agreement in issue is one of a number of similar agreements having a cumulative effect on
competition constitutes only one factor amongst others in assessing whether access to that market is indeed difficult4.
The second condition is that the agreement in question must make a significant contribution to the sealing-off effect
brought about by the totality of those agreements in their economic and legal context. The extent of the contribution
Page 316
made by the individual agreement depends on the position of the contracting parties in the relevant market and on the
duration of the agreement5. Thus, where the landlord held only a small share of the UK beer market (not more than
0.2%) and the beer tie enabled the tenant to opt (and the tenant had opted) to have a subsidiary of the landlord supply
him with beers (the suppliers being much larger UK brewers) it was held that the tie was not contrary to art 81 of the
Treaty of Rome. The tenant could not, by choosing to be supplied with the products of larger brewers, bring the tie
within art 81. The object of the tie was not the restriction, distortion or prevention of competition within the terms of the
article6. An exclusive supply clause whereby the tenant is required to purchase all beer and certain non-beer drinks from
the lessor or its nominees if contrary to art 81of the European Community Treaty does not give rise to a claim in
damages as a party to an illegal contract is unable to recover damages from the other party7. Even if the tie is to be
considered unenforceable by reason of art 81 it was held not to invalidate a rent review clause which could be initiated
by the landlord upon the landlord's exercise of an option to release the tie or his inability to enforce any of the tie
provisions. The rent review provisions were not inextricably linked with the tie nor did the landlord have to rely on the
illegality of the tie in order to exercise its option8. An agreement if prohibited under art 81 does not remain
automatically void thereafter. It is void only for so long as the conditions imposing the prohibition under art 81 to
anti-competition agreements subsist9.
HR A[1485.4]
1
Holleran v Daniel Thwaites plc[1989] 2 CMLR 917.
2Article 81 prohibits all agreements between

undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which
have as their object or effect the prevention, restriction or distortion of competition between Member States. Any agreement or deicison
prohibited by Art 81(1) is automatically void: Art 81(2). However, the Articles makes provision for exemptions. It provides that it 'may be
declared inapplicable' to individual agreements on their particular merits or by the applications of block exemptions covering certain types of
common agreement: Art 81(3).
3The Treaty of Amsterdam, which came into

force on 1 May 1999, provided for a complete renumbering of the Treaty of Rome and, as a result, art 85 is now art 81. This change must be
kept in mind when reading pre-Amsterdam decisions.
4See case C-234/89 Delimitis v Henninger

Brau[1991] ECR I-935, [1992] 5 CMLR 210, ECJ.
5
Delimitis v Henninger Bräu AG[1991] ECR I-935 at I-987, para 27; Gibbs Mew plc v Gemmell [1999] 01 EG 117, CA.
6
Page 317
Gibbs Mew plc v Gemmell[1999] 01 EG 117, CA; Trent Taverns Ltd v Sykes[1999] NLD 22 January, CA; Courage Ltd v Crehan [1999]
EGCS 85, Ch D.
7
Inntrepreneur Pub Co (CPC) Ltd v Price[1998] EGCS 167, Ch D. In Courage v Crehan [2001] All ER (D) 55 ECJ, the ECJ ruled that:
'1. A party to a contract liable to restrict or

distort competition within the meaning of Article 85 of the EC Treaty (now Article 81 EC) can
rely on the breach of that provision to obtain relief from the other contracting party.
2. Article 85 of the Treaty precludes a rule of
national law under which a party to a contract liable to restrict or distort competition within the
meaning of that provision is barred from claiming damages for loss caused by performance of
that contract on the sole ground that the claimant is a party to that contract.
3. Community law does not preclude a rule of
national law barring a party to a contract liable to restrict or distort competition from relying on
his own unlawful actions to obtain damages where it is established that that party bears
significant responsibility for the distortion of competition.'
8Where terms are

void at common law for being in restraint of trade or by reason of Article 81 EC and the Chapter I
prohibition, the courts apply the doctrine of severance to determine if the offending terms can be severed
from the contract leaving the residue to continue to operate as an enforceable contract; see, for example,
Crehan v Courage Limited; Byrne v Inntreprenneur Beer Supply Co Ltd[1999] EuLR 834 at 896E-901A.
The Court of Appeal in Crehan rehearsed various formulations of the severance test propounded over the
years without identifying which, if any, was to be preferred. These included:
(i) whether the invalid restraint formed the

whole or substantially the whole consideration for the promise;
(ii) whether the contract would be so
changed in its character as not to be the sort of contract that the parties intended to enter at all;
(iii) whether what was unenforceable was
part of the main purpose and substance, or whether the deletion altered entirely the scope and
intention of the agreement or, on the contrary, left the rest of the agreement a reasonable
arrangement between the parties;
(iv) whether it would disappoint the main
purposes of one of the main parties; and
(v) whether the agreement was in substance
an agreement for an invalid restraint.
The comments of the Court of Appeal on the approach to

severance are unaffected by the reversal of the court's decision by the House of Lords ([2006] UKHL 38,
[2006] 3 WLR 148, HL).
9
Passmore v Morland plc
[1999] 1 EGLR 51 , CA.
Page 318
(c) Competition
Act 1988
HR A[1485.4.1]
Sections 2 and 18 of the Competition Act 1988 enact, in the national context, the
provisions of Articles 81 and 82 respectively of the EC Treaty1. Agreements between undertakings, decisions by
associations of undertakings or concerted practices which:
(a) may affect trade within the UK; and

(b) have as their object or effect the prevention, restriction or
distortion of competition within the UK,
are prohibited unless they are exempt2. The prohibition applies, in particular, to
agreements, decisions or practices which:
(a) directly or indirectly fix purchase or selling prices or any

other trading conditions;
(b) limit or control production, markets, technical
development or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with
other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by
the other parties of supplementary obligations which, by their nature or according to commercial usage,
have no connection with the subject of such contracts3.
The prohibition applies only if the agreement, decision or practice is, or is

intended to be, implemented in the UK4. A beer tie imposed by the landlord on the tenant as a part of a lease in the
context of an associated agreement between the landlord and the nominated supplier whereby the landlord, rather than
the tenant, received the discounts and the price to the tenant was dictated by the nominated supplier not the landlord,
albeit an arrangment likely to inhibit competition from the tenant, could not be said to be one which prevented,
restricted or distorted the bar trade within the UK or in the part of the UK in which the premises were situated (being
Blackpool) when the evidecne before the court was that the landlord owned no other licensed premises in the area. The
tenant alone was not an appreciable contributor to the market and there were some 150 licensed pubs or bars amongst
whom price competiton was shown to be particulary strong5.
Page 319
HR A[1485.4.2]
1The relationship between the EC

competition rules and the national rules is determined by Art 3 of the Modernisation Regulations effective from 1 May 2004, Council
Regulation (EC) 1/2003; [2003] CMLR 551. Articles 81 and 82 of the EC Treaty must be applied where national competition law applies to
agreements that may affect trade between Member States: Art 3(1) of reg 1/2003. It is not possible to apply a stricter national competition
law to the agreement if the agreement affects trade between Member States but does not fall within Art 81(1) or satisy the conditions of Art
81(3) of the EC Treaty: Art 3(2) of reg 1/2003. However, it is possible for national courts to impose stricter national competition laws or
sanctions where the conduct does affect trade between Member States but does not infringe Art 82 of the EC Treaty; Art 3(3) of reg 1/2003
2Competiton Act 1988, s 2(1). Any

agreement prohibited by this section is void: s 2(4).
3Competiton Act 1988, s 2(2).
4Competiton Act 1988, s 2(3). 'The United

Kingdom' means, in relation to an agreement which operates or is intended to operate only in a part of the UK, that part: s 2(7).
5
P & S Amusements Ltd v Valley House Leisure Ltd[2006] EWHC 1510, Ch D; [2006] All ER (D) 285 (Jun). Accordingly, the tenant's
defence to the landlord's claim to enforce the tie was summarily dismissed.
HR A[1485.4.3]
Any conduct on the part of one or more undertakings which amounts to the
abuse of a dominant position1 in a market is prohibited if it may affect trade2 within the UK3. Conduct may, in
particular, constitute such an abuse if it consists in:
(a) directly or indirectly imposing unfair purchase or selling

prices or other unfair trading conditions;
(b) limiting production, markets or technical development to
the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions
with other trading parties, thereby placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance
by the other parties of supplementary obligations which, by their nature or according to commercial
Page 320
usage, have no connection with the subject of the contracts4.
A beer tie imposed by the landlord on the tenant as a part of a lease in the
context of an associated agreement between the landlord and the nominated supplier whereby the landlord, rather than
the tenant, received the discounts and the price to the tenant was dictated by the nominated supplier not the landlord,
was not prohibited as the landlord was not dominant in the market (having no other premises other than that leased to
the tenant). Albeit the nominated supplier may have been in a dominant position, there was no evidence that it was in
the nominated suppliers interests to drive the tenant out of the market. Further, the nominated supplier was not bound to
supply the tenant any beer at prices which were so excessive as to be unfair or abusive, the agreement with the landlord
requiring the tenant to pay the nominated supplier's list prices for the region in which the tenant's premises were
situated5.
HR A[1485.4.4]
1'Dominant position' means a dominant

position within the UK; and 'the United Kingdom' means the UK or any part of it: Competition Act 1988, s 18(3). A dominant position is:
'a position of economic strength enjoyed by an

undertaking which enables it to prevent effective competition being maintained on the relevant
market by allowing it the power to behave to an appreciable extent independently of its
competitors, its customers and ultimately of the consumers.'
See Hoffman-La Roche v Commission [1979] ECR 461.

2In Aberdeen
Journals Ltd v OFT [2003] CAT 11, paras 453-463, the Competition Appeal Tribunal dealt with a
complaint under s 18 which also requires an 'effect [on] trade within the United Kingdom'. They
concluded (para 459) that:
'More generally, we are not satisfied that we

should read into the statutory wording of section 18(1) of the 1998 Act a requirement that the
effect on trade should be appreciable. It is true that, ever since the decision of the Court of Justice
in Case 5/69 Volk v Vervaecke[1969] ECR 295, it has been the rule that the prohibition of Article
81 of the EC Treaty applies only if there is an "appreciable" effect on competition and trade
between Member States: see also Case 22/71 Béguelin v Commission[1971] ECR 949. The
requirement that there should be an "appreciable" effect on inter-state trade is, however, largely
understood as a jurisdictional requirement which demarcates the boundary line between the
application of Community competition law and national competition law: see e.g. Cases
C-215/96 and C-216/96 Bagnasco v Banco Popolare di Novara[1999] ECR I-135, a case under
Article s 81 and 82, and Case 22/78 Hugin v Commission[1979] ECR 1869, a case under Article
82.'
Page 321
In P & S Amusements Ltd v Valley House Leisure Ltd[2006]

EWHC 1510, Ch D; [2006] All ER (D) 285 (Jun), Morrit VC said that he had 'considerable misgivings
about the validity of the Tribunals conclusion in the context of s 18 [para 22] ibid'.
3Competiton Act
1988, s 18(1). This section corresponds to Art 82 of the EC Treaty.
4Competition Act
1988, s 18(2).
5
P & S Amusements Ltd v Valley House Leisure Ltd[2006] EWHC 1510, Ch D; [2006] All ER (D) 285
(Jun).
HR A [1485.4.5]
The provisions contained within Chapter I of the 1998 Act do not apply an
agreement to the extent that it is a land agreement1. A "land agreement" means an agreement between undertakings
which creates, alters, transfers or terminates an interest in land, or an agreement to enter into such an agreement. The
definition extends to covenants restriciting the use of land2.
HR A [1485.4.6]
1Art 4 to the Competition Act 1998 (Land

Agreements Exclusion and Revocation) Order 2004, SI 2004/1260. This came into force on 1st May 2005. It revoked the earlier Competition
Act 1988 (Land and Vertical Agreements Exclusion) Order 2000.
2ibid Arts 3 and 5.

Page 322
Leases of licensed premises/4 Devolution of burden and benefit of covenants
4 Devolution of burden and benefit of covenants
HR A[1485.5]
A covenant binding the lessee to purchase liquor only from the lessor is capable of running with the land, so that the
burden will devolve upon the assignee of the term and the benefit will pass to a grantee of the reversion1, and this is so
whether in either case 'assigns' are mentioned or not2. So far as the covenant is in substance negative it will be enforced
by injunction3, and since the intention is to bind the premises into whosoever hands they may come, the covenant will
be so enforced against a sublessee with notice, notwithstanding that it purports to bind the lessee and his 'assigns'4.
Moreover, apart from the question whether the covenant runs with the land, the assignee of the reversion can enforce it
if he also takes an express assignment of the covenant5.
HR A[1486]
1 Clegg v Hands (1890) 44 Ch D 503, CA. For covenants running with the land generally, see Chapter 4.
2 White v Southend Hotel Co [1897] 1 Ch 767, CA.
3 Clegg v Hands (1890) 44 Ch D 503, CA at 519; Brandon v Bernhardt (1886) 30 Sol Jo 753.
4 John Bros Abergarw Brewery Co v Holmes [1900] 1 Ch 188.
5 Clegg v Hands (1890) 44 Ch D 503, CA at 518.

Page 323
Leases of licensed premises/5 Liability to assigns of business
5 Liability to assigns of business
HR A[1487]
If the covenant binds the lessee to take liquor from the lessor and his assigns, being successors in his business, then
assigns of the reversion cannot take the benefit of the covenant unless they are also assigns of the business1. The
covenant may be further restricted by requiring them to carry on the business at the particular brewery to which the
premises were originally tied2. But in the absence of special restriction it is sufficient if they are assigns of the business
generally; and if the reversion and the business are assigned together, the assignee is entitled to the benefit of the
covenant, notwithstanding that he carries on business at a different place and that the lessor's brewery is closed3. If the
reversion is assigned, and the business retained by the lessor, the lessee comes under no liability to the assignee of the
reversion, but he remains liable to the lessor4; and if the business is assigned and the reversion retained by the lessor,
the lessee is still liable to the lessor, who alone can sue on the covenant, though the lessee satisfies his liability if he
takes liquor from the assignee of the business5.
HR A[1488]
1 Birmingham Breweries Ltd v Jameson (1898) 67 L J Ch 403, CA, where the phrase 'successors in business' was held to qualify the word
'assigns' introduced into the covenant by the definition clause. As to covenant running with the land, see Chapter 4.
2 Doe d Calvert v Reid (1830) 10 B & C 849, where the covenant was to take beer from the lessors or their successors 'in their late or
present trade of brewers'. This was held to be restricted to the business carried on at the lessors' brewery, and the covenant did not bind the
lessee after the business had been assigned and the brewery closed. But the decision has been confined to the particular case. To ensure such
a restriction the brewery should be specifically mentioned; see Clegg v Hands (1890) 44 Ch D 503, CA at 517; Manchester Brewery Co v
Coombs [1901] 2 Ch 608 at 613.
3 Manchester Brewery C v Coombs [1901] 2 Ch 608 at 613.
4 Birmingham Breweries Ltd v Jameson (1898) 67 L J Ch 403, CA.
5 White v Southend Hotel Co [1897] 1 Ch 767, CA, where it was held that the lessee was entitled to the benefit of a proviso for reduction
of rent so long as he took liquor from the assigns of the business. It was suggested that damages in an action by the lessor for breach of the
covenant would not necessarily be nominal. The assignment of the business did not include an assignment of the covenant, and even if it had
it seems that latter assignment would have been ineffectual; see White v Southend Hotel Co [1897] 1 Ch 767 at 774, CA, per Rigby LJ; and
cf Clegg v Hand (1890) 44 Ch D 503, CA.
Page 324
Leases of licensed premises/6 Liability to assigns of reversion on covenant not incident to business
6 Liability to assigns of reversion on covenant not incident to business
HR A[1489]
If the covenant binds the lessee to take liquor from the lessor simply, without reference to his business, the benefit of
the covenant is not necessarily incident to the business. It will pass upon an assignment of the reversion together with
the business1; but it will pass also with the reversion although the reversion and the business are severed, and whether
the business is retained by the lessor is assigned by him in a different direction2. For the benefit of the covenant to pass,
it is not necessary that the lessor's business should be given up, as even though it continues, the lessee's obligation is to
the new reversioner, and no longer to the lessor3. Nor is it necessary that the reversioner should himself carry on a
brewery business as he can qualify himself to take the benefit of the covenant by purchasing beer and reselling it4.
HR A[1490]
1 John Bros Abergarw Brewery Co v Holmes [1900] 1 Ch 188.
2 Clegg v Hands (1890) 44 Ch D 503, CA.
3 This follows from the circumstance that the covenant runs with the land, and so the lessee is only bound to the reversioner for the time
being.
4 Clegg v Hands (1890) 44 Ch D 503, CA. In this case the lessors at the time of the demise were themselves purchasing part of the beer
which they supplied.
Page 325
Leases of licensed premises/7 Landlord and Tenant (Covenants) Act 1995
7 Landlord and Tenant (Covenants) Act 1995
HR A[1490.1]
The law described above relating to the transmission of the benefit and burden of covenants is that which applies to
tenancies which are not 'new tenancies', within the meaning of the Landlord and Tenant (Covenants) Act 19951.
HR A[1490.2]
1 See Chapter 4; see Landlord and Tenant (Covenants) Act 1995, s 3 for transmission of benefit and burden of covenants in 'new
tenancies'.
Page 326
Leases of licensed premises/8 Covenant by landlord against competition
8 Covenant by landlord against competition
HR A[1490.3]
The landlord may covenant not to permit competition in the landlord's retained property. He may, for instance, covenant
not to permit another public house within a specified distance of the demised premises. The burden of such a covenant
would not, in relation to tenancies which are not 'new tenancies1', touch and concern the subject matter of the lease2 and
thus would not be binding upon a successor in title to the landlord3. In respect of tenancies which are 'new tenancies'
within the meaning of the Landlord and Tenant (Covenants) Act 19954 the burden of the covenant will5 pass with the
reversion as the transmission of the covenant is not dependent upon the concept of 'touching and concerning'6.
However, notwithstanding the provisions of the Landlord and Tenant (Covenants) Act 19957 the covenant will not be
binding on a bona fide purchaser for value of a legal estate without notice of the covenant.8 The burden of a landlord's
covenant restricting public house use on the landlord's adjoining land will not pass to his assigns if it is personal to the
original covenantor9. Whether the burden of the covenant is personal to the original covenantor is a matter of
construction. In the case of an 'old lease10' it is provided by statute that the burden of a covenant relating to the land of
the covenantor is deemed to be made by the covenantor on behalf of himself and his successors in title and the person
deriving title under him or them and has effect as if such successors and other persons were express, the operation of
that statutory provision is subject to a contrary intent11. The contrary intention is to be found in the instrument, and may
be sufficiently contained in the wording and context of the instrument even though the instrument contains no provision
expressly excluding successors in title from its operation12.
HR A[1491]
1 That is, one governed by the provisions of the Landlord and Tenant (Covenants) Act 1995. This is, in general, leases granted after 1
January 1996.
2 Law of Property Act 1925, s 142 refers to more modern phraseology: 'has reference to the subject-matter of the lease'.
3 Thomas v Hayward [1869] LR 4 EX 311. The correctness of this decision was doubted in Kumar v Dunning [1989] QB 193 at 205.
4 As to which, see Chapter 4.
5 Unless personal, see fn 9 below.
6 As it is a 'landlord's covenant' within the terms of Landlord and Tenant (Covenants) Act 1995, s 3(1). See para HR A [1967] ff.
7 Landlord and Tenant (Covenants) Act 1995, s 3(5) provides that 'Any landlord or tenant covenant of a tenancy which was restrictive of
the user of land shall, as well as being capable of enforcement against an assignee, be capable of being enforced against any other person
who is the owner or occupier of any demised premises to which the covenant relates, even though there is no express provision in the
tenancy to that effect'. It has been held by Neuberger J in Oceanic Village Ltd v United Attractions Ltd [2000] Ch 234, [2000] 1 All ER 975
that the term 'any demised premises' within s 3(5) of the 1995 Act does not refer to any premises demised by the landlord, but means the
premises demised by the lease in question. Thus a covenant by the landlord with the tenant not to grant a lease in the landlord's adjoining
Page 327
land for a competitive user was not enforceable by the tenant against the tenant of the adjoining premises. The effect of this decision is that
the only types of persons who could conceivably become bound by the landord's covenant would be an assingee or sub-tenant of part of the
premises demised by the lease.
8 This is the position in relation to unregistered land. Restrictive covenants are, save where the covenant is made between lessor and
lessee, required to be registered as a class D(ii) land charge: Land Charges Act 1972, s 4(6). It has been held that a covenant that affects the
landlord's adjoining land was a covenant between lessor and lessee for the purposes of the 1972 Act. The exception from registration is not
confined to covenants that affect the land which is the subject matter of the lease: Dartstone Ltd v Cleveland Petroleum Co Ltd [1969] 1
WLR 1807. In the case of registered land it has been held that equally the covenant is not registrable having regard to Land Registration Act,
1925, s 50(1): Oceanic Village Ltd v United Attractions Ltd [2000] Ch 234, [2000] 1 All ER 975. It was said that the doctrine of notice has
no part to play in the case of registered land. The provisions under the Land Registration Act 2002 are narrower. A restrictive covenant made
between a lessor and a lessee, so far as relating to the demised premises, cannot be the subject of a notice in the register: LRA 2002, s 33(c).
The position under the Land Registration Act 1925, s 50(1) prevented protection by entry of a notice even if the covenant related to land
other than the demised premises: Oceanic Village ibid.
9 This is the case even with a covenant contained in a new tenancy: Landlord and Tenant (Covenants) Act 1995, s 3(6)(a).
10 That is one granted before 1 January 1996.
11 Law of Property Act 1925, s 79. This applies only in relation to old leases: Landlord and Tenant (Covenants) Act 1995, s 30(4)(a).
12 Morrells of Oxford Ltd v Oxford United Football Club [2001] 2 WLR 128, CA. (A case as between freeholders rather than as between
landlord and tenant.) In that case the contrast between the covenant by the purchaser which expressly referred to successors in title, and the
covenant given by the vendor, which did not, was a sufficient expression of contrary intent.
Page 328
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 2 Leases and agreements for leases/F
Mining leases
F
Page 329
Mining leases/1 In general
1 In general
(a) Nature of mining lease
HR A[1491.1]
Nature of mining lease
A lease may be granted of land or any part of land, and since minerals are a part of the land it follows that a lease can be
granted of the surface of the land and the minerals below, or of the surface alone1, or of the minerals alone2. It has been
said that a contract for the working and getting of minerals, although for convenience called a mining lease, is not in
reality a lease at all in the sense in which one speaks of an agricultural lease, and that such a contract, properly
considered, is really a sale of a portion of the land at a price payable by instalments, that is, by way of rent or royalty,
spread over a number of years3.
HR A[1491.2]
1 See eg Masters v Green (1888) 20 QBD 807 at 808, DC, per Field J.
2 Jegon v Vivian (1865) LR 1 CP 9 at 18; on appeal (1868) LR 3 HL 285.
3 See Gowan v Christie (1873) LR 2 Sc & Div 273 at 284, HL, per Lord Cairns; Coltness Iron Co v Black (1881) 6 App Cas 315 at 335,
HL, per Lord Blackburn; Re Aldam's Settled Estate [1902] 2 Ch 46 at 56, CA, per Collins MR; Earl Fitzwilliam's Collieries Co v Phillips
[1943] AC 570 at 582, [1943] 2 All ER 346 at 350, HL, per Lord Wright.
HR A[1491.3]
Statutory definitions of 'mining lease'
In the Law of Property Act 1925, 'mining lease' means a lease for mining purposes, that is, the searching for, winning1,
working, getting, making merchantable, carrying away or disposing of mines and minerals2, or purposes connected
therewith, and includes a grant or licence for mining purposes3, and 'lease' includes an underlease or other tenancy4. In
the Settled Land Act 19255 and the Landlord and Tenant Act 1927, 'mining lease' means a lease6 for any mining
purpose or purposes connected therewith, and 'mining purposes' includes the sinking and searching for, winning,
working, getting, making merchantable, smelting or otherwise converting or working for the purposes of any
manufacture, carrying away and disposing of mines and minerals7, in or under land8, and the erection of buildings, and
the execution of engineering and other works suitable for those purposes9. 'Mining lease' is also defined for the
purposes of the Opencast Coal Act 195810. 'Coal-mining lease'11, 'lease'12 and 'mine of coal'13 were all defined for the
purposes of the Coal Act 1938.
Page 330
HR A[1491.4]
1 See Lewis v Fothergill (1869) 5 Ch App 103 at 111 per Lord Hatherley LC; Lord Rokeby v Elliot (1879) 13 ChD 277 at 279, CA; revsd
(1881) 7 App Cas 43, HL, without affecting this point.
2 See Law of Property Act 1925 at paras HR A[20012]ff.
3 See LPA 1925, s 205(1)(xiv).
4 See LPA 1925, s 205(1)(xxiii).
5 This definition enables a tenant for life, in a proper case, to grant a lease of a right to let down or damage the surface: Sitwell v Earl of
Londesborough [1905] 1 Ch 460; cf IRC v Joicey (No 2) [1913] 2 KB 580, CA (release by copyholder of right to support not a lease of a
right to work minerals).
6 In the Settled Land Act 1925, 'lease' includes an agreement for a lease (see s 117(1)(x)), and in the Landlord and Tenant Act 1927, 'lease'
means a lease, underlease or other tenancy, assignment operating as a lease or underlease, or an agreement for such lease, underlease,
tenancy or assignment (s 25(1)).
7 For the meaning of 'mines and minerals' see the Settled Land Act 1925.
8 Ie in the Settled Land Act 1925, the settled land or any other land: see s 117(1)(xv).
9 See SLA 1925, s 117(1)(xv); and the Landlord and Tenant Act 1927, s 25(1). This definition of 'mining lease' is applied for the purposes
of the Landlord and Tenant Act 1954, Pt II (ss 23-46) (as amended) by s 46. Part II (as amended) (which provides for security of tenure for
business, professional and other tenants) does not apply to a tenancy created by a mining lease: s 43(1)(b).
10 See the Opencast Coal Act 1958, s 51(1).
11 'Coal-mining lease' means in relation to any coal a lease that confers a right to work and carry away that coal, and means in relation to
any mine of coal a lease that confers a right to use it for a coal-mining purpose: see the Coal Act 1938, s 44 (repealed with savings).
12 'Lease' includes a licence (whether personal or by way of profit à prendre) that confers a right to work and carry away coal or a right to
use a mine of coal for a coal-mining purpose: see CA 1938, s 44 (repealed with savings).
13 See CA 1938, s 44 (repealed with savings).
HR A[1491.5]
Rents and royalties
An agreement for a lease usually contains stipulations as to the dead rents and other rents and royalties to be reserved
by, and the covenants and provisions to be inserted in, the lease, but the omission to provide for the payment of a dead
rent does not render the agreement so inequitable as to be unenforceable1. Rent and royalties are true rents in the sense
that they are incident to the reversion2, but periodical payments under a lease of mines for a specific period may amount
to personal debts only3. A lessee who goes into possession and works minerals before completion of the lease may be
ordered on motion to pay into court the amount of royalties due in respect of minerals raised4.
Page 331
HR A[1491.6]
1 Walters v Morgan (1861) 3 De GF & J 718.
2 Barrs v Lea (1864) 33 LJ Ch 437.
3 Lord Hatherton v Bradburne (1843) 13 Sim 599; and see Re Smith (1874) 10 Ch App 79 at 86 per James LJ.
4 Lewis v James (1886) 32 ChD 326, CA.
HR A[1491.7]
Usual provisions in leases
The statutory formalities regarding the disposition of an interest in land will apply to a contract for a mining lease and
so agreements which provide for the insertion of the 'usual covenants' will be ineffective1. In a contract for a lease for
working a mine, time is of the essence of the contract even if not expressly stated to be so2. Mining leases usually
contain clauses providing for the reference of disputes to arbitration3 or determination by an expert where the value of
the minerals gotten is in dispute.
HR A[1491.8]
1 See the Law of Property (Miscellaneous Provisions) Act 1989, s 2 (as amended); McCausland v Duncan Lawrie Ltd [1996] 4 All ER
995, [1997] 1 WLR 38, CA.
2 Macbryde v Weekes (1856) 22 Beav 533; Green v Sevin (1879) 13 ChD 589 at 594, obiter, per Fry J. Notice may be given fixing a time
for completion if no time is named in the contract: Macbryde v Weekes.
3 For the effect of such a clause see Willesford v Watson (1873) 8 Ch App 473.
HR A[1491.9]
Stamp duty
A lease granted in consideration of a fine and also of an annual rent bears, in respect of the fine, the same stamp duty as
a conveyance on sale for the same consideration and ad valorem duty on the amount of the rent1. A lease which
reserves a fixed rent, and also a varying rent or royalties, on the amount of minerals gotten2, is chargeable ad valorem
on the fixed rent, and with a further duty of a specified sum on the varying rent3.
HR A[1491.10]
Page 332
1 See the Stamp Act 1891, s 1, Sch 1 'lease or tack' (as amended).
2 See paras HR A[335]-[337].
3 See the Stamp Act 1891, Sch 1 'lease or tack' (as amended).
Page 333
Mining leases/2 Property demised; consideration
2 Property demised; consideration
(a) Parcels
HR A[1491.11]
Parcels in agreement for lease
Unless the minerals intended to be included in an agreement for a lease are properly defined in it, the agreement will be
unenforceable. Uncertainty may arise either from an imperfect enumeration of the minerals to be dealt with1 or an
indefinite description of the area under which they are situated2. A description by name of the area is sufficient if the
boundaries can be ascertained3. An agreement for the lease of a particular vein is not void merely because the vein
cannot be found4.
HR A[1492]
1 Price v Griffith (1851) 1 De GM & G 80 (agreement to lease 'coals etc').
2 Lancaster v De Trafford (1862) 31 LJ Ch 554 (description of ironstone as situate under lands at Patricroft, Patricroft being a district
without defined boundaries); Davis v Shepherd (1866) 1 Ch App 410 (agreement defined the minerals by reference to the supposed line of a
fault and approximate acreage, but the fault did not run in the direction supposed, and would have included a larger area: agreement held to
be unenforceable).
3 Haywood v Cope (1858) 25 Beav 140.
4 Jefferys v Fairs (1876) 4 ChD 448.
HR A[1492.1]-[1492.2]
Parcels in lease
Mines and minerals included in a demise are usually described by reference to the surface under which they lie. Faults
crossing a mineral area form natural boundaries between different mines, and are sometimes used to define the extent of
the demise by reference to a line drawn on a plan showing the position or supposed position of the fault1. When a plan
is indorsed on or annexed to the lease and referred to in it, the plan ought to be looked at as part of the description2. If
there is any discrepancy between the plan and description, the description, if clear, will prevail3, but endeavour should
be made to reconcile any apparent discrepancy4. Where the superficial limits of demised mines are ascertained it is
sometimes a question of construction what seams or veins are included in the demise5, or as to the extent of the demise
where the description contains technical expressions which have a definite meaning according to local usage6.
Page 334
HR A[1492.3]
1 Davis v Shepherd (1866) 1 Ch App 410.
2 Lyle v Richards (1866) LR 1 HL 222.
3 See Taylor v Parry (1840) 9 LJCP 298.
4 Brain v Harris (1855) 10 Exch 908.
5 Carr v Benson (1868) 3 Ch App 524, CA (where the meaning of a grant was interpreted by reference to a concurrent licence); Dugdale v
Robertson (1857) 3 K & J 695 (which restricted any right to mine under certain defined lands).
6 Clayton v Gregson (1836) 5 Ad & El 302.
HR A[1492.4]
Exceptions and reservations
It is usual in mining leases to make certain exceptions and reservations1 in favour of the lessor. These are intended
either for the protection of the demised mines or the surface land and buildings on it, or for the preservation of the
lessor's right to work excepted mines2. Sometimes there is an exception from the liberty to work, in which case the part
of the mine so excepted remains subject to the demise3. Thus a covenant to work mines and get the minerals until the
whole are worked, except pillars and barriers which the lessor may require to be left unworked, operates as a partial
exemption from the covenant to work, and the lessee retains an interest in the pillars and barriers entitling him to
compensation on compulsory acquisition. There is an implied reservation to the lessor of the right to descend the
lessee's shafts for the purpose of inspecting the demised mines and the lessee's workings in them.
HR A[1492.5]
1 Dugdale v Robertson (1857) 3 K & J 695; Mostyn v Lancaster (1883) 23 ChD 583, CA.
2 Swindell v Birmingham Canal Co (1860) 9 CBNS 241.
3 Lewis v Marsh (1849) 8 Hare 97.
(b) Rights of working
HR A[1492.6]
General principles
Page 335
A lease of mines or minerals includes by implication a right to get out or enjoy all minerals1 except coal2. The
incidental power, however, warrants nothing beyond what is strictly necessary for the convenient working of the
minerals (which does not include the surface)3, and it is usual in a mining lease to grant express liberty to work and to
do such other things as, in the particular instance, are contemplated as being desirable for that purpose. An implied
power is not restricted by the grant of an express power which is exercisable to a greater extent or for a longer period4;
but if the express power is restrictive of that which would otherwise be implied the grantee is limited to the exercise of
the express power5. Express powers must be exercised in good faith in a reasonable course of working6.
HR A[1492.7]
1 Rowbotham v Wilson (1860) 8 HL Cas 348 at 360 per Lord Wensleydale; Ramsay v Blair (1876) 1 App Cas 701 at 703, HL, per Lord
Chelmsford; Borys v Canadian Pacific Rly Co [1953] AC 217, [1953] 1 All ER 451, PC.
2 Unworked coal is vested in the coal authority which has power to dispose of it. Coal-mining operations are required to be licensed under
the Coal Industry Act 1994 Pt II (ss 25-36).
3 Earl of Cardigan v Armitage (1823) 2 B & C 197 at 211; Lord Darcy v Askwith (1618) Hob 234; Marshall v Borrowdale Plumbago
Mines and Manufacturing Co Ltd (1892) 8 TLR 275.
4 Earl of Cardigan v Armitage (1823) 2 B & C 197; Hodgson v Field (1806) 7 East 613; and see Whidborne v Ecclesiastical Comrs for
England (1877) 7 ChD 375.
5 Re Wilson Syndicate Conveyance, Wilson v Shorrock [1938] 3 All ER 599 (working restricted to underground working); General
Accident Fire and Life Assurance Corpn Ltd v British Gypsum Ltd [1967] 3 All ER 40, [1967] 1 WLR 1215 ('win' included searching for
minerals but construction of deed confined searching to underground searching).
6 Honeywell Cotton Spinning Co v Marland [1875] WN 46.
HR A[1492.8]
Shafts
If minerals cannot be got otherwise, the owner or lessee of the minerals may bore in a reasonable way through the
lessor's land and minerals not included in the demise in order to reach them, and it does not matter whether the barrier is
horizontal or vertical1. The grant of an express liberty to sink pits or shafts imposes no obligation on the lessee to sink,
even though at the time the lease was granted he did not own any adjoining mines2, or although it appears from the
lease that all parties contemplated that a shaft would be sunk3, or that working by instroke is less advantageous4, or that
the lease contains a covenant that the mines will be delivered up at the end of the term in such a state that the working
may be continued by the reversioner5. However, if the lease contains a covenant to work, and the mine cannot be
worked otherwise, the lessee is bound to sink a shaft6, and in some cases a covenant to work in a proper and
workmanlike manner may impose a similar liability7. A proper and workmanlike manner may not mean the best
possible mode of working for the lessor, but it means in such a manner as shall not be simply an attempt to get out of
the earth as much mineral as can be got for the particular purpose of the lessee, regardless of any ordinary or
workmanlike proceeding8. If the lessee enters into an absolute covenant to sink a shaft, performance will not be excused
because it would be useless or unprofitable9. It is, of course, otherwise if the covenant is made subject to a qualification
which excuses performance10. The measure of damages for breach of a covenant to sink a shaft is the sum which the
lessor must expend in sinking where the lessor can go onto the soil11. Where the lessor cannot go onto the soil the
Page 336
damages are either the amount the lessee would have expended in sinking the pit or where the lessee covenanted to pay
the lessor a sum if minerals were found when the pit was sunk, that sum12. Liberty to sink a pit creates an interest in the
land in respect of which compensation is payable when the surface is taken in the exercise of compulsory powers13. A
lessee of minerals who sinks a shaft in land of which the surface is occupied by another must keep the shaft properly
fenced14.
HR A[1492.9]
1 Re Lord Gerard and London and North Western Rly Co [1895] 1 QB 459 at 466, CA, per Lord Esher MR; cf Goold v Great Western
Deep Coal Co (1865) 2 De GJ & Sm 600; see also Harris v Ryding (1839) 5 M & W 60.
2 Jegon v Vivian (1871) 6 Ch App 742.
3 James v Cochrane (1853) 8 Exch 556, Ex Ch; Jegon v Vivian (1871) 6 Ch App 742.
4 Wheatley v Westminster Brymbo Coal Co (1869) LR 9 Eq 538.
5 Lewis v Fothergill (1869) 5 Ch App 103; and see Jegon v Vivian (1871) 6 Ch App 742.
6 James v Cochrane (1852) 7 Exch 170 at 178, obiter, per Parke B; affd (1853) 8 Exch 556, Ex Ch.
7 Lewis v Fothergill (1869) 5 Ch App 103 (working the coal by instroke was held under the circumstances to be working in a proper and
workmanlike manner).
8 Lewis v Fothergill (1869) 5 Ch App 103 at 108 per Lord Hatherley LC.
9 Jervis v Tomkinson (1856) 1 H & N 195.
10 Hanson v Boothman (1810) 13 East 22.
11 Pell v Shearman (1855) 10 Exch 766 at 769 per Parke B.
12 See Pell v Shearman (1855) 10 Exch 766.
13 Re Masters and Great Western Rly Co [1901] 2 KB 84, CA.
14 Williams v Groucott (1863) 4 B & S 149.
HR A[1492.10]
Instroke
'Instroke' means liberty to work a demised mine from an adjoining mine. In the absence of express stipulation a lessee is
not bound to sink a shaft from the surface, but may work by instroke1, and may make use, for that purpose, of apertures
lawfully made in any barrier which he has covenanted to leave between the demised mine and adjoining mines2.
Page 337
HR A[1493]
1 Whalley v Ramage (1862) 10 WR 315; Lewis v Fothergill (1869) 5 Ch App 103; Jegon v Vivian (1871) 6 Ch App 742.
2 James v Cochrane (1853) 8 Exch 556, Ex Ch (where there was liberty to create the apertures in the barrier).
HR A[1493.1]
Outstroke
'Outstroke' means liberty to work an adjoining mine from the demised mine. Whether or not a lessee may work by
outstroke depends on the extent of the demise. If access to the adjoining mine, sufficient for the purpose of working, can
be obtained without entry on property not included in the lease, or without unwarranted user of any rights of way, the
lessee may work by outstroke without express liberty to do so. In many cases the lease only grants to the lessee rights of
way over the surface and through the shaft for the purpose of working the demised mine, and in such cases the lessee
cannot work by outstroke, as he cannot use rights of way for purposes other than those for which they are granted.
HR A[1493.2]
Right to withdraw support
If it is intended that the lessee is to be entitled to work so as to withdraw support from the surface, the lease should grant
express liberty so to work1. The mere fact of giving a right to sink pits and to work and get minerals is not sufficient to
deprive the surface owner of his common law right of support2. To displace this common law right permission to
withdraw support must be given expressly or by necessary implication3. Cases of express permission present no
difficulty; but the question whether or not permission is given by implication must be decided by consideration of the
whole of the lease and of the state of knowledge at the time when, and the circumstances in which, it was made, as to
whether according to the local practice the minerals could be got without subsidence, of which oral evidence may be
given4. The test is whether the introduction of a clause to the effect that the mines must be worked so as not to let down
the surface would or would not be inconsistent with the actual demise: if it would not, then the surface cannot be let
down5.
HR A[1493.3]
1 The right to withdraw support may, however, arise by implication.
2 Davis v Treharne (1881) 6 App Cas 460, HL; Butterknowle Colliery Co Ltd v Bishop Auckland Industrial Co-operative Co Ltd [1906]
AC 305 at 313, HL, per Lord Macnaghten.
3 Davis v Treharne (1881) 6 App Cas 460, HL; Butterley Co Ltd v New Hucknall Colliery Co Ltd [1910] AC 381, HL
4 Butterley Co Ltd v New Hucknall Colliery Co Ltd [1910] AC 381, HL; Locker-Lampson v Staveley Coal and Iron Co Ltd (1908) 25 TLR
136.
Page 338
5 Butterknowle Colliery Co v Bishop Auckland Industrial Co-operative Co [1906] AC 305 at 309, HL, per Lord Loreburn LC. For cases in
which it has been held that an implied right is granted see Butterley Co Ltd v New Hucknall Colliery Co Ltd [1910] AC 381, HL;
Locker-Lampson v Staveley Coal and Iron Co Ltd (1908) 25 TLR 136; Smith v Darby (1872) LR 7 QB 716; Shafto v Johnson (1863) 8 B & s
252n; Brewer v Rhymney Iron Co [1910] 1 Ch 766. It is submitted that little reliance can be placed on the cases decided before Davis v
Treharne (1881) 6 App Cas 460, HL. As to the right of a tenant for life to grant a lease of the right to let down the surface see Sitwell v Earl
of Londesborough [1905] 1 Ch 460.
(c) Consideration
HR A[1493.4]
Dead rent
It is usual in mining leases to reserve both a fixed annual rent (otherwise known as a 'dead rent', 'minimum rent' or
'certain rent') and royalties varying with the amount of minerals worked1. The object of the fixed rent is to ensure that
the lessee will work the mine2; but it is sometimes ineffective for that purpose3. Another function of the fixed rent is to
ensure a definite minimum income to the lessor in respect of the demise. If a fixed rent is reserved, it is payable until the
expiration of the term even though the mine is not worked4, or is exhausted during the currency of the term5, or is not
worth working6, or is difficult or unprofitable to work owing to faults7 or accidents8, or even if the demised seam
proves to be non-existent9. Where a fixed rent is reserved to commence from the time when a certain quantity of
minerals has been got and the lessee covenants to get that quantity without delay, the commencement of the payment
will not be delayed should the lessee fraudulently fail to complete the getting of the quantity10.
HR A[1493.5]
1 See Mitchell v Mosley [1914] 1 Ch 438, CA. Rent and royalties to be rendered in kind may be reserved: see R v Earl of Pomfret (1816) 5
M & S 139; Re Moody and Yates' Contract (1885) 30 ChD 344 at 346, 347, CA, per Brett MR. As to the use of the terms 'rent' and 'royalty'
to denote payments in respect of coal see Greville-Nugent v Mackenzie [1900] AC 83 at 87, 88, HL, per the Earl of Halsbury LC.
2 Jegon v Vivian (1865) LR 1 CP 9 at 34 per Erle CJ (subsequent proceedings Jegon v Vivian (1871) 6 Ch App 742 at 758 per Lord
Hatherley LC); Re Aldam's Settled Estate [1902] 2 Ch 46 at 60, CA, per Stirling LJ.
3 See Glassbrook Bros Ltd v Leyson [1933] 2 KB 91 at 119, CA, per Slesser LJ, and at 123 per Romer LJ. See also McDonald v Kent
Coal Co Ltd [1943] 3 WWR 207 (Can).
4 Jegon v Vivian (1871) 6 Ch App 742 at 757 per Lord Hatherley LC; Jones v Reynolds (1836) 7 C & P 335.
5 R v Bedworth Inhabitants (1807) 8 East 387; Marquis of Bute v Thompson (1844) 13 M & W 487.
6 Haywood v Cope (1858) 25 Beav 140 at 149 per Romilly MR; Strelley v Pearson (1880) 15 ChD 113.
7 Mellers v Duke of Devonshire (1852) 16 Beav 252; Ridgway v Sneyd (1854) Kay 627.
8 Phillips v Jones (1839) 9 Sim 519.
9 Jefferys v Fairs (1876) 4 ChD 448. Possibly if the seam demised were found to have been previously worked out it would be treated as a
case of mutual mistake (Ridgway v Sneyd (1854) Kay 627 at 635 per Page Wood V-C), and thus as a ground for rescinding the lease (Solle v
Page 339
Butcher [1950] 1 KB 671, [1949] 2 All ER 1107, CA).
10 Green v Sparrow (1725) 3 Swan 408n.
HR A[1493.6]
Royalties
A royalty, in the sense in which the word is used in connection with mining leases, is a payment to the lessor
proportionate to the amount of the demised mineral worked within a specified period1. A royalty is a true rent2, and as
such may be apportioned3 on a time basis4. Usually the royalties are made to merge in the fixed rent by means of a
provision that the lessee, without any additional payment, may work, in each period for which a payment of fixed rent is
made, so much of the minerals as would, at the royalties reserved, produce a sum equal to the fixed rent. Reservations
of royalties take different forms and, as a lessor may reserve royalties in the form he considers most suitable or
advantageous in any particular case, the questions which arise are questions of construction and the decided cases
cannot be reduced to any principle generally applicable5. Sometimes in colliery leases coal consumed in working was
freed from royalty6. An average or short workings clause by which overpayments by the lessee in years in which the
workings are less than those covered by the minimum or fixed rent are permitted to be recouped in subsequent years in
which the workings are sufficient to produce royalties in excess of that minimum7 confers no right of property in
minerals remaining unworked when the lease is determined8.
HR A[1493.7]
1 See Bridges v Potts (1864) 17 CBNS 314 at 345 per Willes J.
2 R v Westbrook, R v Everist (1847) 10 QB 178 at 203; see Verdin v Coughtrie (Inspector of Taxes) [1961] AC 880 at 894, sub nom
Tollmache Settled Estates Trustees v Coughtrie [1961] 1 All ER 593 at 596, HL, per Lord Denning; and T and E Homes Ltd v Robinson
(Inspector of Taxes) [1979] 2 All ER 522, [1979] 1 WLR 452, CA.
3 Ie under the Apportionment Act 1870, s 2 (as amended).
4 Coal Commission v Earl Fitzwilliam's Royalties Co [1942] Ch 365, [1942] 2 All ER 56.
5 Clifton v Walmesley (1794) 5 Term Rep 564 (royalty payable on sums for which coal should sell at pit's mouth: construction of covenant
held not affected by mistaken conduct of parties). See also Gerrard v Clifton (1798) 7 Term Rep 676; Earl of Shrewsbury v Gould (1819) 2
B & Ald 487 (lessee's duty to burn lime); Edwards v Rees (1836) 7 C & P 340 (royalty payable on money which should arise from sales, no
allowance for bad debts); Bishop v Goodwin (1845) 14 M & W 260 (covenant to pay royalties quarterly, no average over other quarters of
same year); Buckley v Kenyon (1808) 10 East 139; Cartwright v Forman (1866) 7 B & S 243 (delivery of coal for lessor's use when mine not
workable at a profit); Morley v Yorkshire Lead Mines [1890] WN 47 (royalty payable on dressed or undressed ore); Elliot v Lord Rokeby
(1881) 7 App Cas 43, HL (deduction allowed for expenses of winning where several seams); and Mitchell v Mosley [1914] 1 Ch 438, CA.
6 Senhouse v Harris (1862) 5 LT 635.
7 As to the construction of such a clause see Clayton v Penson [1878] WN 158.
8 See Re Fullerton's Will [1906] 2 Ch 138.

Page 340
HR A[1493.8]
Wayleave royalties
Royalties estimated similarly to royalties on demised minerals are often reserved in respect of minerals worked by way
of outstroke1 from and brought through the demised mine2 or over surface land3. Such minerals are frequently referred
to as foreign minerals and such royalties are known as wayleave rents or wayleaves. If a wayleave is used without
authority, the measure of damages is the sum which would properly have been payable in royalty if the right of
wayleave had been granted4.
HR A[1493.9]
1 As to outstroke see para HR A[1493.1].
2 Senhouse v Harris (1862) 5 LT 635.
3 Directors etc of Great Western Rly Co v Rous (1870) LR 4 HL 650.
4 Jegon v Vivian (1871) 6 Ch App 742; Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, HL; Whitwham v Westminster Brymbo
Coal and Coke Co [1896] 2 Ch 538, CA.
Page 341
Mining leases/3 Covenants
3 Covenants
(a) Covenants to pay rent, royalties, taxes etc
HR A[1493.10]
Covenant to pay rent and royalties
Nearly every mining lease contains a covenant by the lessee for payment of the specified rent and royalties, and
sometimes, where the lessee is under an express obligation to refrain from or to do certain acts, a stipulation is inserted
for the payment of a penal sum, either fixed in amount or proportionate to the extent to which the obligation is
disregarded, as where the lessee is under an obligation to restore the surface at the end of the term to its original
condition1. Where the covenant is absolute in its terms, a stipulation for the payment of a sum in case of breach does
not give the lessee the right to commit the breach on payment of that sum2. The benefit of a covenant for the payment
of wayleave rent passes with the land over which the wayleave has been granted3.
HR A[1493.11]
1 Re Earl of Mexborough and Wood (1882) 47 LT 516, which involved consideration of whether the sum payable was a penalty and
therefore unenforceable. It was adjudged not to exceed the amount of damage that would be caused. Such provisions are commonly found in
modern day construction or building contracts and the amount payable referred to as 'liquidated damages'.
2 Forrest v Merry and Cuninghame Ltd [1909] AC 417, HL.
3 Lord Hastings v North Eastern Rly Co [1898] 2 Ch 674; affd [1899] 1 Ch 656, CA, [1900] AC 260, HL. See the Law of Property Act
1925, s 141.
HR A[1494]
Action for and indemnity against rent and royalties
No action may be brought, or distress made, to recover arrears of rent, or damages in respect of arrears of rent, after the
expiration of six years from the date on which the arrears became due1. In an action to recover rents and royalties,
interest may also be claimed2. An action for an account does not lie against a person entitled in equity who is in
possession of the demised property, nor is he liable upon the covenants in the lease3. Where the assignee of a lease
covenanted with his assignor to pay the rents reserved by the lease so long as he was in possession, and at all times
thereafter to indemnify his assignor against the rent payable under the lease, the covenant for indemnity was not
restricted to the rents during the period while the assignee was in possession4.
HR A[1494.1]
Page 342
1 See the Limitation Act 1980, s 19 at para HR A[20210].
2 Newton v Nock (1880) 43 LT 197. See also the Law Reform (Miscellaneous Provisions) Act 1934, s 3 (as amended); the Supreme Court
Act 1981, s 35A (as added); the County Courts Act 1984, s 69 (as amended).
3 Walters v Northern Coal Mining Co (1855) 5 De GM & G 629; Cox v Bishop (1857) 8 De GM & G 815. The decisions to the contrary
in Clavering v Westley (1735) 3 P Wms 402; and Wright v Pitt (1870) LR 12 Eq 408, cannot be relied on: see Ramage v Womack [1900] 1
QB 116. As to the right to an account in equity see Parrott v Palmer (1834) 3 My & K 632.
4 Crossfield v Morrison (1849) 7 CB 286. However, such covenants are now restricted by the effect of the Landlord and Tenant
(Covenants) Act 1995.
HR A[1494.2]
Covenant to pay rates, taxes and other assessments
The lessee usually expressly covenants to pay all rates, taxes and other assessments1, and in the absence of an express
covenant an undertaking to pay rates and taxes may be inferred from words in the reddendum importing payment of rent
clear of all taxes etc. Usually the covenant is worded so as to include all assessments that may be imposed in the
future2. If the lessee covenants to pay all rates, taxes and assessments he is only liable for all such payments as are of a
recurring nature, but if such a covenant includes any of the words 'duties', 'outgoings', 'impositions' or 'burdens' he is
generally liable for non-recurring expenses of permanent statutory improvements3. However, 'outgoings' has been held
not to include the cost of statutory drainage works carried out by a lessee under a mining lease where that cost was
deductible from the rent under a local Act4.
HR A[1494.3]
1 See Duke of Devonshire v Barrow Haematite Steel Co Ltd (1877) 2 QBD 286, CA; Chaloner v Bolckow (1878) 3 App Cas 933, HL.
2 See eg Thompson v Lapworth (1868) LR 3 CP 149; Budd v Marshall (1880) 5 CPD 481, CA.
3 Dalton Main Collieries Ltd v Rossington Main Colliery Co Ltd and Amalgamated Denaby Collieries Ltd [1941] Ch 268, [1941] 1 All
ER 544, CA. As to impositions see Denaby and Cadeby Main Collieries Ltd v Brodsworth Main Colliery Co Ltd [1941] Ch 289n, CA.
(b) Covenants as to working the mine
HR A[1494.4]
Covenant to work continuously
Covenants as to working are inserted in a mining lease either to ensure that the demised mine will be worked
continuously, or that it will be worked in a particular manner, or in some cases to effect both objects1. A lessee is not
Page 343
bound to work continuously or at all unless he undertakes to do so2, and it is often a difficult question of construction
into which of the foregoing classes a particular covenant falls3. If a lessee covenants without qualification4 to work the
demised mine continuously he is liable for breach of covenant even if the working should prove difficult and
unprofitable or even impossible5, and even if the dead rent is paid6, but a covenant to work continuously or at a certain
rate may in some cases be construed to apply only to the minerals found, so that if none are discovered there is nothing
to which the covenant can apply7. Sometimes covenants to work are qualified so as to save the lessee from useless
expense. The extent of these qualifications is a question of construction8, extrinsic evidence being admissible to explain
the accepted meaning of the terms used9. Specific performance of a covenant to work continuously cannot be obtained,
as the court refuses to supervise the working of a mine. The measure of damages for breach of a covenant to work is the
amount which would in all probability have been paid to the lessor if the mine had been worked. Where working is
unduly expensive a lessee may be relieved from such a covenant on payment to the lessor of all that he would receive
under the lease and surrender of the lease10.
HR A[1494.5]
1 Quarrington v Arthur (1842) 10 M & W 335 (undertaking to work mine discovered or opened: none were discovered or opened);
Wheatley v Westminster Brymbo Coal Co (1869) LR 9 Eq 538; Jegon v Vivian (1871) 6 Ch App 742. As to the importance of such a
covenant see Glassbrook Bros Ltd v Leyson [1933] 2 KB 91, CA. A lessee who has not covenanted to work may by agreement with a third
person limit his workings to a specified amount: Forrest v Merry and Cuninghame Ltd [1909] AC 417, HL.
2 Walker v Jeffreys (1842) 1 Hare 341; Wheatley v Westminster Brymbo Coal Co (1869) LR 9 Eq 538; Lord Abinger v Ashton (1873) LR
17 Eq 358; Charlesworth v Watson [1906] AC 14, HL. See also Doyershoek Asbestos Mine (Pty) Ltd v Estate Snyman [1956] 2 SA 304 (SA
SC App Div), where the law as stated in the text was considered by Centlivres CJ.
3 Foley v Addenbrooke (1844) 13 M & W 174; Jervis v Tomkinson (1856) 1 H & N 195; Lord Clifford v Watts (1870) LR 5 CP 577 at 588
per Willes J; Jegon v Vivian (1871) 6 Ch App 742; Charlesworth v Watson [1906] AC 14, HL; Wigan Coal and Iron Co v Eckersley (1910)
103 LT 468, HL; and see Kinsman v Jackson (1880) 42 LT 80; on appeal 42 LT 558, CA, where the question was one of construction.
Possibly where the mine is drowned without the default of the lessee, the lessee may not be liable for not working: see Walker v Jeffreys
(1842) 1 Hare 341.
4 Whitehead v Bennett (1861) 9 WR 626; Simpson v Ingleby (1872) 27 LT 695.
5 Lord Clifford v Watts (1870) LR 5 CP 577.
6 Jones v Shears (1836) 7 C & P 346; Foley v Addenbrooke (1844) 13 M & W 174; Griffiths v Rigby (1856) 1 H & N 237; Lord Abinger v
Ashton (1873) LR 17 Eq 358; Newton v Nock (1880) 43 LT 197; cf Swindell v Birmingham Canal Co (1860) 9 CBNS 241.
7 Clayton v Gregson (1836) 5 Ad & El 302.
8 Pollard v Clayton (1855) 1 K & J 462; Wheatley v Westminster Brymbo Coal Co (1869) LR 9 Eq 538; and see Lord Abinger v Ashton
(1873) LR 17 Eq 358.
9 Watson v Charlesworth [1905] 1 KB 74, CA; affd [1906] AC 14, HL.
10 Smith v Morris (1788) 2 Bro CC 311; and see Phillips v Jones (1839) 9 Sim 519; Mellers v Duke of Devonshire (1852) 16 Beav 252;
Ridgway v Sneyd (1854) Kay 627; Simpson v Ingleby (1872) 26 LT 543; on appeal 27 LT 695. However, relief cannot be obtained from an
absolute covenant to pay a minimum rent or to pay for a certain quantity of mineral whether got or not: Mellers v Duke of Devonshire. For
the difference between the cases see Ridgway v Sneyd.
Page 344
HR A[1494.6]
Covenant to work in a particular manner
A covenant to work a mine in a particular way, as in a workmanlike manner or in accordance with the method usually
practised in the district1, does not bind the lessee to work at all, but only to work in the way specified when he does
work2. However, if stipulations as to the method of working are added to a covenant to work, such stipulations do not
detract from the obligation to work, but impose an additional obligation3. In the absence of express stipulation, the
convenience and business interests of a lessee in pursuing a regular course of working through contiguous areas held
under different lessors do not affect his liability under any one of these leases. The lessee's liability must in each case be
determined by reference to the lease in question and as if the obligation under the working covenant in that lease alone
is upon him, and he is under no obligation to any other lessor4. A covenant to work in a particular way will not be
enforced by an order for specific performance or by an injunction restraining working in any other way5, but an
injunction may be obtained to restrain a lessee from doing a particular act which he has covenanted not to do6.
HR A[1494.7]
1 A covenant to employ a particular method of working must be read in conjunction with the other provisions of the lease, and a different
method may be adopted where necessary to avoid a breach of such other provisions: Brewer v Rhymney Iron Co [1910] 1 Ch 766.
2 Wheatley v Westminster Brymbo Coal Co (1869) LR 9 Eq 538; Jegon v Vivian (1871) 6 Ch App 742 at 757 per Lord Hatherley; Lord
Abinger v Ashton (1873) LR 17 Eq 358.
3 Walker v Jeffreys (1842) 1 Hare 341; Jervis v Tomkinson (1856) 1 H & N 195; Charlesworth v Watson [1906] AC 14, HL; and see
Doyershoek Asbestos Mine (Pty) Ltd v Estate Snyman [1956] 2 SA 304 (SA SC App Div).
4 Eckersley v Wigan Coal and Iron Co Ltd (1910) 102 LT 264 at 269, CA, per Cozens-Hardy MR; on appeal 103 LT 468, HL.
5 Wheatley v Westminster Brymbo Coal Co (1869) LR 9 Eq 538; Lord Abinger v Ashton (1873) LR 17 Eq 358; and see Moore v Ullcoats
Mining Co Ltd [1908] 1 Ch 575 at 585 per Warrington J.
6 Anon (1754) Amb 209; Wheatley v Westminster Brymbo Coal Co (1869) LR 9 Eq 538.
HR A[1494.8]
Covenant to sink shafts or pits
In the absence of a covenant to that effect, express or implied, there is no obligation upon a lessee to sink a shaft. The
mere grant of a liberty to sink a pit or shaft implies no obligation to sink1; nor, where the lessee is in a position to work
from an adjoining mine and the right to work by instroke is not excluded, will the inference be strengthened by the fact
that it was possibly contemplated by the parties that a shaft would be sunk for the purpose of working the demised mine,
and that specific liberties are conferred by the lease for that purpose and for raising and carrying away over the surface
not only the minerals from the demised mines but also minerals from the land of adjoining owners2. If the lease
imposes an obligation to work the demised mines, the lessee will be bound to sink a shaft if no other mode of working is
possible3, but no such obligation arises merely from a covenant to deliver up at the end of the term the mines and works
in such a condition that the lessor may continue the workings4. If a lessee enters into an unqualified covenant to sink a
pit, he will be liable in damages if he does not sink it, even if it is known that the sinking will be fruitless5. The measure
Page 345
of damages recoverable in ordinary cases for breach of such a covenant is the cost to the lessor of sinking the pit6. If a
covenant imposes an obligation to proceed to search for and sink for minerals as far as practicable, the lessee may be
absolved from liability if he shows that his efforts and exploratory works were usual and customary in such cases7.
HR A[1494.9]
1 James v Cochrane (1852) 7 Exch 170; on appeal (1853) 8 Exch 556, Ex Ch.
2 Jegon v Vivian (1871) 6 Ch App 742 at 755 per Lord Hatherley LC.
3 James v Cochrane (1852) 7 Exch 170 at 178 per Pollock CB; on appeal (1853) 8 Exch 556, Ex Ch.
4 Jegon v Vivian (1871) 6 Ch App 742 at 756 per Lord Hatherley LC.
6 Pell v Shearman (1855) 10 Exch 766 at 769 per Parke B.
7 Hanson v Boothman (1810) 13 East 22.
HR A[1494.10]
Covenants relating to pillars and barriers
Under a covenant to leave, at the end of the lease, sufficient pillars for the support of the roof of the mine or the surface,
or for the prevention of thrusts and creeps, the duty to leave pillars does not allow the pillars to be removed provided
artificial support is substituted. In this respect the lessee's obligation differs from his obligation, if it exists, to support
the surface, for in this latter case the lessee may work out the minerals affording support provided artificial support is
substituted1. A covenant to leave pillars for support will be enforced by injunction2, and if a lessee works pillars which
he has covenanted to leave, he is liable for the damage thereby caused, whether to the surface3 or to the mine4. He must
also pay for the minerals contained in the pillars, less the cost of bringing them to the surface, but without any
allowance for severing5. A covenant to leave barriers may also be enforced by mandatory injunction6. If an act is
prohibited both by the general law and by covenant the lessor may avail himself of either remedy7.
HR A[1494.11]
1 See Hodgson v Moulson (1865) 18 CBNS 332; Mostyn v Lancaster, Taylor v Mostyn (1883) 23 ChD 583, CA.
2 Mostyn v Lancaster, Taylor v Mostyn (1883) 23 ChD 583, CA. Where there is an express contract not to work specified pillars, the right
to an injunction is not affected by any question of the safety or the danger of working: Mostyn v Lancaster, Taylor v Mostyn supra.
3 Hodgson v Moulson (1865) 18 CBNS 332. A mandatory injunction to restore fences injured by subsidence may be obtained: Newton v
Nock (1880) 43 LT 197. As to mandatory injunctions generally see INJUNCTIONS vol 24 (Reissue) paras 802, 846 et seq.
Page 346
4 Taylor v Mostyn (1886) 33 ChD 226, CA.
5 Taylor v Mostyn (1886) 33 ChD 226, CA.
6 Eg if a lessee in breach of an express covenant pierces a barrier, he will be compelled by mandatory injunction to stop up the opening:
Earl of Mexborough v Bower (1843) 7 Beav 127; affd 2 LTOS 205. Working a barrier is waste: Marker v Kenrick (1853) 13 CB 188.
7 Marker v Kenrick (1853) 13 CB 188.
(c) Other covenants
HR A[1495]
Usual covenants
In addition to the covenants already dealt with, it is usual to insert in mining leases covenants as to repair1, as to
securing the mine against being drowned, as to compensation for surface damage2, as to inspection of workings by the
lessor, and as to the removal of machinery during or at the end of the term. There are also usually covenants dealing
with keeping and inspection of accounts, and the means by which minerals gotten are to be weighed and valued. In the
absence of agreement, a lessee is not bound to drain the demised mine, and the fact that the lessor has a right to pass
through the mine does not impose an obligation on the lessee to keep it free from water, as there is no derogation from
the grant3. Even where a lease contains a covenant not to do any act which would tend to the drowning of the mine, the
court will not restrain the lessee from removing pumping machinery during the term4, but a covenant to pump may be
enforced by an interlocutory injunction5, and a covenant not to remove machinery at the end of the term will be
enforced by injunction6.
HR A[1495.1]
1 The questions arising on covenants to repair are mainly questions of fact or construction: see eg Foley v Addenbrooke (1844) 13 M & W
174; James v Cochrane (1853) 8 Exch 556, Ex Ch. As to the obligation of a lessee who has covenanted to deliver up in repair see Lurcott v
Wakely and Wheeler [1911] 1 KB 905, CA. A covenant to repair is not specifically enforceable: see Lord Abinger v Ashton (1873) LR 17 Eq
358 at 376 per Jessel MR.
2 A covenant to restore damaged surface is not specifically enforceable: Flint v Brandon (1803) 8 Ves 159.
3 Payne v Rocher Colliery Co [1887] WN 37. In the absence of stipulation the lessor is entitled to go down the shaft to inspect the
demised mine: Lewis v Marsh (1849) 8 Hare 97.
4 Rolleston v New (1858) 4 K & J 640. The lessee may, however, by removing the machinery render himself liable to an action for
damages: Rolleston v New supra at 649 per Page Wood V-C.
5 Goodrich v Everglyn Coal Co [1889] WN 152.
6 Hamilton v Dunsford (1857) 6 I Ch R 412. Where a lessee covenanted to deliver up at the end of the term machinery with respect to
which the lessor could have given notice to purchase at any time during the term, an injunction to restrain a breach was refused as
oppression: Talbot v Ford (1842) 13 Sim 173.
Page 347
HR A[1495.2]
Covenants running with the land
A covenant contained in a lease of mines and minerals to erect a smelting mill on land not included in the lease has been
held to run with the reversion1 and covenants to make compensation for surface damage have been held to run with the
land2.
HR A[1495.3]
1 Sampson v Easterby (1829) 9 B & C 505 at 516; affd (1830) 6 Bing 644, Ex Ch. The basis of the decision seems to have been that, on
the facts, the demise of the mines was immediately connected with possession of the smelting mill. See also Dewar v Goodman [1909] AC
72, HL; and Ricketts v Churchwardens of Enfield [1909] 1 Ch 544.
2 Norval v Pascoe (1864) 34 LJ Ch 82; Aspden v Seddon, Preston v Seddon (1876) 1 Ex D 496, CA; Dyson v Forster, Dyson v Seed,
Quinn, Morgan etc [1909] AC 98, HL; Westhoughton UDC v Wigan Coal and Iron Co Ltd [1919] 1 Ch 159, CA; Snowdon v Ecclesiastical
Comrs for England [1935] Ch 181. A covenant by the lessee with 'the owner or owners, occupier or occupiers for the time being' of the
surface is effectual even if the surface owners are not parties to the lease, and may be enforced by the surface owners at the time of the
demise and by their successors in title: Dyson v Forster, Dyson v Seed, Quinn, Morgan etc supra.
HR A[1495.4]
Covenant for quiet enjoyment
If a mining lease contains no express covenant for quiet enjoyment, such a covenant will be implied by the use of the
words 'demise' or 'let' or other equivalent words1. The working of an upper stratum so as to cause falls in the demised
mine is a breach of the covenant2, but the working of an adjoining mine in a proper manner which unexpectedly causes
flooding is not3. Not every disappointment which a lessee meets with or experiences in the course of his enjoyment of
the demised mines is a disturbance of that enjoyment within the meaning of the covenant for quiet enjoyment, but any
substantial interruption of the enjoyment of the demised premises by the lessor or those claiming under him will, in
general, be a breach of the covenant4, because it is to some extent an interference with both the title and the
possession5. Sometimes an act may be not only a breach of a covenant for quiet enjoyment but also wrongful as a
derogation from the lessor's grant6.
HR A[1495.5]
1 Markham v Paget [1908] 1 Ch 697; Mostyn v West Mostyn Coal and Iron Co (1876) 1 CPD 145 at 152 per Brett J.
2 Shaw v Stenton (1858) 2 H & N 858; cf Mundy v Duke of Rutland (1883) 23 ChD 81, CA.
3 Harrison, Ainslie & Co v Lord Muncaster [1891] 2 QB 680, CA.
4 Sanderson v Berwick-upon-Tweed Corpn (1884) 13 QBD 547, CA.

Page 348
5 See Jones v Consolidated Anthracite Collieries Ltd and Lord Dynevor [1916] 1 KB 123 at 136, 137 per Scrutton J; cf Morgan v Hunt
(1690) 2 Vent 213; Spencer v Marriott (1823) 1 B & C 457; Dennett v Atherton (1872) LR 7 QB 316.
6 Markham v Paget [1908] 1 Ch 697. For a case where workings were restrained as inconsistent with a prior grant see Earl of Glasgow v
Hurlet and Campsie Alum Co (1850) 3 HL Cas 25.
Page 349
Mining leases/4 Distress, forfeiture and determination of tenancy
4 Distress, forfeiture and determination of tenancy
HR A[1495.6]
Distress
Royalties, as well as a fixed or dead rent, may be distrained for1. An express power to distrain, extending to chattels in
adjoining or neighbouring mines in the lessee's occupation, does not constitute the lease a bill of sale2 and is binding
upon assignees of such mines who take with notice3
HR A[1495.7]
1 Daniel v Gracie (1844) 6 QB 145.
2 Re Roundwood Colliery Co, Lee v Roundwood Colliery Co [1897] 1 Ch 373, CA; Bills of Sale Act 1878, s 6.
3 Daniel v Stepney (1874) LR 9 Exch 185, Ex Ch.
HR A[1495.8]
Forfeiture
It is usual to insert in mining leases a power of re-entry, exercisable not only on non-payment of rent but also on breach
of covenant or condition. Sometimes the power is also made exercisable in case the mine is not worked for a specified
period1, or in case the lessee becomes bankrupt or makes an arrangement with his creditors, or, being a company, goes
into liquidation, receivership or administration. If a lease contains, instead of a power of re-entry, a provision that in
certain events the lease is to be void the effect is the same, and the lease, on the happening of such events, will subsist
until the lessor elects to determine2. In either case the demand for possession should be made without undue delay3,
and must be unequivocal4.
HR A[1495.9]
1 To avoid forfeiture in such case the working must be in good faith (Doe d Bryan v Bancks (1821) 4 B & Ald 401), although the lessees
may be given reasonable time for the restitiution of the works where the lessor has continued to accept dead rent (Whitehead v Bennett
(1861) 4 LT 818).
2 Doe d Bryan v Bancks (1821) 4 B & Ald 401; Roberts v Davey (1833) 4 B & Ad 664; James v Young (1884) 27 ChD 652.
Page 350
3 Bowser v Colby (1841) 1 Hare 109. Where the delay was insufficient to deprive the lessor of the right to take proceedings, he was
nevertheless compelled to allow the lessee an opportunity of putting himself in a position to comply with the covenant the breach of which
was complained of: Whitehead v Bennett (1861) 9 WR 626.
4 Moore v Ullcoats Mining Co Ltd [1908] 1 Ch 575; Muskett v Hill (1839) 9 LJCP 201.
HR A[1495.10]
Determination of tenancy by lessee
Some mining leases contain a clause empowering the lessee to determine the tenancy as soon as the minerals are
exhausted or in some other event1. To determine the term effectively, all conditions, such as giving notice2 or the
performance of covenants or otherwise, to which the exercise of the power is made subject must be strictly observed3.
A power for the lessee to give notice at any time authorises him to give a notice expiring during the currency of a year4.
A power to determine in case of accident is not exercisable on account of an accident happening before the actual date
of grant of the lease but subsequent to the date expressed in the lease to be the commencement of the term5. If a lessee
continues in possession after the expiration of the notice, it is a question of fact whether he has waived the notice and
continues to hold over as tenant6. Power is frequently conferred upon the lessee to determine the lease if the mines
cannot be worked to a profit. Such a provision is generally accompanied by a specification of means for ascertaining by
arbitration or by the opinion of experts whether it can be said of a mine at a particular time that it cannot be so worked.
For the purposes of such a provision, 'profit' means gain after paying for work and labour and the rent of the mine7. In
general, the power will only be exercisable if it can be shown that the working of the mine over a considerable period of
time will prove unprofitable. A mere temporary loss of profit due to market fluctuations in the price of the produce of
the mine will be insufficient to enable the lessee to avail himself of the benefit of the provision7.
HR A[1496]-[1500]
1 As to the construction of 'fairly worked out', 'fairly workable' and 'fairly wrought' see Jones v Shears (1836) 7 C & P 346; Griffiths v
Rigby (1856) 1 H & N 237; Cartwright v Forman (1866) 7 B & S 243; Carr v Benson (1868) 3 Ch App 524, CA. As to the construction of
'economically viable' see Nocturn Ltd v Water Hall Group plc [1997] EGCS 97.
2 Cartwright v Forman (1866) 7 B & S 243.
3 Grey v Friar (1854) 4 HL Cas 565. However, a notice that contained a minor misdescription, served to determine a lease has been held
to be valid: see Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, [1997] 3 All ER 352, HL.
4 Bridges v Potts (1864) 17 CBNS 314. In such case an apportioned part of the rent is payable for the broken period: see the
Apportionment Act 1870, s 2 at para HR A[20058.1].
6 Jones v Shears (1836) 4 Ad & El 832, where the lessees claimed to remain in possession in pursuance of a custom. As to the tacit
incorporation of usages in leases see Tucker v Linger (1883) 8 App Cas 508, HL. As to a case dealing with an alleged usage with reference
to a quarry see Vint v Constable (1871) 25 LT 324.
7 Gowan v Christie (1873) LR 2 Sc & Div 273 at 282, HL, per Lord Cairns.
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Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises
Chapter 3 Demised premises
Editor
Alison Oakes
Page 352
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/A Premises
included in the demise
A
Page 353
included in the demise/1 Description of parcels
1 Description of parcels
HR A[1501]
The description of the parcels is one of the key elements of the lease. Indeed, in respect of a registrable lease which is
granted out of a registered estate on or after 19 June 2006, it is required to contain a prescribed term setting out the
property1. The requirement does not apply where the lease is granted as a result of a deemed surrender and regrant on a
variation of a lease1 or where the lease is in a form expressly required:
(a) by an agreement entered into before 19 June 2006;

(b) by an order of the court;
(c) by or under an enactment; or
(d) by a necessary consent or licence for the grant of the lease given before 19 June 20061.
HR A[1501.1]
1 Land Registration Rules 2003, r 58A (inserted by the Land Registration (Amendment) No 2 Rules 2005, SI 2005/1982).
HR A[1501.2]
Whether or not the above applies, in order to avoid disputes the lease should describe with reasonable certainty the
property demised. This may be done by giving a name or some denoting mark to the property. For example, in the case
of a house in a town, the street and number or name of the house should be given. The parcels are usually defined by
such words as 'all that etc (hereinafter called "the demised premises")'. This may include land occupied with the main
parcel for many years1. Or the property may be identified by measurements or abuttals. These are not necessarily
construed strictly, unless the description by abuttals, if correct, would increase2. But where measurements are qualified
by the words 'more or less' and abuttals are also given, the abuttals, if supported by the actual occupation, will show the
extent of the property3. Words such as 'more or less'4 or 'thereabouts'5 only authorise variations which bear a very small
proportion to the amount named6. A doubt as to what is intended to be comprised in the parcels may be removed by
reference to the recitals7.
HR A[1502]
1 Higham v Baker (1538) Cro Eliz 15.
2 Robert v Karr (1809) 1 Taunt 495.

Page 354
3 Neale d Leroux v Parkin (1794) 1 Esp 228 at 230.
4 Cross v Eglin (1831) 2 B & Ad 106 at 110.
5 Davis v Shepherd (1866) LR 1 Ch App 410 at 416 at 418.
6 Day v Fynn (1601) Owen 133; Neale d Leroux v Parkin (1794) 1 Esp 228 at 230; Davis v Shepherd (1866) 1 Ch App 410.
7 Doe d White v Osborne (1840) 4 Jur 941, 9 LJCP 313 at 318.

Page 355
included in the demise/2 Plans
2 Plans
HR A[1503]
The property may also be identified by reference to a plan. A plan attached to and endorsed on a deed, or referred to in
the deed, ought to be looked at for the purpose of explaining the language of the parcels1. A plan which is not merely
for identification only2 may also be held to control the description in the body of the deed3, though not if the scale is
too small4. But a complete or unambiguous description in the deed will prevail over the plan5. In certain circumstances
a plan may control the contract to which it is annexed, though not referred to in the contract6. Where there are
inconsistencies within the plan itself, it has been held that the construction of the demise will depend upon the
application of the plan to the physical features which existed on the ground when the conveyance was made in order to
assess which of the possible conclusions gives the most sensible result7.The lessee is only entitled to have a plan if the
verbal description is not sufficient without one8. In all cases now the plan should be based on the Ordnance Survey map
since that is 'the basis of all registered description of land'9. It is also convenient that the edition and sheet number of the
Ordnance Survey map should be shown on the plan or in the parcels. Although in registered conveyancing the filed plan
or general map normally indicates general boundaries only and the exact line is left undetermined10, reference to the
Ordnance Survey map in the parcels may have significant effects on what is conveyed11.
HR A[1504]
1 Taylor v Parry (1840) 1 Man & G 604 at 616; Lyle v Richards (1866) LR 1 HL 222 at 231.
2 Neilson v Poole (1969) 20 P & CR 909 at 916; Alan Wibberley Building Ltd v Insley [1998] 1 WLR 881 at 891, CA.
3 Gordon-Cumming v Houldsworth [1910] AC 537; Eastwood v Ashton [1915] AC 900; Wigginton and Milner Ltd v Winster Engineering
Ltd [1978] 3 All ER 436; Spall v Owen (1981) 44 P & CR 36.
4 Taylor v Parry (1840) 1 Man & G 604; Mayer v Hurr (1983) 49 P & CR 56, CA.
5 Roe v Lidwell (1860) 11 ICLR 320; Horne v Struben [1902] AC 454; Re Wellings and Parsons' Contract (1906) 97 LT 165; Maxted v
Plymouth Corpn (1957) 169 Estates Gazette 427, CA; Hatfield v Moss [1988] 2 EGLR 58, CA.
6 Nene Valley Drainage Comrs v Dunkley (1876) 4 Ch D 1; Re Lindsay and Forder's Contract (1895) 72 LT 832; cf Wyse v Leahy (1875)
IR 9 CL 384 (map attached to, but not referred to in, conveyance not admitted).
7 Jackson v Bishop (1979) 48 P & CR 57; Cook v JD Wetherspoon [2006] 2 P & CR 326, CA.
8 Re Sansom and Narbeth's Contract [1910] 1 Ch 741; Re Sharman and Meade's Contract [1936] Ch 755.
9 Land Registration Rules 1925, r 272.

Page 356
10 LRR 1925, r 278; Fisher v Winch [1939] 1 KB 666 at 672, CA.
11 See Fisher v Winch [1939] 1 KB 66, CA; cf Alan Wibberley Building Ltd v Insley [1999] 1 WLR 894, HL.
Page 357
included in the demise/3 Evidence
3 Evidence
HR A[1505]
The issue of the precise boundary or extent of the property demised, referred to as parcel or no parcel, is a question of
fact and it may be shown by parol evidence what was and what was not included in the description, such evidence being
always admissible to prove all the circumstances necessary to place the court in the position of the parties, thus enabling
it to judge of the meaning of the instrument. Thus, it has been held that the court could look at the surrounding
circumstances at the time of the grant of an easement to determine the extent of the dominant tenement to which the
easement attached1.
HR A[1506]
1 Shannon Ltd v Venner Ltd [1965] Ch 682; see also Johnstone v Holdway [1963] 1 QB 601; St Edmundsbury and Ipswich Diocesan
Board of Finance v Clark (No 2) [1973] 3 All ER 902; affd [1975] 1 All ER 772, CA.
Page 358
included in the demise/4 Falsa demonstratio
4 Falsa demonstratio
HR A[1507]
Where the property is described in more than one way, it is possible that part of the description may be inconsistent with
the rest. In this case it becomes necessary to determine which part is to be accepted and which part is to be rejected as a
falsa demonstratio. The rule is clearly settled that, when there is sufficient description set forth of premises by giving
the particular name of a close or otherwise, a falsa demonstratio may be rejected. On the other hand, if premises be
described in general terms and then a particular description is added, the latter controls the former1. It does not affect
the principle that the falsa demonstratio precedes the correct description of the property in the lease. A plan boundary
may be rejected under the rule2. But an inaccurate statement of the boundary is not enough to exclude what is not so
bounded if it appears from the evidence to have been part of the property dealt with and the previous description of the
property is sufficient to include it3. The rectification of mistakes in descriptions in deeds is dealt with elsewhere4.
HR A[1508]
1 Doe d Smith v Galloway (1835) 5 B & Ad 43; Hutchins v Scott (1837) 2 M & W 809; Hardwick v Hardwick (1873) LR 16 Eq 168;
Cowen v Truefitt Ltd [1899] 2 Ch 309; Eastwood v Ashton [1915] AC 900.
2 Maxted v Plymouth Corpn (1957) 169 Estates Gazette 427, CA.
3 Francis v Hayward (1882) 22 Ch D 177 at 181-182, CA.

Page 359
included in the demise/5 Land
5 Land
HR A[1508.1]
The word 'land', when used in a lease or other assurance, includes, if there is nothing to restrict its technical meaning, all
kinds of land, whether arable, meadow or otherwise1. If a particular kind of land is mentioned, such as a meadow or
marshland, only that kind will pass2. It also includes everything on or under the soil, all buildings erected on it3, the
airspace above it4 and, subject now to the rights of the successors to the British Coal Corporation, including the Coal
Authority5, all mines and minerals beneath it6. An enclosed piece of land is technically 'close' and similarly this term
carries the soil and what lies beneath it7. 'Farm' includes the farmhouse, farm buildings and land used therewith8 and
also woodlands9. The expression 'farm buildings' in a will includes farmhouses10. A lease of woods includes not only
the trees, but the land on which they grow11.
HR A[1509]
1 Co Litt 4a; Shep Touch, ed Preston, 91; Cooke v Yates (1827) 4 Bing 90.
2 Co Litt 5a.
3 Newcomen v Coulson (1877) 5 Ch D 133 at 143, CA; cf Law of Property Act 1925, ss 62(2), 205(1)(ix).
4 Martyr v Lawrence (1864) 2 De G J & Sm 261; Kelsen v Imperial Tobacco Co (of Great Britain and Ireland) Ltd [1957] 2 QB 334; cf
Bernstein v Skyviews & General Ltd [1978] QB 479 (overflying aircraft).
5 See the Coal Industry Act 1994, especially ss 7-16.
6 Newcomen v Coulson (1877) 5 Ch D 133, CA.
7 Cox v Glue (1848) 5 CB 533 at 551.
8 Shep Touch, ed Preston, 93.
9 Goodtitle d Paul v Paul (1760) 2 Burr 1089; Portman v Mill (1839) 3 Jur 356.
10 Cooke v Cholmondeley (1858) 4 Drew 326.
11 Co Litt 4b.
Page 360
included in the demise/6 Profits
6 Profits
HR A[1510]-[1520]
Words which are appropriate for granting part of the profits of the land do not carry the land itself - for instance, a grant
of a right to dig turves1. So a grant of 'warren of conies' only passes a franchise to be exercised over the soil. But a grant
of a 'warren' in the grantors own ground may carry the soil2. Similarly a grant of water ordinarily gives only the fishery
in the water3. But a several fishery raises a presumption of ownership of the soil4. And apparently a lease of a several
fishery in a river will, in the absence of contrary indication, carry the bed of the river5. Where the soil under the water is
intended to pass the expression 'land covered with water' should be used6. However, a grant of a 'pool' carries the soil7.
A grant of 'all streams that might be found in' property demised passes all wells in existence and subsequently found8.
There are various restrictions on and control of the abstraction of water from wells, boreholes and other works9. In
contrast to a grant of part of the profits of the land, a grant of all of the profits of land is equivalent to a grant of the land
itself10.
HR A[1521]
1 Co Litt 4b.
2 Earl Beauchamp v Winn (1873) LR 6 HL 223 at 236 at 255; Co Litt 5b; Shep Touch, Ed Preston, 90.
3 Co Litt 4b.
4 Harris v Earl of Chesterfield [1911] AC 623.
5 R v Old Alresford Inhabitants (1786) 1 Term Rep 358; Ecroyd v Coulthard [1897] 2 Ch 554 at 565; affd [1898] 2 Ch 358, CA.
6 Co Litt 4b.
7 Co Litt 5b.
8 Whitehead v Parks (1858) 2 H & N 870.
9 See the Water Resources Act 1991, s 24.
10 Co Litt 4b; see also Parker v Plummer (1590) Cro Eliz 190 (issues and profits).
Page 361
included in the demise/7 House
7 House
HR A[1522]
By a lease of a 'house', stables and outbuildings occupied with and necessary for the convenient occupation of the house
will pass1. So also will a courtyard, garden and orchard2. The word 'messuage' has the same meaning as 'house'3,
though it can also refer to one floor of a dwelling house4. In the expression 'house and premises', the word 'premises'
refers only to matters intimately connected with the house. So it will not include an adjoining meadow5. But it may
include a cave6 or an adjoining yard7. The words 'with the appurtenances' do not extend the demise so as to include
land or buildings which are used with the demised property, but are not parcel of it8. But estovers9 granted to repair a
house are 'appurtenant' to it10. Where there is a demise of a house and upper floors in an adjoining house without the
staircase, the staircase does not pass under 'appurtenances' because it is afterwards required11. Nor do the words 'with
the appurtenances' include a part of the building which has been separated from it and has not been occupied with it for
many years previous to the demise12. But the words 'lands appertaining to' or 'belonging to' are more easily extended to
lands usually occupied with the demised premises13. A right of way can be 'enjoyed with' other land14.
HR A[1523]
1 Doe d Clements v Collins (1788) 2 Term Rep 498 at 502; Steele v Midland Railway Co (1866) 1 Ch App 275 at 289; Law of Property
Act 1925, ss 62(2), 205(1)(ii).
2 Co Litt 5b, 56b; Shep Touch, ed Preston, 94; Bettisworth's case (1580) 2 Co Rep 31b; notes to Smith v Martin (1672) 2 Wms Saund 394.
3 Doe d Clements v Collins (1788) 2 Term Rep 498.
4 Fenn v Grafton (1836) 2 Bing NC 617.
5 Minton v Geiger (1873) 28 LT 449.
6 Gardiner v Sevenoaks RDC [1950] 2 All ER 84.
7 Mason v Leavy [1952] IR 40.
8 Bettisworth's case (1580) 2 Co Rep 31b; Bryan v Wetherhead (1625) Cro Car 17; Maitland v Mackinnon (1862) 1 H & C 607 at 614;
Trim v Sturminster RDC [1938] 2 KB 508; Owens v Thomas Scott & Sons (Bakers) Ltd [1939] 3 All ER 663; Methuen-Campbell v Walters
[1979] QB 525, CA.
10 Windsor v Hyde (1601) 5 Co Rep 24a.

Page 362
11 Chappell v Mason (1894) 10 TLR 404, CA.
12 Kerslake v White (1819) 2 Stark 508.
13 Ongley v Chambers (1824) 1 Bing 483; Doe d Gore v Langton (1831) 2 B & Ad 680; Evans v Angell (1858) 26 Beav 202.
14 Celsteel Ltd v Alton House Holdings Ltd [1985] 1 WLR 204 at 221; and see paras HR A[1708]-[1746].
Page 363
included in the demise/8 Tenements and hereditaments
8 Tenements and hereditaments
HR A[1524]
The words 'tenements' and 'hereditaments' have both technical and general meanings. The former technically refers to
whatever can be the subject of tenure, whereas the latter refers technically to whatever is capable of devolving on death
to personal representatives1. The definition of the latter in the 1925 property legislation is narrower, being restricted to
realty2. These words are also used in a non-technical sense to include both the corporeal things--houses and land--which
are the subject of property and the rights which arise out of them3. There is a distinction between corporeal and
incorporeal hereditaments. In both cases there exist rights, to the subject matter of which is corporeal property. If those
rights amount to exclusive possession of the property they are termed a corporeal hereditament. If they amount to some
interest in the property less than exclusive possession, such as an easement, they are termed an incorporeal
hereditament4.
HR A[1525]
1 Co Litt 6a; Re Gosselin [1906] 1 Ch 120.
2 Settled Land Act 1925, s 117(1)(vii); Trustee Act 1925, s 68(1), (6); Land Registration Act 1925, s 3(viii); Law of Property Act 1925, s
205(1)(ix).
3 Co Litt 19b; Earl Beauchamp v Winn (1873) LR 6 HL 223 at 241.

Page 364
included in the demise/9 Construction of lease
9 Construction of lease
HR A[1526]
The question whether any particular property is included in the lease depends on the words of the lease as applied to the
circumstances of the property. The meaning may be assisted by reference to the recitals1. Evidence outside the deed is
admissible to identify the particular lands denoted by the words of the deed2. Words in an instrument of grant, as
elsewhere, are to be taken in the sense which the common usage of mankind has implied to them in reference to the
context in which they are found and to the circumstances to which they are used3. They may be explained by
subsequent possession4. The express mention of certain property may show that other property was not intended to
pass, on the principle expressio unius est exclusio alterius, especially when assisted by the recitals5. Evidence is
admissible to show the state and condition of the property at the time the lease was granted and although prima facie
particular property would be included, the circumstances may show a contrary intention6. In general, the lease is
construed with reference to the circumstances existing at the time of execution, but where it is clear that it had reference
to previous circumstances (such as those existing at the time of the agreement for the lease) the earlier circumstances
would apparently determine the construction7. And where the true construction of the lease is tried as a preliminary
issue, without any investigation of the facts, it is not proper to consider the 'factual matrix' in which negotiations took
place8.
HR A[1527]
1 Doe d White v Osborne (1840) 4 Jur 941.
2 Dublin and Kingstown Railway Co v Bradford (1857) 7 ICLR 624; Lyle v Richards (1866) LR 1 HL 222; Francis v Hayward (1882) 22
Ch D 177 (fascia on adjoining house); Graystone Property Investments Ltd v Margulies (1984) 47 P & CR 472 at 269 EG 538 (voids above
a false ceiling held part of demise of flat 'on the first floor').
3 Lord v Sydney City Comrs (1859) 12 Moo PCC 473 at 479.
4 Booth v Ratté (1890) 15 App Cas 188 at 192, PC.
5 Denison v Holliday (1857) 1 H & N 631 at 648 at 649.
6 Doe d Freeland v Burt (1787) 1 Term Rep 701 at 703 at 704.
7 Crisp v Price (1814) 5 Taunt 548; Mappin Bros v Liberty & Co Ltd [1903] 1 Ch 118 at 127; cf Broomfield v Williams [1897] 1 Ch 602
at 616, CA.
8 Gilmartin v West Sussex County Council (1976) 242 Estates Gazette 203, CA.
Page 365
included in the demise/10 Part of a building
10 Part of a building
HR A[1528]
Where the lease comprises part only of a building, whether it be of a floor, a room or an office and whether the division
is horizontal or vertical, it will prima facie include both sides of any external wall and anything attached to it, unless
there is an exception or reservation or something in the context of the lease to exclude them1. The lessee may only use
the walls in a reasonable way and he is not entitled to fix to the wall something (eg a sign) which trespasses on the
property of an adjoining owner2. A demise of a particular floor of a building will include voids above a false ceiling
below the floor above3. Generally, the demise of a building will include a demise of the roof of the building4. That is
not, however, invariably so. The question is one of construction. So it has been held that the demise of a top floor flat,
described in the parcels clause as a 'suite of rooms', included no part of the common roof5. It has also been held as a
matter of construction of the lease as a whole that the demise of the first, second and third floors of a three storey
building did not include the roof6. A demise which includes the roof includes the airspace above and thus the landlord
cannot prevent the tenant from making a loft conversion7 or extension8. Nor can the landlord erect a fire escape from
adjacent premises into airspace above the roof9. Where a tenant covenanted to repair the demised premises and to
contribute to the cost of repair by the landlord of all 'mutual or party walls', the roof and external walls were held to be
mutual structures10. Flats are for all legal purposes separate houses built one above another11.
HR A[1529]
1 Carlisle Café Co v Muse Bros & Co (1897) 77 LT 515; Hope Bros Ltd v Cowan [1913] 2 Ch 312; Goldfoot v Welch [1914] 1 Ch 213;
Phelps v City of London Corpn [1916] 2 Ch 255 at 263; Sturge v Hackett [1962] 3 All ER 166, CA.
2 Gifford v Dent (1926) 71 Sol Jo 83.
3 Graystone Property Investments Ltd v Margulies (1984) 47 P & CR 472, 269 EG 538.
4 Straudley Investments v Barpress [1987] 1 EGLR 69.
5 Cockburn v Smith [1924] 2 KB 119.
6 Delgable v Perinpanathan [2006] 1 EGLR 78, CA.
7 Davies v Yadegar [1990] 09 EG 67, CA; see also Kelsen v Imperial Tobacco Co (of Great Britain and Ireland) Ltd [1957] 2 QB 234.
8 Haines v Florensa (1989) 59 P & CR 200, CA.
9 Straudley Investments Ltd v Barpress Ltd [1987] 1 EGLR 69, CA.
10 Twyman v Charrington [1994] 1 EGLR 243.

Page 366
11 Yorkshire Insurance Co v Clayton (1881) 8 QBD 421, CA.

Page 367
included in the demise/11 Road or river boundary
11 Road or river boundary
HR A[1530]-[1540]
Where the premises are referred to as bounded by a public road or by a river and the soil of the road or river is vested in
the lessor, the lease will prima facie include the soil ad medium filum viae, or (unless the river is tidal1) to the middle
point of the river bed2. The rule applies to streets in a town as well as to highways in the country3. Similarly where the
premises are described as bounded by a river they include half the bed of the river4. If there is a small quantity of waste
land between the highway and the demised premises, this also, if vested in the lessor, will be presumed to be included in
the demise5. But the presumption can be rebutted6. And it does not apply to premises bounded by a railway7.
HR A[1541]
1 A-G v Lonsdale (1868) LR 7 Eq 377.
2 Haynes v King [1893] 3 Ch 439 at 448; Tidswell v Whitworth (1867) LR 2 CP 326 at 333; Hodges v Lawrence (1854) 18 JP 347; Blount
v Layard [1891] 2 Ch 681n at 689.
3 Re White's Charities [1898] 1 Ch 659 at 664; City of London Land Tax Comrs v Central Railway Co [1913] AC 364; cf Mappin Bros v
Liberty & Co Ltd [1903] 1 Ch 118 at 128.
4 Dwyer v Rich (1871) IR 6 CL 144; Thames Conservators v Kent [1918] 2 KB 272.
5 Doe d Pring v Pearsey (1827) 7 B & C 304.
6 Kingsmill v Millard (1855) 11 Exch 313; Salisbury v Great Northern Rly Co (1858) 5 CBNS 174; Beckett v Leeds Corpn (1872) 7 Ch
App 421; Pryor v Petre [1894] 2 Ch 11, CA; Mappin Bros v Liberty & Co Ltd [1903] 1 Ch 118.
7 Thompson v Hickman [1907] 1 Ch 550.

Page 368
included in the demise/12 Accretion
12 Accretion
HR A[1542]-[1543]
Where land is demised with a water boundary, including the boundary of an inland lake, the lessees title extends to land
added to it by accretion unless the doctrine of accretion is plainly excluded1. The doctrine is not excluded merely
because the original boundary can be identified. It is therefore capable of applying notwithstanding that the lease is
accompanied by a map showing the boundary or by a parcels clause stating the area of the land1. But for the doctrine to
apply it is essential that the accretion should have been both gradual and imperceptible1.
HR A[1544]
1 Southern Centre of Theosophy Inc v South Australia [1982] AC 706.

Page 369
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/B Boundaries
and fences
B
Page 370
and fences/1 Hedges and ditches
1 Hedges and ditches
HR A[1545]
Where adjoining lands in different ownership are separated by a hedge and ditch and the boundary is not delimited in
the parcels to the conveyancing documents, the boundary is presumed to be the outward edge of the ditch, rather than
the hedge1. The presumption may be rebutted by proof of acts of ownership by the owner of the land on the ditch side2,
by the evidence of an award map3, by the limits and acreage shown by a conveyance4, or by a conveyance referring to
the Ordnance Survey Map5. But the presumption does not apply where there is no ditch6, where the ditch was there
before the boundary was drawn7, where there is a natural watercourse8, or where both lands are in the same ownership,
though let to different tenants9. In the last case, a declaration by the landlord as to the position is admissible in
evidence10.
HR A[1546]
1 Vowles v Miller (1810) 3 Taunt 137; Guy v West (1808) 2 Selwyns NP 13th ed 1244; Doe d Pring v Pearsey (1827) 7 B & C 304 at
307-308; Craven v Pridmore (1902) 18 TLR 282; Weston v Lawrence Weaver Ltd [1961] 1 QB 402; Alan Wibberley Building Ltd v Insley
[1999] 1 WLR 894, HL; Palmer v Bowman, (14 October 1999, unreported), CA.
2 Craven v Pridmore (1902) 18 TLR 282 (failed on facts); Henniker v Howard (1904) 90 LT 157 (failed on facts).
3 Collis v Amphlett [1920] AC 271.
4 Fisher v Winch [1939] 1 KB 666.
5 Rouse v Gravelworks Ltd [1940] 1 KB 489, CA; Davey v Harrow Corporation [1958] 1 QB 60, CA; cf Alan Wibberley Building Ltd v
Insley [1999] 1 WLR 894, HL (not rebutted).
6 Collis v Amphlett [1920] AC 271.
7 Fisher v Winch [1939] 1 KB 666, as explained in Alan Wibberley Building Ltd v Insley [1999] 1 WLR 894, HL.
8 Marshall v Taylor [1895] 1 Ch 641.
9 Noye v Reed (1827) 1 Man & Ry KB 63.
10 Noye v Reed (1827) 1 Man & Ry KB 63.

Page 371
and fences/2 Duty to preserve boundaries
2 Duty to preserve boundaries
HR A[1547]
The relationship of landlord and tenant imposes on the tenant an obligation to preserve the boundaries between the
demised land and the tenant's own land and not to permit them to be destroyed so that the landlord's land cannot be
distinguished1. If, therefore, the tenant has thrown the lands together, the landlord is entitled to have the boundary
ascertained by the court, even during the term2. The tenant may be required for this purpose to produce his own title
deeds3. If the confusion is such that at the end of the tenancy the tenant cannot render up specifically the landlord's land
and the true boundary cannot be ascertained, the tenant must restore land to the same value as the demised premises4.
For this purpose the land will be valued fairly, but to the utmost as against the tenant who has rendered it impossible for
the landlord to have his own5. The rule applies to co-lessees as to a sole lessee6 and applied to copyhold tenants as to
freehold7.
HR A[1548]
1 Leeds v Strafford (1798) 4 Ves 180; Aston v Exeter (1801) 6 Ves 288; A-G v Fullerton (1813) 2 Ves & B 263; A-G v Stephens (1855) 6
De GM & G 111.
2 Spike v Harding (1878) 7 Ch D 871 (directing inquiry in chambers).
3 Southwell v Thompson (1837) 6 LJ Ch 196; Brown v Wales (1872) LR 15 Eq 142.
4 Leeds v Strafford (1798) 4 Ves 180; Aston v Exeter (1801) 6 Ves 288.
5 A-G v Fullerton (1813) 2 Ves & B 263; A-G v Stephens (1855) 6 De GM & G 111.
6 Willis v Parkinson (1818) 1 Swan 9.
7 Searle v Cooke (1890) 43 Ch D 519.

Page 372
and fences/3 Encroachment by tenant
3 Encroachment by tenant
HR A[1549]
A related rule is the presumption that encroachments made by the tenant during his tenancy1, whether on land
belonging to the landlord or to a third party, form an accretion to the demised premises and must be yielded up with the
rest of the premises on the determination of the term2. The presumption applies whether or not the land encroached
upon is waste3. Before the commencement of the Land Registration Act 2002, where the land encroached upon belongs
to a third party then, at the expiration of the 12-year limitation period4, the tenant will acquire a leasehold interest and
his landlord the reversion, in that land5. That still applies in relation to unregistered land, but the law relating to adverse
possession of registered land has now been substantively changed. The encroachment need not be actually adjoining. It
may be separated from the holding by a highway6, or by a brook and fence and narrow strip of waste7. On the other
hand, land more than half a mile away from the demised premises has been held not to be subject to this rule8. If the
tenant purchases the reversion in the demised premises so that his leasehold interest becomes merged in the freehold,
his interest in his encroachment determines and he thereupon becomes a trespasser9. The presumption is one of fact and
not of law. It may be rebutted by showing that the tenant took possession contrary to the wishes of the landlord10, that
the landlord offered the encroached land for sale with vacant possession and the tenant negotiated for its purchase and
lease11, that the tenant intended at the time to hold the encroachment for his own benefit12, or that the encroachment
was not held with the demised premises as one occupation13. Even if the presumption does not arise, it may still appear
from the circumstances that the tenant intended the land to be part of his holding. If so and he obtains a title by
limitation (whether against the landlord or a third party), he must give it up to the landlord when his tenancy comes to
an end14, complying in the meantime with any other applicable covenants (eg repair)15.
HR A[1550]-[1560]
1 Dixon v Baty (1866) LR 1 Exch 259 (encroachment before tenancy).
2 Kingsmill v Millard (1855) 11 Exch 313; Whitmore v Humphries (1871) LR 7 CP 1; Lisburne v Davies (1866) LR 1 CP 259; A-G v
Tomline (1877) 5 Ch D 750; King v Smith [1950] 1 All ER 553, CA; Smirk v Lyndale Developments Ltd [1975] Ch 317, CA.
3 Kingsmill v Millard (1855) 11 Exch 313; Tabor v Godfrey (1895) 64 LJQB 245; Smirk v Lyndale Developments Ltd [1975] Ch 317, CA;
Long v Tower Hamlets London Borough Council [1998] Ch 197 at 203; cf Hastings v Saddler (1898) 79 LT 355.
4 Limitation Act 1980, s 17.
5 King v Smith [1950] 1 All ER 553, CA.
6 Andrews v Hailes (1853) 2 E & B 349.
7 Lisburne v Davies (1866) LR 1 CP 259.

Page 373
8 Hastings v Saddler (1898) 79 LT 355.
10 Doe d Baddeley v Massey (1851) 17 QB 373.
12 Doe d Lewis v Rees (1834) 6 C & P 610; Whitmore v Humphries (1871) LR 7 CP 1 at 4; Long v Tower Hamlets London Borough
Council [1998] Ch 197 at 203-204.
13 Andrews v Hailes (1853) 2 E & B 349.
14 Tabor v Godfrey (1895) 64 LJQB 245.
15 White v Wakley (No 1) (1858) 26 Beav 17; JF Perrott & Co Ltd v Cohen [1951] 1 KB 705.
Page 374
and fences/4 Third party encroachment
4 Third party encroachment
HR A[1561]
In the reverse situation, where a third party encroaches on the tenant's land, 12 years' adverse possession will give the
encroacher a title to the lease in unregistered land1. The lessor's title is, however, unaffected and he can recover
possession against the encroacher when the lease expires2. He may do so earlier in unregistered land if the dispossessed
lessee surrenders his lease3. But, previously, in registered land, once the encroacher became registered proprietor of the
lease the former lessee had nothing to surrender4. Moreover, even before the encroacher was registered, the statutory
trust5 operated to preserve his rights against the lessor despite surrender by the (paper title) lessee6.
HR A[1562]
1 Limitation Act 1980, ss 15, 17; Jacobs v Revell [1900] 2 Ch 858.
2 Limitation Act 1980, s 15, Sch 1 para 4; and cf paras 5-6.
3 Fairweather v St Marylebone Property Co [1963] AC 510.
4 Spectrum Investment Co v Holmes [1981] 1 All ER 6.
5 Under s 75 of the 1925 Act.
6 Central London Commercial Estates Ltd v Kato Kagaku Co Ltd [1998] 4 All ER 948.
Page 375
and fences/5 Duty to fence
5 Duty to fence
HR A[1563]
At common law, adjoining owners are not bound to fence either against or for the benefit of each other1. But each
occupier is bound to prevent his cattle from trespassing on his neighbour's premises2. A liability to fence may be
imposed by statute3, by agreement4 or by prescription5. An obligation by prescription will not be implied from the fact
that the owner of the fence has done repairs for his own benefit6. As between landlord and tenant, apart from express
covenant on his part, the landlord is under no liability to repair fences7. It is the duty of the tenant in occupation to
repair the fences and for this purpose he may take sufficient wood8. The landlord can maintain an action against his
tenant for not repairing, even without any agreement to that effect, upon the ground of the injury done to the
inheritance9. Moreover, if injury is caused to a third person through non-repair of the fences, the remedy is as against
the occupier and not the owner, unless the fences were out of repair when the land was let10, or unless the owner has
undertaken or has a right to repair the fences11. Where damage is caused as a result of the escape of animals from one
farm to another, it is no answer for the owner of the animals to show that the person who has suffered the damage was
under a covenant with his landlord to repair the fences between the two farms12.
HR A[1564]
1 Smith v Burton (1674) Freem KB 145; Star v Rookesby (1711) 1 Salk 335; Hilton v Ankesson (1872) 27 LT 519.
2 Churchill v Evans (1809) 1 Taunt 529; Lawrence v Jenkins (1873) LR 8 QB 274; Holgate v Bleazard [1917] 1 KB 443; Wellaway v
Courtier [1918] 1 KB 200; Park v J Jobson & Son [1945] 1 All ER 222, CA.
3 Wiseman v Booker (1878) 3 CPD 184; Dixon v Great Western Rly Co [1896] 2 QB 333, [1897] 1 QB 300.
4 Hilton v Ankesson (1872) 27 LT 519.
5 Star v Rookesby (1711) 1 Salk 335; Lawrence v Jenkins (1873) LR 8 QB 274.
6 Hudson v Tabor (1877) 2 QBD 290; Rundle v Hearle [1898] 2 QB 83; Boyle v Tamlyn (1827) 6 B & C 329 at 332; Lawrence v Jenkins
(1873) LR 8 QB 274.
7 Cheetham v Hampson (1791) 4 Term Rep 318; see also Erskine v Adeane (1873) 8 Ch App 756.
8 Co Litt 53; Whitfield v Weedon (1772) 2 Chit 685.
9 Cheetham v Hampson (1791) 4 Term Rep 318.
10 Cheetham v Hampson (1791) 4 Term Rep 318.

Page 376
11 See paras HR A[7380.215] and A[7380.339] as to landlord's liability for injury to persons using the premises where he is under a duty
or has a right to maintain or repair.
12 Holgate v Bleazard [1917] 1 KB 443.

Page 377
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/C Game
C
Page 378
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/C Game/1 Grant
of sporting rights
1 Grant of sporting rights
HR A[1565]
A grant of sporting rights alone is an incorporeal hereditament1 and must be by deed2. The right to game may be rated
separately from the land when it is not enjoyed by the occupier of the land3. Where a lessor grants a lease of such rights
over his land, he does not impliedly promise the lessee of such rights that he will keep up the quantity of game on the
land4, or that neither he5 nor his occupying tenant6 will cut down trees on the land, even though this may prejudice the
exercise of sporting rights, or that he will not sell7 or demise8 the land concerned to a third party, unless this amounts to
a derogation from grant9. The lessee of sporting rights has no property in the game until reduced into his possession10.
Game found and killed by a trespasser belongs to the lessor11. If the sporting lessee turns out game on the land not bred
on it the lessor is apparently justified in keeping down the excess12. On the other hand, the sporting lessee is entitled, in
the case of fire on the land, to adopt such means for extinguishing the fire as may be necessary to preserve his rights13.
A covenant in a lease of sporting rights to leave the land at the end of the term as well stocked with game as at the time
of the demise touches and concerns the hereditament demised14.
HR A[1566]
1 Bird v Higginson (1837) 6 Ad & E1 824; Thomas v Fredericks (1847) 10 QB 775; Hooper v Clark (1867) LR 2 QB 200; Lowe v Adams
[1901] 2 Ch 598.
2 Law of Property Act 1925, s 52(1); Bird v Higginson (1837) 6 Ad & EL 824; Brigstocke v Rayner (1875) 40 JP 245; cf Coleman v
Bathurst (1871) LR 6 QB 366 (reservation).
3 General Rate Act 1967, s 29 (before 1 April 1990); Local Government Finance Act 1988, ss 42(1), 43(1), 64(4)(e), 65(9), 67(13) (from
1 April 1990).
4 Bird v Great Eastern Rly Co (1865) 19 CBNS 268.
5 Gearns v Baker (1875) 10 Ch App 355; Dick v Norton (1916) 85 LJ Ch 623
6 Turner v Clowes (1869) 20 LT 214.
7 Pattison v Gilford (1874) LR 18 Eq 259.
8 Newton v Wilmot (1841) 8 M & W 711.
9 Peech v Best [1931] 1 KB 1 (sale for erection of racing stables).
10 Gott v Measures [1948] 1 KB 234.

Page 379
11 Hooper v Clark (1867) LR 2 QB 200.
12 Birkbeck v Paget (1862) 31 Beav 403.
13 Cope v Sharpe (No 2) [1912] 1 KB 496.

Page 380
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/C Game/2
Implied and statutory rights of sporting
2 Implied and statutory rights of sporting
HR A[1567]
The right of sporting, that is, the right to go upon the land to take and kill game, is part of the dominion over the land
and passes at common law by a demise to the tenant unless expressly reserved1. In addition, the tenant has a statutory
right to kill and take 'ground game' (meaning hares and rabbits)2 on the land in his occupation, whether or not any other
person is entitled also to kill and take such game on the same land3. The statutory right is incident to his occupation and
cannot be divested by contract or otherwise4. But the prohibition against divesting is not retrospective5 and only
extends to ground game6. Moreover the tenant can divest himself of any non-statutory right he may have, retaining the
statutory right7. The right is limited in time in relation to moorlands and uninclosed non-arable land, except detached
portions of either which are less than 25 acres in extent and adjoin arable lands. Between 11 December in one year and
31 March in the next inclusive the right may be exercised in any legal way8. Between 1 September and 10 December
inclusive the right may be exercised otherwise than by the use of firearms9 and an agreement may be made between the
occupying and the owner or shooting tenant for the joint exercise of the right for its exercise for their joint benefit10.
Between 1 April and 31 August inclusive, the statutory right is suspended altogether. Tenants in occupation of land on
which the right to take and kill ground game is vested in some other person by lease, contract of tenancy or other bona
fide contract made for valuable consideration before 7 September 1880 are not entitled to exercise their right until the
determination of that contract and any special rights of third parties existing before that date by virtue of any franchise,
charter, or Act of Parliament are preserved11.
HR A[1568]
1 Copland v Maxwell (1871) LR 2 Sc & Div 103; Pochin v Smith (1887) 52 JP 4.
2 Ground Game Act 1880, s 8.
4 Ground Game Act 1880, s 3; Sherrard v Gascoigne [1900] 2 QB 279; Anderson v Vicary [1900] 2 QB 287.
5 Allhusen v Brooking (1884) 26 Ch D 559.
6 Morgan v Jackson [1895] 1 QB 885; Stanton v Brown [1900] 1 QB 671.
7 Ground Game Act 1880, s 2; Morgan v Jackson [1895] 1 QB 885.
8 GGA 1880, s 1(3).
9 Ground Game (Amendment) Act 1906, s 2.

Page 381
10 Ground Game (Amendment) Act 1906, s 3.
11 GGA 1880, s 5.
Page 382
Exercise of statutory right
3 Exercise of statutory right
HR A[1569]
The statutory right can only be exercised by the occupier and by persons duly authorised by him in writing1. The
persons who may be authorised are members of the occupier's household resident on the land in his occupation, persons
in his ordinary service on such land and any one other person bona fide employed by him for reward in the taking and
destruction of ground game2. The authority must be produced on demand to any persons having a current right to take
and kill ground game, or to any person authorised by the latter in writing3. The occupier's household will include
household servants4. A resident includes a visitor staying in the house5, but not a friend invited for a day's shooting6.
'Bona fide employed for reward' means employment as a servant under the orders of the master or tenant of the ground,
but it may extend to a person employed to kill ground game whose only reward is to keep such game7. 'Employed'
covers any employment, direct or indirect and, accordingly, when the tenant employs the Agricultural Executive
Committee to destroy rabbits, it covers a servant of that Committee8. A person who kills ground game under the verbal
authority of the occupier is a trespasser9. Only one other person besides the occupier himself may be authorised by him
to exercise his rights by killing the ground game with firearms10. There is a prohibition on shooting ground game at
night11, which applies to occupying tenants12 and to grantees of occupying tenants13 but neither to an owner
occupier14 nor to a shooting tenant not in occupation15.
HR A[1570]-[1580]
1 Ground Game Act 1880, s 1(1).
2 Ground Game Act 1880, s 1(1)(b).
3 Ground Game Act 1880, s 1(1)(c).
4 Cf Re Drax, Savile v Yeatman (1887) 57 LT 475.
5 Stuart v Murray (1884) 12 R 9.
6 Niven v Renton (1888) 15 R 42.
7 Bruce v Prosser (1898) 25 R 54, 35 SLR 433, 5 SLT 301.
8 Mason v Clarke [1954] 1 QB 460, CA, revsd other grds [1955] AC 778, HL.
9 Cf Richardson v Maitland (1897) 34 SLR 426.
10 Ground Game Act 1880, s 1(1)(a).

Page 383
12 Saunders v Pitfield (1888) 58 LT 108; Waters v Phillips [1910] 2 KB 465.
13 Leworthy v Rees (1913) 109 LT 244.
14 Smith v Hunt (1885) 54 LT 422.
15 May v Waters [1910] 1 KB 431; Leworthy v Rees (1913) 109 LT 244.

Page 384
Reservation of sporting rights
4 Reservation of sporting rights
HR A[1581]
Subject to statute1, the landlord can reserve to himself the right to game2. Such a reservation need not be under seal3
and the rights reserved are protected by statutory penalties4. The right may be so reserved as to extend to friends of the
lessor5. Where the right is reserved to the lessor or 'all other persons authorised by him' such persons must be lawfully
authorised and prepared to vouch their authority when called upon by the tenant6. A reservation is not created by a mere
agreement by the tenant to preserve the game. In such a case during the tenancy neither landlord nor tenant can kill
game7. A reservation in a lease of the right of 'shooting and sporting' is not limited to 'game' in the strict sense, but
extends to all such animals commonly understood to be the subject of sport8. A reservation of rights in respect of 'game'
in a lease has been construed in its context as not extending to deer9. A similar reservation in a transfer has been
construed as not being restricted to wild game naturally occurring on the property, but as extending to game reared in
pens on other land and brought on to the land in question10. When the lessor has reserved, subject to any statutory
rights, the exclusive right of shooting and sporting, the lessee is entitled to use the land and to destroy furze and
underwood11 in the ordinary and reasonable way, but he must not designedly drive the game away12, or adopt farming
practices that interfered with the exercise of the reserved shooting rights13. On the other hand, the lessor or his tenant of
the shooting must not trample fields of standing crops at a time when it is not usual or reasonable to do so14. If by some
unreasonable action he causes the game to increase to an abnormal extent, the tenant can recover damages for the injury
to his crops15. But where game increases abnormally without any unreasonable action by the landlord (eg as a result of
weather conditions) there is no obligation on the landlord to reduce them and the tenant has no right of action in respect
of any damage caused16. Nor has the tenant any claim for damage suffered as a necessary consequence of the exercise
of reserved rights, for example rights to rear pheasants on the land17. The landlord is entitled to be indemnified by the
shooting tenant against claims for compensation for damage by game, but not if the grant to the shooting tenant does not
enable him to go onto the land to shoot it18.
HR A[1582]
1 Ie the Ground Game Act 1880.
2 Game Act 1831, s 8.
3 Coleman v Bathurst (1871) LR 6 QB 366.
4 Game Act 1831, ss 8, 11, 12.
5 Gardiner v Colyer (1864) 10 LT 715; Wickham v Hawker (1840) 7 M & W 63.
6 Mason v Clarke [1954] 1 QB 460, CA.
7 Coleman v Bathurst (1871) LR 6 QB 366.

Page 385
8 Jeffryes v Evans (1865) 19 CBNS 246.
9 Inglewood Investment Co Ltd v Forestry Commission [1989] 1 All ER 1, CA.
10 Pole v Peake (1998) EGCS 125, CA.
11 As to this term, see para HR A[1604].
12 Jeffryes v Evans (1865) 19 CBNS 246 at 264; Mason v Clarke [1955] AC 778, HL.
14 Hilton v Green (1862) 2 F & F 821.
15 Hilton v Green (1862) 2 F & F 821; Paget v Birkbeck (1863) 3 F & F 683; Farrer v Nelson (1885) 15 QBD 258.
16 Seligman v Docker [1949] Ch 53.
18 Cornewall v Dawson (1871) 24 LT 664.

Page 386
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/D Trees and
underwood
D
Page 387
underwood/1 Preliminary
1 Preliminary
HR A[1583]
There is much old law as to rights to trees and underwood in the relation of landlord and tenant, but this must all be read
subject to the overriding requirements of social control, expressed in statute law. Thus, subject to certain important
exceptions, no growing trees may now be felled otherwise than with the licence, or pursuant to the direction, of the
Forestry Commissioners1. Where a tree preservation order2 (which is registrable as a local land charge3) has been
made, the concurrence of the local planning authority, or in certain cases, of the Secretary of State for the Environment,
is necessary before the Forestry Commissioners can give a licence or directions for the felling of any trees to which the
licence relates4.
HR A[1584]
1 See the Forestry Act 1967.
2 Town and Country Planning Act 1990, ss 198, 202.
3 Local Land Charges Act 1975, s 1.
4 Forestry Act 1967, s 15.

Page 388
underwood/2 Timber
2 Timber
HR A[1585]
The respective rights of landlord and tenant as to trees vary according to whether the trees are or are not timber trees.
Strictly, to be timber, trees must be 6 inches in diameter, or 2 feet in girth1. What is timber depends first on the general
law and second on the custom of the part of the country2. Oak, ash and elm trees of 20 years' growth are in all places
timber3. Other trees, such as birch, beech and walnut, are timber in some places by the custom of the country4. Thus,
beech has been held timber in Bedfordshire5, Buckinghamshire6, Gloucestershire7, Hampshire8, but not Oxfordshire9.
Birch has been held timber in Yorkshire10 and willows in Hampshire11. Thorns have been held timber in some
counties12, particularly where trees are scant13. Larch is not timber at common law14, nor by the custom of
Cumberland and Westmorland15. Pollards, if sound, are as much timber as entire trees of the same growth would be16.
Hornbeam, sallow, hazel, ash and stub-oak have been held not timber in Essex17. Alder poles have been held not timber
in Berkshire18.
HR A[1586]
1 Whitty v Dillon (1860) 2 F & F 67.
2 Co Litt 53a; Aubrey v Fisher (1809) 10 East 446 at 455; Dunn v Bryan (1872) IR 7 Eq 143; Honywood v Honywood (1874) LR 18 Eq
306.
3 Anon (1587) Cro Eliz 55; Aubrey v Fisher (1809) 10 East 446; Whitty v Dillon (1860) 2 F & F 67; Honywood v Honywood (1874) LR 18
Eq 306.
4 Palmer's case (1611) Co Litt 53an (10); Chandos v Talbot (1731) 2 P Wms 601; R v Minchin-Hampton Inhabitants (1762) 3 Burr 1308;
Honywood v Honywood (1874) LR 18 Eq 306; Re Harrison's Trusts (1884) 28 Ch D 220; Dashwood v Magniac [1891] 3 Ch 306.
5 Bilby v Huxley (1724) Bunb 192.
6 Lapthorne v ------ (1616) 1 Roll Rep 355; Dashwood v Magniac [1891] 3 Ch 306.
7 Abbott v Hicks (1694) Eag & Y 584.
8 Layfield v Cowper (1694) 1 Eag & Y 591.
9 Dashwood v Magniac [1891] 3 Ch 306.
10 Cumberland's case (1610) Moore KB 812.
11 Cuffly v Pindar (1616) Hob 219; cf Anon (1581) Godb 4.

Page 389
12 Palmer's case (1611) Co Litt 53an (10); Cook v Cook (1638) Cro Car 531.
13 Barret v Barret (1628) Het 34.
14 Re Harrison's Trusts (1884) 28 Ch D 220.
15 Re Harker's Will Trusts [1938] Ch 323.
16 Chandos v Talbot (1731) 2 P Wms 601; Walton v Tryon (1751) Amb 130.
17 Turnor v Smith (1680) 1 Eag & Y 526; and see Anon (1581) Godb 4.
18 Goodall v Parkins (1694) 1 Eag & Y 606.

Page 390
underwood/3 General and special property
3 General and special property
HR A[1587]
All trees pass as parcel of the demised premises unless they are excepted1. The lessee has a special property in timber
trees so long as they are annexed to the land. By virtue of this he is entitled to all such benefit, such as fruit or shade, as
may be derived from them while so annexed2. The general property in timber trees is in the landlord3. If living trees are
severed from the land, whether deliberately or accidentally, the special property of the tenant comes to an end and the
landlord may take them4. Similarly, if the house is pulled down, the timber belongs at once to the landlord5. But if the
trees are dead ('dotards'), the tenant may cut them down6, or wait until they are blown down7 and take them. If the
landlord fells timber not excepted from demise, the tenant will be entitled to damages adequate to the loss of his
particular interest and for the trespass8. If the tenant fells or injures such timber he will be liable to an action for waste9.
If a stranger cuts them down both landlord and tenant may have an action against him to recover their respective
losses10.
HR A[1588]
1 Mervyn v Lyds (1553) 1 Dyer 90a; Barret v Barret (1628) Het 34; Doe d Douglas v Lock (1835) 2 Ad & El 705 at 750.
2 Herlakenden's case (1589) 4 Co Rep 62a; Liford's case (1614) 11 Co Rep 46b.
3 Berriman v Peacock (1832) 9 Bing 384 at 386.
4 Herlakenden's case (1589) 4 Co Rep 62a; Bowles' case (1615) 11 Co Rep 79b; Ward v Andrews (1772) 2 Chit 636.
5 Herlakenden's case (1589) 4 Co Rep 62a; Bowles' case (1615) 11 Co Rep 79b; Ward v Andrews (1772) 2 Chit 636.
6 Co Litt 53a.
7 Herlakenden's case (1589) 4 Co Rep 62a.
8 1 Wms Saund 322b.
9 Co Litt 53c.
10 Co Litt 57a; Bedingfield v Onslow (1685) 3 Lev 209.

Page 391
underwood/4 Estovers
4 Estovers
HR A[1589]
The tenant is also entitled to estovers, that is, to fell timber for the purpose of repairing buildings and fences so as to
keep them as he found them and to mend implements and also for fuel if there is no sufficient dead wood available1.
The use of timber for such purposes is called 'house-bote', 'ploughbote', 'hedgebote' and 'firebote', or simply estovers2.
But, although the tenant may fell timber for necessary botes, he must at his own peril select such trees as are fit for the
purpose and employ them accordingly3. To justify taking the wood, the use for which it is taken must be shown4. The
tenant cannot sell the timber and use the proceeds in the purchase of other material for the repair of buildings5. Nor may
he cut down timber in advance so as to be used for repairs as occasion requires6. The tenant does not acquire a right of
sale by the landlord's long acquiescence7. Similarly, a tenant may cut turf for fuel, but not for sale8, unless nothing but
bog was demised which is not capable of use except by being cut for sale, or if it was cut for sale at the time of demise9.
In old cases it was also held that if the house fell by tempest or other act of God, the tenant might take timber to rebuild
it10.
HR A[1590]-[1600]
1 Co Litt 53b.
2 Co Litt 41b; cf Courtenay v Fisher (1826) 4 Bing 3.
3 Simmons v Norton (1831) 7 Bing 640 at 649.
4 Purifie v Gryme (1611) Cro Jac 291.
5 Co Litt 53b.
6 Gorges v Stanfield (1597) Cro Eliz 593.
7 Cf Courtown v Ward (1802) 1 Sch & Lef 8.
8 Courtown v Ward (1802) 1 Sch & Lef 8; De Salis v -- (1809) 2 Mod 516; Waterpark v Austen (1822) 1 Jo Ex Ir 627n; Pollard v Smith
(1826) 1 Hog 391; White v Walsh (1829) 1 Jo Ex Ir 626n.
9 Coppinger v Gubbins (1846) 3 Jo & Lat 397 at 410.
10 Herlakenden's case (1589) 4 Co Rep 62a at 63a; Bowles' case (1615) 11 Co Rep 79b.
Page 392
underwood/5 Young timber
5 Young timber
HR A[1601]
Where trees have not attained the age necessary to make them timber trees, their prospective value as timber trees
prevents the tenant from cutting them down, save in a proper course of thinning and if he does so he commits waste1.
He also commits waste if he suffers the young plants or germens to be destroyed2. But if he does this in a due course of
cultivation and for the purpose of improving the growth of adjacent timber trees, he is entitled to the proceeds3. There
may also be a coppice of timber trees, that is, where the trees are felled and shoots are allowed to grow from the
stumps4, these being cut at intervals of 15 years and upwards. The tenant in such case is entitled to continue the same
cutting at the proper time and to take the proceeds without regard to the age of the trees5.
HR A[1602]
1 Phillips v Smith (1845) 14 M & W 589 at 594; Honywood v Honywood (1874) LR 18 Eq 306 at 310; Anon (1581) Godb 4.
2 Co Litt 53a.
3 Honywood v Honywood (1874) LR 18 Eq 306 at 312.
4 Ie silva coedua: Dashwood v Magniac [1891] 3 Ch 306 at 362, CA.
5 Phillips v Smith (1845) 14 M & W 589 at 594; Bagot v Bagot (1863) 32 Beav 509 at 517; Dashwood v Magniac [1891] 3 Ch 306 at 330
at 392, CA; Hood (Viscount) v Kendall (1855) 17 CB 260.
Page 393
underwood/6 Property in trees not being timber
6 Property in trees not being timber
HR A[1603]
The general property in trees which are not timber and in underwood is in the tenant1. Underwood refers to wood
species that send up many shoots from one stool, the root remaining perfect from which the shoots are cut and
producing new shoots; but wood which is not timber is not necessarily underwood2. Thus, the tenant may cut down
trees and underwood, subject to: (a) the restrictions on felling imposed by the general law3; (b) the proviso that they are
not planted for ornament or for the protection of the house or of banks, or for shade, animals or pasture4; and (c) the
further proviso that the cutting does not change the nature of the property demised. Thus, the tenant may not cut down
apple trees in a garden or orchard, or cut down a quick set hedge5, or plough up strawberry beds in full bearing6.
Underwood is in the nature of a crop and may be cut by the tenant at the periodical times which usage and custom of the
country has established, but not before or after those times7. Where the tenant properly cuts down trees or underwood
he is entitled to the proceeds and so, too, where they are cut down by a stranger and the tenant adopts his act8. But the
tenant can only cut down the trees or underwood in a reasonable manner9 and not so as to prevent them from growing
again10. He cannot take up a growing tree11, or stub up the stools from which the young shoot will spring12. If he
exceeds his right he is liable to an action for waste13. However, a market gardener is entitled to remove trees and shrubs
in the course of his trade14.
HR A[1604]
1 Berriman v Peacock (1832) 9 Bing 384 at 387; R v Ferrybridge Inhabitants (1823) 1 B & C 375 at 383.
2 R v Ferrybridge Inhabitants (1823) 1 B & C 375; R v Narberth North Inhabitants (1839) 9 Ad & El 815; Lord Fitzhardinge v Pritchett
(1867) LR 2 QB 135.
4 Co Litt 53a; Phillipps v Smith (1845) 14 M & W 589; Honywood v Honywood (1874) LR 18 Eq 306 at 310.
5 Co Litt 53a; Phillipps v Smith (1845) 14 M & W 589; Berriman v Peacock (1832) 9 Bing 384 at 387.
6 Watherell v Howells (1808) 1 Camp 227.
7 Brydges v Stephens (1821) 6 Madd 279; Humphreys v Harrison (1820) 1 Jac & W 581.
8 Berriman v Peacock (1832) 9 Bing 384.
9 Brydges v Stephens (1821) 6 Madd 279; Humphreys v Harrison (1820) 1 Jac & W 581.
10 Anon (1581) Godb 4.

Page 394
11 Empson v Soden (1833) 4 B & Ad 655 at 657.
12 Co Litt 53a; Phillipps v Smith (1845) 14 M & W 589 at 594; Dunn v Bryan (1872) IR 7 Eq 143; Gage and Smith's case (1613) Godb
209.
13 Berriman v Peacock (1832) 9 Bing 384.
14 Penton v Robart (1801) 2 East 88 at 90; Wyndham v Way (1812) 4 Taunt 316; cf Wardell v Usher (1841) 3 Scott NR 508.
Page 395
underwood/7 Rights of adjoining owners
7 Rights of adjoining owners
HR A[1605]
The property in trees which grows so near to the boundaries of two adjoining properties that their roots extend into the
soil of each has been the subject of conflicting views, but it appears that such trees belong to the owner of the soil where
they were first sown or planted1. If the boughs of the trees on one person's land grow over the land of another, the latter
may cut them off, but not before they grow over to prevent them from so growing2. In cutting the branches the
aggrieved party should do so from his own land3. He is entitled to cut them without notice4. Care must be taken not to
cut off more than actually overhangs5. Alternatively, he may prefer to bring an action for damages6. But the right to lop
the branches does not imply a right to pick the fruit and if the neighbour does so he will be liable in conversion7. In
some circumstances the owner of the fruit has the right to enter on his neighbour's land to retrieve fallen trees or fruit8.
He may also be liable for damage caused by falling trees9. The owner of a wall may enter his neighbour's land to
remove a tree growing against it10. Encroaching roots stand on exactly the same footing as overhanging branches and
may be cut by the owner of the land on which they encroach11. In this case also an action for damages will lie if actual
damage has resulted from the encroachment12, whether before or after the issue of the claim form13.
HR A[1606]
1 Masters v Pollie (1620) 2 Roll Rep 141; Holder v Coates (1827) Mood & M 112.
2 Norris v Baker (1616) 1 Roll Rep 393; Earl of Lonsdale v Nelson (1823) 2 B & C 302.
3 Jones v Williams (1843) 11 M & W 176.
4 Earl of Lonsdale v Nelson (1823) 2 B & C 302; Lemmon v Webb [1895] AC 1.
5 Pickering v Rudd (1815) 1 Stark 56.
6 Smith v Giddy [1904] 2 KB 448.
7 Mills v Brooker [1919] 1 KB 555.
8 Vin Abr Trespass, L a (6); H a 2(11); Millen v Fawdry (1626) Lat 119; cf Thorns Case (1466) YB 6 Edw IV, 7 pl 18 (thorn clippings: no
right to enter; boughs blown down by wind: right to enter).
9 Bruce v Caulfield (1918) 34 TLR 204; Noble v Harrison [1926] 2 KB 332.
10 Pickering v Rudd (1815) 1 Stark 56.
11 Butler v Standard Telephones and Cables Ltd [1940] 1 KB 399.

Page 396
12 Lemmon v Webb [1895] AC 1; Middleton v Humphries (1913) 47 ILT 160; Davey v Harrow Corpn [1958] 1 QB 60.
13 McCombe v Read [1955] 2 QB 429.

Page 397
underwood/8 Exception of trees from leases
8 Exception of trees from leases
HR A[1607]
The common law rights of landlord and tenant in respect of trees growing on the demised land may be varied by the
contract of the parties and this is done either by exception, or by covenant or agreement. An exception of 'trees' refers
prima facie to trees which are useful for their wood and hence it does not extend to fruit trees1. An exception of 'all
timber and other trees, but not the annual fruit thereof' has similar effect, for the term 'fruit' is not confined to trees
which are popularly known as fruit trees, but applies to the produce of oak, elm and walnut trees2. The exception will
extend to trees at any time growing on the land during the demise.
HR A[1608]
1 London v Chapter of Southwell Collegiate Church (1618) Hob 303; Wyndham v Way (1812) 4 Taunt 316 at 318n.
2 Bullen v Denning (1826) 5 B & C 842 at 847.
HR A[1609]
An exception of 'timber and other trees' refers only to the trees themselves and does not except the soil, but any
sufficient nutriment out of the land to sustain the life of the trees1. It is the same where the exception is of 'suitable
woods'2. But an exception of 'plantations'3, or 'wood and underwoods'4, refers also to the soil and excepts the soil on
which the trees grow. If the exception is of 'timber and other trees, wood and underwood', the former words control the
latter and the soil of land covered with growing wood does not pass5.
HR A[1610]-[1620]
1 Liford's case (1614) 11 Co Rep 46b at 50a; Whilster v Paslow (1619) Cro Jac 487; cf Rolls v Rock (1729) 2 Selwyn's NP 13th ed 1244.
2 Pincomb v Thomas (1619) Cro Jac 524.
3 Simpson v Brook (1855) 19 JP 436.
4 Ive v Sams (1597) Cro Eliz 521; Whilster v Paslow (1619) Cro Jac 487.
5 Legh v Heald (1830) 1 B & Ad 622.

Page 398
HR A[1621]
In an exception of timber and other trees, underwood, 'bushes and thorns, other than such bushes and thorns as shall be
necessary for the repair of the fences', the final words do not specify any particular bushes and thorns. Hence they do
not operate as an exception from the exception. All the bushes and thorns are excepted, subject to the right of the lessee
to take such as are necessary for the repair of fences1. If the lessor has covenanted to provide stakes and bushes for
repair, it seems that he must assign the bushes before the tenant can cut them2.
HR A[1622]
1 Jenney v Brook (1844) 6 QB 323.
2 Jenney v Brook (1844) 6 QB 323 at 339.

Page 399
underwood/9 Right to enter, cut and carry away
9 Right to enter, cut and carry away
HR A[1623]
An exception of trees carries with it the right to do all things necessary for getting and disposing of them. Consequently,
without express reservation, the lessor may enter to show the trees to an intending purchaser and either he or the
purchaser can cut them down and carry them away1. It is not necessary that the lease should be under seal. If it is under
hand only, the lessor enters as licensee of the lessee2. If the landlord fails to remove the excepted timber within an
agreed time, the property nevertheless remains in him3. However, there is no implied right to enter where the timber is
ornamental and the lessor has so acted as to make it inequitable that he should fell it, as where, for example, he has
consented to the lessee spending money in improving the grounds4. In the absence of express agreement, the excepted
trees are at the risk of the lessor and the lessee is not bound to protect them from his cattle5. This however seems
contrary to principle, since the damage by the lessees cattle is a trespass and where a field contains young trees and
shrubs, the tenant should give notice to the landlord before grazing cattle in it, so that the landlord may protect them by
fences6.
HR A[1624]
1 Liford's case (1614) 11 Co Rep 46b.
2 Hewitt v Isham (1851) 7 Exch 77.
3 Ellis v Noakes [1932] 2 Ch 98n.
4 Jackson v Cator (1800) 5 Ves 688.
5 Clithero v Higgs (1636) W Jo 388; Glenham v Hanby (1699) 1 Ld Raym 739.
6 Fowler v Johnstone (1892) 8 TLR 327.

Page 400
underwood/10 Covenants as to trees
10 Covenants as to trees
HR A[1625]
The rights of the parties may also be affected by express covenants relating to trees. Examples are a covenant by the
lessor to provide for the delivery of timber for repairs and the covenant by the lessee to restrain interference with the
trees, whether they are included in the demise or excepted. Under a covenant by the lessor to deliver timber growing on
the premises, sufficient for the repairs of such premises, he must deliver timber in quality as well as in quantity1.
HR A[1626]
1 Snell v Snell (1825) 4 B & C 741 at 749.
HR A[1627]
When trees are excepted out of a demise, the cutting of them is not waste but trespass, since waste can only be
committed of the thing demised1. Although it is actionable as trespass, it is usual to support the exception by an express
covenant on the part of the lessee not to fell, lop or top them2. The executor of the lessor can sue for a breach of the
covenant committed in his lifetime2. A covenant not to cut down trees is broken by the deliberate commission of acts
such as ring barking, which lead to the tree dying3. But such a covenant will not prevent the lessee from cutting trees or
underwood which interfere with the use of the land for the purposes for which it is demised. Thus, where in the lease of
a farm and quarries of stone on the farm with liberty to work the quarries, there is an exception of trees and a covenant
not to commit waste by cutting down wood or underwood, it is not a breach of covenant to cut down wood and
underwood required to be removed in order to work the quarries4.
HR A[1628]
1 Goodright d v Peters v Vivian (1807) 8 East 190 at 192; Barret v Barret (1628) Het 34.
2 Raymond v Fitch (1835) 2 Cr M & R 588.
3 George v Reeves (1969) 210 Estates Gazette 211, CA.
4 Doe d Rogers v Price (1849) 8 CB 894.
HR A[1629]
Page 401
Although trees are not excepted, the lessee may be placed under special restrictions as to removing them during the
tenancy, or under special obligations as to delivering them up at the end of the tenancy. Under a covenant not to remove
or grub up or destroy trees, the lessee is prevented from removing trees from one part of the premises to another or
taking them away, unless dead, even though he plants a greater number than he takes away1. But under a covenant to
deliver up at the end of the term all the orchard trees existing at the time of the demise, reasonable use and wear only
excepted, it is a reasonable use of the orchard, if it is overcrowded, to remove the trees past bearing2. Where the tenant
is restrained by covenant from cutting coppice of less than ten years' growth, with a provision that at the end of the term
the landlord will pay the value of the coppice then growing, this provision extends to coppice of less than ten years'
growth, although, since the tenant could not cut it, there is no special consideration for extension of the payments3.
HR A[1630]-[1640]
1 Doe d Wetherell v Bird (1833) 6 C & P 195.
2 Doe d Jones v Crouch (1810) 2 Camp 449.
3 Love v Pares (1810) 13 East 80.

Page 402
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/E Fixtures
E
Page 403
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/E Fixtures/1
Chattels and the demise
1 Chattels and the demise
HR A[1641]
At the commencement of a tenancy, the question may arise as to what chattels form part of the demise. Similarly, on the
determination of a tenancy the question may arise what chattels the departing tenant may remove. As to the first
question, it is an old rule of law that anything fixed to the freehold becomes part of the freehold1. Thus, chattels fixed to
premises at the date of a lease by a landlord, or by some prior owner or tenant, will prima facie pass under the demise2.
The lessee does not, by accepting the lease, come under an implied contract to pay for fixtures3. However, such chattels
may be expressly or impliedly excluded from the demise. For example, the express mention of certain fixtures may
show an intention to exclude others4.
HR A[1642]
1 Bain v Brand (1876) 1 App Cas 762 at 767; Wake v Hall (1880) 7 QBD 295 at 301; Gough v Wood & Co [1894] 1 QB 713; Mancetter
Development Ltd v Garmanson Ltd [1986] QB 1212; Elitestone Ltd v Morris [1997] 2 All ER 513.
2 Colegrave v Dias Santos (1823) 2 B & C 76; Longstaff v Meagoe (1834) 2 Ad & E1 167.
3 Goff v Harris (1843) 5 Man & G 573.
4 Hare v Horton (1833) 5 B & Ad 715.
HR A[1643]
As to the second question, subject to certain exceptional cases, it is the duty of the tenant not to remove fixtures from
the land1. They must be delivered up to the lessor on the determination of the tenancy. As between landlord and tenant
the right to remove a chattel brought onto the land would exist:
(a) when the article has never become in law a fixture2;

(b) when the article, although in law a fixture, is removable by reason of the rules of relaxation in
favour of;
(i) trade;
(ii) agriculture; or
(iii) ornament and convenience3;
(c) when the right is conferred by custom or agreement4.

Page 404
In cases (b) and (c), apart from any such special rule, statute or agreement, fixtures left on the premises after the
determination of the tenancy (for whatever reason5) become the property of the landlord6. The development of the
tenant's right to remove certain fixtures was a qualification of the duty not to remove them. But the tenant's rights do not
alter the concept of a fixture and nor do they affect the principles which determine what is or is not a fixture7.
HR A[1644]
1 Gibson v Hammersmith and City Rly Co (1863) 2 Drew & SM 603 at 608; Mancetter Development Ltd v Garmanson Ltd [1986] QB
1212.
2 See paras HR A[1647]-[1680].
3 See paras HR A[1681]-[1688].
4 See paras HR A[1689]-[1702].
5 Eg surrender of lease: Leschallas v Woolf [1908] 1 Ch 641.
6 Re Thomas, ex Baroness Willoughby d'Eresby (1881) 44 LT 781; Pole-Carew v Western Counties and General Manure Co [1920] 2 Ch
97; Smith v City Petroleum Co Ltd [1940] 1 All ER 260.
7 As to which see paras HR A[1647]-[1680].

Page 405
Tenant's fixtures and landlord's fixtures
2 Tenant's fixtures and landlord's fixtures
HR A[1645]
Chattels which have become fixtures but which are removable by the tenant are usually referred to as 'tenant's fixtures'1.
Where fixtures are removable, they remain part of the freehold until severed2. If they are not removed during the
tenancy or (in some cases) within a reasonable time thereafter they become the property of the landlord3. Fixtures
which the tenant may not remove are usually referred to as 'landlord's fixtures'4. This expression, though perhaps
inaccurate5, is generally useful for the purposes of distinction. The term fixtures is sometimes used as meaning only
articles affixed to the freehold which are removable at the will of the person who affixed them6. This seems
unnecessarily limited. Moreover, it is not properly applicable to articles forming part of the construction of premises,
but only to articles affixed as accessories7. Thus, plate glass windows forming one side of a building are not fixtures8.
Nor are skylights, which are part of the roof9. Doors and windows have occasionally been referred to as fixtures10, but
this is doubtful11.
HR A[1646]
1 Minshall v Lloyd (1837) 2 M & W 450 at 459; Gibson v Hammersmith & City Rly Co (1863) 2 Drew & SM 603 at 609; Bain v Brand
(1876) 1 App Cas 762 at 770 at 772; Horwich v Symond (1914) 110 LT 1016; affd (1915) 84 LJKB 1083.
2 Lee v Gaskell (1876) 1 QBD 700; Underwood v Burgh Castle and Cement Syndicate [1922] 1 KB 123.
3 Re Thomas, ex p Baroness Willoughby D'Eresby (1881) 44 LT 781; Pole-Carew v Western Counties and General Manure Co [1920] 2
Ch 97; Smith v City Petroleum Co Ltd [1940] 1 All ER 260; see para HR A[1703].
4 Boswell v Crucible Steel Co [1925] 1 KB 119.
5 Elliott v Bishop (1854) 10 Exch 496 at 508.
6 Hallen v Runder (1834) 1 Cr M & R 266; Elliott v Bishop (1854) 10 Exch 496 at 508; Re Gawan, ex p Barclay (1855) 5 De GM & G
403 at 410; Re De Falbe [1901] 1 Ch 523 at 538.
9 Taylor v Webb [1937] 2 KB 283.
10 Herlakenden's Case (1589) 4 Co Rep 62a, 64a; Pool's case (1703) 1 Salk 368; Climie v Wood (1869) LR 4 Exch 328 at 329; New
Zealand Government Property Corpn v HM & S Ltd [1982] QB 1145.
Page 406
11 Elitestone Ltd v Morris [1997] 2 All ER 513 at 516-518.

Page 407
What is a fixture?
3 What is a fixture?
HR A[1647]
Whether a chattel has been so affixed to the land or buildings as to become a fixture depends on the circumstances of
each case, but mainly on two factors, the degree of annexation and the object and purpose of the annexation1. If the
chattel can be removed without doing irreparable damage to the premises, neither the method nor the degree of
annexation, nor the quantum of damage that would be done to the chattel or to the premises by its removal, affects the
question save in so far as any of them throws light upon the object and purpose of the annexation2. The mode of
annexation is only one of the circumstances to be considered and it is not always the most important consideration. It is
not as important as it was in former times3. If a structure can only be enjoyed in situ and cannot be removed in whole or
in sections to another site, there is a strong inference that the purpose of placing the structure on the original site was
that it should form part of the land and should therefore cease to be a chattel4. However, the terms expressly or
impliedly agreed between the fixer of the chattel and the owner of the land, although they regulate any rights to sever
the chattel from the land and remove it5, cannot affect the determination of the question whether, in law, the chattel has
become a fixture6. The intention is only material insofar as such intention can be ascertained from the degree and
purpose of annexation and is thus to be viewed objectively7. It is not possible for one building which is a fixture to the
land it stands on also to be a fixture to the adjacent building8.
HR A[1648]
1 Holland v Hodgson (1872) LR 7 CP 328 at 334; Elitestone Ltd v Morris [1997] 2 All ER 513.
2 Hellawell v Eastwood (1851) 6 Exch 295 at 312; Parsons v Hind (1866) 14 WR 860; Holland v Hodgson (1872) LR 7 CP 328 at 334;
Spyer v Phillipson [1931] 2 Ch 183 at 209.
3 Leigh v Taylor [1902] AC 157 at 162.
4 Elitestone Ltd v Morris [1997] 2 All ER 513.
5 See paras HR A[1689]-[1702].
6 Mellhuish v BMI (No 3) Ltd [1996] AC 454; Elitestone v Morris [1997] 2 All ER 513 at 516.
7 See fn 6.
8 Debenhams plc v Westminster City Council [1987] AC 396 at 408-409.

Page 408
Degree: articles not attached to soil
4 Degree: articles not attached to soil
HR A[1649]
A chattel which is no further attached to the land than by its own weight1, notwithstanding that it sinks into the
ground2. or rests by its own weight on foundations3, or is inserted in a place prepared for it in the ground4, is not
generally to be regarded as a fixture. Mere juxtaposition is not usually enough to make a chattel a fixture, nor is
attachment to a driving mechanism which is itself fixed to the land5 and nor is being connected to mains services6.
There must ordinarily be some direct attachment to the land or building7.
HR A[1650]-[1660]
1 Culling v Tufnal (1694) Bull NP 34 (barn); Mather v Fraser (1856) 2 K & J 536 at 559 (cisterns).
2 Wood v Hewett (1846) 8 QB 913 at 919; Huntley v Russell (1849) 13 QB 572 at 577n; Metropolitan Counties etc Society v Brown
(1859) 26 Beav 454 at 461 (straightening plates in iron foundry); Duke of Beaufort v Bates (1862) 3 De GF & J 381 (tram lines fastened to
sleepers).
3 R v Londonthorpe Inhabitants (1795) 6 Term Rep 377 (wooden barn); R v Otley Inhabitants (1830) 1 B & Ad 161 (same);
Wansborough v Maton (1836) 4 Ad & E1 884 (same); Wiltshear v Cottrell (1853) 1 E & B 674 at 688 (wooden granary); Horn v Baker
(1808) 9 East 215 at 222 at 238 (brewers' vats); Chidley v Churchwardens of West Ham (1874) 32 LT 486 (distillers' vats); Deen v Andrews
(1986) 52 P & CR 17 (prefabricated greenhouse on concrete plinth).
4 Re Richards, ex p Astbury (1869) 4 Ch App 630 at 638 (weighing machine in brick-lined hole).
5 Hulme v Brighan [1943] KB 152.
6 TSB Bank plc v Botham (1997) 73 P & CRD1; Vaudeville Electric Cinema Ltd v Muriset [1923] 2 Ch 74.
7 Turner v Cameron (1870) LR 5 QB 306 at 311; Bain v Brand (1876) 1 App Cas 762 at 772; Mancetter Development Ltd v Garmanson
Ltd [1986] QB 1212.
HR A[1661]
But absence of attachment is not conclusive. A house which rests on its own weight without attachment, but is so
constructed as not to be removable without destruction, is part of the land1. So too where blocks of stone are used
without water or cement to form a stone wall2, or where sculptured figures or vases are part of the architectural scheme
of a house3, or where movable dog grates are substituted for fixed grates4, or where large chambers and towers, used
for the preparation of acid, rest on foundations prepared for them5. Further, an article will be treated as fixture if it is
essential to the use of the land or building, even though it is temporarily removed from it6, or even though it exists as a
mere chattel7. And where an article is a fixture, portions of it which are removable, but which are an essential and
Page 409
integral part of it, are also fixtures8.
HR A[1662]
1 Reid v Smith (1905) 3 CLR 656; Elitestone Ltd v Morris [1997] 2 All ER 513.
2 Holland v Hodgson (1872) LR 7 CP 328 at 335.
3 D'Eyncourt v Gregory (1866) LR 3 Eq 382 at 396.
4 Monti v Barnes [1901] 1 KB 205.
5 Pole-Carew v Western Counties and General Manure Co [1920] 2 Ch 97.
6 Liford's case (1614) 11 Co Rep 46b, 50a, 50b; Place v Fagg (1829) 4 Man & Ry KB 277; Mather v Fraser (1856) 2 K & J 536 at 551;
Moody v Steggles (1879) 12 Ch D 261 at 267.
7 Liford's case (1614) 11 Co Rep 46b (the keys to a house); Elliott v Bishop (1854) 10 Exch 496 at 509, (1855) 11 Exch 113 at 119;
Moody v Steggles (1879) 12 Ch D 261; Re Thomas, ex p Baroness Willoughby d'Eresby (1881) 44 LT 781; Metropolitan Counties etc Soc v
Brown (1859) 26 Beav 454 (the handle of a water pump).
8 Mather v Fraser (1856) 2 K & J 536; Metropolitan Counties etc Society v Brown (1859) 26 Beav 454 at 459; Re Richards, ex p Astbury
(1869) 4 Ch App 630 at 635; Sheffield and South Yorkshire Permanent Benefit Building Society v Harrison (1884) 15 QBD 358.
HR A[1663]
On the other hand, where an installation does not in fact form a single unit, any part, such as a superstructure attached to
a concrete base, which can be detached without losing its essential identity and character, is not a fixture1. On the same
principle electric lamps have been held not to form part of an electric light installation and so not to be fixtures2.
Similarly, storage batteries have been held not to be an integral part of a generating plant3 and gas fittings are not in
practice treated as fixtures, though they may be included on a sale of a house with 'fixtures'4. The onus of showing that
articles not attached to the land have nonetheless ceased to be chattels and become fixtures lies on those who so assert5.
But the onus of showing that articles attached to the land are not fixtures but remain chattels lies on those who so
assert6.
HR A[1664]
1 Webb v Frank Bevis Ltd [1940] 1 All ER 247; Smith v City Petroleum Co Ltd [1940] 1 All ER 260; Billing v Pill [1954] 1 QB 70; Young
v Dalgety plc [1987] 1 EGLR 116.
2 British Economical Lamp Co Ltd v Empire, Mile End, Ltd (1913) 29 TLR 386. Although it is considered that light fittings will normally
be sufficiently attached to the property to satisfy the test of degree of annexation: Gray v Fidler [1943] KB 694 per Lord Greene MR.
3 Jordan v May [1947] KB 427.

Page 410
4 Sewell v Angerstein (1868) 18 LT 300.
5 Holland v Hodgson (1872) LR 7 CP 328 at 335.
6 Holland v Hodgson (1872) LR 7 CP 328 at 335; Jordan v May [1947] KB 427.

Page 411
Purpose: articles attached only for use as chattels
5 Purpose: articles attached only for use as chattels
HR A[1665]
Where an article is actually attached to the land or to a building the tests to determine whether it is a chattel or a fixture
are the purpose of the item and the purpose of the link between the item and the land or building1. If the item is
intended to be permanent and to afford a lasting improvement to the land or building, it will be a fixture1. If the
attachment is intended to be temporary and no more than necessary for the use and enjoyment of the item, it remains a
chattel2. Some indicators of these two conclusions are: whether the item is ornamental, whether the item can be
removed without damage to the fabric, the existence of third party hire purchase agreements and the identity of the
person who attached the item to the land or building2.
HR A[1666]
1 Corthorn Land and Timber Co Ltd v Minister of Housing and Local Government (1965) 17 P & CR 210; TSB Bank plc v Botham (1997)
73 P & CR 1.
2 TSB Bank plc v Botham (1997) 73 P & CR 1.
HR A[1667]
Frequently, the attachment is such that the chattel can be removed without damage to the land or building. Examples
are: a greenhouse fastened by mortar on walls built to support it1; a gas engine fastened by bolts and grooved iron plates
embedded in concrete2; a shed affixed to a concrete floor by wrought iron straps bolted to posts3; a boiler fixed in
brickwork4, or bolted to a wooden framework embedded in mortar laid on brickwork5; looms in a cotton mill fastened
by nails through the loom feet of wooden plugs6 or to beams7 in the floor; machinery fastened to buildings by bolts and
nuts8; a threshing machine fixed by bolts and screws to posts let in the ground9; machinery fastened by bolts and nuts
to concrete beds and worked by steam power transmitted by a steam engine by shafts, wheels and gearing10; an engine
and steam hammer fastened by screws to stone fixed in the ground11; a steam crane screwed to blocks of stone cramped
together and laid on prepared mortar bed with guy supports12; petrol pumps affixed to tanks embodied in concrete13;
stills set in brickwork and let into the ground14; tip-seats screwed to the floor of a cinema or theatre15; a Portakabin16;
a sectional concrete hut with a felt covered roof17. In such cases, the article is not a fixture if it is placed in position
temporarily, or for the purpose of the more convenient use of the chattel as a chattel18. Nor is it a fixture if it is a mere
convenience and not a necessity, for the manufacture carried on in the factory19.
HR A[1668]
1 Buckland v Butterfield (1820) 2 Brod & Bing 54; Jenkins v Gething (1862) 2 John & H 520; Mears v Callender [1901] 2 Ch 388.
Page 412
2 Hobson v Gorringe [1897] 1 Ch 182; Crossley Bros Ltd v Lee [1908] 1 KB 86.
3 Webb v Frank Bevis Ltd [1940] 1 All ER 247.
4 Metropolitan Counties etc Society v Brown (1859) 26 Beav 454 at 459; Climie v Wood (1868) LR 3 Exch 257; affd (1869) LR 4 Exch
328; Gough v Wood & Co [1894] 1 QB 713.
5 Cross v Barnes (1877) 46 LJQB 479.
6 Boyd v Shorrock (1867) LR 5 Eq 72; cf Hutchinson v Kay (1857) 23 Beav 413 (loom feet not fixed, but steadied).
7 Holland v Hodgson (1872) LR 7 CP 328.
8 Walmsley v Milne (1859) 7 CBNS 115; Longbottom v Berry (1869) LR 5 QB 123.
9 Wiltshear v Cottrell (1853) 1 E & B 674; Holland v Hodgson (1872) LR 7 CP 328 at 339.
11 Metropolitan Counties etc Society v Brown (1859) 26 Beav 454 at 458.
12 Re Armytage, ex p Moore and Robinson's Banking Co (1880) 14 Ch D 379.
13 Smith v City Petroleum Co Ltd [1940] 1 All ER 260.
14 Horn v Baker (1808) 9 East 215 at 222 at 238.
15 Vaudeville Electric Cinema Ltd v Muriset [1923] 2 Ch 74; New Zealand Government Property Corpn v HM & S Ltd [1982] QB 1145;
cf Lyon & Co v London City and Midland Bank [1903] 2 KB 135 (temporary purpose only).
16 Wessex Reserve Forces & Cadets Association v White [2005] 3 EGLR 127.
17 Wessex Reserve Forces & Cadets Association v White.
18 Hobson v Gorringe [1897] 1 Ch 182 at 190; Spyer v Phillipson [1931] 2 Ch 183; Webb v Frank Bevis Ltd [1940] 1 All ER 247.
19 Parsons v Hind (1866) 14 WR 860; Chamberlayne v Collins (1894) 70 LT 217.
HR A[1669]
But the 'mere convenience for use test' is not conclusive. If the presence of such an article is an essential feature of the
land or building, then the article will be treated as a fixture, even though it is capable of being moved from one part of
the premises and fastened in another1. Thus, articles and machinery useful for the purposes on land as agricultural
land2, or of a factory as a factory3 and attached to it in the manner described, are fixtures, although they could be
removed without substantial damage to the freehold. If the removal of an article would cause irreparable damage to
itself, or to the land or buildings to which it is attached, there is a strong presumption that it was intended to form part of
the realty4. Although trade fixtures may have to be taken to pieces in the removal, yet in general it is essential that they
should be capable of being put together in the same form in some other place5. Buildings of a permanent nature are not
Page 413
removable6, as the obvious intention with which they were erected is that they should remain permanently7.
HR A[1670]-[1680]
1 Boyd v Shorrock (1867) LR 5 Eq 72.
2 Wiltshear v Cottrell (1853) E & B 674; Holland v Hodgson (1872) LR 7 CP 328 at 339.
3 Walmsley v Milne (1859) 7 CBNS 115 at 131; Longbottom v Berry (1869) LR 5 QB 123 at 138; Holland v Hodgson (1872) LR 7 CP
328; Hobson v Gorringe [1897] 1 Ch 182; Reynolds v Ashby & Son [1904] AC 466; Crossley Bros Ltd v Lee [1908] 1 KB 86.
4 Spyer v Phillipson [1931] 2 Ch 183 at 209; Provincial Bill Posting Co v Low Moor Iron Co [1909] 2 KB 344; Young v Dalgety plc
[1987] 1 EGLR 116; Smith v Render (1857) 27 LJ Ex 83 (unfinished building).
5 Whitehead v Bennett (1858) 27 LJ Ch 474.
6 Whitehead v Bennett (1858) 27 LJ Ch 474; Wake v Hall (1880) 7 QBD 295 at 301; affd (1883) 8 App Cas 195; Pole-Carew v Western
Counties and General Manure Co [1920] 2 Ch 97.
7 Reid v Smith (1905) 3 CLR 656; Elitestone Ltd v Morris [1997] 2 All ER 513.
Page 414
Trade, agricultural and ornamental fixtures
6 Trade, agricultural and ornamental fixtures
HR A[1681]
At common law, once a fixture had been annexed to land, it became part of the land and could not be moved by a
tenant1. In modern times, that rule has been relaxed. Today, fixtures are divided in law between those which a tenant
may remove at the end of the term and those which, once affixed, become the property of the landlord. Generally, those
which a tenant is entitled to remove are known as 'tenant's fixtures' and those which he is not as 'landlord's fixtures'. A
tenant's fixture is one which has been annexed by a tenant to the land; is so annexed for the purposes of his trade or for
mere ornament and convenience; and is physically capable of removal without causing substantial damage to the land
and without losing its utility2.
HR A[1681.1]
1 Herlakenden's Case (1589) 4 Co. Rep. 62a, 64a; Bain v Brand (1876) 1 App. Cas. 762.
2 New Zealand Government Property Corporation v H.M. & S [1982] QB 1145.
HR A[1681.2]
The principle, therefore, is that where an article, such as machinery, has been attached to the demised premises by the
lessee so as to become a fixture for the purpose of trade and it is a chattel perfect in itself, independently of its union
with the soil and can be removed without being entirely demolished or losing its essential character or value, the lessee
is entitled, in the absence of agreement to the contrary, to sever it from the premises and to remove it1. Thus, a lessee
can remove vats used for soap boiling2, salt pans3, engines for working collieries4 and a whole range of other chattels
fixed to the land for trade purposes5.
HR A[1682]
1 Spyer v Phillipson [1931] 2 Ch 183 at 192; Poole's case (1703) 1 Salk 368; Penton v Robart (1801) 2 East 88 at 90; Elwes v Maw (1802)
3 East 38 at 52.
2 Poole's case (1703) 1 Salk 368
3 Lawton v Salmon (1782) 1 Hy B1 260, n(b).
4 Lawton v Lawton (1743) 3 Atk 13; Lord Dudley v Lord Warde (1751) Amb 113; Lord Ward v Lord Dudley (1887) 57 LT 20.
Page 415
5 See the cases cited in para HR A[1667].
HR A[1683]
As between the mortgagor and mortgagee there is no relaxation of the common law rule and articles affixed to the
freehold pass to the mortgagee as part of his security. This is so whether they are affixed before1 or after2 the mortgage
and whether the mortgage is of freehold, or leasehold premises and is legal or equitable3. But even as between
mortgagor and mortgagee, machines which are not affixed to the freehold, but only to driving machinery which is so
affixed, are not fixtures4. Where the chattels belong to a third party and have been affixed by the mortgagor after the
mortgage under an agreement (such as a hire purchase agreement) giving the third party the right in certain events to
remove them, this right, if exercisable at all5, can only be exercised before the mortgagee takes possession6. But such
hire purchase agreements, if they create equitable interests, take priority over a subsequent equitable mortgage and the
third party in such cases is entitled to remove the articles7.
HR A[1684]
1 Mather v Fraser (1856) 2 K & J 536; Climie v Wood (1868) LR 3 Exch 257; affd (1869) LR 4 Exch 328; Holland v Hodgson (1872) LR
7 CP 328.
3 Boyd v Shorrock (1867) LR 5 Eq 72; Meux v Jacobs (1875) LR 7 HL 481; Southport and West Lancashire Banking Co v Thompson
(1887) 37 Ch D 64.
4 Northern Press and Engineering Co v Shepherd (1908) 52 Sol Jo 715; Hulme v Brigham [1943] KB 152.
5 Gough v Wood & Co [1894] 1 QB 713.
6 Hobson v Gorringe [1897] 1 Ch 182; Reynolds v Ashby & Son [1904] AC 466; Ellis v Glover & Hobson Ltd [1908] 1 KB 388.
7 Re Samuel Allen & Sons Ltd [1907] 1 Ch 575; Re Morrison, Jones and Taylor Ltd [1914] 1 Ch 50.
HR A[1685]
The tenant's privilege to remove trade fixtures was not at common law extended to agricultural fixtures generally1. But
glasshouses erected by a market gardener for the purposes of his business are trade fixtures2. Whether the brickwork
should be left has been said to be doubtful3. Shrubs and trees forming part of a nursery gardener's stock in trade are
removable4. But this does not authorise cutting down or removing plants which would only be destroyed in the
process5. Orchard trees are not removable6 and a private person may not remove trees or shrubs7. Agricultural fixtures
only became removable generally by virtue of statute8. Indeed the latest statutory regime provides that any fixture (of
whatever description), whether affixed for the purposes of agriculture or not, to the holding by the tenant under what is
known as a 'farm business tenancy'9 and any building erected by him on the holding, may be removed by the tenant
during the tenancy or at any time thereafter when he remains in possession as tenant10. (There are however a limited
number of exceptions to this11.) In removing a fixture, the tenant must do no avoidable damage to the holding12 and
must make good all damage in fact done13. Moreover, a tenant under a farm business tenancy may not exercise any
Page 416
other right to remove fixtures than that conferred by the statute14.
HR A[1686]
1 Elwes v Maw (1802) 3 East 38.
2 Penton v Robart (1801) 2 East 88; Mears v Callender [1901] 2 Ch 388.
3 Syme v Harvey (1861) 24 D 202.
4 Penton v Robart (1801) 2 East 88 at 90; Oakley v Monck (1866) LR 1 Exch 159 at 167.
5 Oakley v Monck (1866) LR 1 Exch 159.
6 Mears v Callender [1901] 2 Ch 388.
7 Wyndham v Way (1812) 4 Taunt 316; Empson v Soden (1833) 4 B & Ad 655.
8 Agricultural Holdings Act 1986, ss 10, 79, 95; see HR F[642], [1387], [1526].
9 Agricultural Tenancies Act 1995, s 1; see HR F[1591].
10 ATA 1995, s 8(1); see HR F[1638].
11 ATA 1995, s 8(2).
12 ATA 1995, s 8(3).
13 ATA 1995, s 8(4).
14 ATA 1995, s 8(7).
HR A[1687]
Objects which have been fixed to the freehold either (a) by way of ornament, or (b) for domestic convenience and
utility, are removable by the tenant1. As to (a), such objects must not be ordinary accessories to a house, but specifically
ornamental2. Thus, what satisfies this test will vary from generation to generation as tastes and fashions change and the
older cases must be treated with care3. In the past they have included: wainscot fixed only by screws4; marble and other
ornamental chimney pieces5; pier glasses6; tapestry and other hangings7; and stuffed birds and other specimens in cases
forming the contents of a museum8. As to (b), articles of domestic utility held removable have included: stoves and
grates fixed with brickwork in the chimney places which can be removed without doing injury to the chimney places9;
kitchen ranges, ovens and coppers10; cupboards which stand and are supported by hold fasts and are removable without
other injury to the walls than the marks of a few nails11; bells12; carpets and light fittings13. Some of such articles
would today be held not fixtures at all14. But articles which form an essential part of the house at the time of its
construction may not be removed, such as doors and windows15 and hearths and chimney pieces inserted to complete
Page 417
the house16.
HR A[1688]
1 Elliott v Bishop (1854) 10 Exch 496; Climie v Wood (1869) LR 4 Exch 328; Holland v Hodgson (1872) LR 7 CP 328 at 333; Re De
Falbe [1901] 1 Ch 523; affd [1902] AC 157; Spyer v Phillipson [1931] 2 Ch 183.
2 Buckland v Butterfield (1820) 2 Brod & Bing 54 at 58; Leach v Thomas (1835) 7 C & P 327.
3 See Spyer v Phillipson [1931] 2 Ch 183 at 192.
4 Elwes v Maw (1802) 3 East 38 at 53; Buckland v Butterfield (1820) 2 Brod & Bing 54 at 58.
5 Allen v Allen (1729) Mos 112; Lawton v Lawton (1743) 3 Atk 13; Ex p Quincy (1750) 1 Atk 477; Lord Dudley v Lord Ward (1751) Amb
113; Lawton v Salmon (1782) 1 Hy B1 260 n (b); Elliott v Bishop (1854) 10 Exch 496, on app (1855) 11 Exch 113 at 119; see also Avery v
Cheslyn (1835) 3 Ad & El 75 (ornamental cornice held removable).
6 Beck v Rebow (1706) 1 P Wms 94.
7 Squier v Mayer (1701) Freem Ch 249; Harvey v Harvey (1740) 2 Stra 11412; Beck v Rebow (1706) 1 P Wms 94; Re De Falbe [1901] 1
Ch 523; affd [1902] AC 157.
8 Viscount Hill v Bullock [1897] 2 Ch 482.
9 R v Dunstan Kent Inhabitants (1825) 4 B & C 686 at 691; Grymes v Boweren (1830) 6 Bing 437 at 439; R v Gawan, ex p Barclay
(1855) 5 De GM & G 403 at 410; R v Lee Inhabitants (1866) LR 1 QB 241 at 254.
10 Grymes v Boweren (1830) 6 Bing 437; Darby v Harris (1841) 1 QB 895.
11 R v Dunstan Kent Inhabitants (1825) 4 B & C 686; Re Gawan, ex p Barclay (1855) 5 De GM & G 403 at 410.
12 Lyde v Russell (1830) 1 B & Ad 394; Pugh v Arton (1869) LR 8 Eq 626 at 629.
13 Young v Dalgety plc [1987] 1 EGLR 116.
15 Bishop v Elliot (1855) 11 Exch 113 at 119; Climie v Wood (1869) LR 4 Exch 328 at 329.
16 Poole's case (1703) 1 Salk 368.

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Effect of custom or expressed stipulation
7 Effect of custom or expressed stipulation
HR A[1689]
The lessee's right to remove trade or other fixtures may be restricted by custom1 or by the terms of the contract between
the lessor and the lessee. Thus, the tenant may expressly renounce his right to remove tenant's fixtures2. Or the lease
may contain a covenant by the tenant to deliver up all fixtures or certain specified items and all other fixtures with or
without a stipulation for payment of their value. The word 'fixtures' if it stands in the covenant by itself, will apparently
include both landlord's and tenant's fixtures3. But if the covenant enumerates a series of specific items, all of which are
of the nature of landlord's fixtures and then concludes with general words such as 'all other fixtures', the general words
will be construed according to the eiusdem generis rule of including only landlord's fixtures and the tenant will retain
his ordinary right to remove tenant's fixtures4. The same result follows if the specific words simply refer to articles not
ordinarily removable by the tenant5. On the other hand, if the specific words are not referable exclusively to landlord's
fixtures, then the general words will have their full effect and will prevent the removal of tenant's fixtures6.
HR A[1690]-[1700]
1 Davis v Jones (1818) 2 B & Ald 165; Wake v Hall (1883) 8 App Cas 195.
2 R v Topping (1825) M' Cle & Yo 544; Dumergue v Rumsey (1863) 2 H & C 777; Porter v Drew (1880) 5 CPD 143.
3 Leschallas v Woolf [1908] 1 Ch 641.
4 Bishop v Elliott (1855) 11 Exch 113; Dumergue v Rumsey (1863) 2 H & C 777 at 788; Sumner v Bromilow (1865) 34 LJQB 130.
5 Lambourn v McLellan [1903] 2 Ch 268.
6 Wilson v Whateley (1860) 1 John & H 436; Bidder v Trinidad Petroleum Co (1868) 17 WR 153.
HR A[1701]
The lessee may also in the usual repairing covenants bind himself to yield up in repair the premises or 'erections' or
'improvements'1. A covenant to deliver up buildings erected during the term includes trade buildings2. A covenant to
deliver up a water mill with all 'fixtures and improvements' includes new millstones set up by the lessee, although
according to the custom of the country he could remove them3. A covenant to yield up 'erections and improvements'
extends to a greenhouse4, a veranda5 and a plate-glass front6. A covenant to yield up specified machinery extends to
substituted machinery7. But the covenant will not necessarily extend to new machinery of an improved kind which was
not contemplated at the date of lease8. A covenant to leave at the end or to termination of the term all erections, fences
and fixed machinery in good repair and condition is sufficient to deprive the tenant of his right to remove trade
fixtures9. It has been determined that a covenant to yield up 'works' does not extend to articles which are not fixtures10.
Page 419
Where, however, a tenant was required to yield up buildings and works he was obliged to yield up salt pans affixed to a
salt works and essential to its operation, even though they were the tenant's fixtures11. In all cases, for the lease to take
away the ordinary legal right of the tenant to remove tenant's fixtures, the intention to this effect must be clearly
expresssed12. A licence by the landlord for the removal of fixtures after the determination of the tenancy is effective
against the succeeding tenant if it is under seal13. But fixtures cannot be removed under such an agreement as against a
mortgagee taking without notice of the agreement14. On the other hand, a parol agreement by the landlord to take
fixtures which the tenant could remove is enforceable, since it does not relate to an interest in land15.
HR A[1702]
1 Bidder v Trinidad Petroleum Co (1868) 17 WR 153.
2 Naylor v Collinge (1807) 1 Taunt 19; Thresher v East London Water Works Co (1824) 2 B & C 608 at 614; Foley v Addenbrooke (1844)
13 M & W 174.
3 Martyr v Bradley (1832) 9 Bing 24.
4 West v Blakeway (1841) 2 Man & G 729 at 754.
5 Penry's Administratrix v Brawn (1818) 2 Stark 403.
6 Haslett v Burt (1856) 18 CB 893.
7 Cf Sunderland v Newton (1830) 3 Sim 450.
8 Cosby v Shaw (1888) 23 LR Ir 181.
9 Re British Red Ash Collieries Ltd [1920] 1 Ch 326.
10 Duke of Beaufort v Bates (1862) 3 De GF & J 381 at 388.
11 Earl of Mansfield v Blackburne (1840) 6 Bing. N.C. 426.
12 Duke of Beaufort v Bates (1862) 3 De GF & J 381 at 390.
13 Roffey v Henderson (1851) 17 QB 574.
14 Thomas v Jennings (1896) 45 WR 93.
15 Hallen v Runder (1834) 1 Cr M & R 266; Lee v Gaskell (1876) 1 QBD 700.
Page 420
Exercise of right of removal
8 Exercise of right of removal
HR A[1703]
Where fixtures are removable by a tenant the general rule is that he must exercise the right of removal during the term1.
This rule applies in whatever manner the term comes to an end, whether by effluxion of time or by surrender2 or
forfeiture3. However, in the case of surrender4 or forfeiture5 a third party, such as a mortgagee of the fixtures from the
tenant, assuming that he has a right of entry onto the premises at all6, is entitled to a reasonable time7 within which to
remove them. If the tenant omits to remove the fixtures during the term (or during any extended period) they become
the absolute property of the landlord8. If the tenant remains in possession after the term, in circumstances where he is
still entitled to consider himself the tenant, his right to remove fixtures extends through the period of possession9. This
will not apply if the tenant has no basis for believing that he has the right to remain (eg landlord's consent)10 and a
fortiori if the landlord has commenced possession proceedings11. But it will include the tenant who remains in
possession following the contractual expiry of his lease under modern statutory provisions which confer a continued
right of posssession12. A further exception is that if the tenancy is determinable by notice (for example a periodic
tenancy or one determinable in accordance with a break clause) and there is not a reasonable time between the service
of the notice determining the lease and its termination, the tenant has a reasonable period after the termination to
remove tenant's fixtures13. A tenant who is entitled to remove fixtures under the stipulations of the lease can remove
them within a reasonable time after the determination of the term14. Articles which are chattels and not fixtures may be
removed after the term has expired15. There are special rules relating to a trustee in bankruptcy who disclaims the
lease16 and to land requisitioned under emergency powers where the term ends before the land ceases to be
requisitioned17.
HR A[1704]
1 Poole's case (1703) 1 Salk 368; Ex p Quincy (1750) 1 Atk 477; Lord Dudley v Lord Warde (1751) Amb 113; Lyde v Russell (1830) 1 B
& Ad 394 at 395; Minshall v Lloyd (1837) 2 M & W 450; Gibson v Hammersmith and City Rly Co (1863) 2 Drew & Sm 603 at 608; British
Economical Lamp Co Ltd v Empire, Mile End Ltd (1913) 29 TLR 386.
2 Re Roberts, ex p Brooke (1878) 10 Ch D 100 at 116.
3 Pugh v Arton (1869) LR 8 Eq 626; cf Re Walker, ex p Gould (1884) 13 QBD 454.
4 London and Westminster Loan and Discount Co Ltd v Drake (1859) 6 CBNS 798; Saint v Pilley (1875) LR 10 Exch 137.
5 Re Glasdir Copper Works Ltd [1904] 1 Ch 819.
6 Cf British Economical Lamp Co Ltd v Empire, Mile End Ltd (1913) 29 TLR 386 at 387.
7 Moss v James (1878) 38 LT 595; as to growing crops, see Clements v Matthews (1883) 11 QBD 808.
Page 421
8 Poole's case (1703) 1 Salk 368; Meux v Jacobs (1875) LR 7 HL 481 at 490; Smith v City Petroleum Ltd [1940] 1 All ER 260.
9 Weeton v Woodcock (1840) 7 M & M 14 at 19; Minshall v Lloyd (1837) 2 M & W 450; Roffey v Henderson (1851) 17 QB 574 at 586;
Mackintosh v Trotter (1838) 3 M & W 184 at 186; Leader v Homewood (1858) 5 CBNS 546; Re Lavies, Ex p Stephens (1877) 7 Ch D 127;
Re Roberts, ex p Brook (1878) 10 Ch D 100 at 109; Leschallas v Woolf [1908] 1 Ch 641 at 652
10 Deeble v M'Mullen (1857) 8 ICLR 355 at 365.
11 Barff v Probyn (1895) 11 TLR 467; cf Penton v Robart (1801) 2 East 88.
12 New Zealand Government Property Corpn v HM & S Ltd [1982] QB 1145.
13 Oakley v Monck (1866) LR 1 Exch 159 at 164; Re Roberts, ex p Brook (1878) 10 Ch D 100; Smith v City Petroleum Co Ltd [1940] 1
All ER 260; cf Climie v Wood (1869) LR 4 Exch 328 at 329.
14 Pugh v Arton (1869) LR 8 Eq 626 at 630; Stansfield v Portsmouth Corpn (1858) 4 CBNS 120; Sumner v Bromilow (1865) 34 LJQB
130.
15 Wansbrugh v Maton (1836) 4 Ad & E1 884; Darby v Harris (1841) 1 QB 895.
16 Bankruptcy Act 1914, s 54(3); Insolvency Act 1986, s 317(2); Re Moser (1884) 13 QBD 738; cf Re Roberts, ex p Brook (1878) 10 Ch
D 100.
17 Landlord and Tenant (Requisitioned Land) Act 1942, s 7.
HR A[1705]
Where a tenant at the determination of one tenancy remains in possession and is granted a new tenancy the question
arises whether he loses the right to remove fixtures introduced by him during the first tenancy. There is authority that he
does lose this right in the case of an express surrender1, but not where the previous tenancy is ended by effluxion of
time or by a surrender by operation of law2. The former proposition has, however, been disapproved2. Whether older
authorities still govern in the case of an express surrender of a previous tenancy nowadays is therefore open to doubt2,
but in any event, prima facie, the question must be determined in accordance with the provisions of the deed of
surrender so far as applicable.
HR A[1705.1]
1 Leschallas v Woolf [1908] 1 Ch 641; Slough Picture Hall Co Ltd v Wade (1916) 32 TLR 542; Pole-Carew v Western Counties and
General Manure Co [1920] 2 Ch 97.
2 New Zealand Government Property Corporation v HM & S Ltd [1982] QB 1145.

Page 422
Remedies of lessor and lessee
9 Remedies of lessor and lessee
HR A[1706]
Where fixtures have been improperly removed the landlord may sue the tenant for damages either in tort for waste1, or
for breach of covenant2. This will either be a covenant to yield up the demised premises in proper repair or a special
covenant relating to fixtures. He will have to elect which course to pursue3. He may also be able to sue a third party in
tort. Against a threatened removal he may seek an injunction4 and after actual removal he may maintain an action for
wrongful interference with goods5. In an action for waste the damages will be the amount of injury to the reversion. For
breach of covenant in removing fixtures, their actual value as such and not merely their value as chattels, may be
recovered6, but with an upper limit of the amount of damage to the reversion7. In an action for wrongful interference
with goods, the damages recoverable will be the value of the fixtures as chattels8. Where a tenant, or a person claiming
under him, has the right to sever and remove fixtures, he may maintain an action against any person upon whom the
right is binding who has prevented him from exercising it. The measure of damages will be the value of the fixtures as
severed9. But an action for wrongful interference with goods will not lie, until severance of the fixtures10.
HR A[1707]
1 Mancetter Development Ltd v Garmanson Ltd [1986] QB 1212; Hitchman v Walton (1838) 4 M & W 409; Kinlyside v Thornton (1776)
2 Wm B1 1111.
2 Mancetter Development Ltd v Garmanson Ltd [1986] QB 1212; Hitchman v Walton (1838) 4 M & W 409; Kinlyside v Thornton (1776)
2 Wm B1 1111.
3 Mancetter Development Ltd v Garmanson Ltd [1986] QB 1212.
4 Sunderland v Newton (1830) 3 Sim 450; Richardson v Ardley (1869) 38 LJ Ch 508; Hamilton v Dunsford (1857) 6 I Ch R 412.
5 Farrant v Thompson (1822) 5 B & Ald 826; Hitchman v Walton (1838) 4 M & W 409; Petre v Ferrers (1891) 61 LJ CH 426.
6 Thompson v Pettit (1847) 10 QB 103; Moore v Drinkwater (1858) 1 F & F 134.
7 Watson v Lane (1856) 11 Exch 769.
8 Clarke v Holford (1848) 2 Car & Kir 540; Barff v Probyn (1895) 73 LT 118.
9 London and Westminster Loan and Discount Co Ltd v Drake (1859) 6 CBNS 798.
10 Lee v Risdon (1816) Taunt 188; Colegrave v Dias Santos (1823) 2 B & C 76; Minshall v Lloyd (1837) 2 M & W 450; cf Davis v Jones
(1818) 2 B & Ald 165 (articles never became fixtures).
Page 423
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/F Easements
relating to demised property
HR A[1708]
There are two separate issues to consider in relation to easements and demised property. The first is when a leased
property is to include the demise of an easement appertaining to that property. In this case the leased property is the
dominant tenement. The second is when a lease of property is to be subject to an easement over that property, reserved
to the lessor. In this case the leased property is the servient tenement. Dealing with the first issue, a lease of property
includes an easement appertaining to that property if either (a) the lease expressly or by implication grants the
easement, or (b) it is included by virtue of statute.
HR A[1709]
A grant of an easement may be created by express words, such as a demise of property 'with all appurtenances'1.
Formerly, this word was confined to rights strictly appurtenant to the demised property2. But the context may show that
the word is to be taken in a secondary sense as equivalent to 'used and enjoyed'3. The word 'appurtenances' used in an
agreement for a lease may have a limiting effect4. A grant of an easement may also be implied from the circumstances
of the lease or the purpose for which the property is demised. Thus, in a lease for a timber yard a right of access of air
may be implied5. Similar cases deal with access of light and air to the window of an intended warehouse6 and rights of
way implied from plans7. At common law, in addition, a grant will be implied of all 'continuous and apparent' rights
used with the demised property at the date of the lease8. These would include a right over a formed road9. The phase
'continuous and apparent' has been considered in a number of cases10. A profit à prendre may also be included11. All
these rights are referred to as quasi-easements. Where it is proved that there was a common intention that the easement
or right should not be enjoyed by the grantee, the lease or agreement will be rectified by the insertion of express words
to prevent the implication of the right which would pass without such words12. In addition, an easement of light may be
acquired against the lessor by prescription13. There are statutory provisions for a temporary extension of the period of
prescription of rights of light and registration of notice of registration in lieu of obstruction14.
HR A[1710]-[1720]
1 Hansford v Jago [1921] 1 Ch 322 at 332.
2 Bolton v Bolton (1879) 11 Ch D 968 at 971; James v Plant (1836) 4 Ad & El 749; Brett v Clowser (1880) 5 CPD 376 at 383.
3 James v Plant (1836) 4 Ad & El 749; Thomas v Owen (1887) 20 QBD 225 at 232.
4 Re Peck and London School Board's Contract [1893] 2 Ch 315.
5 Aldin v Latimer Clark, Muirhead & Co [1894] 2 Ch 437.

Page 424
6 Frederick Betts Ltd v Pickfords Ltd [1906] 2 Ch 87.
7 Espley v Wilkes (1872) LR 7 Exch 298; Rudd v Bowles [1912] 2 Ch 60.
8 Wheeldon v Burrows (1879) 12 Ch D 31.
9 Watts v Kelson (1871) LR 6 Ch App 166 at 174; Kay v Oxley (1875) LR 10 QB 360; Barkshire v Grubb (1881) 18 Ch D 616; Baring v
Abingdon [1892] 2 Ch 374.
10 Pyer v Carter (1857) 1 H & N 916; Ford v Metropolitan and Metropolitan District Rly (1886) 17 QBD 12 at 27; Long v Gowlett
[1923] 2 Ch 177.
11 White v Williams [1922] 1 KB 727.
12 Clark v Barnes [1929] 2 Ch 368.
13 Morgan v Fear [1907] AC 425.
14 Rights of Light Act 1959.
HR A[1721]
Turning now to inclusion by statute, a lease of land, or of land and buildings thereon, made since 31 May 1881,
includes1, without express mention, all easements appertaining or reputed to appertain to demised property or any part
thereof, or at the time of the lease2 occupied and enjoyed therewith or with any part thereof, or reputed or known as part
or parcel of or appurtenant to the demised property or any part thereof3, so far as a contrary intention is not expressed in
the lease. A number of points arise. First is the range of rights covered by this provision. Second is the extension beyond
'appertaining' to 'occupied and enjoyed therewith'. Third is the question of a contrary intention. The fourth point
concerns limitations on the inclusion of such an easement. These will be dealt with in turn.
HR A[1722]
1 Law of Property Act 1925, s 62, referring to 'conveyance' (defined by s 205(1)(ii) to include lease).
2 Not the commencement of occupation, if this is earlier: Goldberg v Edwards [1950] Ch 247.
3 See Kooystra v Lucas (1822) 5 B & Ald 830.
HR A[1723]
First there is the range of rights. Where the demised premises consists of land and buildings, a right of support from the
adjoining land of the lessor will be implied, so that he cannot make excavations on it, even though such operations may
be necessary for the reasonable development of his land1. So where the buildings on the demised land depend for their
support on buildings retained by the lessor, whether the division is vertical or horizontal, a right of support will be
implied2. The lessor need not, however, keep in repair the buildings retained by him and he will not be liable if they
Page 425
collapse by reason of disrepair and bring the demised property down with them3. If a local authority demolishes an
adjoining building belonging to the lessor, after the lessor had failed to comply with a demolishing order, it would seem
the lessor will be liable to the lessee for damages caused4. Where the property had been allowed to fall into disrepair by
tenants, the lessor is not liable5.
HR A[1724]
1 Rigby v Bennett (1882) 21 Ch D 559.
2 Colebeck v Girdlers Co (1876) 1 QBD 234.
3 Colebeck v Girdlers Co (1876) 1 QBD 234; Jones v Pritchard [1908] 1 Ch 630; Sack v Jones [1925] Ch 235.
4 Bradburn v Lindsay [1983] 2 All ER 408.
5 Williams v Gabriel [1906] 1 KB 155.
HR A[1725]
Where the demised property contains windows overlooking adjoining land of the lessor, a right to light will be implied
which will prevent the lessor from building so as to obstruct that light1. But the circumstances may be such as to show
that it was the common intention of the parties that the lessor should be entitled to build and in that case no right of light
will be implied2. In order to exclude the lessee's right, it is not sufficient that the adjoining land should be marked
'building land' on a plan annexed to the lease or that a continuous building line should be shown on the plan3. Another
example of such a right is a right of way4. A right to a carriageway or for carts now includes mechanically propelled
vehicles5. Where a right of way is included by necessity, it is limited by the necessity which created it and cannot be
subsequently enlarged6. Where the necessity later ceases, the right of way also ceases7.In addition to these specific
examples of rights, there are other possibilities. They must be rights known to the law, such as a right to store coal in a
shed8, or a right to water9. There is, however, no such easement known to law as an easement to be protected from the
weather10.
HR A[1726]
1 Wheeldon v Burrows (1879) 12 Ch D 31; Allen v Taylor (1880) 16 Ch D 355.
2 Birmingham, Dudley and District Banking Co v Ross (1888) 38 Ch D 295; Godwin v Schweppes Ltd [1902] 1 Ch 926.
3 Broomfield v Williams [1897] 1 Ch 602; Pollard v Gare [1901] 1 Ch 834.
4 International Tea Stores Co v Hobbs [1903] 2 Ch 165; Hansford v Jago [1921] 1 Ch 322; Graham v Philcox [1984] QB 747.
5 Lock v Abercester Ltd [1939] Ch 861; Kain v Norfolk [1949] Ch 163.

Page 426
6 Gayford v Moffatt (1868) 4 Ch App 133.
7 Donaldson v Smith [2006] EWHC (2006) 150 Sol Jo LB 744 (Ch), [2006] All ER (D) 293.
8 Wright v Macadam [1949] 2 KB 744.
9 Bartlett v Tottenham [1932] 1 Ch 114.
10 Phipps v Pears [1965] 1 QB 76; cf Marchant v Capital and Counties Property Co Ltd (1983) 267 Estates Gazette 843.
HR A[1727]
As to the second point, not only will easements and other rights and privileges strictly appurtenant to the demised
property pass with it, but, if the lessor retains land which adjoins or is near to the demised property, all rights over the
lessor's land which, immediately before the demise, were actually 'used and enjoyed' (whether as of right or by
permission)1 with the demised land, or with any part of it, or were reputed or known as appurtenant to the land or any
part thereof, whether or not actually used2, will pass to the lessee. But this will not apply to rights under contract
imposing purely personal obligations to provide services3.
HR A[1728]
1 As in Wright v Macadam [1949] 2 KB 744.
2 Clark v Barnes [1929] 2 Ch 368.
3 Regis Property Co Ltd v Redman [1956] 2 QB 612.
HR A[1729]
Third, there is the question of a contrary intention. The contrary intention may appear either by express words, or from
the circumstances of the conveyance1. However, the express grant of a more limited right than would pass under the
statute does not necessarily mean that the full right is not to pass2. Thus, if the right enjoyed is such that it could not
reasonably be expected to continue, no easement will be implied3. The same result follows if the lessor was not in a
position to convey an easement4 and similarly if the convenience for which the right existed depended on the
continuous occupation of both tenements by the same person5. Finally, the expression of a contrary intention is relevant
for the purposes of the statute: it does not prevent the acquisition of a right by any other means, eg prescription6.
HR A[1730]-[1740]
1 Birmingham, Dudley and District Banking Co v Ross (1888) 38 Ch D 295.
2 Gregg v Richards [1926] Ch 521.

Page 427
3 Burrows v Lang [1901] 2 Ch 502; Bartlett v Tottenham [1932] 1 Ch 114; Godwin v Schweppes Ltd [1902] 1 Ch 926.
4 Quicke v Chapman [1903] 1 Ch 659; cf Beddington v Atlee (1887) 35 Ch 9 317 (equitable owner).
5 Kay v Oxley (1875) LR 10 QB 360; Thomson v Waterlow (1868) LR 6 Eq 36 at 41.
6 Hapgood v JH Martin & Son Ltd (1934) 152 LT 72.
HR A[1741]
The fourth point relates to limitations on the inclusion of such an easement. A tenant's title to an easement passing by
virtue of the statute can be no better than the title he obtains under the lease to the corporeal hereditament demised1.
Nor can he acquire an easement which could not have been expressly included in the lease2. A mere alteration to the
extent of premises comprising a dominant tenement to which a right of way was appurtenant is not of itself sufficient to
extinguish a right of way, or even to affect the entitlement to its use, unless as a result of the alteration the extent of the
user of the right would be increased3. Nor could excessive user of a discontinuous easement itself extinguish or even
suspend such an easement. Where there is excessive user the servient owner is entitled to have the excessive use
restrained, but provided the dominant owner reverts to lawful user of the easement, his prior excessive user is
irrelevant3.
HR A[1742]
2 Law of Property Act 1925, s 62(5); Quicke v Chapman [1903] 1 Ch 659.
3 Graham v Philcox [1984] QB 747.
HR A[1743]
A tenancy agreement under hand where the term does not exceed three years is within the statutory provision1. But an
agreement for a lease for more than three years is not within the statute and the tenant is in the same position as if the
lease had been granted without any express words before 1882, that is, at common law2.
HR A[1744]
1 Wright v Macadam [1949] 2 KB 744.
2 Borman v Griffith [1930] 1 Ch 493.
HR A[1745]
Page 428
Turning to the second issue, if the lessor wishes to reserve for himself an easement over the demised land, he must
normally do so by express words1. Where one of a row of houses using a common approach is demised, a right of way
over the part demised must be expressly reserved, or neither the lessor nor his assigns will be entitled to use it2.
However, where the properties are demised simultaneously, mutual rights are implied3. In accordance with the principle
that a grantor must not derogate from his grant4, no reservation which interferes with the enjoyment of the demised
property will be implied unless there are very strong circumstances to show that such a right must be implied to give
effect to the common intention of the parties5, or unless there is an 'easement of necessity' in favour of the lessor. An
easement of necessity arises when land retained by the lessor is completely cut off because of the lease6. The land
retained need not be completely enclosed by the land conveyed; it is sufficient that the land retained is cut off partly by
the land enclosed and partly by other land7. An easement of necessity can also arise where there is another access but it
is not enjoyed as of right and can be terminated at any time8. Easements of necessity are usually rights of way. It has
however been suggested that a right of support could be an easement of necessity9.
HR A[1746]
1 Wheeldon v Burrows (1879) 12 Ch D 31; Phillips v Low [1892] 1 Ch 47; Re Vickers' Lease [1947] Ch 420.
2 Aldridge v Wright [1929] 2 KB 117; Liddiard v Waldron [1934] 1 KB 435.
3 Hansford v Jago [1921] 1 Ch 322.
5 See eg Cory v Davies [1923] 2 Ch 95.
6 Wms Saund 323 N(6); Union Lighterage Co v London Graving Dock Co [1902] 2 Ch 557; London Corpn v Riggs (1880) 13 Ch D 798.
7 Barry v Hasseldine [1952] Ch 835.
8 Barry v Hasseldine [1952] Ch 835.
9 Richards v Rose (1853) 9 Exch 218.

Page 429
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 3 Demised premises/G Exceptions
and reservations
G
Page 430
and reservations/1 Exceptions
1 Exceptions
HR A[1747]
An exception is always part of the thing granted and refers therefore to a thing in existence1. Thus, there may be a grant
of a house except certain rooms, or of a farm except certain fields, or of land except the timber growing on it or the
minerals underneath it. An exception of 'all mosses and turbaries' has been held to except all places in which turf, or
matter in the course of becoming turf, is found2. An exception of 'all water and water courses' has been held to except a
well3. All these are true exceptions; they withdraw a physical part from that which is first mentioned as passing, the
result being that the thing excepted is no part of the parcels4. The exception is construed most strongly against the
lessor and in favour of the lessee5. An exception of 'bogs and turf mosses' excepts the soil6. A landlord may have
exclusive possession of the part excepted, in which case the lessee will not be liable for rates in respect of the excepted
part7.
HR A[1748]
1 Co Litt 47a; Shep Touch, ed Preston, 80; Mason v Clarke [1954] 1 QB 460.
2 Quinn v Shields (1877) IR 11 CL 254.
3 Whelan v Leonard [1917] 2 IR 323.
4 Cooper v Stuart (1889) 14 App Cas 286 at 289 at 290.
5 Savill Bros Ltd v Bethell [1902] 2 Ch 523; Earl of Cardigan v Armitage (1823) 2 B & C 197 at 207; Bullen v Denning (1826) 5 B & C
842 at 847 at 850.
6 Boyle v Olpherts (1841) 4 I Eq R 241.
7 Curzon v Westminster Corpn (1916) 86 LJKB 198.
HR A[1749]
But an exception of the whole of what has been granted is repugnant and void. This is the case where there is a lease of
all the lessor's lands in a certain place, except specified land and those specified are in fact all that he has there1.
Similarly, the exception is void if it is something specifically granted in the parcels, though not the whole of them2. But
this does not apply where the thing has been mentioned merely as assisting in the description of the whole and not by
way of grant3. Where the terms of the lease prevent an apparent exception from operating as such, it may operate as a
re-demise of the part purporting to be excepted4. Uncertainty in an exception raises particular problems. The general
principle is that if the grant is clear, but the exception is bad for uncertainty, then the grant operates and the exception
Page 431
fails5. But if the uncertainty consists in failing to specify who shall select the stipulated part reserved, there are
authorities both ways6. In some cases the exception still fails. But in others it is said to be a case of election. Thus, it has
been held that an exception of 37 acres (unspecified) out of 437 was good, since the lessor would have the selection7.
Premises excepted out of an exception pass as part of the premises demised8.
HR A[1750]-[1760]
1 Dorrell v Collins (1582) Cro Eliz 6.
2 Horneby v Clifton (1567) 3 Dyer 264b; of Miller v Pratt (1606) 3 Dyer 264b, n (40).
3 Ellis v Lord Primate (1865) 16 I ch R 184; Cochrane v M'Cleary (1869) IR 4 CL 165.
4 Moroney v Macnamara (1872) 20 WR 905.
5 Savill Bros Ltd v Bethell [1902] 2 Ch 523 at 538.
6 Savill Bros Ltd v Bethell [1902] 2 Ch 523 at 538.
7 Jenkins v Green (1858) 27 Beav 437.
8 Leigh v Shaw (1594) Cro Eliz 372.

Page 432
and reservations/2 Reservations
2 Reservations
HR A[1761]
In its strict legal sense a reservation is 'always of a thing not in esse but newly created or reserved out of the land or
tenement demised'1. Thus, it is only properly used in respect of rent or services to be rendered by the tenant2. The term
is, however, sometimes used in a wide sense, as meaning any benefit in respect of the subject matter of the grant which
is kept by the grantor for himself. Thus, it may imply a keeping back of a physical part of a thing, in which case it is
equivalent to an exception. Accordingly, when the context requires it, the word 'reserving' is construed as making an
exception3. However, the word 'reservation' will not be construed as meaning 'exception' if effect can be given to the
instrument by construing it in its technical sense4.
HR A[1762]
1 Co Litt 47a.
2 Doe d Douglas v Lock (1835) 2 Ad & E1 705 at 745.
3 Co Litt 1432; Doe d Douglas v Lock (1835) 2 Ad & E1 705 at 745.
4 Doe d Douglas v Lock (1835) 2 Ad & E1 705 at 745 at 746.
HR A[1763]
Again, 'reservation' may be used where what is intended is that the grantor shall keep for himself some rights of user or
of taking the profits of the land. In conveyancing practice the words 'except and reserving' frequently but inaccurately
introduce the creation in favour of the lessor of an easement, or of a profit à prendre. One such is the free running of
water and soil coming from adjacent buildings. Such a reservation extends to water and soil coming from the adjacent
premises, whether it first arises there or not, but does not ordinarily extend beyond water in its natural condition and
such matters as are the product of the ordinary use of land for habitation1. Another is the right to make and maintain
sewers under the demised premises2. Where the right of passage of gas, water and other pipes is reserved, the right must
be exercised in such a way as not to cause any unnecessary or avoidable inconvenience, annoyance, disturbance, or
injury to the person through whose property the right is to be exercised3. A reservation of free passage of inter alia
electric current does not entitle the plaintiff to enter and lay computer cables4. A third example is rights of way and
other easements over the demised premises. A regrant of securing the right of way to the lessor may disappear through
merger with the reversion5. The lessor may reserve power to alter a road6. A fourth example is rights of sporting7. By
apt words, however, the lessor may be given mere personal rights of sporting which are not assignable by him and
which cease on his death8.
Page 433
HR A[1764]
1 Chadwick v Marsden (1867) LR 2 Exch 285 at 289.
2 Lee v Stevenson (1858) EB & E 512.
3 Taylor v British Legal Life Assurance Co [1925] Ch 395.
4 Trailfinders Ltd v Razuki [1988] 2 EGLR 46.
5 Lord Dynevor v Tennant (1886) 33 Ch D 420; affd (1888) 13 App Cas 279; Doe d Egremont v Williams and Hole (1848) 11 QB 688.
6 Butt v Imperial Gas-light and Coke Co (1866) 15 WR 92.
7 Wickham v Hawker (1840) 7 M & W 63 at 67; Mason v Clarke [1955] AC 778.
8 Re Vickers' Lease [1947] Ch 420.
HR A[1765]
In all these cases the clause operates as the regrant of an incorporeal hereditament by the grantee to the grantor1. For
this purpose an easement and a profit à prendre are on the same footing2. A right of way 'is neither parcel of the thing
granted, nor is it issuing out of the thing granted, the former being essential to an exception and the latter to a
reservation'3. In terms Coke's definition of a reservation4 suits the reservation of an easement as much as the
reservation of a rent5, but is considered to cover only 'services to be rendered by the tenant, such as paying rent or
providing a beast (heriot)'6. Formerly, to give the regrant legal validity the instrument had to be executed by the grantee
and in the case of a lease this requirement was satisfied by the lessee's execution of the counterpart7. But even without
execution by the grantee, the grant might operate as evidence of an agreement to regrant the easement or profit à
prendre8. Now by statute9 a reservation of a legal estate made on or after 1 January 192610 operates at law without any
execution of a conveyance by the grantee of the legal estate out of which the reservation is made, or any regrant by him,
so as to create the legal estate reserved and so as to vest the same in possession in the person (whether being the grantor
or not) for whose benefit the reservation is made. For this purpose legal estate includes an easement, right or privilege in
or over land for an interest equivalent to a fee simple or term of years absolute11. A conveyance of a legal estate,
expressed to be made subject to another legal estate not in existence immediately before the date of the conveyance,
operates as a reservation unless the contrary intention appears12. There may also be a reservation out of a parol
demise13.
HR A[1766]
1 Doe d Douglas v Lock (1835) 2 Ad & El 705 at 743.
2 Wickham v Hawker (1840) 7 M & W 63; Durham and Sunderland Rly Co v Walker (1842) 2 QB 940.
3 Durham and Sunderland Rly Co v Walker (1842) 2 QB 940 at 967.

Page 434
4 Co Litt 47a; quoted in para HR A[1761].
5 Cf Houston v Marquis of Sligo (1885) 55 LT 614.
6 Mason v Clarke [1954] 1 QB 460.
7 Durham and Sunderland Rly Co v Walker (1842) 2 QB 940 at 967 at 968.
8 May v Belleville [1905] 2 Ch 605; Thellusson v Liddard [1900] 2 Ch 635 at 645.
11 Law of Property Act 1925, s 1(2),(4).
13 Bridgland v Shapter (1839) 5 M & W 375.
HR A[1767]
The reservation may operate in favour of a person who is not a party to the deed1. Thus, for example, when a lease of a
farm is subject to the use of a golf course, with liberty for the golf club to keep the course free from long grass, the
question of what is long grass is to be determined from the golfer's point of view2. A reservation of a right of sporting in
favour of the lessor and his assigns, where the right is exercisable concurrently with the lessee, is not available for
licensees of the lessor3. But it is otherwise where the lessor excepts a part of the premises with right of access thereto
and the lessor can authorise licensees to use the excepted part4.
HR A[1768]-[1860]
1 Wickham v Hawker (1840) 7 M & W 63.
2 Woodward v Heywood (1910) 27 TLR 123.
3 Reynolds v Moore [1898] 2 IR 641.
4 Mitcalfe v Westaway (1864) 17 CBNS 658.

Page 435
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 4 Assignment of land and devolution
of leases
Chapter 4 Assignment of land and devolution of leases
Editor
John Furber
Page 436
of leases/A Assignment and devolution of leases
A
Page 437
of leases/A Assignment and devolution of leases/1 The right to assign or underlet
1 The right to assign or underlet
(a) Lessee's right to assign the term
HR A[1861]
In the absence of any provision in the lease to the contrary, a lessee has the right to assign his interest in the lease and to
create subleases1. However the lessor may validly impose restrictions upon the right to assign or sublet and this is
usually done by his taking a covenant from the lessee imposing such restrictions2. An assignment or subletting in
breach of such a covenant is not void, but is effectual to vest the lease or sublease in the assignee or sublessee, subject
to any right of the lessor to forfeit the lease for breach of covenant3. However, a right of occupation which is personal
only (such as a statutory tenancy pursuant to the Rent Act 1977) is not assignable4 and it also seems that neither a
tenancy at will nor a tenancy at sufferance is assignable5.
HR A[1862]
1 'It is of the nature of the creation of a term of years that the owner of the term is capable of dealing with it as a piece of property': per
Lord Russell of Killowen in Old Grovebury Manor Farm Ltd v W Seymour Plant Sales and Hire Ltd (No 2) [1979] 3 All ER 504, [1979] 1
WLR 1397, CA. Similarly, an agreement for a lease, or an option to require the grant or renewal of a lease, is assignable: see Tolhurst v
Associated Portland Cement Manufacturers (1900) Ltd [1903] AC 414 at 423, per Lord Lindley.
2 For consideration of covenants of this sort, see Chapter 5.
3 Old Grovebury Manor Farm Ltd v W Seymour Plant Sales and Hire Ltd (No 2) [1979] 3 All ER 504, [1979] 1 WLR 1397, CA;
Governors of the Peabody Donation Fund v Higgins [1983] 3 All ER 122, [1983] 1 WLR 1091, CA (assignment of a 'secure tenancy'). As
well as the remedy of forfeiture (to be exercised only after the service of a notice under s 146 of the Law of Property Act 1925, which in the
case of an assignment in breach of covenant, must be served on the assignee: see Old Grovebury Manor Farm Ltd v W Seymour Plant Sales
and Hire Ltd (No 2) [1979] 3 All ER 504, [1979] 1 WLR 1397, CA) the lessor is able to sue for damages for breach of the covenant and in
appropriate circumstances may be able to obtain a mandatory injunction requiring the lease to be reassigned or the sublease to be amended:
see Esso Petroleum Co Ltd v Kingswood Motors (Addlestone) Ltd [1974] QB 142, [1973] 3 All ER 1057 and Hemmingway Securities Ltd v
Dunraven Ltd [1995] 1 EGLR 61.
4 See Keeves v Dean [1924] 1 KB 685, CA.
5 For these tenancies, see paras HR A[150], [164].
(b) Lessor's right to assign the reversion
HR A[1863]
Although in theory a lessor might covenant not to assign the reversion to a lease, in practice such covenants are not
Page 438
sought or given. Thus, the lessor is generally free to assign the reversion to whom he wishes1 and the conveyance is
valid without attornment by the lessee2. The conveyance of the reversion does not affect the validity of any payment of
rent by the lessee to the person making the conveyance before notice of the conveyance is given to him by the person
entitled under the conveyance, nor does it render the lessee liable for any breach of covenant to pay rent, on account of
his failure to pay rent to the person entitled under the conveyance before such notice is given to him3. However, notice
of the conveyance is not necessary before commencement of proceedings for forfeiture for breach of covenant other
than a covenant for payment of rent4.
HR A[1864]
1 The conveyance must usually be made by deed: Law of Property Act 1925, s 52.
2 Law of Property Act 1925, s 151(1). An attornment is a formal recognition of the lessor by the lessee. This statutory provision does not
give to the assignee of the reversion a right of action for rent against a yearly tenant, holding by an oral grant, who had parted with his
interest before the assignment of the reversion: Allcock v Moorhouse (1882) 9 QBD 366, CA.
3 Law of Property Act 1925, s 151(1). See also the Landlord and Tenant Act 1985, s 3, considered at para HR A[2707] requiring
notification to the tenant of an assignment of the reversion of residential premises.
4 Scaltock v Harston (1875) 1 CPD 106.
HR A[1865]
An attornment by the lessee in respect of any land to a person claiming to be entitled to the interest in the law of the
lessor, if made without the consent of the lessor, is void1.
HR A[1866]
HR A[1867]
In certain cases, a lessor will commit a criminal offence if he conveys a reversion without first offering it to his
lessees1, but this does not affect the validity of the conveyance2.
HR A[1868]
1 See Pt I of the Landlord and Tenant Act 1987 (as amended by the Housing Act 1996) considered at para HR A[2729].
2 Landlord and Tenant Act 1987, s 10A(5).

Page 439
of leases/B Method of assignment
B
Page 440
of leases/B Method of assignment/1 Agreement to assign must be in writing
1 Agreement to assign must be in writing
HR A[1869]
The sale of a leasehold interest is, in general, governed by the same principles as the sale of freehold property1. A
contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all
the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each2. The
terms may be incorporated in a document either by being set out in it or by reference to some other document3 and the
document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not
necessarily the same one) must be signed by or on behalf of each party to the contract4. Therefore, all contracts for the
assignment of leaseholds on tenancies must be in writing in order to be enforceable5. This requirement applies to an
agreement to assign a lease even if some steps have to be taken or some condition fulfilled prior to the intended
assignment6.
HR A[1870]-HR A[1880]
1 Law of Property (Miscellaneous Provisions) Act 1989, s 2 (which came into force on 27 September 1989) applies to a contract for sale
or other disposition of land (s 2(1)). By s 2(6), 'disposition' has the same meaning as in the Law of Property Act 1925 (see s 205 (1)(ii)) and
'interest in land' means any estate interest or charge in or over land. Section 2 superseded the Law of Property Act 1925, s 40 which itself
replaced part of the Statute of Frauds 1677, s 5. A contract for the assignment of a lease is an estate contract which must be registered if it is
to be binding upon subsequent purchasers for value (see Land Charges Act 1972, s 2(4)) and, where the title to the lease is registered the
contract should be protected by notice or caution on the register (see Land Registration Act 1925, s 59(2)).
2 LP(MP)A 1989, s 2(1).
3 LP(MP)A 1989, s 2(2).
4 LP(MP)A 1989, s 2(3).
5 This is so even though the unexpired residue of the term is less than three years (Poultney v Holmes (1720) 1 Stra 405; Barrett v Rolph
(1845) 14 M & W 348) or the tenancy to be assigned is a tenancy from year to year (Botting v Martin (1808) 1 Camp 317). Cf Law of
Property (Miscellaneous Provisions) Act 1989, s 2(5)(a), relating to contracts to grant short leases.
6 Representative Body of the Church in Wales v Newton [2005] EWHC 631 (QB), [2005] 16 EG 145 (CS), applying Singh v Beggs (1995)
71 P&CR 120, C.A. An argument that a constructive trust had been created also failed in this case.
HR A[1881]
The rules stated above apply wherever there is, in effect, an agreement for the transfer of leasehold premises for the
residue of the term; for example, where the lessee agrees to give possession to another who is intended to be the tenant
for the residue of the term1 or merely to give up possession of leasehold premises to another2. As a consequence of
Page 441
these rules where an assignment has been completed by a transfer pursuant to an oral agreement, the vendor cannot
recover the purchase price pursuant to that contract, but may be able to recover on some other basis, for example on a
restitutionary or quasi-contractual basis3.
HR A[1882]
1 Buttermere v Hayes (1839) 5 M & W 456.
2 Kelly v Webster (1852) 12 CB 283; Smart v Harding (1855) 15 CB 652.
3 See eg Cocking v Ward (1845) 1 CB 858 (where the remedy was granted on the basis of 'account stated'); Lavery v Turkey (1860) 6 H &
N 239. See also Pulbrook v Lawes (1876) 1 QB 284 (recovery of payment for work done to premises pursuant to an enforceable
agreements).
HR A[1883]
Unless there is a provision to the contrary in the contract, a person who has entered into a contract to take an assignment
of a leasehold interest is precluded by statute from calling for the title to the freehold or leasehold reversion1.
HR A[1884]

Page 442
of leases/B Method of assignment/2 An assignment of legal estate must be made by deed
2 An assignment of legal estate must be made by deed
HR A[1885]
An assignment of a leasehold interest in land must be in writing1 and, in order to pass the legal estate, it must be made
by deed2. This rule applies to assignments of leases which can be created orally or in writing without a deed (such as a
lease for a term not exceeding three years3) as it applies to the assignment of leases required to be made by deed4.
HR A[1886]
1 Law of Property Act 1925, s 53(1)(a); but this section by its terms does not apply to assignments by operation of law: see Parc
Battersea Ltd v Hutchinson [1999] 22 EG 149.
2 LPA 1925, s 52(1).
3 See LPA 1925, s 54(2).
4 Crago v Julian [1992] 1 All ER 744, [1992] 1 WLR 372, CA, in which Botting v Martin (1808) 1 Camp 317 was considered and
followed.
HR A[1887]
However if an assignment is made in writing, it may operate as an agreement to assign so as to vest an equitable interest
in the assignee1 and a prospective assignee who has entered the premises and paid rent to the landlord may be estopped
from denying his liability to the landlord on the covenants in the lease even though there has been no assignment of the
legal leasehold interest2.
HR A[1888]
1 This is an example of the question of the principle in Walsh v Lonsdale (1882) 21 Ch D 9, considered at para HR A[908]. The
agreement must still satisfy the requirements of the Law of Property (Miscellaneous Provisions) Act 1989, s 2; see para HR A[1869].
2 Rodenhurst Estates Ltd v W H Barnes Ltd [1936] 2 All ER 3, CA (a case in which the landlord had given a licence to assign).
HR A[1889]
In cases where an assignment of a leasehold interest must be registered in order to transfer the legal estate1, the assignor
Page 443
of the lease remains the 'lessee', as regards a third party such as the lessor, after completion of the assignment until
registration2.
HR A[1890]-HR A[1900]
1 See Land Registration Act 1925, s 22(1).
2 Brown & Root Technology Ltd v Sun Alliance and London Assurance Co Ltd [1997] EGLR 39, CA, applying Gentle v Faulkner [1900]
2 QB 267, CA.
HR A[1901]
An assignor may assign a leasehold interest to himself and another1 or assign them to or vest them in himself2; two or
more persons can assign to one or more themselves, but it appears that the number of assignees must be at least one less
than the number of assignors3.
HR A[1902]
2 LPA 1925, s 72(3).
3 LPA 1925, s 72(4) and see the observations of Viscount Simonds in Rye v Rye [1962] AC 496, at 504, 505, [1962] 1 All ER 146 at 149.
Page 444
of leases/C Transmission of benefit and burden of covenants on assignment of lease or reversion
C
Page 445
of leases/C Transmission of benefit and burden of covenants on assignment of lease or reversion/1 Introduction
1 Introduction
HR A[1903]
A covenant entered into between a lessor and a lessee is primarily binding as between the two personally; that is, it
binds each party and their personal representatives. However, upon an assignment either of the reversion or of the term,
a covenant may also be binding upon the grantee of the reversion or the assignee of the term and, similarly, the benefit
of the terms and the benefit of a covenant may pass to these persons1. It is therefore necessary to consider the following
cases:
(a) where the benefit of a lessee's covenants runs with the reversion;
(b) where the burden of lessor's covenant runs with the reversion;
(c) where the burden of a lessee's covenant runs with the term (or, as it is more usually put, runs with
the land);
(d) where the benefit of a lessor's covenant runs with the land.
These cases are considered in detail below.
HR A[1904]
1 The principle that the benefit and the burden of covenants in a lease may run with the reversion or the term is necessary for the effective
operation of the law of landlord and tenant and is an extension of the fundamental principles of English contract law. The origins of the
principle are to be found in both statute (the Grantees of Reversions Act 1540, now the Law of Property Act 1925, ss 141, 142, dealing with
the transfer of the reversion) and in common law (Spencer's Case (1583) 5 Co Rep 16a, dealing with the transfer of the term).
HR A[1905]
The law relating to the transmission of the benefit and burden of covenants has been radically changed by the Landlord
and Tenant (Covenants) Act 19951, but for the most part the Act applies only to 'new tenancies'2. It is thus necessary in
each case to consider separately the law applicable to old and new tenancies.
HR A[1906]
2 For the definition of a 'new tenancy', see the Landlord and Tenant (Covenants) Act 1995, s 1. Generally speaking, a 'new tenancy' is a
tenancy granted on or after 1 January 1996.
Page 446
of leases/C Transmission of benefit and burden of covenants on assignment of lease or reversion/2 The benefit of the
lessee's covenants: tenancies to which the Landlord and Tenant (Covenants) Act 1995 does not apply
2 The benefit of the lessee's covenants: tenancies to which the Landlord and Tenant
(Covenants) Act 1995 does not apply
HR A[1907]
At common law the benefit of the lessee's covenants did not run with the reversion except in the case of covenants for
payment of rent or the rendering of services in the nature of rent1.
HR A[1908]
1 Vyvyan v Arthur (1823) 1 B & C 410; Bickford v Parson (1848) 5 CB 920 at 931; Harper v Burgh (1677) 2 Lev 206. Such covenants
were considered an inherent incident of the relationship between landlord and tenant.
HR A[1909]
However, by statute1, rent2 reserved by a lease3 and the benefit of every covenant or provision therein contained
having reference to the subject matter of the lease4 and on the lessee's5 part to be observed or performed and every
condition of re-entry6 and other condition contained in the lease is annexed and incident to and goes with the
reversionary estate in the land7, or in any part thereof, immediately expectant on the term granted by the lease,
notwithstanding severance of that reversionary estate8. This is without prejudice to any liability affecting a covenantor
or his estate9. The benefit only passes with the legal interest in the reversion10.
HR A[1910]-HR A[1920]
1 Law of Property Act 1925, s 141, replacing the Grantees of Reversions Act 1540, s 1, the Conveyancing Act 1881, s 10 and the
Conveyancing Act 1911, s 2. The Grantees of Reversions Act 1540 was passed on the dissolution of the monasteries in order to preserve the
remedies on leases of the forfeited lands, but though primarily designed for the benefit of guarantees from the Crown, it was made to apply
to grantees of reversions generally (see Co Litt 15a, resolution).
2 For these purposes, 'rent' includes a rent service or a rent charge, or other rent, toll, duty, royalty or annual or periodical payment in
money or money's worth, reserved or issuing out of or charged upon land, but it does not include mortgage interest: Law of Property Act
1925, s 205(1)(xxiii).
3 Law of Property Act 1925, s 141 applies to leases created before or after the commencement of that Act (except 'new tenancies' within
the meaning of the Landlord and Tenant (Covenants) Act 1995) and 'lease' includes an underlease or other tenancy: Law of Property Act
1925, s 154. In Lord Hastings v North Eastern Railway Co [1898] 2 Ch 674 (affirmed on another point sub-nom North Eastern Railway Co v
Lord Hastings [1900] AC 260, HL) it was held that a wayleave should be treated as a lease for these purposes; see also Earl of Partmore v
Burn (1823) 1 B & C 694.
Page 447
4 The Grantees of Reversions Act 1540 was not in terms confined to covenants which touched and concerned the land, but was so
construed by judicial interpretation and by analogy with Spencer's Case (1583) 5 Co Rep 16a, which establishes the common law rule that
covenants may run with the lease. This requirement was then enacted in the Conveyancing Acts and the Law of Property Act 1925, using the
modern expression 'having reference to the subject matter of the lease'. For consideration of the meaning of this expression, see para HR
A[1921].
5 For these purposes 'lessee' includes an underlessee and a person deriving title under a lease or underlease: Law of Property Act 1925, s
205(1)(xxiii).
6 The wording of the Law of Property Act 1925, s 141(1) might suggest that a right of re-entry can be exercised by an assignee of the
reversion even in the event of a breach of a covenant or condition which does not have reference to the subject-matter of the lease, but in
Stevens v Copp (1868) LR 4 Exch 20 (a decision on the Grantees of Reversions Act 1540) it was held that the assignee of the reversion was
not entitled to re-enter on breach of condition caused by a conviction under the game laws, because the condition did not touch or concern
the land. However, in Shiloh Spinners Ltd v Harding [1973] AC 691, [1973] 1 All ER 90, HL (not a case between landlord and tenant) it was
held by the House of Lords that, in general, a right of re-entry can subsist in law in respect of non-compliance with covenants even if those
covenants, as such, are not enforceable and Lord Wilberforce cast doubt on the decision in Stevens v Copp (1868) LR 4 Exch 20 at 717, 96,
although not finding it necessary to disapprove of it formally.
7 'Land' includes land of any tenure and mines or minerals, whether or not held apart from the surface, buildings or parts of buildings
(whether the division is horizontal, vertical or made in any other way) and other corporeal hereditaments; also, a manor, an advowson and a
rent and other incorporeal hereditaments and an easement right, privilege, or benefit in, over or derived from land; but not an undivided
share in land; Law of Property Act 1925, s 205(1)(ix).
8 Law of Property Act 1925, s 141(1). Section 141 applies to leases made before or after the commencement of the Act but does not affect
the operation of (a) any severance of the reversionary estate or (b) any acquisition by conveyance or otherwise of the right to receive or
enforce any rent covenant or provision effected before the commencement of the Act (s 141(4)).
10 Thus, it will only pass on registration of the title of the assignee of the reversion, where such registration is necessary for the
acquisition of legal title: see, for example, Rother District Investments Ltd v Corke [2004] EWHC 14 (Ch), [2004] 13 EG 128.
HR A[1921]
The meaning of the expression 'having reference to the subject matter of the lease' is of importance1. A 'satisfactory
working test' for determining whether, in any given case, a covenant has reference to the subject matter of the lease (or
'touches and concerns the land') has been described as follows:
(a) the covenant benefits only the reversioner for the time being and if separated from the reversion
ceases to be of benefit to the covenantee;
(b) the covenant affects the nature, quality, mode of user or value of the land of the reversioner;
(c) the covenant is not expressed to be personal (that is to say neither being given only to a specific
reversioner nor in respect of the obligations only of a specific tenant);
(d) the fact that a covenant is to pay a sum of money will not prevent it from touching and concerning
the land if the covenant is connected with something to be done on to or in relation to the land2.
HR A[1922]
1 The expression 'having reference to the subject matter of the land' when used in modern statutes has the same meaning as the more
Page 448
ancient expression 'touching or concerning the land'; see Davis v Town Properties Investment Corpn Ltd [1903] 1 Ch 797, CA; Breams
Property Investment Co Ltd v Stroulger [1948] 2 KB 1, [1948] 1 All ER 758, CA.
2 P & A Swift Investments v Combined English Stores Group plc [1989] AC 632 at 642, [1988] 2 All ER 885 at 891, HL, per Lord Oliver
of Aylermerton (a case concerned with the ability of an assignee of the reversion to enforce a covenant by a surety guaranteeing the
performance of the tenant's covenants: see further para HR A[1947].) Cf Hua Chiao Commercial Bank Ltd v Chiaphua Industries Ltd [1987]
AC 99, [1987] 1 All ER 1110, PC. Examples of covenants which may be enforced by an assignee of the reversion are: a covenant in a lease
of a public-house to conduct the business in a proper and orderly manner so as to afford no ground whereby the liquor licence might be
suspended, discontinued or forfeited: Fleetwood v Hull (1889) 23 QBD 35; a covenant in a lease of a public house to buy beer only from the
landlord or his assignee (Clegg v Hands (1890) 44 Ch D 503, CA); a covenant in a lease of a farm as to hay and manure (Chapman v Smith
[1907] 2 Ch 97); a covenant in a lease of mines not to let down the surface and to pay compensation for damage done (Westhoughton UDC v
Wigan Coal and Iron Co Ltd [1919] 1 Ch 159, CA); a covenant in a lease of a petrol-filling station not to sell motor fuel other than that
supplied by the landlord; Caerns Motor Services Ltd v Texaco Ltd [1995] 2 EGLR 54, [1994] 36 EG 141. An example of a covenant which
may not be enforced by an assignee of the reversion is a covenant to pay a premium on the grant of a lease by instalments: Hill v Booth
[1930] 1 KB 381, CA.
HR A[1923]
Further, by statute1, any such rent, covenant or provision2 shall be capable of being recovered, received, enforced and
taken advantage of by the person from time to time entitled, subject to the term, to the income of the whole or any part,
as the case may require, of the land leased. Thus, a mortgagor in possession whose mortgagee has neither taken
possession nor given notice of his intention to take possession is entitled to enforce the covenants in a lease of the
mortgaged land3 and, similarly, a mortgagee, on going into possession, can enforce the covenants in a lease made by
the mortgagor under his statutory powers4. Where an assignee of the lessor's reversionary interest has taken a valid
equitable assignment of the rents and has given notice to the lessee, he is entitled to the benefit of this statutory
provision, notwithstanding that he is not yet the registered proprietor of the reversionary interest5. A person in whom
the reversion is vested by a private Act of Parliament can enforce the covenants in a lease6. If the covenants in the lease
have been modified, the assignee can only enforce the covenants as modified and notice of the modification, or the
absence of it, is irrelevant7.
HR A[1924]
2 The words 'condition of re-entry and other condition' are not to be found in Law of Property Act 1925, s 141(2) (cf s 141(1)) but the
word 'provision' in s 141(2) should probably be construed as including such conditions.
3 Turner v Walsh [1909] 2 KB 484, CA.
4 Municipal Permanent Investment Building Society v Smith (1888) 22 QBD 70, CA. The mortgagee in possession is also entitled to
arrears of rent: see Re Ind Coope & Co Ltd [1911] 2 Ch 223.
5 Scribes West Ltd v Relsa Anstalt [2004] EWCA Civ 1744, [2005] O2 EG 100 (CS). The Court of Appeal recognised that in these
circumstances the equitable assignee would have rights concurrent with those enjoyed by the legal owner of the reversionary interest.
6 Sunderland Orphan Asylum Co v River Wear Comrs [1912] 1 Ch 191.
7 See Burford Midland Properties Ltd v Marley Extrusions Ltd [1995] 2 EGLR 15, [1995] 30 EG 89.
Page 449
HR A[1925]
Where the person entitled to the income of the land becomes entitled by conveyance or otherwise, such rent, covenant
or provision may be recovered, received, enforced or taken advantage of by him notwithstanding that he becomes so
entitled after the condition of re-entry or forfeiture has become enforceable1, but this statutory provision does not render
enforceable any condition of re-entry or other condition waived or released before such person becomes entitled2.
HR A[1926]
2 LPA 1925, s 141(3). As to waiver of the right to forfeit a lease, see para HR A[8905].
HR A[1927]
Notwithstanding these statutory provisions a beneficiary may not obtain or sue for rent under a lease where the legal
estate in the reversion is vested in his trustee1. As a consequence of these statutory provisions, an assignee of the
reversion is entitled to sue in respect not only of rent due and breaches of covenant which occur after the assignment,
but also in respect of rent due and breaches of covenants occurring prior to the assignment2; as a corollary, after the
assignment, only the assignee may sue for rent and for breaches of covenant whenever they have occurred, at least in
the absence of an agreement to the contrary between the assignor and the assignee3. These statutory provisions apply
whether the lease under which the tenant holds is by deed, in writing, or oral4. Where they do not apply, so that the
benefits of the covenant is not transferred, the lessor continues to be entitled to enforce it5. It appears that an assignee of
a reversion does not need to rely on the statutory provisions in order to enforce any implied covenants and conditions,
as these are enforceable at law in any event6.
HR A[1928]
1 Schalit v Joseph Nadler Ltd [1933] 2 KB 79.
2 Re King, Robinson v Grey [1963] Ch 459, [1963] 1 All ER 781, CA; London and County (A & D) Ltd v Wilfred Sportsman Ltd [1971]
Ch 764, [1970] 2 All ER 600, CA; Arlesford Trading Co Ltd v Servansingh [1971] 3 All ER 113, [1971] 1 WLR 1080, CA. The latter case
shows that an assignee of the reversion can recover from an original lessee arrears of rent accrued due prior to the assignment of the
reversion, even where the lessee has assigned the lease before the assignment of the reversion. In such case, there has never been privity of
estate between the original lessee and the assignee of the reversion, but the assignee of the reversion has the benefit of the original lessee's
covenant, by virtue of the statutory provisions. For some consideration of the effect of Law of Property Act 1925, s 141, on the expiry of the
term of a head lease, see Electricity Supply Nominees Ltd v Thorn EMI Retail Ltd [1991] 2 EGLR 46, [1991] 35 EG 114 CA.
3 Re King, Robinson v Grey [1963] Ch 459, [1963] 1 All ER 781, CA. The possibility of an agreement between the assignor and the
assignee was recognised by Upjohn LJ [1963] Ch 459 at 488, [1963] 1 All ER 781 at 793, although he observed that it may be necessary for
the assignor to sue in the name of the assignee.
4 See the definition of 'lease' in the Law of Property Act 1925, para HR A[1910], n 3. In Re King Robinson v Grey [1963] Ch 459 at 487,
[1963] 1 All ER 781 at 792, CA. Upjohn LJ observed that one of the distinctions between the Law of Property Act 1925, s 141 and the
Page 450
Conveyancing Act 1881, s 10(1) (as amended by the Conveyancing Act 1911, s 2) was that the former provision applies to all leases,
whereas, by judicial decision, the latter provision only applied to leases in writing: see Blane v Francis [1971] 1 KB 252, CA. The word
'covenant' in the Law of Property Act 1925 is not limited to covenants under seal: Weg Motors Ltd v Hales [1962] Ch 49, [1961] 3 All ER
181, CA. The statutory provisions also apply to an agreement for a lease: see eg Manchester Brewery Co v Coombs [1901] 2 Ch 608.
5 Bickford v Parson (1848) 5 CB 920.
6 Wedd v Porter [1916] 2 KB 91, CA.

Page 451
lessee's covenants: tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
3 The benefit of the lessee's covenants: tenancies to which the Landlord and Tenant
(Covenants) Act 1995 applies
HR A[1929]
The relevant provisions of the LT(C)A 19951 apply only to new tenancies which generally speaking are tenancies
granted on or after 1 January 19962. The Act applies to a tenant covenant of a tenancy whether or not the covenant has
reference to the subject matter of the tenancy and whether the covenant is expressed, implied or imposed by law3. For
the purposes of the Act, a covenant includes any term, condition or obligation (including a covenant contained in a
collateral agreement)4 and a tenant covenant is a covenant falling to be complied with by the tenant of premises
demised by the tenancy5.
HR A[1930]-HR A[1940]
2 For the full definition of 'new tenancy' see Landlord and Tenant (Covenants) Act 1995, s 1 and the annotations at para HR A[21033].
3 LT(C)A 1995, s 2(1); the Act, however, does not apply to any covenants of the sort set out in s 2(2). As a consequence of s 2(1), the case
law considered at para HR A[1921] relating to what covenants touch and concern the land, is irrelevant in the case of a new tenancy.
4 LT(C)A 1995, s 28(1).
5 LT(C)A 1995, s 28(1).
HR A[1941]
Section 141 of the Law of Property Act does not apply in relation to new tenancies1. Rather, it is provided that the
benefit of all tenant covenants of such a tenancy shall be annexed and incident to the whole and to each and every part
of the reversion to the premises denied by the tenancy and shall in accordance with s 3 of the 1995 Act pass on the
assignment of the whole or any part of the reversion2. This is subject to an exception in the case of personal covenants;
nothing in s 3 of the 1995 Act operates, in the case of a covenant to be personal to any person, to make it enforceable by
any other person3. Further, nothing in s 3 operations to make a covenant enforceable against a person if, apart from the
section, it would not be enforceable against him by reason of its not having been registered under the Land Registration
Act 1925 or the Land Charges Act 19724.
HR A[1942]
Page 452
1 Landlord and Tenant (Covenants) Act 1995, s 30(4).
2 LT(C)A 1995, s 3(1). For the position where the reversion severed see para HR A[2009]. For the meaning of 'assignment' in this
context, see s 28(1), (5), (6)(a).
3 LT(C)A 1995, s 3(6)(a).
4 LT(C)A 1995, s 3(6)(b).
HR A[1943]
An assignee of the reversion who becomes entitled to the benefit of a covenant by virtue of the 1995 Act does not have
any rights under the covenant in relation to any time falling before the assignment1, although such rights may be
expressly assigned2. However the benefit of a landlord's right of re-entry under a new tenancy is annexed and incident
to the whole and to each and every part, of the reversion in the premises demised by the tenancy and passes on the
assignment of the whole or part of the reversion of those premises3 and it is further provided that, where the assignee of
the reversion becomes entitled to a right of re-entry contained in a tenancy, that right is exercisable in relation to any
breach of covenant of the tenancy occurring before the assignment as in relation to one occurring thereafter, unless by
reason of any waiver or release it was not so exercisable immediately before the assignment4.
HR A[1944]
1 Landlord and Tenant (Covenants) Act 1995, s 21(1). The right to sue for breaches of the tenant covenant committed before the
assignment therefore remains with the assignor of the reversion; cf the position under the Law of Property Act 1925, s 141, at para HR
A[20116].
2 LT(C)A 1995, s 23(2).
3 LT(C)A 1995, s 4.
4 LT(C)A 1995, s 23(3). Thus, for example, an assignee of the reversion can forfeit the lease for arrears of rent falling due before the
assignment, even though he cannot obtain judgment for the arrears themselves. Relief from forfeiture would presumably be granted upon
payment of the arrears to the person to whom they were due.
HR A[1945]
Where a tenant covenant of a new tenancy, or any right of re-entry contained in such a tenancy, is enforceable by the
reversioner in respect of any premises demised by the tenancy, it is also enforceable by: (a) any person (other than the
reversioner) who as the holder of the immediate reversion in the premises, is for the time being entitled to the rents and
profits; or (b) any mortgagee in possession of the reversion in those premises who is so entitled1.
HR A[1946]
Page 453
(a) The benefit of the surety's covenant
HR A[1947]
A covenant given by a surety, guaranteeing the performance of a lessee's obligations, is a covenant which touches and
concerns that land1 and thus the benefit of such a covenant passes to the assignee of the reversion, even though the
surety has no interest in the land2. In this respect, the law applicable to new tenancies within the meaning of the
Landlord and Tenant (Covenants) Act 19953 and other tenancies is the same4. A covenant by a surety to take a new
lease if the original tenancy is disclaimed on the insolvency of the lessee is a covenant of this sort and thus is
enforceable by an assignee of the reversion5.
HR A[1948]
1 For the meaning of this expression, see para HR A[1921].
2 P & A Swift Investments v Combined English Stores Group plc [1989] AC 632, [1988] 2 All ER 885, HL, approving Kumar v Dunning
[1989] QB 193, [1987] 2 All ER 801, CA.
4 This is because the benefit of the covenant passes at common law and not by virtue of the provisions of the Law of Property Act 1925, s
141; see P & A Swift Investments v Combined English Stores Group plc [1989] AC 632, [1988] 2 All ER 885. Thus, the Landlord and
Tenant (Covenants) Act 1995, s 30(4)(b) (providing that s 141 shall not apply to new tenancies) is relevant for these purposes.
5 Coronation Street Industrial Properties Ltd v Ingall Industries plc [1989] 1 All ER 979, [1979] 1 WLR 304, HL.
Page 454
of leases/C Transmission of benefit and burden of covenants on assignment of lease or reversion/4 The burden of the
lessor's covenants: tenancies to which the Landlord and Tenant (Covenants) Act 1995 does not apply
4 The burden of the lessor's covenants: tenancies to which the Landlord and Tenant
HR A[1949]
By statute the obligation under a condition or of a covenant1 entered into by a lessor2 with reference to the
subject-matter of the lease3 is, if and as far as the lessor has power to bind the revertionary estate immediately expectant
on the term granted by the lease, annexed and incident to and goes with that reversionary estate4. If the reversion has
been severed, the obligation goes with the severed parts thereof, notwithstanding severance5. The obligation may be
taken advantage of and enforced by the person in whom the term is from time to time vested by conveyance, devolution
in law or otherwise; and, if and as far as the lessor has power to bind the person from time to time entitled to that
reversionary estate, the obligation aforesaid may be taken advantage of and enforced against any person so entitled6.
HR A[1950]-HR A[1960]
1 The word 'covenant' in the Law of Property Act 1925 is not limited to covenants under seal: Weg Motors Ltd v Hales [1962] Ch 49,
[1961] 3 All ER 181, CA.
2 For these purposes 'lessor' includes an underlessor and a person deriving title under a lessor or underlessor: Law of Property Act 1925, s
205(1)(xxiii).
3 The expression 'having reference to the subject matter of the land' when used in modern statutes has the same meaning as the more
ancient expression 'touching and concerning the land': for the meaning of these expressions, see para HR A[1921] and in particular, the
'satisfactory working test' described by Lord Oliver of Aylemerton in P & A Swift Investments v Combined English Stores Group plc [1989]
AC 632, [1988] 2 All ER 885. Examples of covenants which may be enforced against an assignee of the reversion are: a covenant for a quiet
enjoyment (see Noke v Awder (1595) Cro Eliz at 436; Cole's Case (1692) 1 Salk 196; Derisley v Custance (1790) 4 Term Rep 75; Campbell
v Lewis (1820) 3 B & Ald 392; cf Dewar v Goodman [1908] 1 KB 94 at 108, CA) a covenant to supply the demised houses with water,
(Jourdain v Wilson (1821) 4 B & Ald 266); a covenant restrictive of building on adjoining land of the lessor (Rickett v Churchwardens of
Enfield [1909] 1 Ch 544); a covenant to build on the demised land (Re Hughes, Ellis v Hughes [1913] 2 Ch 491; a covenant to supply a
housekeeper to keep chambers clean (Barnes v City of London Real Property Co [1918] 2 Ch 18); a restriction on the right to give notice to
quit during a specified period (Breams Property Investment Co Ltd v Strougler [1948] 2 KB 1, [1948] 1 All ER 758, CA). Examples of
covenants which may not be enforced against an assignee of the reversion are: a covenant to give the lessee a right to pre-emption of land
adjoining the demised premises (Collinson v Lettsom (1815) 6 Taunt 224 at 229); a covenant to pay at the end of the term for articles which
are not fixtures (Gorton v Gregory (1862) 3 B & S 90, Ex Ch); a covenant by an underlessor to perform the covenants of the head lease so
far as they relate to premises comprised in the head lease, but not the underlease (Dewar v Goodman [1909] AC 72, HL); a covenant to pay a
sum on the determination of the lease (Re Hunter's Lease, Giles v Hutchings [1942] Ch 124, [1942] 1 All ER 27); a covenant to repay a
deposit paid to secure the performance of the lessee's covenants (Hua Chiao Commercial Bank Ltd v Chiaphu Industries Ltd [1987] AC 99,
[1987] 1 All ER 1110, PC). A covenant to renew a lease may be enforced against an assignee of the reversion (Richardson v Sydenham
(1703) 2 Vern 447, Simpson v Clayton (1838) 4 Bing NC 758 at 780, Muller v Trafford [1901] 1 Ch 54 at 60), although is has been said that
this is an anomaly which is difficult to justify (per Romer LJ in Woodall v Clifton [1905] 2 Ch 257 at 279, CA, considering an option to
purchase); see also Weg Motors Ltd v Hales [1962] Ch 49, [1961] 3 All ER 181, CA. However, a covenant to renew runs only with the
reversion which is vested in the lessor at the date of the lease and does not bind the assignee of a different reversion which the lessor
subsequently acquires (Coey v Pascoe [1899]] 1 IR 125; Muller v Trafford [1901] 1 Ch 54); as to who is bound by a covenant to renew, see
further Earl Shelburne v Biddulph (1748) Bro Parl Cas 356 at 363, Beere v Cavendish (1806) 5 I Eq R 472, Hamilton v Pattern (1839) 1 I Eq
R 341).
Page 455
4 Law of Property Act 1925, s 142(1), which replaces Grantees of Reversions Act 1540, s 2 and the Conveyancing Act 1881, s 11. The
section applies to leases made before on or after 1 January 1926; s 142(1). For a consideration of the width of s 142(1) (albeit in obiter dicta),
see Celsteel Ltd v Alton House Holdings Ltd (No 2) [1987] 2 All ER 240, [1987] 1 WLR 291, CA, per Fox LJ.
5 Law of Property 1925, s 142(1). For severance of the reversion see para HR A[2003]. The section applies to any severance effected
before or after 1 January 1926, save that, where a lease was made before 1 January 1882, nothing in the section affects the operation of any
severance of the reversionary estate effected before 1 January 1926: s 142(2).
6 Law of Property Act 1925, s 142(1). See Weg Motors Ltd v Hales [1962] Ch 49, [1961] All ER 181, CA, where it was held that a
mortgagor had power to bind the reversionary estate.
HR A[1961]
These statutory provisions apply whether the lease under which the tenant holds is by deed, in writing or oral1. It is not
necessary that the obligation should be contained in the lease itself in order that the burden should run with the
reversion; it is sufficient if it is undertaken by an antecedent agreement or collateral contract and it follows that an
assignee of the reversion may become bound by a collateral obligation not known to him prior to the assignment2.
HR A[1962]
2 Breams Property Investment Co Ltd v Strougler [1948] 2 KB 1, [1948] 1 All ER 758, CA; Lotteryking Ltd v AMEC Properties Ltd
[1995] 2 EGLR 13 (in which it was also held that a tenant's right to set off against any liability to the landlord, his a claim for damages for
breach of a provision of a collateral contract which runs with the reversion is exercisable not merely against the person entitled to the
reversion at the date of the breach, but also against any successor in title); System Floors Ltd v Ruralpride Ltd [1995] 1 EGLR 48, CA (in
which it was also held that a covenant of which the benefit is personal to the tenant may nonetheless be a covenant with reference to the
subject matter of the lease so that the burden of it may pass on an assignment of the reversion).
HR A[1963]
These statutory provisions do not enable a lessee to sue an assignee of the reversion for breaches committed before the
assignment1 and the original lessor remains liable on the covenants, even after he has assigned the reversion2. The
assignee of the reversion is not liable upon any covenant which, on its true construction, is personal and not incident to
the relationship of landlord and tenant3.
HR A[1964]
1 Duncliffe v Caerfelin Properties Ltd [1989] 2 EGLR 38 (in this respect the operation of Law of Property Act 1925, ss 141 and 142 is not
the same; cf para HR A[2707].
2 Stuart v Joy [1904] 1 KB 362, CA; but see also Bath v Bowles (1905) 93 LT 801; Williams v Gabriel [1906] 1 KB 155. The lessor's
liability for breaches of covenant committed by him also survives an assignment of the lease by the lessee: City and Metropolitan Properties
Ltd v Greycroft Ltd [1987] 3 All ER 839, [1987] 1 WLR 1085.
Page 456
3 Eccles v Mills [1898] AC 360.
HR A[1965]
If an assignee of the reversion of a lease of residential premises fails to comply with his statutory obligations to give
notice to the lessee of his name and address1 then the assignor remains liable in respect of any breach of the lessor's
covenants until enter the assignor or the assignee gives the requisite notice to the lessee2; where the assignee is also
liable in respect of any such breach, the liability of the assignor and the assignee is joint and several3.
HR A[1966]
1 These duties arise under the Landlord and Tenant Act 1985, s 3, considered at para HR A[2707].
2 Landlord and Tenant Act 1985, ss 3A, 3B, introduced by the Landlord and Tenant Act 1987, s 50. There is nothing in the Landlord and
Tenant (Covenants) Act 1995 which affects this provision (see LT(C)A 1995, s 26(2)).
3 Landlord and Tenant Act 1985, s 3A.

Page 457
lessor's covenants: tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
5 The burden of the lessor's covenants: tenancies to which the Landlord and Tenant
HR A[1967]
The relevant provisions of the LT(C)A 19951 apply only to new tenancies which, generally speaking, are tenancies
granted on or after 1 January 19962, s 142 of the Law of Property Act 1925 does not apply in the case of a new
tenancy3 and instead it is provided that the burden of all landlord covenants4 of such a tenancy shall be annexed and
incident to the whole and to each and every part of the reversion in the premises demised by the tenancy and shall, in
accordance with the statutory provisions, pass on an assignment of the whole or any part of the reversion in the
premises5.
HR A[1968]
2 For the full definition of 'new tenancy' see Landlord and Tenant (Covenants) Act 1995, ss 1 and 28 and the general note at para HR
A[21034].
3 LT(C)A 1995, s 30(4).
4 For the definition of 'covenant' and 'landlord covenant', see the LT(C)A 1995, s 28(1). By virtue of the definitions in this sub-section an
agreement collateral to the tenancy may be a 'landlord covenant'. The Act applies to a 'landlord covenant' whether or not the covenant has
reference to the subject matter of the tenancy and whether the covenant is express, implied, or imposed by the law: s 2(1); but subject to the
exceptions set out in s 2(2).
5 LT(C)A 1995, s 3(1).
HR A[1969]
As from the date of the assignment of the reversion or part of it the assignee becomes bound by the landlord covenants1
of the tenancy except to the extent that: (a) immediately before the assignment they did not bind the assignor2; or (b)
they fall to be complied with in relation to any demised premises not comprised in the assignment3. However in
determining for these purposes whether any covenant bound the assignor immediately before the assignment, any
waiver or release of the covenant which (in whatever terms) is expressed to be personal to the assignor shall be
disregarded4.
HR A[1970]-HR A[1980]
Page 458
1 For the definition of 'covenant' and 'landlord covenant', see the Landlord and Tenant (Covenants) Act 1995, s 28(1). By virtue of the
definitions in this subsection an agreement collateral to the tenancy may be a 'landlord covenant'. The Act applies to a 'landlord covenant'
whether or not the covenant has reference to the subject matter of the tenancy and whether the covenant is express implied, or imposed by
the law: LT(C)A 1995, s 2(1); but subject to the exceptions set out in s 2(2).
2 A covenant may cease to be binding if, for example, the person having the benefit of it has given a waiver or release of it.
3 LT(C)A 1995, s 3(3). For the meaning of the expression, 'fall to be complied with in relation to any demised premises not comprised in
the assignment', see s 28(2).
4 LT(C)A 1995, s 3(4).
HR A[1981]
Nothing in the Landlord and Tenant (Covenants) Act, s 3 operates, in the case of a covenant which (in whatever terms)
is expressed to be personal to any person, to make the covenant enforceable against any other persons1; neither does
anything in the section operate to make a covenant enforceable against any person if, apart from the section, it would
not be enforceable against him by reason of it not being registered under the Land Registration Act 1925 or the Land
Charges Act 19722.
HR A[1982]
1 Landlord and Tenant (Covenants) Act 1995, s 3(6)(a).
2 LT(C)A 1995, s 3(6)(b).
HR A[1983]
To the extent that there remains in force any rule of law by virtue of which the burden of a covenant whose subject
matter is not in existence at the time when it is made does not run with the land affected, unless the covenantor
covenants or behalf of himself and his assignees, that rule of law is abolished in relation to new tenancies1.
HR A[1984]

Page 459
of leases/C Transmission of benefit and burden of covenants on assignment of lease or reversion/6 Release of lessor
from the burden of covenants following assignment of the reversion: tenancies to which the Landlord and Tenant
6 Release of lessor from the burden of covenants following assignment of the reversion:
tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
HR A[1985]
A lessor is not released from his covenants merely by virtue of the assignment of the reversion1. However, when the
lessor assigns the reversion in premises of which he is landlord under a new tenancy2, he is given a statutory right to
apply to be released from the landlord covenants3 of the tenancy4; if he is so released from all of these covenants, he
ceases to be entitled to the benefit of the tenant covenants5 of the tenancy as from the assignment6.
HR A[1986]
1 See para HR A[1963] and see the general note to the Landlord and Tenant (Covenants) Act 1995, s 6 at para HR A[21075].
2 For the definition of 'new tenancy', see LT(C)A 1995, s 1.
3 For the meaning of 'landlord covenants', see LT(C)A 1995, s 28(1).
4 LT(C)A 1995, s 6(2)(a). For the procedure to be adopted by a lessor seeking release, see para HR A[1989].
5 For the meaning of 'tenant covenants', see LT(C)A 1995, s 28(1).
6 LT(C)A 1995, s 6(2)(b). For the statutory right to apply when the lessor assigns part of the reversion only, see s 6(3). The section applies
whether or not the lessor is lessor of the whole of the premises comprised by in the tenancy, s 6(4).
HR A[1987]
Even if a lessor does not obtain a release when he himself assigns the reversion pursuant to these statutory provisions1,
it may be possible for him to obtain a release at a later date. Where a lessor assigns the reversion in premises of which
he is landlord under a new tenancy2 and immediately before the assignment a former landlord remains bound by a
landlord covenant3 of the tenancy ('the relevant covenant') then, provided that immediately before the assignment the
former landlord does not remain the landlord of any other premises demised by the tenancy, he may apply to be released
from the relevant covenant4. These provisions apply whether or not the former landlord has previously applied (whether
under s 6 or s 7 of the 1995 Act) to be released from the relevant covenant5.
HR A[1988]
Page 460
2 For the definition of 'new tenancy', see LT(C)A 1995, s 1.
3 For the meaning of 'landlord covenants', see LT(C)A 1995, s 28(1).
4 LT(C)A 1995, s 7(1), (2). In any other case, the former landlord may apply to be so released from the relevant covenant to the extent
that it falls to be complied with in relation to any premises comprised in the assignment; s 7(3) (see also s 28(2) from the definition of the
expression 'falls to be complied with relation to any premises'). For the procedure to be adopted by a former landlord seeking release, see
para HR A[1989] and for the effect of such release, see s 7(4), (5). Section 7 applies whether or not the lessor making the assignment is
landlord of the whole premises comprised in the tenancy: s 7(6)(a).
5 LT(C)A 1995, s 7(6)(b). The statute contemplates that a former landlord may possibly make a number of applications for release, no
doubt because a decision whether or not to grant the release may depend upon the financial standing of the current landlord.
HR A[1989]
Where a lessor or a former landlord wish to apply for the release of a covenant to any extent, the procedure to be
adopted is as follows. Either before the relevant assignment of the reversion or within the period of four weeks
beginning with the date of such assignment, he must serve on the tenant a notice1 informing him of: (a) the proposed
assignment or (as the case may be) the fact that the assignment has taken place; and (b) the request for the covenant to
be released to that extent2. Where such an application is made, the covenant is released to the extent mentioned in the
notice in the following circumstances3:
(a) if the tenant does not, within the period of four weeks beginning with the day on which the notice
is served, serve on the landlord or former landlord a notice in writing objecting to release4;
(b) if the tenant does so serve such a notice, the court5, on the application of the landlord or former
landlord makes a declaration that it is reasonable for the covenant to be so released6;
(c) if the tenant serves on the landlord or former landlord a notice in writing consenting to the release7
and, if he has previously served a notice objecting to it, stating that notice is withdrawn.
Any release from a covenant in accordance with these statutory provisions shall be regarded as occurring at the time
when the assignment in question takes place8.
HR A[1990]-HR A[2000]
1 The notice must be in a prescribed form or a form substantially to the like effect: see the annotations to the Landlord and Tenant
(Covenants) Act 1995, s 8(1) at para HR A[21080]. Section 23 of the Landlord and Tenant Act 1927 applies in relation to the service of
notices under s 8: LT(C)A 1995: s 27(5). The 'tenant' to be served is the tenant of the premises comprised in the assignment in question, or, if
different parts of those premises are held under the tenancy by different tenants, each of those tenants: LT(C)A 1995; s 8(4)(a).
2 LT(C)A 1995, s 8(1). For a full consideration of s 8, see paras HR A[21091]ff.
3 LT(C)A 1995, s 8(2).

Page 461
4 The notice must be in a prescribed form or a form substantially to the like effect: see the general note to LT(C)A 1995, s 8 at paras HR
A[21091]ff.
5 The 'court' for these purposes means a county court: LT(C)A 1995, s 8(4)(c).
6 The statute does not state what is to be taken into account when considering whether it is reasonable for a covenant to be released: see
the annotations to LT(C)A 1995, s 8 at paras HR A[21091]ff.
7 The notice consenting to the release must be in the prescribed form or a form substantially to the like effect: see the annotations to
LT(C)A 1995, s 8 at paras HR A[21091]ff.
8 LT(C)A 1995, s 8(3). The 'assignment in question' must be the assignment which has given the lessor or former landlord the opportunity
successfully to seek release.
HR A[2001]
Nothing in these provisions prevents a party to a tenancy releasing a person from a landlord covenant of a tenancy1.
Further, a landlord or a former landlord cannot apply for a release pursuant to these provisions in the event of an
'excluded assignment' of the reversion2. Where a landlord or former landlord is released from a landlord covenant by
virtue of these provisions, that release does not affect any liability of his arising from a breach of the covenant occurring
before the release3. A landlord or former landlord who is released from all of his landlord covenants by virtue of these
provisions ceases to be entitled to the benefit of the tenant covenants as from the relevant assignment4. However, this
does not affect any rights of his arising from a breach of the tenant covenant occurring before he ceases to be so
entitled5.
HR A[2002]
1 Landlord and Tenant (Covenants) Act 1995, s 26(1)(a). Thus, landlord and tenant can agree a release of a landlord covenant without
going through the procedures required by s 8 of the Act.
2 LT(C)A 1995, s 11(3)(a). An 'excluded assignment' is an assignment in breach of a covenant of a tenancy or an assignment by operation
of law; s 11(1). However, there is a right to apply for a release on the next assignment of the reversion if any: s 11(3)(b) and see also s 11(4),
s 11(7).
3 LT(C)A 1995, s 24(1).
4 LT(C)A 1995, s 6(2)(b), s 7(4). See also s 6(3)(b), s 7(5).
5 LT(C)A 1995, s 24(4). Thus, a landlord who has obtained a release can still sue for arrears of rent falling due before the date of the
relevant assignment.
Page 462
of leases/C Transmission of benefit and burden of covenants on assignment of lease or reversion/7 Severance of the
reversion: tenancies to which the Landlord and Tenant (Covenants) Act 1995 does not apply
7 Severance of the reversion: tenancies to which the Landlord and Tenant (Covenants) Act
1995 does not apply
HR A[2003]
A reversion on a lease is said to be severed when the reversion in part of the land becomes vested in one person and the
reversion in another part of the land becomes vested in another person1. Severance of the reversion does not sever the
tenancy into two; notwithstanding the statutory provisions described below2, there remains one single tenancy
following the severence3.
HR A[2004]
1 A reversion is also divided where the reversioner grants a new lease which is subject to an existing lease, but this is described as a lease
of the reversion, rather than a severance of the reversion. In such a case, the benefit and burden of the covenants in the existing lease pass to
the new lessee, by virtue of the Law of Property Act 1925, s 141, 142; see paras HR A[1909], [1949].
3 Jelley v Buckman [1974], QB 489. [1973] 3 All ER 853, CA (distinguished in William Skelton & Sons Ltd v Harrisons and Pindar Ltd
[1975] QB 361, [1995] 1 All ER 182); Nevill Long & Co (Boards) Ltd v Firmenich & Co (1983) 47 P & CR 59, CA. The continuing
existence of a single tenancy may be a matter of great practical importance where the tenant claims statutory protection, for example under
the Rent Act 1977 or Pt II of the Landlord and Tenant Act 1954.
HR A[2005]
It is provided by statute1 that notwithstanding the severance by conveyance, surrender or otherwise of the reversionary
estate in any land comprised in a lease and notwithstanding the avoidance or cessor in any other manner of the term
granted by a lease as to part only of the land comprised therein, every condition or right of re-entry2 and every other
condition contained in the lease are apportioned and remain annexed to the severed parts of the reversionary estate, or
the term in the part of the land as to which the term has not been surrendered, or has not been avoided or has not
otherwise ceased, in like manner as if the land comprised in each severed part, or the land as to which the term remains
subsisting, as the case may be, had alone originally been comprised in the lease3. These statutory provisions only apply
in the case of a genuine severance and do not apply in the case of a conveyance of part of a reversionary interest to a
nominee as bare trustee4.
HR A[2006]
Page 463
1 Law of Property Act 1925, s 140(1), which applies to leases made before on or after 1 January 1926 and whether the severance of the
revertionary estate or the partial avoidance on cesser of the term was effected before, on or after such date, although where the lease was
made before 1 January 1882, nothing in the section affects the operation of a severance of the reversionary estate or partial avoidance or
cesser of the term which was effected before 1 January 1926 (s 140(3)). See para HR A[2021] for the different statutory provisions relating
to tenancies to which the LT(C)A 1995 applies. As to apportionment of rent, see para HR A[3481].
2 Right of re-entry includes a right to determine the lease by notice to quit or otherwise; but where the notice is served by a person entitled
to a severed part of the reversion so that it extends only to part of the land demised, the lessee may, within one month, determine the lease in
regard to the rest of land by giving to the owner of the reversionary estate therein a counter notice expiring at the same time as the original
notice; Law of Property Act 1925, s 140(2). This statutory provision overrides the decision in Re Bebington's Tenancy, Bebington v Wildman
[1921] 1 Ch 559: see Smith v Kinsey [1936] 3 All ER 73, CA, so that the owner of the severed part of a revision can serve a notice to quit
without the concurrence of the owner of the other part. However, it does not apply to a notice to determine a tenancy under s 25 of the
Landlord and Tenant Act 1925 (see Division B); Dodson Bull Carpet Co Ltd v City of London Corpn [1975] 2 All ER 497, [1975] 1 WLR
781.
3 Previously, under the Grantees of Reversions Act 1540, the lessee's covenants could be severed, but not a condition entered into by the
lessee except where the assignment of the reversion took place by operation of law or where the assignee was the Crown; see eg Dumpor's
Case (1603) 4 Co Rep 119b; Piggott v Middlesex County Court [1909] 1 Ch 134. This anomaly is now rectified by the Law of Property Act
1925, s 140(1).
4 Persey v Bazely (1983) 47 P & CR 37, CA.
HR A[2007]
It is further provided by statute that the benefit of the lessee's covenants and the burden of the lessor's covenants shall
run with the reversion, notwithstanding severance of it1.
HR A[2008]
1 Law of Property Act 1925, ss 141, 142; see paras HR A[1909] and [1949].
Page 464
reversion: tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
8 Severance of the reversion: tenancies to which the Landlord and Tenant (Covenants) Act
1995 applies
HR A[2009]
The relevant provisions of the 1995 Act1 apply only to 'new tenancies' which, generally speaking are tenancies granted
on or after 1 January 19962.
HR A[2010]-HR A[2020]
2 For the full definition of 'new tenancy', see Landlord and Tenant (Covenants) Act 1995, s 1 at para HR A[21033].
HR A[2021]
Where the 1995 Act applies, the benefit and burden of all landlord and tenant covenants of a tenancy1 are annexed and
incident to the whole and every part of the premises demised by the tenancy and of the reversion to them and pass on an
assignment of the whole or any part of the premises or of the reversion to term2. As from the assignment of the
reversion the assignee becomes bound by the landlord covenants of the tenancy except to the extent that: (a)
immediately before the assignment they did not bind the assignor; or (b) they fall to be complied with in relation to any
demised premises not comprised in the assignment3 and also becomes entitled to the benefit of the tenant covenants of
the tenancy except to the extent that they fall to be complied with in relation to any such premises4. However, nothing
in these premises operates in the case of any covenant expressed to be personal to any person5 or to make a covenant
enforceable if it would not otherwise be enforceable by virtue of non-registration under the Land Registration Act 1925
or the Land Charges Act 19726.
HR A[2022]
1 For the meaning of 'landlord covenant' and 'tenant covenant', see Landlord and Tenant (Covenants) Act 1995, s 28.
2 LT(C)A 1995, s 3(1).
3 LT(C)A 1995, s 3(3)(a). For the meaning of the expression 'fall to be complied with in relation to any demised premises comprised in
the assignment', see LT(C)A 1995, s 28(2).
Page 465
4 LT(C)A 1995, s 3(3)(b).
5 LT(C)A 1995, s 3(6)(a).
6 LT(C)A 1995, s 3(6)(b).
HR A[2023]
The statute also provides for the passing of the benefit of a landlord's right of re-entry on assignment of any part of the
reversion1 and for the release of a landlord who assigns part of the reversion from any covenants falling to be complied
with in relation to that part of the premises2. There are also provisions for the apportionment of liability under
covenants binding both assignor and assignee of the reversion3.
HR A[2024]
2 LT(C)A 1995, s 6(3). For landlord's release generally, see para HR A[1985].
3 LT(C)A 1995, s 10, 11.

Page 466
of leases/C Transmission of benefit and burden of covenants on assignment of lease or reversion/9 Mortgage of the
reversion
9 Mortgage of the reversion
HR A[2025]
In the case of 'new tenancies' within the meaning of the Landlord and Tenant (Covenants) Act 19951 there are statutory
provisions whereby any mortgagee in possession of a reversion is entitled to the benefit of any tenant covenant of a
tenancy and is subject to the burden of any landlord covenant of a tenancy2. A mortgagee in possession of the reversion
may also enforce any right of re-entry contained in the tenancy3. However, nothing in these provisions operates to make
a covenant which is expressed (in whatever terms) to be personal to any person enforceable against any other person, or
to make a covenant enforceable against any person if it would not otherwise be enforceable against him by virtue of
non-registration under the Land Registration Act 1925 or the Land Charges Act 19724.
HR A[2026]
1 Landlord and Tenant (Covenants) Act 1995 is printed in full and annotated at paras HR A[21033]ff. 'New tenancies', generally speaking
are tenancies granted on or after 1 January 1996; for the full definition of 'new tenancy', see s 1 of the Act and the annotations at para HR
A[21033].
2 LT(C)A 1995, s 15(1), (2). For the definition of 'tenant covenant', a 'landlord covenant' and 'reversion', see s 28; for the definition of
'mortgage', see s 15(6).
3 LT(C)A 1995, s 15(1).
4 LT(C)A 1995, s 15(5).
HR A[2027]
In the case of tenancies other than 'new tenancies', a mortgage is entitled to the benefit of the lessee's covenants at such
times as he is entitled, subject to the term, to the income of the land leased1. However, there is no equivalent statutory
provision relating to the burden of the lessee's covenant2.
HR A[2028]
1 Law of Property Act 1925, s 141(2). See para HR A[1909].
2 See Law of Property Act 1925, s 142, considered at para HR A[1949].

Page 467
lessee's covenant: tenancies to which the Landlord and Tenant (Covenants) Act 1995 does not apply
10 The burden of the lessee's covenant: tenancies to which the Landlord and Tenant
HR A[2029]
Whether the burden of a covenant by the lessee runs with the land and thus passes to an assignee of the lease depends
partly on the nature and partly on the form of the covenant1. As regards its nature, the covenant:
(a) may concern the land itself or something already in existence on the land, in which case it is said to
concern a thing 'in esse'; or
(b) although directly relating to the land, it may concern something only contemplated to be brought
into existence, in which case it is said to concern a thing 'in futuro'; or
(c) it may not in strictness concern the land at all, in which case it is said to be collateral.
HR A[2030]-HR A[2040]
1 The general rule is that the burden of a covenant does not run with the land at law (Austerberry v Oldham Corpn (1883) 29 Ch D 750,
CA), although it may not run with the land in equity if the covenant is restrictive, pursuant to the rule in Tulk v Moxhay (1848) 2 Ph 774. The
House of Lords has refused to overrule the Austerberry case; see Rhone v Stephens [1994] 2 AC 310, [1994] 2 All ER 65. The general rule
applies to transfers of freehold land, but the relationship of landlord and tenant gives rise to an exception from the rule; see Austerberry v
Oldham Corpn (1883) 29 Ch D 750, CA at 781.
HR A[2041]
Covenants in the first two categories are covenants which 'touch and concern the land' and are capable of running with
the land1. However a covenant which is capable of running with the land will not do so if the parties to the lease
indicate an intention that it shall not so run2.
HR A[2042]
1 Spencer's Case (1583) 5 Co Rep 16a. For a formulation of a 'satisfactory working test' for determining whether a covenant 'touches and
concerns the land' or 'has reference to the subject matter of the lease' (the more modern expression), see the observations of Lord Oliver of
Aylermerton in P & A Swift Investments v Combined English Stores Group plc [1989] AC 632 at 642, [1988] 2 All ER 885 at 891, set out at
para HR A[1921].
2 Re Robert Stephenson & Co Ltd [1915] 1 Ch 802 at 808, per Sargant J.

Page 468
HR A[2043]
As regards the form of the covenant, it may be entered into by the lessee for himself, or for himself and his personal
representatives only, or it may purport expressly to bind his assignees. The following rules, which apply also to
incorporeal hereditaments1, govern these cases:
(a) when the covenant relates to a thing in esse and directly concerns the land, it binds an assignee,
whether named or not2;
(b) a covenant made before 1 January 1926, when it relates to a thing in futuro but directly concerns
the land, binds an assignee if he is named, but not otherwise3; however, a covenant made on or after that
date binds an assignee unless a contrary intention is expressed4;
(c) when the covenant does not touch and concern the land but is merely collateral, it does not bind an
assignee; it is a personal covenant only and cannot be made to run with the land5.
HR A[2044]
1 Hooper v Clark (1867) LR 2 QB 200; see Martyn v Williams (1857) 1 H & N 817.
2 This is the first resolution in Spencer's Case (1583) 5 Co Rep 16a. According to the words of the resolution, the thing must be part and
parcel of the demise, but it is sufficient if it directly concerns the land; see Lyle v Smith [1909] 2 IR 58.
3 Second resolution in Spencer's Case (1583) 5 Co Rep 16a. It is not necessary that the assignee is mentioned by name; a general
reference to 'assignees' is sufficient. For this rule to apply the covenant, while relating to a thing in futuro, must directly touch or concern the
thing demised: Spencer's Case (1583) 5 Co Rep 16a; Congleton Corpn v Pattison (1808) 10 East 130 at 135; Doughty v Bowman (1848) 11
QB 444 at 454; Thomas v Hayward (1869) LR 4 Exch 311. The distinction between covenants relating to a thing in esse and a thing in
futuro, although well established, rests on no intelligible basis and was questioned in Minshull v Oakes (1858) 2 H & N 793.
5 Second resolution in Spencer's Case (1583) Co Rep 16a; Lord Uxbridge v Staveland (1747) 1 Ves Sen 56; Thomas v Hayward (1869)
LR 4 Exch 311.
HR A[2045]
Examples of covenants directly concerning the land within the first rule are as follows: covenants to pay rent1; to render
services in the nature of rent2; to repair or to leave in repair buildings already built3; to repair and renew fixtures
already affixed to the premises4; to expend a stated sum annually on repairs or pay to the lessor the difference between
the stated amount and the sum actually expended5; to pay a fixed sum 'towards redecoration' in lieu of damages for fair
wear and tear6; to insure against fire7; to use the premises as a private dwelling house only8, to reside upon the
premises during the demise9; to pay a sum as liquidated damages for breach of a covenant which ran with the land10;
not to assign without the consent of the landlord11; that a named person should not be concerned in the business carried
on at the demised premises12; in a mining lease, to pay compensation for damage due to the surface13; in a sporting
lease, to leave the land well stocked with game14 and in a lease of land near the sea, to maintain a sea wall, even though
not part of the demised premises15.
Page 469
HR A[2046]
1 Parker v Webb (1693) 3 Salk 5: Stevenson v Lambard (1802) 2 East 575 at 580; Williams v Bosanquet (1819) 1 Brod & Bing 238.
2 Vyvyan v Arthur (1823) 1 B & C 410; and see Keppell v Bailey (1834) 2 My & K 517 at 541.
3 Matures v Westwoof (1598) Cro Eliz 599, Dean and Chapter of Windsor v Hyde (1601) 5 Co Rep 24a, Wakefield v Brown (1846) 9 QB
209 at 223, Martyn v Clue (1852) 18 Q 661.
4 Willians v Earle (1868) LR 3 QB 739.
5 Moss' Empires Ltd v Olympia (Liverpool) Ltd [1939] AC 544, [1939] 3 All ER 460, HL.
6 Boyer v Warbey [1953] 1 QB 234, [1953] 1 All ER 269, CA.
7 Vernon v Smith (1821) 5 B & Ald 1.
8 Wilkinson v Rogers (1864) 2 De GJ & Sm 62.
9 Tatern v Chaplin (1793) 2 Hy Bl 133.
10 Lord Howard de Walden v Barber (1903) 19 TLR 183.
11 Goldstein v Sanders [1915] 1 Ch 549; Re Robert Stephenson & Co Ltd [1915] 1 Ch 802.
12 Lewin v American and Colonial Distributors Ltd [1943] Ch 225, [1945] 1 All ER 592.
13 Norval v Pascoe (1864) 34 LJ Ch 82; Dyson v Forster [1909] AC 98, HL.
15 Lyle v Smith [1909] 2 IR 58.
HR A[2047]
Examples of covenants directly concerning the land but 'in futuro' within the second rule are as follows: a covenant to
erect new buildings1; to deliver up fruit then growing at the end of the term2; in a colliery lease to convey all coal got
from a certain colliery upon a railway to be made on the demised land3. Even if the thing 'in futuro' is to be done off the
land, the covenant is treated as directly concerning the land if the thing to be done tends to the maintenance of the
demised premises, such as a covenant in a mining lease to build a smelting mill on adjacent waste land not included in
the demise4.
HR A[2048]
Page 470
1 Spencer's Case (1583) 5 Co Rep 16a; Doughty v Bowman (1848) 11 QB 444.
2 Grey v Cuthbertson (1785) 2 Chit 482.
3 Hemingway v Fernandes (1842) 13 Sim 228.
4 Sampson v Easterby (1829) 9 B & C 505 at 516, affd sub nom Easterby v Sampson (1830) 6 Bing 664 Ex Ch; see also Bally v Wells
(1769) 3 Wils 25; Lyle v Smith [1909] 2 IR 58; cf Dewar v Goodman [1909] AC 72 at 77, HL (covenant relating to premises not demised
held to be collateral).
HR A[2049]
Examples of covenants which are merely collateral within the third rule are as follows: a covenant to pay the lessor or a
third party a collateral sum, not reserved as rent1, to pay taxes on premises not included in the demise2, to build a home
upon other land of the lessor, if it is not immediately required for the purposes of the demised premises3, to repair and
renew chattels4, not to employ a certain class of person on the premises5, in a public house lease, not to keep a public
house within half a mile of the demised premises6.
HR A[2050]-HR A[2060]
1 Mayho v Buckhurst (1617) Cro Jac 438; Earl Inchiquin v Burnell (1793) 3 Ridg Parl Rep 376; Lambert v Norris (1837) 2 M & W 333;
see also Flight v Glossopp (1835) 2 Bing NC 125; Re Hunter's Lease [1942] Ch 124, [1942] 1 All ER 27.
2 Gower v Postmaster General (1887) 57 LT 527.
3 Spencer's Case (1853) 5 Co Rep 16a; Sampson v Easterby (1829) 9 B & C 505 at 516.
4 Williams v Earle (1868) LR 3 QB 739; see also Gorton v Gregory (1862) 3 B & S 90.
5 Congleton Corpn v Pattison (1808) 10 East 130; Walsh v Fussell (1829) 6 Bing 163.
6 Thomas v Hayward (1869) 38 LJ Ex 175 at 176.
HR A[2061]
Even though the burden of a covenant may not have passed to the assignee of the lessor by virtue of the third rule, so
that the lessor cannot enforce the covenant by proceedings for an injunction or damages, it is possible that the lessor
may still be able to forfeit the lease by virtue of a breach of the covenant1.
HR A[2062]
1 See Shiloh Spinners Ltd v Harding [1973] AC 691, [1973] 1 All ER 90, HL; but cf Stevens v Copp (1868) LR 4 Exch 20 and Horsley
Estate Ltd v Steiger [1899] 2 QB 79, CA.
Page 471
HR A[2063]
The above rules relating to the transfer of the burden of a covenant by a lessee apply both to leases made by deed and
leases made in writing but not by deed1 and there appears to be no reason in principle why they should not apply to a
lease made orally2. However, it has been held that the assignment of a specifically enforceable agreement for a lease
does not transfer the burden of the tenants covenants to the assignee3, but if in such a case the assignee goes into
possession and rent is paid and accepted a new agreement or new lease on the terms of the previous agreement may
arise by implication and the covenants may be enforced against the assignee by virtue of privy of contract4.
HR A[2064]
1 Boyer v Warbey [1953] 1 QB 234, [1953] 1 All ER 269, CA, overruling Elliot v Johnson (1866) LR 2 QB 120.
2 The reasoning in Boyer v Warbey [1953] 1 QB 234, [1953] 1 All ER 269, CA (concerning a written lease) is apparently applicable,
although the practical difficulty is to see how assignees are to know the exact oral terms.
3 Marquis of Camden v Batterbury (1860) 7 CBNS 864, ExCh; Purchase v Lichfield Brewery Co [1915] 1 KB 184. In the latter case the
reason given was that there was neither privy of contract nor privy of estate between the lessor and the assignee, but the dicta of Denning LJ
in Boyer v Warbey [1953] 1 QB 234 at 246, [1953] 1 All ER 269 at 274, CA suggest that since the fusion of law and equity the burden of a
covenant might pass to an assignee of an agreement for a lease.
4 Buckworth v Simpson (1835) 1 Cr M & R 834; Elliot v Johnson (1866) LR 2 QB 120; Cornish v Stubbs (1870) LR 5 CP 334.
Page 472
lessee's covenants: tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
11 The burden of the lessee's covenants: tenancies to which the Landlord and Tenant
HR A[2065]
The relevant provisions of the 1995 Act1 apply only to 'new tenancies' which, generally speaking, are tenancies granted
on or after 1 January 19962. The Act applies to a tenant covenant of a tenancy whether or not the covenant has reference
to the subject matter of the tenancy and whether the covenant is express, implied or imposed by law3.
HR A[2066]
3 LT(C)A 1995, s 2(1); the Act, however, does not apply to any covenants of the sort set out in s 2(2). As a consequence of s 2(1), the case
law considered at para HR A[2045] relating to what covenants touch and concern the land or irrelevant in the case of a new tenancy.
HR A[2067]
By virtue of the Act1, the burden of all tenant covenants2 shall be annexed and incident to the whole and each and every
part of the premises demised by the tenancy3. On an assignment by the tenant under the tenancy, then as from the
assignment the assignee becomes bound by the tenant covenant of the tenancy except to the extent that: (a) immediately
before the assignment they did not bind the assignor; or (b) they fall to be complied with in relation to any demised
premises not comprised in the assignment4. However, in the case of a covenant which (in whatever terms) is expressed
to be personal to any person, the statute does not operate to make it enforceable against any other person5; further, the
statute does not operate to make a covenant enforceable against any person if it would not otherwise be enforceable
against him by reason of its not having been registered under the Land Registration Act 1925 and the Land Charges Act
19726.
HR A[2068]
2 For the definition 'tenant covenants', see LT(C)A 1995, s 28.

Page 473
3 LT(C)A 1995, s 3(2). For the definition of 'assignment', see s 28.
4 LT(C)A 1995, s 3(2).
5 LT(C)A 1995, s 3(6)(a).
6 LT(C)A 1995, s 3(6)(b).
HR A[2069]
Any rule of law by virtue of which the burden of a covenant whose subject matter is not in existence at the time when it
was made does not run with the land unless the covenantor covenants on behalf of himself and his assignees1 is
abolished in relation to tenancies to which the Act applies2. It is also provided that any tenant covenant which is
restrictive of the user of land shall, as well as being capable of enforcement against an assignee be capable of being
enforced against any other person who is the owner or occupier of any demised premises to which the covenant relates,
even though there is no express provision in the tenancy to that effect3. An assignee who becomes bound by a covenant
by virtue of these statutory provisions does not have any liability under the covenant in relation to any time falling
before the assignment4.
HR A[2070]-HR A[2080]
3 LT(C)A 1995, s 3(5). It has been held that this provision should be construed restrictively: see Oceanic Villlage Ltd v United Attractions
Ltd [2000] Ch 234, [2000] 1 All ER 975, considered at HR A[21053].
4 LT(C)A 1995, s 23(1).

Page 474
of leases/C Transmission of benefit and burden of covenants on assignment of lease or reversion/12 Release of lessee
from the burden of covenants following assignment of the term: tenancies to which the Landlord and Tenant
12 Release of lessee from the burden of covenants following assignment of the term: tenancies
to which the Landlord and Tenant (Covenants) Act 1995 applies
HR A[2081]
If a tenant assigns the whole of the premises demised to him, he is released from the tenant covenants of the tenancy
(and ceases to be entitled to the benefit of the landlord's covenants) as from the assignment1. If he assigns part only of
the premises demised to him then, as from the assignment, he is released from the tenant covenants of the tenancy to the
extent that these covenants fall to be complied with in relation to that part of the demised premises2. However, any
release from the covenants does not affect any liability arising from a breach of covenant occurring before the release3.
HR A[2082]
1 For the meaning of 'assignment', see Landlord and Tenant (Covenants) Act 1995, s 28.
2 LT(C)A 1995, s 5(2).
3 LT(C)A 1995, s 5(2).
4 LT(C)A 1995, s 24(1). Similarly, where the tenant ceases to be entitled to the benefit of the landlord covenants by virtue of the release,
this does not affect any right of his arising from a breach of covenant occurring before he ceases to be so entitled: s 24(4).
HR A[2083]
Where, by virtue of these statutory provisions, a tenant is released from a tenant covenant of a tenancy and immediately
before the release another person is bound by a covenant imposing any liability or penalty in the event of a failure to
comply with that tenant covenant then, as from the release, that other person is released from that covenant to the same
extent as the tenant is released1. In this way, where a tenant is released so also is any guarantor of his obligations under
the tenant covenants.
HR A[2084]
HR A[2085]
Page 475
However, no release occurs in the event of 'excluded assignments' which are assignments in breach of a covenant or
assignments by operation of law1. In such a case, the release occurs on the next assignment (if any) which is not an
excluded assignment2. Where a person assigns the whole or part of his interest demised by the tenancy but is not
released from the covenant, the assignment does not affect any liability of his arising from a breach of covenant
occurring before the assignment3.
HR A[2086]
1 Landlord and Tenant (Covenants) Act 1995, s 11(1), (2).
2 LT(C)A 1995, s 11(2).
3 LT(C)A 1995, s 24(3).
HR A[2087]
The Act contains anti-avoidance provisions which are of considerable practical importance1, intended to ensure that a
tenant will not be prevented from obtaining a release from his covenants on assignment. However, these provisions do
not prevent the landlord imposing an absolute covenant against assignment and thus ensuring that the tenant is not
released from his covenants throughout the term2, nor do they prevent the landlord requiring the tenant to enter into an
'authorised guarantee agreement' upon an assignment3.
HR A[2088]
1 Landlord and Tenant (Covenants) Act 1995, s 25 at para HR A[21252].
2 LT(C)A 1995, s 25(2).
3 LT(C)A 1995, s 25(3). For 'authorised guarantee agreements', see s 16 at para HR A[21135].
Page 476
lessor's covenants: tenancies to which the Landlord and Tenant (Covenants) Act 1995 does not apply
13 The benefit of the lessor's covenants: tenancies to which the Landlord and Tenant
HR A[2089]
The benefit of a covenant by the lessor runs with the land in favour of the assignees of the lessee providing that the
covenant is one which touches and concerns the land1, whether the lease is made by deed or in writing or, perhaps,
orally2. Where a lessor has been in breach of covenant, an assignee of the lessee may obtain damages for a breach of
covenant occurring while the lease was vested in him, even though he has subsequently assigned the lease3. Even if the
benefit of a covenant does not pass by virtue of the doctrine of privity of estate4, it may be transferred to an assignee by
express assignment and thus the benefit of an agreement for a lease may be assigned and the benefit of covenants in a
lease may be assigned by an equitable assignment of the lease. In such cases the benefit is passed in accordance with the
normal contractual principle that the benefit of a covenant may be assigned5.
HR A[2090]-HR A[2100]
1 See Spencer's Case (1583) 55 Co Rep 16a, resolution (covenant to repair houses during the term). For consideration of what covenants
touch and concern land (or 'have reference to the subject matter of the lease'), see paras HR A[1921] and [2045]. See also Law of Property
Act 1925, s 78.
2 It appears that the reasoning in Boyer v Warbey [1953] 1 QB 234, [1953] 1 All ER 269, CA is applicable; see para HR A[2063], n 2.
3 City and Metropolitan Properties Ltd v Greycroft Ltd [1987] 3 All ER 839 [1987] 1 WLR 1085.
4 The rules in Spencer's Case (1583) 5 Co Rep 16a depend upon privity of estate and they apply only where the legal estate in the lease
vested in the assignee.
5 Whereas, as a matter of the ordinary law of contract the burden of a contracts cannot be assigned. For the passing of the burden of the
lessor's covenants, see para HR A[1949].
Page 477
lessor's covenants: tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
14 The benefit of the lessor's covenants: tenancies to which the Landlord and Tenant
HR A[2101]
The relevant provisions of the 1995 Act1 apply only to 'new tenancies' which, generally speaking, are tenancies granted
on or after 1 January 19962. The Act applies to a landlord covenant of a tenancy whether or not the covenant has
reference to the subject matter of the tenancy and whether the covenant is express, implied or imposed by law3.
HR A[2102]
3 LT(C)A 1995, s 2(1). The Act, however, does not apply to any covenants of the sort set out in s 2(2). As a consequence of s 2(1), the
case law referred to at para HR A[2089] and considered at paras HR A[1921] and [2045], relating to what covenants touch and concern the
land is irrelevant in the case of a new tenancy.
HR A[2103]
By virtue of the Act1 the benefit of all landlord covenants2 shall be annexed and incident to the whole and each and
every part of the premises demised by the tenancy. On assignment by the tenant under the tenancy, then as from the
assignment the assignee becomes entitled to the benefit of the landlord covenants of the tenancy except to the extent
that they fall to be complied with in relation to any of the demised premises not comprised in the assignment3.
HR A[2104]
2 For the definition of 'landlord covenants', see LT(C)A 1995, s 28.
3 LT(C)A 1995, s 3(2). For the definition of 'assignment; see LT(C)A 1995, s 28.
HR A[2105]
Page 478
Nothing in these statutory provisions operates: (a) in the case of a covenant which (in whatever terms) is expressed to
be personal to any person to make the covenant enforceable by or against any other person1; or (b) to make a covenant
enforceable against any person if it would otherwise not be enforceable against him by reason of its not being registered
under the Land Registration Act 1925 or the Land Charges Act 19722.
HR A[2106]
1 Landlord and Tenant (Covenants) Act 1995, s 3(6)(a).
2 LT(C)A 1995, s 3(6)(b).

Page 479
term: tenancies of which the Landlord and Tenant (Covenants) Act 1995 does not apply
15 Severance of the term: tenancies of which the Landlord and Tenant (Covenants) Act 1995
does not apply
HR A[2107]
Severance of the term occurs when the lessee assigns part of the premises demised by the lease1. Such severance does
not of itself create two separate tenancies2. On severance, the assignor and the assignee may apportion the rent payable
as between themselves3, but such apportionment will generally not bind the landlord4. However, the assignee cannot be
sued for the whole rent, but only for a proportionate part of it which the court considers to be fairly attributable to the
part of the premises in question5. Although the assignee of part is liable, like any other occupier, to distress for the rent
of the whole premises, he will be entitled to reimbursement of the apportioned part of the rent if he pays the whole rent
in order to avoid distress6. The assignee of part is also liable on every covenant running with the land and affecting the
part of the premises assigned to him7.
HR A[2108]
1 Such assignments are often prohibited by the lessee's covenant relating to alientation.
2 Lester v Ridd [1990] 2 QB 430, [1989] 1 All ER 1111, CA.
3 By virtue of the Law of Property Act 1925, s 190.
4 A binding order for apportionment may be made by the Secretary of State under the Landlord and Tenant Act 1927, s 20(1), at para HR
A[20148] and it is of course possible for the lessor to enter into the agreement relating to apportionment.
5 See the observations of Dillon LJ in Lester v Ridd [1990] 2 QB 430 at p 438, [1989] 1 All ER 1111 at 1115, CA and the cases there
cited.
6 See Whithan v Bullock [1939] 2 KB 81, [1939] 2 All ER 310, CA.
7 Congham v King (1631) Cro Car 221; Stevenson v Lambard (1802) 2 East 575; Wollaston v Hakewell (1841) 3 Man & G 297.
Page 480
term: tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
16 Severance of the term: tenancies to which the Landlord and Tenant (Covenants) Act 1995
applies
HR A[2109]
The relevant provisions of the 1995 Act relating to the termination of the burden of the lessee's covenants and release on
assignment have been described above. There are also provisions in the 1995 Act, applying only to 'new tenancies'1,
which enable the assignor and assignee of part of the demised premises to agree between themselves an apportionment
of liability under the covenants of the lease2 and to make that apportionment biding upon the landlord3. The right to
apply for an agreed apportionment to become binding upon the landlord does not arise in the case of an 'excluded
assignment'4, but arises on the next assignment which is not an 'excluded assignment'5. In the event of an assignment of
part of the premises demised by a 'new tenancy'1, the landlord's right to forfeiture are limited in the event of a breach of
covenant by the assignee to forfeiture in relation to that part only6.
HR A[2110]-HR A[2120]
1 For the definition of 'new tenancy', see Landlord and Tenant (Covenants) Act 1995, s 1.
2 LT(C)A 1995, s 9 at para HR A[21095].
3 LT(C)A 1995, s 10 at para HR A[21097].
4 LT(C)A 1995, s 11(5)(a). For the definition of 'excluded assignment', see s 11(1).
5 LT(C)A 1995, s 11(5)(b), which must be read with s 11(7).
6 LT(C)A 1995, s 21 at para HR A[21227].

Page 481
of leases/C Transmission of benefit and burden of covenants on assignment of lease or reversion/17 Mortgage of the
term
17 Mortgage of the term
HR A[2121]
In the case of 'new tenancies' within the meaning of the Landlord and Tenant (Covenants) Act 19951 there are statutory
provisions whereby any mortgagee in possession under a mortgage granted by the tenant may enforce any landlord
covenant of the tenancy which is enforceable by the tenant in respect of any premises demised by the tenancy2.
Similarly, where a tenant covenant of a tenancy or any right of re-entry contained in a tenancy is enforceable against the
tenant in respect of any premises demised by the tenancy, it is also enforceable against such a mortgagee3. However,
nothing in these provisions operates to make a covenant which is expressed (in whatever term) to be personal to any
person enforceable against any other person if it would not otherwise be enforceable against him by virtue of
non-registration under the Land Registration Act 1925 or the Land Charges Act 19724.
HR A[2122]
1 Landlord and Tenant (Covenants) Act 1995 is printed in full and annotated at paras HR A[21033]ff. 'New tenancies', generally
speaking, are tenancies granted on or after 1 January 1996; for the full definition of 'new tenancy', see s 1 of the Act.
2 LT(C)A 1995, s 15(3), For the definition of 'landlord covenant', see s 28; for the definition of 'mortgage', see s 15(6).
3 LT(C)A 1995, s 15(4). For the definition of 'tenant covenant', see s 28.
4 LT(C)A 1995, s 15(5).
HR A[2123]
Otherwise, a mortgagee is not liable to pay the rent to the landlord or to perform the tenant's covenants in the lease
because there is no privity of contract or estate between the mortgagee and the landlord1. However, in the event of
non-payment of rent on breach of contract, the landlord may exercise whatever right of re-entry is available to him and
thus forfeit the mortgagee's security2.
HR A[2124]
1 See Bonner v Tottenham and Edmonton Permanent Investment Building Society [1899] 1 QB 161, CA.
2 For the right of a mortgage to seek relief from forfeiture, see para HR A[9285].
Page 482
of leases/D Liability of original lessee to lessor following assignment of lease
D
Page 483
of leases/D Liability of original lessee to lessor following assignment of lease/1 Introduction
1 Introduction
HR A[2125]
As a matter of general principle, the original lessee remains liable to the lessor on the covenants in the lease
notwithstanding an assignment of the lease, by reason of privity of contract. Similarly, an assignee who has covenanted
directly with the lessor to observe the covenants in the lease will remain liable on those covenants, notwithstanding
another assignment by him. However, this principle is not generally applicable to 'new tenancies' within the meaning of
the Landlord and Tenant (Covenants) Act 19951. The 1995 Act also imposes restrictions in all cases upon the liability
of the lessor to recover 'fixed charges' from the original lessee or any 'former tenant' who has assigned his lease2.
HR A[2126]
1 Landlord and Tenant (Covenants) Act 1995, s 5 at para HR A[21072]. 'New tenancies' granted on or after 1 January 1996; for the full
definition of 'new tenancy', see s 1 of the Act.
2 LT(C)A 1995, s 17.

Page 484
of leases/D Liability of original lessee to lessor following assignment of lease/2 Original lessee's liability: privity of
contract
2 Original lessee's liability: privity of contract
HR A[2127]
Subject to the provisions of the Landlord and Tenant (Covenants) Act 1995 considered below, the assignment of the
lease does not prejudice the personal contract between the lessee and the lessor and accordingly the lessee remains
liable on the covenant for payment of rent and the other covenants given by him and contained in the lease, unless the
lease otherwise provides1. The lessor may therefore have remedies based on the covenants of the lease both against the
original lessee, by virtue of privity of covenant and against the person in whom the lease is vested by virtue of privity of
estate2. It is entirely for the lessor to choose whether to sue one or the other or both3, although he cannot recover money
due twice over4.
HR A[2128]
1 See Barnard v Godscall (1612) Cro Jac 309; Thursby v Plant (1669) 1 Saund 230; Auriot v Mills (1790) 4 Term Rep 94; Staines v
Morris (1812) 1 Ves & B 8; Orgist v Kernshead (1812) 4 Taunt 642; Baynton v Morgan (1888) 22 QBD 74; Selous Street Properties Ltd v
Oronel Fabrics Ltd [1984] 1 EGLR 50, 270 Estates Gazette 643; Allied London Investments Ltd v Hambro Life Assurance Ltd [1985] 1
EGLR 45, CA; GUS Property Management Ltd v Texas Homecare Ltd [1993] 2 EGLR 63, [1993] 27 EG 130.
2 For the passing of the burden of the lessee's covenants on assignment of the lease, see para HR A[2029].
3 There is no rule of equity requiring the lessor to pursue his other remedies before proceeding against the original lessee: Norwich Union
Life Insurance Society v Low Profile Fashions Ltd [1992] 1 EGLR 86, CA.
4 See Brett v Cumberland (1618) Cro Jac 521; House Property and Investment Co Ltd v Bernardont [1948] 1 KB 314 at 318, where
Singleton J said that the lessor 'can have only one satisfaction'.
HR A[2129]
Following an assignment, the original lessee may defend an action based on his covenants on the grounds that he has
performed the covenants or that his assignee has performed the covenants or that some event has occurred, such as a
surrender of the lease, which has put a complete end to any liability under the covenants1. He may also have a defence
if the lessor has released the assignee from a liability by means of accord and satisfaction, at least in a case where the
lessor does not expressly reserve his rights against the original lessee2.
HR A[2130]-HR A[2140]
1 See Allied London Investments Ltd v Hambro Life Assurance Ltd (1983) 269 Estates Gazette 41 at 46, per Walton J.
Page 485
2 Deanplan Ltd v Mahmoud [1993] Ch 151, [1992] 3 All ER 945; cf Sun Life Assurance Society plc v Tantofex (Engineers) Ltd [1999]
EGCS 50 (no accord and satisfaction, so that the original tenant was not released by the release of an assignee).
HR A[2141]
As a consequence of the original lessee's liability by virtue of privity of contract, he remains liable to pay the rent
throughout the lease even though he has assigned the lease and the liquidator or trustee in bankruptcy of the assignee
has disclaimed the lease1. He is also liable to pay any increased rent determined on a rent review in the lease, even
though the rent review is conducted by his assignee2 and may be liable to pay interest on unpaid rent from the date of
failure by the assignee to pay the rent3.
HR A[2142]
1 Warnford Investments Ltd v Duckworth [1979] Ch 127, [1978] 2 All ER 517.
2 Centrovincial Estates plc v Bulk Storage Ltd (1983) 46 P & CR 393; Selous Street Properties Ltd v Oronel Fabrics Ltd [1984] 1 EGLR
50, 270 Estates Gazette 643; GUS Property Management Ltd v Texas Homecare Ltd [1993] 2 EGLR 63. All these cases were considered and
explained in Friends, Provident Life Office v British Railways Board [1996] 1 All ER 336, CA.
3 Allied London Investments Ltd v Hambro Life Assurance Ltd [1985] 1 EGLR 45, CA.
HR A[2143]
Where the original lessee is granted an option to extend the term of his lease, he may be liable on the covenants of the
lease during the period of extension, even though the option is exercised by his assignee1; however, if the exercise of an
option is found in the circumstances of the case to involve the creation of a new lease, as opposed to the retrospective
enlargement of an existing lease, there will be no privity of contract between the lessor and the original lessee under the
lease containing the option, if that lease has been assigned before the exercise of the option2.
HR A[2144]
1 Baker v Merckel [1960] 1 QB 657, [1960] 1 All ER 688, CA.
2 See Re Savile Settled Estates [1931] 2 Ch 210.
HR A[2145]
Similarly, the question whether an original lessee remains liable for breaches of covenant committed by an assignee
during a statutory continuation of the lease (for example, by virtue of the provisions of Pt II of the Landlord and Tenant
Act 1954) is a question of the construction of the provisions of the lease. In most cases, the covenant of the original
lessee will extend only to the duration of the term originally granted and thus will not endure throughout a person of
statutory continuation; however, the covenant may be drafted so that it expressly includes a period of statutory
Page 486
continuation1.
HR A[2146]
1 City of London Corpn v Fell [1994] 1 AC 458, [1993] 4 All ER 968, HL.
HR A[2147]
As the liability of the original lessee derives from his covenants in the original lease and not from the existence of a
leasehold estate, he is not bound by any agreement made by an assignee with the lessor which was not contemplated by
the covenants in the original lease1. The making of a voluntary arrangement under Pt I of the Insolvency Act 1986 may
provide the original lessee with a defence to claims by the lessor relating to the debts of the assignee2 but such an
arrangement will ordinarily be construed as reserving all rights of creditors against other parties3.
HR A[2148]
1 Friends' Provident Life Office v British Railways Board [1996] 1 All ER 336, CA. In that case Beldam LJ said that the earlier decisions
in Centrovincial Estates plc v Bulk Storage Ltd (1983) 46 P & CR 393, Selous Street Properties Ltd v Oronel Fabrics Ltd [1984] 1 EGLR
50, 270 Estates Gazette 643 and GUS Property Management Ltd v Texas Homecare Ltd [1993] 2 EGLR 63 might all have been reached on
the ground that the original lessee's covenant contained a provision in each case to pay not only the original, but also a reviewed rent, but
could not be justified on the ground that the estate as altered by the assignee binds the original lessee, as suggested by Harman J in
Centrovincial Estates plc v Bulk Storage Ltd (1983) 46 P & CR 393. See also Beegas Nominees Ltd v BHP Petroleum Ltd [1998] 31 EG 96
(obligation of original lessee to pay rent as reviewed in accordance with the provisions of the original lease, but not in accordance with the
provisions as varied by his successor); Landlord and Tenant (Covenants) Act 1995, s 18 at para HR A[21160].
2 Burford Midland Properties Ltd v Marley Extrusions Ltd [1995] 2 EGLR 15.
3 March Estates plc v Gunmark Ltd [1996] 2 EGLR 38. See also RA Securities Ltd v Mercantile Credit Co Ltd [1995] 2 All ER 581;
Mytre Investments Ltd v Reynolds [1995] 3 All ER 588; Johnson v Davies [1997] 19 EG 157.
HR A[2149]
A guarantor of the liability of the original lessee also remains liable to the lessor throughout the term of the lease1, but
his liability will also generally extend only to the duration of the term originally granted, unless it is expressly provided
that it will extend during a period of statutory continuation2. Forfeiture of the lease does not of itself discharge a
guarantor from liability3, but a variation of the terms of the lease, imposing an additional burden on the lessee and
therefore on the guarantor, will release the guarantor4. The limitation period under the Limitation Act 1980 in respect of
a claim against a guarantor of a lessee's obligation to pay rent, when both the lease and the guarantee are under seal; vs
six years5. The release by the lessor of the liability of a guarantor for the assignee does not release the original lessee
from his liability; this is because the original lessor has a primary liability to the lessor and is not to be regarded as a
co-guarantor of the primary liability of the assignee6.
HR A[2150]-HR A[2160]
Page 487
1 Selous Street Properties Ltd v Oronel Fabrics Ltd [1984] 1 EGLR 50, 270 Estates Gazette 643.
2 Junction Estates Ltd v Cope (1974) 27 P & CR 482; A Plesser & Co Ltd v Davies [1983] 2 EGLR 70, 267 Estates Gazette 1039.
3 Apus Properties Ltd v Douglas Farrow & Co Ltd [1989] 2 EGLR 265.
4 See Howard de Walden Estates Ltd v Pasta Place Ltd [1995] 1 EGLR 79; West Horndon Industrial Park Ltd v Phoenix Timber Group
plc [1995] 1 EGLR 77; cf Metropolitan Properties Co (Regis) Ltd v Bartholomew [1995] 1 EGLR 65.
5 Romain v Scuba TV Ltd [1996] 1 EGLR 103, CA. It was held that this was the relevant limitation period under s 19 of the 1980 Act,
rather than 12 years pursuant to s 8 of the 1980 Act.
6 Allied London Investments Ltd v Hambro Life Assurance Ltd [1984] 1 EGLR 16, 269 Estates Gazette 41.
Page 488
of leases/D Liability of original lessee to lessor following assignment of lease/3 Restrictions on liability: imposed
generally by the Landlord and Tenant (Covenants) Act 1995
3 Restrictions on liability: imposed generally by the Landlord and Tenant (Covenants) Act
1995
HR A[2161]
The Landlord and Tenant (Covenants) Act 19951 contains provisions applicable to all tenancies whenever granted2 (not
only an original lease) imposing restrictions upon the ability of the lessor to recover 'fixed charges' due from a 'former
tenant' following an assignment of his interest. The expression 'fixed charge' means: (a) rent; (b) any service charge as
defined by s 18 of the Landlord and Tenant Act 19853; (c) any amount payable under a tenant covenant of the tenancy
providing for the payments of a liquidated sum in the event of a failure to comply with any such covenant4. The
restrictions imposed apply where a person (described as 'the former tenant') is as a result of an assignment no longer a
tenant under a tenancy but (a) (in the case of a tenancy which is a new tenancy5) he has under an 'authorised guarantee
agreement'6 guaranteed the performance by his assignee of a tenant covenant of the tenancy under which any fixed
charge is payable or (b) (in the case of any tenancy) he remains bound by such a covenant7.
HR A[2162]
1 Landlord and Tenant (Covenants) Act 1995, s 17 at para HR A[21153].
2 The provisions considered here apply both to 'new tenancies' as defined in s 1 of the LT(C)A 1995 and to all other tenancies. They do
not apply to covenants of the sort described in s 2(2) of the Act.
4 LT(C)A 1995, s 17(6).
5 For the definition of 'new tenancy' see LT(C)A 1995, s 1. Generally speaking, a new tenancy is a tenancy granted on or after 1 January
1996.
6 For the meaning of 'authorised guarantee agreement', see LT(C)A 1995, s 16.
7 LT(C)A 1995, s 17(1).
HR A[2163]
The restrictions imposed are of a procedural nature. It is provided1 that the former tenant shall not be liable to pay any
amount in respect of any fixed charge unless within the period of six months beginning with the date on which the
charge becomes due, the landlord serves on the former tenant a notice informing him (a) that the charge is now due and
(b) that in respect of the charge the landlord intends to recover from the former tenant such amount as is specified in the
Page 489
notice and (where payable) interest calculated on such basis as is so specified. The notice must be in a prescribed form.
There are transitional provisions to deal with claims for fixed charges falling due before the date when the Act came
into force2. The provisions of section 23 of the Landlord and Tenant Act 1927 apply in relation to the service of these
notices3; therefore a notice is validly served if sent by recorded delivery to its recipient at his last known place of abode,
whether it is received by that recipient or not4.
HR A[2164]
1 Landlord and Tenant (Covenants) Act 1995, s 17(2) at para HR A[21153].
2 See LT(C)A 1995, s 19(1). The Act came into force on 1 January 1996.
3 LT(C)A 1995, s 27(3), printed at HR A[21259]; Landlord and Tenant Act 1927, s 23 is printed at HR B[395].
4 Commercial Union Life Assurance Co Ltd v Moustafa [1999] 24 EG 155.
HR A[2165]
The same restrictions apply to any claim for a fixed charge made against a guarantor of performance of a covenant by a
former tenant1 Where the landlord has duly served a notice under these statutory provisions on either a former tenant or
a guarantor, the amount (exclusive of interest) which the former tenant or the guarantor is liable to pay in respect of the
fixed charge in question shall not exceed the amount specified in the notice unless: (a) his liability in respect of the
charge is subsequently determined to be for a greater amount; (b) the notice informed him of the possibility that the
liability would be so determined; and (c) within the period of three months beginning with the date of the determination,
the landlord serves on him a further notice informing him that the landlord intends to recover that greater amount from
him (plus interest, where payable)2.
HR A[2166]
1 Landlord and Tenant (Covenants) Act 1995, s 17(3). See Cheverell Estates Ltd v Harris [1998] 1 EGLR 27, considered in the
annotations to s 17 at para HR A[21153].
2 LT(C)A 1995, s 17(4).
HR A[2167]
Payment of a sum claimed under the above provisions carries with it a new statutory right. Where a former tenant or
guarantor has made full payment of an amount which he has been duly required to pay in accordance with the statutory
provisions described above, he is entitled to have the landlord under the relevant tenancy (that is, the tenancy in respect
of which the payment has been made) grant him an overriding lease of the premises demised by the tenancy1, so that he
may exercise all the remedies available to a landlord against the tenant who has failed to make payments.
Page 490
HR A[2168]
HR A[2169]
An overriding lease is defined1 as a tenancy of the reversion expectant on the relevant tenancy which (a) is granted for a
term equal to the remainder of the term of the relevant tenancy plus three days, or the longest period (less than three
days) that will not wholly displace the landlord's reversionary interest expectant on the relevant tenancy, as the case
may require; and (b) (subject to sub-ss (3) and (4) and to any modifications agreed to by the claimant and the landlord)
otherwise contains the same covenants as the relevant tenancy, as they have effect immediately before the grant of the
lease.
HR A[2170]-HR A[2180]
HR A[2181]
A claim to exercise the right to an overriding lease is made by the claimant making a request for such a lease to the
landlord. Any such request: (a) must be made to the landlord in writing and specify the payment by virtue of which the
claimant claims to be entitled to the lease ('the qualifying payment'); and (b) must be so made at the time of making the
qualifying payment or within the period of 12 months beginning with the date of that payment1. Where the claimant
duly makes such a request the landlord shall (subject to sub-s (7)) grant and deliver to the claimant an overriding lease
of the demised premises within a reasonable time of the request being received by the landlord2.
HR A[2182]
2 LT(C)A 1995, s 19(6). For further detailed provisions relating to requests for and granted of overriding leases, see ss 19 and 20 of
LT(C)A 1995 at paras HR A[21178] and HR A[21199] respectively.
HR A[2183]
Any claim that the landlord has failed to comply with his obligation to grant an overriding lease may be made the
subject of civil proceedings in like manner as any other claim in tort for breach of statutory duty1. An overriding lease
granted pursuant to these provisions shall be a 'new tenancy' within the meaning of the Act2 only if the 'relevant
tenancy'3 is itself a 'new tenancy'4.
Page 491
HR A[2184]
2 See LT(C)A 1995, s 1.
3 The 'relevant tenancy' is the tenancy in respect of which the claimant has made the payment which entitles him to the overriding lease:
see LT(C)A 1995, s 18(1).
4 LT(C)A 1995, s 20(1).
HR A[2185]
The Landlord and Tenant (Covenants) Act 1995 also contains provisions of general applications restricting the liability
of a 'former tenant'1 or his guarantor in the event of a 'relevant variation'2 of the terms of the tenancy effected after an
assignment3. The former tenant or guarantor shall not be liable to pay any amount in respect of a covenant to the extent
that the amount is referable to any relevant variation of the covenant effected after the assignment4.
HR A[2186]
1 See Landlord and Tenant (Covenants) Act 1995, s 18(1).
2 See LT(C)A 1995, s 18(4).
3 LT(C)A 1995, s 18.
4 LT(C)A 1995, s 18 which by virtue of s 18(6) applies only to variations of covenants effected on or after the date when the Act came
into force (1 January 1996). The practical effect of these provisions is somewhat reduced by the decision in Friends' Provident Life Office v
British Railways Board [1996] 1 All ER 336, CA, considered at para HR A[2147] which is applicable to all variations of covenants,
whenever made.
Page 492
of leases/D Liability of original lessee to lessor following assignment of lease/4 Release of original lessee from liability:
tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
4 Release of original lessee from liability: tenancies to which the Landlord and Tenant
HR A[2187]
In the case of a 'new tenancy' within the meaning of the Landlord and Tenant (Covenants) Act 19951; there are statutory
provisions whereby a tenant who assigns his interest in the premises demised to him is released from his covenants2.
There is however no release in the event of an 'excluded assignment', which is an assignment in breach of a covenant or
an assignment by operation of law3.
HR A[2188]
1 Landlord and Tenant (Covenants) Act 1995 at paras HR A[21033]ff. For the definition of 'new tenancy' see LT(C)A 1995, s 1.
Generally speaking, a new tenancy is a tenancy granted on or after 1 January 1996.
2 LT(C)A 1995, s 5. These provisions are described in detail at para HR A[2081].
3 LT(C)A 1995, s 11.

Page 493
of leases/D Liability of original lessee to lessor following assignment of lease/5 Rights of original lessee
5 Rights of original lessee
HR A[2189]
By virtue of the doctrine of privity of contract, the original lessee can enforce the lessor's covenants in the lease against
the original lessor, even though the reversion has been assigned and thus he may also be able to enforce those covenants
against the assignee of the reversion1. However, in the case of a 'new tenancy' within the meaning of the Landlord and
Tenant (Covenants) Act 19952, the lessor may apply to be released from the burden of his covenants following
assignment of the reversion3. On an assignment of the lease by the original lessee, the benefit of the lessor's covenants
will generally pass to the assignee4, but the original lessee may due for loss suffered by the lessor's breach of covenant
before the assignment5.
HR A[2190]-HR A[2200]
1 Stuart v Joy [1904] 1 KB 362; see also para HR A[1949] for the passing of the burden of lessor's covenants and s 142(2) of the Law of
Property Act 1925, preserving the original lessor's liability.
2 Landlord and Tenant (Covenants) Act 1995 at paras HR A[21033]ff. 'New tenancy' is defined in LT(C)A 1995, s 1; generally speaking,
it is a tenancy granted on or after 1 January 1996.
3 LT(C)A 1995, ss 6, 7 are considered in full at para HR A[1985].
5 City and Metropolitan Properties Ltd v Greycroft [1987] 3 All ER 839 [1987] 1 WLR 1085.
Page 494
of leases/E Liability of assignee to lessor following assignment of lease
E
Page 495
of leases/E Liability of assignee to lessor following assignment of lease/1 Who are liable as assignees: tenancies to
which the Landlord and Tenant (Covenants) Act 1995 does not apply
1 Who are liable as assignees: tenancies to which the Landlord and Tenant (Covenants) Act
1995 does not apply
HR A[2201]
The passing of the burden of covenants on the assignment of a lease has been considered above1. An assignment of the
legal interest in a lease must be made by deed2 and an assignee only becomes liable on the lessee's covenants in the
lease where he has taken a legal assignment of the entire residue of the term3, unless he has so conducted himself that
he is estopped from denying such an assignment4. Although entry into possession of the demised premises and payment
of rent will usually be ingredients of such an estoppel, they are not of themselves sufficient to create the estoppel5.
HR A[2202]
3 West v Dobb (1869) LR 4 QB 634; see Goddard v Lewes (1909) 101 LT 528; Governors of St Thomas's Hospital v Richardson [1910] 1
KB 271, CA.
4 Williams v Heales (1874) LR 9 CP 177; Stratford-upon-Avon Corpn v Parker [1914] 2 KB 562; Rodenhurst Estates Ltd v WH Barnes
Ltd [1936] 2 All ER 3, CA.
5 Official Trustee of Charity Lands v Ferriman Trusts Ltd [1937] 3 All ER 85.
HR A[2203]
It follows that a person who is an equitable assignee only--whether by virtue of an agreement for an assignment1 or by
an equitable mortgage2--is not liable, notwithstanding that he has entered into possession. Similarly a person who gains
a title under the statutes of limitation3 by adverse possession as against the lessee is not an assignee so as to be liable at
law on the covenants in the lease4 and words such as 'assignee' or 'assigns' do not ordinarily include an underlessee.
HR A[2204]
1 Cox v Bishop (1857) 8 De GM & G 815, overruling Close v Wilberforce (1830) 1 Beav 112; see also Friary Holroyd and Healey's
Brewery Ltd v Singleton [1899] 1 Ch 86 at 90 (overruled on the facts at [1899] 2 Ch 261, CA).
Page 496
2 See Moores v Choat (1839) 8 Sim 508; Moore v Greg (1848) 2 Ph 717; Robinson v Rocher (1841) 1 Y & C Ch Cas 7; Re Loom, Fulford
v Reversionary Interest Society Ltd [1910] 2 Ch 230.
3 See the Limitation Act 1980, ss 15-17.
4 Tichborne v Weir (1892) 67 LT 735, CA. Restrictive covenants binding in equity will, however, be enforceable; see Re Nisbet and Potts'
Contract [1906] 1 Ch 386, CA.
HR A[2205]
On the other hand, a person who takes the legal estate in a lease by an assignment is liable on the lessee's covenants,
even though he has taken as a trustee and has not entered into possession1, while the person equitably interested in the
lease is not liable2. A trustee under a deed of arrangement which contains a general assignment of personal estate is
liable on the covenants incident to the debtor's leasehold property3, unless the leaseholds are expressly excluded4, or
unless the general words of assignment are not suitable to include leaseholds5. An assignment of the demised premises
to co-owners renders each co-owner liable for the rent and the covenants of the lease6.
HR A[2206]
1 Bryant v Hancock & Co Ltd [1898] 1 QB 716, CA; South of England Dairies Ltd v Baker [1906] 2 Ch 631; Gretton v Diggles (1813) 4
Taunt 766.
2 Nokes v Fish (1857) 3 Drew 735.
3 Ringer v Cann (1838) 3 M & W 343; White v Hunt (1870) LR 6 Exch 32.
4 If power is reserved to exclude leaseholds, the trustee is liable until they are actually excluded: Debenham v Digby (1873) 28 LT 170.
5 Harrison v Blackburn (1864) 17 CBNS 678.
6 United Dairies Ltd v Public Trustee [1923] 1 KB 469.

Page 497
of leases/E Liability of assignee to lessor following assignment of lease/2 Who are liable as assignees: tenancies to
which the Landlord and Tenant (Covenants) Act 1995 applies
2 Who are liable as assignees: tenancies to which the Landlord and Tenant (Covenants) Act
1995 applies
HR A[2207]
The relevant provisions of the Landlord and Tenant (Covenants) Act 19951 apply only to 'new tenancies' which,
generally speaking are tenancies granted on or after 1 January 19962. The passing of the burden of covenants under
such tenancies has been considered above3. The 1995 Act provides that, on assignment by a tenant, the assignee shall
become bound by the 'tenant covenants' of the tenancy4. The definition of 'assignment' in the 1995 Act5 includes an
equitable assignment 'unless the context otherwise requires' and therefore it is possible that equitable assignees may
become liable upon the covenants6.
HR A[2208]
1 Landlord and Tenant (Covenants) Act 1995 at paras HR A[21033]ff.
2 For the full definition of 'new tenancy' see LT(C)A 1995, s 1 at para HR A[21033].
4 LT(C)A 1995, s 3(2).
5 LT(C)A 1995, s 28(1).
6 Cf the position of equitable assignees of tenancies other than 'new tenancies' explained at para HR A[2203].
Page 498
of leases/E Liability of assignee to lessor following assignment of lease/3 Liability of an assignee after a further
assignment: tenancies to which the Landlord and Tenant (Covenants) Act 1995 does not apply
3 Liability of an assignee after a further assignment: tenancies to which the Landlord and
Tenant (Covenants) Act 1995 does not apply
HR A[2209]
Where there is no privity of contract1 and thus the liability of the assignee to the lessor depends on privity of estate
alone2 such liability ceases as soon as the assignee further assigns the lease, except as regards rent accrued due and
breaches of covenant incurred at the time of the assignment3. The assignee may, however, still be liable to indemnify a
predecessor as tenant in relation to claims made against him4.
HR A[2210]-HR A[2220]
1 Whereas the original lessee will always be liable to the lessor by privity of contract (see para HR A[2127], an assignee will only be
liable by privity of contract if, as is commonly the case, he enters into direct covenants with the lessor at the time of the assignment to him
(see further para HR A[2221])).
2 For the nature of the liability of an assignee, see para HR A[2029].
3 Paul v Nurse (1828) 8 B & C 486; and see Pitcher v Tovey (1692) 1 Salk 81; Richmond v City of London (1702) 1 Bro Parl Cas 516,
HL; Chancellor v Poole (1781) 2 Doug KB 764; Odell v Wake (1813) 3 Camp 394. Similarly, an assignee is not liable for breaches of
covenant which occurred before the assignment to him: Grescot v Green (1700) 1 Salk 199; Churchwardens of St Saviour's Southwark v
Smith (1762) 3 Burr 1271; cf Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1959] Ch 592, [1959] 2 All ER 176, CA
(distinction between particular breaches of repairing covenants and general disrepair for which the assignee is liable).
HR A[2221]
The assignee is entitled to rely on this cesser of liability in order to avoid liability, even though the new assignee is a
person of no substance1. No notice to or consent of, the lessor is required2 and the assignee's liability is terminated by
the assignment even though the new assignee does not take possession3. A further assignment of this nature may be
made by a trustee in bankruptcy4. However, an assignment which results in a cesser of liability must be a genuine
assignment5; it is ineffectual to terminate liability if the new assignee is merely the agent of the first assignee6.
HR A[2222]
1 Valliant v Dodemede (1742) 2 Atk 546; Barnfather v Jordan (1780) 2 Doug KB 452; Taylor v Shum (1797) 1 Bos & P 21 at 23; see
Odell v Wake (1813) 3 Camp 394.
Page 499
2 Valliant v Dodemede (1742) 2 Atk 546; Lekeux v Nash (1745) 2 Stra 1221; Onslow v Corrie (1817) 2 Madd 330; see Paul v Nurse
(1828) 8 B & C 486.
3 Walker v Reeve (1781) 3 Doug KB 19; see Valliant v Dodemede (1742) 2 Atk 546.
4 Hopkinson v Lovering (1883) 11 QBD 92.
5 Fogg v Dobie (1838) 3 Y & C Ex 96.
6 Philpot v Hoare and Robertson (1741) 2 Atk 219.
HR A[2223]
In practice, leases usually contain a covenant not to assign without the lessor's consent1 and, where consent cannot
unreasonably be withheld, a proposed assignee's lack of financial standing may be a good reason for refusal of consent2.
An assignment in breach of covenant is effective3, but may render the lease liable to forfeiture and the person assigning
in breach of covenant liable in damages.
HR A[2224]
2 For consent to assignment see para HR A[2507].
HR A[2225]
Where however, as is common, the assignee has entered into a direct covenant with the lessor to pay the rent and
observe the covenant throughout the residue of the term, his liability continues throughout the term, notwithstanding
any subsequent assignment, by virtue of privity of contract; this is so even though a subsequent assignee enters into a
similar direct covenant with the lessor1. Where an assignee entered into an express covenant with the assignor and the
assignor assigned the benefit of that covenant to the original lessor, it was held that the original lessor could sue the
assignee upon the covenants of the lease2.
HR A[2226]
1 J Lyons & Co Ltd v Knowles [1943] 1 KB 366, [1943] 1 All ER 477, CA; Estates Gazette Ltd v Benjamin Restaurants Ltd [1995] 1 All
ER 129, [1994] 1 WLR 1528, CA.
2 Butler Estates Co Ltd v Bean [1942] 1 KB 1, [1941] 2 All ER 793, CA (the real contest in this case was whether the covenant entered
into by the assignee was an absolute covenant or a covenant of indemnity only).
Page 500
HR A[2227]
Under rent review clauses, when the reviewed rent is not ascertained until after the review date, the general principle is
that the additional rent for the period from the review date is not payable until the next rent day after the ascertainment
of that rent1. If the lease is assigned between the review date and that rent day the assignor remains liable for the
additional rent in respect of the period up to the date of the assignment2.
HR A[2228]
1 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, [1977] 2 All ER 62 HL; South Tottenham Land Securities
Ltd v R & A Millett (Shops) Ltd [1984] 1 All ER 614, [1984] 1 WLR 710. For rent review generally, see Chapter 7.
2 Parry v Robinson-Wyllie Ltd [1987] 2 EGLR 133; Torminster Properties Ltd v Green [1983] 2 All ER 457, [1983] 1 WLR 676, CA.
Page 501
of leases/E Liability of assignee to lessor following assignment of lease/4 Liability of an assignee after a further
assignment: tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
4 Liability of an assignee after a further assignment: tenancies to which the Landlord and
Tenant (Covenants) Act 1995 applies
HR A[2229]
The relevant provisions of the Landlord and Tenant (Covenants) Act 19951 apply only to 'new tenancies' which,
generally speaking, are tenancies granted on or after 1 January 19962. The provisions relating to the release of a lessee
on assignment have been considered above3 and are applicable to the release of an assignee upon a further assignment4.
HR A[2230]-HR A[2240]
1 Landlord and Tenant (Covenants) Act 1995 at paras HR A[21033]ff.
2 For the full definition of 'new tenancy' see LT(C)A 1995, s 1.
4 LT(C)A 1995, s 4 and see the definition of 'tenant' in LT(C)A 1995, s 28(1).
Page 502
of leases/F Liability to observe restrictive covenants binding in equity
F
Page 503
of leases/F Liability to observe restrictive covenants binding in equity/1 Liability of assignees and underlessees to
lessors and other owners of land
1 Liability of assignees and underlessees to lessors and other owners of land
HR A[2241]
As explained above1, an assignee of a lease may be bound by covenants in the lease which touch and concern the land.
This is an exception to the general principle of privity of contract whereby only the contracting parties are bound by the
obligations of the contract; the assignee is liable by virtue of privity of estate.
HR A[2242]
1 See para HR A[2029]; cf the position as to 'new tenancies' within the meaning of the Landlord and Tenant (Covenants) Act 1995
considered at para HR A[2065]. See also para HR A[2201], as to who may be liable as assignees.
HR A[2243]
Another exception to the general principle is the rule that, in equity, the burden of negative covenants affecting land
may run with the burdened land and may be enforceable by injunction1, which applies to leasehold interests as it does
to freehold interests2. The normal requirement of equity for the burden of negative covenants to run is that the covenant
must benefit some land retained by the covenantee3 and, in the case of a lease, the reversionary interest retained by the
landlord is sufficient to satisfy this requirement.4
HR A[2244]
1 The rule in Tulk v Moxhay (1848) 2 Ph 774.
2 See eg Clegg v Hands (1890) 44 Ch D 503, CA.
3 LCC v Allen [1914] 3 KB 642, CA.
4 Hall v Ewin (1887) 37 Ch D 74, CA; Regent Oil Co Ltd v J A Gregory (Hatch End) Ltd [1966] Ch 402 at 433, CA.
HR A[2245]
In accordance with this rule, an assignee may be bound in equity to observe a negative covenant which is merely
collateral and so does not run with the land at law1; similarly an underlessee or other occupier is bound to observe
negative covenants, whether running with the land or not2. In the case of a new tenancy, within the meaning of the
Page 504
Landlord and Tenant (Covenants) Act 19953, it is specifically provided that any covenant restrictive of the user of land
shall, as well as being capable of enforcement against an assignee, be capable of being enforced against any other
person who is the owner or occupier of any demised premises to which the covenant relates, even though there is no
express provision in the tenancy to that effect4.
HR A[2246]
1 Luker v Dennis (1877) 7 Ch D 227; Clegg v Hands (1890) 44 Ch D 503, CA; cf Wilkes v Spooner [1911] 2 KB 473, CA; Keppell v
Bailey (1834) 2 My & K 517, so far as it is to the contrary, is overruled.
2 Parker v Whyte (1863) 1 Hem & M 167; Clements v Welles (1865) LR 1 Eq 200; Wilson v Hart (1866) 1 Ch App 463; Fielden v Slater
(1869) LR 7 Eq 523; Manniell v Hart (1877) 1 LR 1r 88, CA; John Bros Abergarw Brewery Co v Holmes [1900] 1 Ch 188; Teape v Douse
(1905) 92 LT 319; see also Holloway Bros Ltd v Hill [1902] 2 Ch 612; cf Hall v Ewin (1887) 37 Ch D 74, CA (the lessee is not liable to the
lessor for not taking active proceedings against his underlessee to prevent him breaching a restrictive covenant); Mander v Falcke [1891] 2
Ch 554, CA (mere occupier); Re Nisbet and Potts' Contract [1906] 1 Ch 386, CA (squatter who has obtained title by adverse possession).
3 For the meaning of 'new tenancy' see LT(C)A 1995, s 1.
4 LT(C)A 1995, s 3(5). It has been held that this provision should be construed restrictively: see Oceanic Village Ltd v United Attractions
Ltd [2000] Ch 234, [2000] 1 All ER 975, considered at HR A[21053].
HR A[2247]
A covenant partly positive and partly negative, if severable, will be enforced so far as it is negative1 and it is sufficient
if a covenant is in substance negative, even though it may in terms be positive2.
HR A[2248]
1 Clegg v Hands (1890) 44 Ch D 503, CA.
2 Catt v Tourle (1869) 4 Ch App 654.
HR A[2249]
In principle, the only persons who are bound by such negative covenants are those who take the premises with actual or
constructive notice of those covenants and a bona fide purchaser for value of a legal estate in the premises without
actual or constructive notice will not be bound1. An underlessee has constructive notice of the covenants contained in
the head lease, even though he has no actual knowledge of them2, since it is his duty to inquire into his lessor's title. The
operation of this rule as to constructive notice has been reduced by statute3, but an underlessee still has constructive
notice of his own lessor's title, though not of the freehold or leasehold reversion to it4.
HR A[2250]-HR A[2260]
Page 505
1 Re Nisbet and Potts' Contract [1906] 1 Ch 386, CA; Wilkes v Spooner [1911] 2 KB 473, CA.
2 Parker v Whyte (1863) 1 Hem & M 167; Clements v Wells (1865) LR 1 Eq 200; Fielden v Slater (1869) LR 7 Eq 523; Patman v
Harland (1881) 17 Ch D 353.
4 See Law of Property Act 1925, s 44. Even where s 44(5) applies, it seems that a person may be bound by a restrictive covenant if he has
actual notice of it, but the burden of proving notice will be upon the person seeking to enforce the covenant: see Shears v Wells [1936] 1 All
ER 832.
HR A[2261]
The rules as to notice were changed by the Land Charges Act 1925 (now the Land Charges Act 1972) and by the Land
Registration Act 1925. A covenant restrictive of the user of the land entered into on or after 1 January 1926 and made
otherwise than between a lessor and a lessee is registable as a land charge1 and if it is not registered it is void against a
subsequent purchaser for money or money's worth of a legal estate in the land, even though he purchases with notice of
it2. Restrictive covenants other than covenants between a lessor and a lessee are also registable under the Land
Registration Act 19253.
HR A[2262]
3 Land Registration Act 1925, s 50(1), (2); see White v Bijou Mansions Ltd [1937] Ch 610, [1937] 3 All ER 269; affd on appeal [1938] Ch
351, [1938] 1 All ER 546, CA. For the consequences of non-registration, on the disposition of a registered leaseholds, see Land Registration
Act 1925, s 23.
Page 506
of leases/F Liability to observe restrictive covenants binding in equity/2 Liability as between adjoining lessees
2 Liability as between adjoining lessees
HR A[2263]
Where neighbouring premises have been let to different lessees, subject to restrictive covenants, it is often necessary to
consider whether the different lessees, or their successors in title, are entitled to enforce the covenants as against each
other. The general rule is that one lessee may not enforce against other lessees the covenants in the leases held by those
other lessees. However there are a number of exceptions to this general rule, applicable in the case of restrictive
covenants:
(a) a lessee who has taken an assignment from his lessor of the benefit of a restrictive covenant
entered into by a lessee of other premises may enforce that covenant1;
(b) where various lessees enter into a mutual deed of covenant, each lessee and successors in title may
enforce the covenant against the other2;
(c) where there exists a building scheme; that is, where an estate has been laid out under a common
scheme for building and the leases have been granted pursuant to the scheme. In such a case, each lessee
and successors in title may enforce the restrictive covenants relating to the scheme (both against the
lessor and other lessees), irrespective of the order in which the leases have been granted3;
(d) where a letting scheme, analogous to a building scheme has been imposed on a large building such
as a block of flats and the leases have been taken under such a scheme4. In such a case, lessees and
successors in title may enforce restrictive covenants as in the case of a building scheme;
(e) restrictive covenants may also be enforceable by lessees against other lessees if it is clear that it
was intended that the benefit of the covenant should be annexed to the relevant land5 and, in the case of
covenants made after 1925, s 78 of the Law of Property Act 1925 will annex the covenant to each and
every part of the land intended to be benefited6.
In other cases one lessee cannot enforce another lessee's restrictive covenants7 and the lessor is not a trustee, so that he
is not bound to allow the lessee to enforce them in his name8. The lessor himself is of course entitled to enforce the
restrictive covenants9; if he has covenanted with other lessees that the restrictions shall be observed, he can, by reason
of his continuing liability, enforce the covenants, notwithstanding that he has conveyed away the whole of the
property10.
HR A[2264]
1 See Renald v Cowlishaw (1878) 9 Ch D 125 at 129; affd (1879) 11 Ch D 866, CA; Re Union of London and Smith's Bank Ltd's
Conveyance, Miles and Easter [1933] Ch 611, CA.
2 See Renald v Cowlishaw (1878) 9 Ch D 125 at 129; affd (1879) 11 Ch D 866, CA.
3 The essentials of a building scheme are a clearly defined area and an intention that all purchasers or lessees within the area should be
Page 507
bound by a set of mutually enforceable obligations. See Renald v Cowlishaw (1878) 9 Ch D 125 at 129; affd (1879) 11 Ch D 866, CA;
Spicer v Martin (1888) 14 App Cas 12, HL; Elliston v Reacher [1908] 2 Ch 374; Reid v Bickerstaff [1909] 2 Ch 305, CA; Brunner v
Greenslove [1971] Ch 993 [1970] 3 All ER 833; Texaco Antilles Ltd v Kernochan [1973] AC 609 [1973] 2 All ER 118, PC; Emile Elias &
Co Ltd v Pine Groves Ltd [1993] 1 WLR 305, PC.
4 Hudson v Cripps [1896] 1 Ch 265; Newman v Real Estate Debenture Corpn Ltd [1940] 1 All ER 131.
5 Drake v Grey [1936] Ch 451, [1936] 1 All ER 363, CA.
6 Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 All ER 371, [1980] 1 WLR 594, CA.
7 Ashby v Wilson [1900] 1 Ch 66; cf Fitz v Iles [1893] 1 Ch 77, CA; Holloway Bros Ltd v Hull [1902] 2 Ch 612; Browne v Flower [1911]
1 Ch 219.
8 Kemp v Bird (1877) 5 Ch D 974, CA; Ashby v Wilson [1900] 1 Ch 66.
9 And if the lessor has not assigned the benefit of the covenants expressly or impliedly to other lessees he can release the covenants: Earl
of Zetland v Hidlot (1882) 7 App Cas 427, HL.
10 Spencer v Bailey (1893) 69 LT 179.

Page 508
of leases/G Liability as between lessee and assignee
G
Page 509
of leases/G Liability as between lessee and assignee/1 Assignee's common law liability to indemnify the lessee:
tenancies to which the Landlord and Tenant (Covenants) Act 1995 does not apply
1 Assignee's common law liability to indemnify the lessee: tenancies to which the Landlord
and Tenant (Covenants) Act 1995 does not apply
HR A[2265]
By taking a leasehold estate subject to the payment of rent and the performance of the covenants in the lease, the
assignee makes it his duty to pay that rent and perform those covenants. From this duty the law implies a promise that
he will pay the rent and perform the covenants1. As a result, while both lessee and assignee are liable to the lessor, as
between themselves the assignee is primarily liable; thus, if he pays the debt or discharges the obligation to the lessor,
the lessee has his remedy against the assignee and is entitled to be indemnified2.
HR A[2266]
1 Burnett v Lynch (1826) 5 B & C 589 at 602; Wolveridge v Steward (1833) 1 Cr & M 644 at 659 Ex Ch; Moule v Garrett (1870) LR 5
Exch 132 at 137; Selous Street Properties Ltd v Oronel Fabrics Ltd [1984] 1 EGLR 50, 270 Estates Gazette 643, Becton Dickinson UK Ltd v
Zwebner [1989] QB 208, [1988] 3 WLR 1376. This liability is generally described as arising under the law of restitution or quasi-contract.
2 As against the lessor, the lessee's liability is primary, as is the assignee's liability. Despite suggestions made in Wolveridge v Steward
(1833) 1 Cr & M 644 and Humble v Langton (1841) 7 M & W 517 at 530, the lessee's liability is not properly described as being that of a
surety only; see per Megarry VC in Warnford Investments Ltd v Duckworth [1979] Ch 127 at 137-138; Allied London Investments Ltd v
Hambro Life Assurance Ltd [1984] 1 EGLR 16.
HR A[2267]
However the lessee has no lien on the demised premises for any payments he makes1 and if he brings an action before
he has made any payments, he may recover only nominal damages notwithstanding that an action by the lessor is
pending2, although he may join the assignee and claim an indemnity against him in the lessor's action3. The rights of a
lessee who is an alien enemy to be indemnified by his assignee are suspended during time of war4.
HR A[2268]
1 O'Loughlin v Dwyer (1884) 13 LT Ir 75.
2 Beattie v Quirey (1876) IR 10 CL 516.
3 See RSC Ord 16, r 1.

Page 510
4 Halsey v Lowenfeld [1916] 2 KB 707, CA.
HR A[2269]
The liability of the assignee described above continues only so long as the lease is vested in him1. Upon a further
assignment, the liability passes to the new assignee, so that the lessee has a remedy against each subsequent assignee in
turn, notwithstanding that the subsequent assignee may have entered into an express covenant to indemnify his
immediate assignor2. Each assignee is liable for rent accrued and breaches of covenant committed in his own time, even
though any action against him is not commenced until after he has further assigned3.
HR A[2270]-HR A[2280]
1 Burnett v Lynch (1826) 5 B & C 589 at 605; Wolveridge v Steward (1833) 1 Cr & M 644, Ex Ch. The assignee may however continue to
be under a liability by virtue of an express or implied covenant to indemnify the lessee; see para [G(3)]
2 Moule v Garrett (1870) LR 5 Exch 132; affd (1872) LR 7 Exch 101; see also Wolveridge v Steward (1833) 1 Cr & M 644 at 660, Ex Ch.
3 Harley v King (1835) 2 Cr M & R 18; see also Burnett v Lynch (1826) 5 B & C 589.
HR A[2281]
The restitutionary principles described above will also apply where the liabilities of an assignee in whom the lease is
vested are guaranteed by a surety; in such a case, the original lessee is entitled to be indemnified by the surety for that
assignee, if he has made payment to the lessor on the assignee's default1.
HR A[2282]
1 Becton Dickinson UK Ltd v Zwebner [1989] QB 208, [1988] 3 WLR 1376. The same principles have also been applied in a case where
both a lessee and an underlessee were liable to the lessor for the same amount by way of a service charge; Electricity Supply Nominees Ltd v
Thorn EMI Retail Ltd [1991] 2 EGLR 46, CA.
Page 511
of leases/G Liability as between lessee and assignee/2 Extent of the assignee's common law liability
2 Extent of the assignee's common law liability
HR A[2283]
The right of indemnity of a lessee against an assignee arises only when the assignee takes the entire estate of the lessee.
It does not extend to an underlessee of the assignee, including an underlease by way of mortgage1, nor does it extend to
a judgment creditor who takes the term in execution as a means of selling it2. Where, however, the lessee has executed
a declaration of trust he is entitled to be indemnified against the liabilities of the lease in the same manner as an ordinary
trustee3 and generally where there is an agreement to assign, under which an equitable assignee enters and enjoys the
premises, he is, it seems, liable to indemnify the assignee in respect of the period of his enjoyment, but not for
subsequent periods4.
HR A[2284]
1 Bonner v Tottenham and Edmonton Permanent Investment Building Society [1899] 1 QB 161, CA.
2 Johns v Pink [1900] 1 Ch 296.
3 Close v Wilberforce (1838) 1 Beav 112; Willson v Leonard (1840) 3 Beav 373; see Nokes v Fish (1857) 3 Drew 735.
4 Crouch v Tregonning (1872) LR 7 Exch 88 at 93.

Page 512
of leases/G Liability as between lessee and assignee/3 Express covenant for indemnity by assignee
3 Express covenant for indemnity by assignee
HR A[2285]
In the past, it was usual for a lessee, on assigning his lease, to take from his assignee an express covenant for payment
of rent and performance of the covenants of the lease and for an indemnity. The assignee, who would remain liable on
this covenant following a further assignment, would take a similar covenant from his own assignee1. An express
covenant of this sort should still be taken whenever an assignment is not made for valuable consideration; in any other
case such an express covenant is not necessary because a similar covenant is implied by statute2.
HR A[2286]
1 It appears that the assignee may have been entitled to have the covenant inserted in the further assignment, at least in the absence of
express stipulation: see Staines v Morris (1812) 1 Ves & B 8.

Page 513
of leases/G Liability as between lessee and assignee/4 Statutory implied covenant for indemnity by assignee
4 Statutory implied covenant for indemnity by assignee
HR A[2287]
In a conveyance after 31 December 1925 for valuable consideration, other than a mortgage, of the entirety of the land
comprised in a lease, for the residue of the term or interest created by the lease, there is implied by statute1 a covenant
by the assignee or joint and several covenants by the assignees (if more than one) with the conveying parties and with
each of them (if more than one) that the assignees, or the persons deriving title for them will at all times:
(a) from the date of the conveyance or other date therein stated, duly pay all rent becoming due under
the lease creating the term or interest for which the land is conveyed and observe and perform all the
covenants, agreements and conditions therein contained and thenceforth on the part of the lessees to be
observed and performed;
(b) from such date, save harmless and keep indemnified the conveying parties and their estates and
effects, for and against all proceedings, costs, claims and expenses on account of any omission to pay
such rent or any breach of any of such covenants, agreements and conditions.
HR A[2288]
1 Law of Property Act 1925, s 77(1)(c) and Sch 2, Pt IX. A similar covenant is implied on the transfer of any leasehold interest in land
under the Land Registration Act 1925, s 24(1). The covenant is a covenant of indemnity rather than a secondary or ancillary obligation of
guarantee only: Scottish and Newcastle plc v Raguz [2003] EWCA Civ 1070, [2003] 33 EG 62 (CS). The scope of this indemnity is not
limited to payments which the assignor is legally liable to make, but extends to all expenses fairly and reasonably incurred by him: Scottish
& Newcastle plc v Raguz [2007] EWCA Civ 150, [2007] 2 All ER 871. Note that these statutory covenants do not apply in the case of any
assignment of a 'new tenancy': see HR A[2305].
HR A[2289]
There will be valuable consideration for these purposes even though the monetary consideration is nothing or is
nominal, because the assumption by the assignee of the primary liability to the lessor on the covenants in the lease1 is
itself valuable consideration passing from him to the assignor2.
HR A[2290]-HR A[2300]
1 As described in para HR A[2265].
2 Johnsey Estates Ltd v Lewis & Manley (Engineering) Ltd (1987) 54 P & CR 296, CA. Although Law of Property Act 1925, s
205(1)(xxii) provides that valuable consideration does not include a nominal consideration in money, this does not prevent the assumption
Page 514
by the assignee of the primary liability to pay rent and observe other covenants being valuable consideration.
HR A[2301]
The chain of liability constituted by successive covenants of indemnity given on successive assignments may in effect
be broken by the bankruptcy of an immediate assignee; but the lessee can take from the trustee in bankruptcy an
assignment of the bankrupt's right of indemnity against a subsequent assignee and can then recover in full from the
latter1.
HR A[2302]
1 Re Perkins, Poyser v Beyfus [1898] 2 Ch 182, CA; see also Josselson v Borst [1938] 1 KB 723, CA.
HR A[2303]
These obligations imposed by statute are of a contractual nature, whereas the liability in restitution or quasi-contract
described above1 is imposed by the law independently of contract. Consequently, where there is a potential liability
both under the implied covenant of indemnity and liability in restitution between, for example, an original lessee and his
immediate assignee, a term in the assignment which expressly excludes the implied covenant will not exclude the
liability in restitution2.
HR A[2304]
2 Re Healing Research Trustee Co Ltd [1992] 2 All ER 481.
HR A[2305]
The statutory covenants described above do not apply in the case of any assignment of a 'new tenancy'; within the
meaning of the Landlord and Tenant (Covenants) Act 19951.
HR A[2306]
1 Landlord and Tenant (Covenants) Act 1995, s 14. For the meaning of 'new tenancy', see s 1 and for the provisions applicable on an
assignment of a 'new tenancy', see further para HR A[2341].
Page 515
of leases/G Liability as between lessee and assignee/5 Construction of express and statutory covenants for indemnity
5 Construction of express and statutory covenants for indemnity
HR A[2307]
Both express and statutory covenants are binding on the assignee for the residue of the term and he cannot put an end to
his liability by a further assignment, unless the liability is expressly limited1. The covenants are construed as covenants
for indemnity only and thus the assignor is not entitled to insist on the observance of the covenants in the lease except
so far as is necessary for his indemnity2. However, where there is an express covenant, the question of whether or not it
is limited to an indemnity is a question of construction of the covenant; where there is no reference to an indemnity, it
may be construed as an unqualified covenant to pay the rent and observe the covenants of the lease3.
HR A[2308]
1 See Harris v Goodwyn (1841) 9 Dowl 409 at 418,419; cf Crossfield v Morrison (1849) 7 CB 286.
2 Re Poole and Clarke's Contract [1904] 2 Ch 173 at 177, CA; Harris v Boots Chemists (Southern) Ltd [1904] 2 Ch 376.
3 Butler Estates Co Ltd v Bean [1942] 1 KB 1, [1941] 2 All ER 793, CA. In that case, the benefit of the assignee's covenant was assigned
by the lessee to the lessor, who was held to be entitled to sue the assignee after the latter had assigned again.
HR A[2309]
The covenant implied by statute1 relates only to breaches of the covenants in the lease occurring after the assignment
and an express covenant is usually expressly qualified to the same effect2. In the absence of such a qualification, an
express covenant may entitle the assignor to an indemnity against past breaches, at any rate as regards dilapidations, as
these may have been taken into account in fixing the price for the lease3. The assignor may also be entitled to indemnity
against past breaches of a continuing nature, for example dilapidations, under the statutory implied covenants4.
HR A[2310]-HR A[2320]
1 Law of Property Act 1925, s 77(1)(c), Sch 2, Pt IX; see para HR A[2287].
2 Hawkins v Sherman (1828) 3 C & P 459; cf Reckitt v Cody [1920] 2 Ch 452.
3 Gooch v Clutterbuck [1899] 2 QB 148, CA; and see Re Russell, Russell v Shoolbred (1885) 29 Ch D 254, CA.
4 Middlegate Properties Ltd v Bilbao (1972) 24 P & CR 329.

Page 516
HR A[2321]
The covenant implied by statute1 may be varied or extended by deed and as so varied or extended shall, as far as may
be, operate in like manner and with all the like incidents, effects and consequences, as if such variations or extensions
were directed by the statute2. It is also possible to exclude the statutory implied covenant by an express provision to that
effect3.
HR A[2322]
1 Law of Property Act 1925, s 77(1)(c), Sch 2, Pt IX.
3 Re Healing Research Trustee Co Ltd [1992] 2 All ER 481; but such an exclusion does not necessarily exclude the liability of an assignee
to indemnify an assignor under the doctrine of restitution, considered at para HR A[2265].
Page 517
of leases/G Liability as between lessee and assignee/6 Recovery of costs under the covenant for indemnity
6 Recovery of costs under the covenant for indemnity
HR A[2323]
If, after an assignment, the lessor sues the original lessee for breach of covenant, it may be reasonable for the lessee to
defend the action, whether for the purpose of having the damages ascertained or otherwise and in an action based on the
covenant for indemnity the lessee can recover as damages from his assignee the costs properly so incurred,
notwithstanding that any defence was unsuccessful1. However, when the extent of the liability to the lessor has been
ascertained, the assignee has no reason for defending the lessee's claim and if he does so, he cannot recover the costs
against a subsequent assignee2.
HR A[2324]
1 Howard v Lovegrove (1870) LR 6 Exch 43; Murrell v Fysh (1883) Cab & E1 80; see Cousins v Phillips (1865) 3 H & C 892.
2 Smith v Howell (1851) 6 Exch 730.

Page 518
of leases/G Liability as between lessee and assignee/7 Assignment of part of land demised
7 Assignment of part of land demised
HR A[2325]
In the case of an assignment of part only of the land demised by a lease, made after 31 December 1925, where the rent
has been apportioned with the consent of the lessor, the covenants implied by statute1 are implied into the assignment in
like manner as if the apportioned rent were the original rent reserved and the lease related solely to the land assigned2.
Where the rent has been apportioned without the consent of the lessor there is implied a similar covenant by the
assignee and also a covenant by the assignor, if he conveys as beneficial owner and he retains a part of the land, that he
will pay his apportioned part of the rent and perform the covenants relating to the land retained by him and will
indemnify the assignee accordingly3. These statutory covenants do not apply in the case of any assignment of a 'new
tenancy' within the meaning of the Landlord and Tenant (Covenants) Act 19954.
HR A[2326]
2 Law of Property Act 1925, s 77(1)(c).
3 Law of Property Act 1925, s 77(1)(d); Sch 2, Pt X. Similar covenants are implied by the Land Registration Act 1925, s 24(2).
4 Landlord and Tenant (Covenants) Act 1995, s 14. For the meaning of 'new tenancy' see s 1 and for the provisions applicable on the
assignment of a 'new tenancy' see further para HR A[2341].
HR A[2327]
There are other statutory provisions dealing with the apportionment of rent on the assignment of part only of the land
demised by a lease, without the consent of the lessor1. If the rent is expressed to be:
(a) charged exclusively on the land conveyed or any part thereof in exoneration of the land retained by
the assignor or other land; or
(b) charged exclusively on the land retained by the assignor or any part thereof in exoneration of the
land conveyed or other land; or
(c) apportioned between the land conveyed or any part thereof and the land retained by the assignor or
any part thereof;
then, without prejudice to the rights of the lessor, such charge or apportionment is binding as between the assignor and
the assignee under the conveyance and their respective successors in title2.
Page 519
Where:
(a) any default is made in the payment of the whole or part of a rent by the person who, by reason of
such charge or apportionment, is liable to pay the same; or
(b) any breach occurs of any of the lessee's covenants (other than in the case of an apportionment the
covenant to pay the entire rent) or conditions contained in the lease, so far as the same relate to the land
conveyed or retained, as the case may be
the lessee for the time being of any other land comprised in the lease, in whom, as respects that land, the residue of the
term or interest created by the lease is vested, who pays or is required to pay the whole or part of the rent which ought to
have been paid by the defaulter or who incurs any costs, damages or expenses by reason of the breach of covenant or
condition, may enter into a distraint on the land comprised in the lease in respect of which the default or breach is made
or occurs, or any part of that land and dispose according to law of any distress found. He may also take possession of
the income of that land until (so long as the term or interest created by the lease is subsisting) by means of such distress
and receipt of income or otherwise, the whole or part of the rent (charged or apportioned as aforesaid) so unpaid and all
costs, damages and expenses incurred by reason thereof or of the breach of the said covenants and conditions are fully
paid or satisfied3.
HR A[2328]
1 Law of Property Act 1925, s 190(3), applying to conveyances of this sort, for valuable consideration other than mortgages, made after
31 December 1925 (s 190(7)). These provisions apply unless a contrary intention is expressed in the conveyance (s 190(6)) and do not apply
where the rent has been legally apportioned with the consent of the lessor (s 190(7)).
2 Law of Property Act 1925, s 190(3). There is also an implied indemnity enforceable by action; see Whitham v Bullock [1939] 2 KB 81,
[1939] 2 All ER 310, CA.
3 Law of Property Act 1925, s 190(4). The rule of law relating to perpetuities does not affect the powers or remedies conferred by s 190 or
any like powers or remedies expressly conferred, whether before, on or after 1 January 1928, by an instrument.
HR A[2329]
The remedies described above take effect so far only as they might have been conferred by the conveyance whereby the
rent or any part thereof is expressed to be charged or apportioned as aforesaid, but a trustee, personal representative,
mortgagee or other person in a fiduciary position has and is deemed always to have had, power to confer the same or
like remedies1.
HR A[2330]-HR A[2340]

Page 520
of leases/G Liability as between lessee and assignee/8 Tenancies to which the Landlord and Tenant (Covenants) Act
1995 applies
8 Tenancies to which the Landlord and Tenant (Covenants) Act 1995 applies
HR A[2341]
The law relating to the liability of an assignee to a lessee as described above1 is not directly applicable to new tenancies
within the meaning of the Landlord and Tenant (Covenants) Act 19952. As explained above3 the assignor of a new
tenancy will usually be released from his covenants on an assignment4 and where he is not released, as in the case of an
'excluded assignment'5 he is jointly and severally liable on the covenants of the lease together with his assignee6. The
indemnity covenants implied by statute7 are therefore unnecessary and do not have effect in relation to new tenancies8.
There will usually be no need to take any express covenants for indemnity on the assignment nor to rely on the
restitutionary remedies described above9.
HR A[2342]
1 See paras HR A[2265]-[2340].
2 'New tenancies' are, generally speaking, tenancies granted on or after 1 January 1996; for the full definition of 'new tenancy' see
Landlord and Tenant (Covenants) Act 1995, s 1 at para HR A[21033].
4 LT(C)A 1995, s 5.
5 See para HR A[2085] and LT(C)A 1995, s 11.
6 See LT(C)A 1995, s 13.
7 Law of Property Act 1925, s 77(1)(c),(d); Land Registration Act 1925, s 24(1)(b), (2); see further para HR A[2287].
8 LT(C)A 1995, s 14.

Page 521
of leases/G Liability as between lessee and assignee/9 Assignor's covenants for title
9 Assignor's covenants for title
HR A[2343]
The statutory covenants for title which are implied on the disposition of freehold land may also be implied on the
assignment of a lease. In the case of assignments made after 1 July 1995, the relevant statutory provisions are to be
found in Pt I of the Law of Property (Miscellaneous Provisions) Act 19941. In the case of assignments before that date,
the implied covenants are to be found by reference to s 76 of the Law of Property Act 1925.
HR A[2344]

Page 522
of leases/H Devolution on death
H
Page 523
of leases/H Devolution on death/1 Vesting of lessee's interest in personal representatives
1 Vesting of lessee's interest in personal representatives
HR A[2345]
On the death of a lessee, his interest in the demised premises, whether for a term of years or periodic, vests in his
personal representative1. This is so notwithstanding that the lessee has bequeathed his interest in his will, as a legatee
will not obtain the legal estate until the representative has by an assent in writing so vested it in him2.
HR A[2346]
1 Administration of Estates Act 1925, s 1.
2 AEA 1925, s 36. After an unconditional assent the executor is not entitled to an indemnity out of the testator's estate in respect of the
covenants of the lease: Shadbolt v Woodfall (1845) 2 Coll 30; Re Bennett [1943] 1 All ER 467; and see Re Owers [1941] Ch 389, [1941] 2
All ER 589.
HR A[2347]
There is a distinction as to the time when a lease vests in an executor and an administrator respectively. An executor
derives his title from the will, not from the grant of probate and the lease vests in him from the moment of the lessee's
death1, so that he can perform almost all the acts incident to his office before probate. An administrator, however,
derives his title from the grant of administration2 and the lease vests in him only from that time; until the grant, the
lease is vested in the Public Trustee3. Thus, when a lessee dies intestate, a lessor who wishes to determine a tenancy by
notice to quit must serve the notice upon the Public Trustee4; although a notice may also be served upon the persons in
occupation of the demised premises as being agents for the Public Trustee5. However, once there has been a grant of
administration, the title of the administrator relates back to the date of death6 and thus he (like an executor) is liable to
pay rent, to the extent of the deceased's assets, from the date of death until the tenancy is properly determined 7.
HR A[2348]
1 Administration of Estates Act 1925, s 1(1).
2 Administration of Estates Act 1925, s 9, as substituted by Law of Property (Miscellaneous Provisions) Act 1994, s 14.
3 Administration of Estates Act 1925, s 9, as substituted by Law of Property (Miscellaneous Provisions) Act 1994, s 14. Under the
previous statutory provisions the estate of an intestate vested in the Probate Judge.
4 See Fred Long & Sons Ltd v Burgess [1950] 1 KB 115, [1949] 2 All ER 484, CA. As from 1 July 1995, notices to quit should be served
Page 524
on the Public Trustee at the Public Trust Office, PO Box 3010, London WC2B 6JS (see Practice Direction [1995] 3 All ER 192, [1995] 1
WLR 1120). A landlord who fails to determine a periodic tenancy by a proper notice to quit served in this way may not succeed in
proceedings for possession; Wirral Borough Council v Smith (1982) 43 P & CR 312, CA.
5 Earl of Harrowby v Sefton [1951] 1 All ER 140.
6 Re Pryse's Goods [1904] P 301; Youngmin v Heath [1974] 1 All ER 461, [1974] 1 WLR 135, CA.
7 Youngmin v Heath [1974] 1 All ER 461, [1974] 1 WLR 135, CA.

Page 525
of leases/H Devolution on death/2 Liability of personal representative as assignee
2 Liability of personal representative as assignee
HR A[2349]
A deceased lessee's personal representative1 takes the demised premises as an assignee2, but as the assignment takes
place by operation of law it is not a breach of a covenant against assignment3. However, he does not become personally
liable for rent or on the covenants of the lease unless he has entered the premises4. Where a personal representative
becomes liable in this way the court will order that he may retain a fund out of the estate by way of indemnity against
that liability5.
HR A[2350]-HR A[2360]
1 Whether he is executor or administrator: see Whitehead v Palmer [1908] 1 KB 151.
2 Tilny v Norris (1700) 1 Ld Raym 553. An executor de son tort can also be treated as an assignee: Williams v Heales (1874) LR 9 CP
177; cf Paull v Simpson (1846) 9 QB 365: Stratford-upon-Avon Corpn v Parker [1914] 2 KB 562. However, where the term is vested in the
survivor of two joint tenants, the executors of the deceased joint tenant are not liable as assignees of the reversion for want of privity of
estate, notwithstanding that there was a tenancy in common in equity: Goddard v Lewis (1909) 101 LT 528.
4 See Stratford-upon-Avon Corpn v Parker [1914] 2 KB 562. A personal representative enters when he pays the rent due under the lease
and it is not essential that he should enter into actual physical possession of the premises; see Rendall v Andreae (1892) 61 LJQB 630 at 633.
To avoid personal liability the personal representative must before paying any rent accruing due after the death of the deceased lessee either
(i) assent to the property vesting in a beneficiary or (ii) assign the lease or (iii) disclaim the lease.
5 Re Owens [1941] Ch 389, [1941] 2 All ER 589.
HR A[2361]
Where the personal representative has made himself personally liable in this way and has thus made himself prima facie
liable as an assignee both for rent and on the covenants of the lease, he is entitled to limit his liability for rent to the
yearly value of the premises1, but he cannot limit his liability in respect of any other covenant2. Where he is sued in his
personal capacity as an assignee, the liability must be satisfied out of the executor's own property3, but he may also be
sued as a personal representative, in which case, the judgment, whether for rent4 or for breach of covenant5, is against
the testator's property only and the claim can be resisted with a plea of plene administravit6.
HR A[2362]
Page 526
1 Rendall v Andreae (1892) 61 LJQB 630; Youngmin v Heath [1974] 1 All ER 461. [1974] 1 WLR 135, CA. The executor may similarly
limit his liability if he is sued for use and occupation; Patten v Reid (1862) 6 LT 281; see also Atkins v Humphrey (1846) 2 CB 654; Nixon v
Quinn (1868) IR 2 CL 248.
2 Tilny v Norris (1700) 1 Ld Raym 553; Rendall v Andreae (1892) 61 LJQB 630.
3 Tilny v Norris (1700) 1 Ld Raym 553; Buckley v Pink (1710) 1 Salk 316.
4 Buckley v Pink (1710) 1 Salk 316; Lyddall v Dunlapp (1743) 1 Wils 4; see also Hargrave's Case (1610) 5 Co Rep 31a.
5 Lady Wilson v Wigg (1808) 10 East 313.
6 Lyddall v Dunlapp (1743) 1 Wils 4; Lady Wilson v Wigg (1808) 10 East 313.
HR A[2363]
If a person takes possession of the demised premises without constituting himself legal personal representative of the
deceased, he becomes an executor de son tort and can properly be sued as an assignee for rent and breaches of covenant,
if he has so conducted himself to make himself liable by estoppel1.
HR A[2364]
1 Norwich Corpn v Johnson (1686) 3 Mod Rep 90; Williams v Heales (1874) LR 9 CP 177; Stratford-upon-Avon Corpn v Parker [1914] 2
KB 562; as to yearly tenancies see Hunt v Archer (1886) 31 Sol Jo 27, CA.
Page 527
of leases/H Devolution on death/3 Avoidance of liability of personal representative
3 Avoidance of liability of personal representative
HR A[2365]
A personal representative who has become personally liable as an assignee can avoid future personal liability by
assigning the lease1. Where the testator was an assignee himself, the personal representative can also avoid any future
liability of the testator's estate by assigning the lease, unless the testator has entered into a covenant to pay the rent and
perform the covenants of the lease2. In a case where the testator was an assignee, the original lessee may be entitled to
an indemnity against the testator's estate, but in an action by the original lessee the executor can plead plene
administravit and is not bound to keep the assets as an indemnity fund3.
HR A[2366]
1 Taylor v Shum (1797) 1 Bos & P 21; Goodland v Ewing (1883) Cab & El 43. The personal representative must of course comply with
any covenant relating to assignment in the lease.
2 In the case of a 'new tenancy' within the meaning of the Landlord and Tenant (Covenants) Act 1995, s 1, the testator's estate may be
released from liability on an assignment, even if the testator was the original lessee; see para HR A[2081].
3 Colleens v Crouch (1849) 13 QB 542.
HR A[2367]
Further, if the personal representative assigns the lease on sale, then he can, by satisfying all liabilities then accrued due
and claimed and setting apart a sufficient fund to answer any future claim in respect of any fixed sum to be laid out on
the property, avoid liability for all claims which have not then been made1. This does not affect the liability of the
testator's estate, but the lessor is not entitled to have the assets impounded to provide for payment of future rent and
performance of covenants2. It is, however, unnecessary for the personal representative to require an indemnity as to
leaseholds on distributing the estate3, unless he has made himself personally liable by entering4.
HR A[2368]
1 Trustee Act 1925, s 26, as amended. This provision does not apply if the executor has entered and has incurred personal liability as an
assignee as well as liability as an executor; see Re Owers [1941] Ch 389, [1941] 2 All ER 589. In such a case he is entitled to have an
indemnity fund set aside until he has assented: Re Owers [1941] Ch 389, [1941] 2 All ER 589; Re Bennett [1943] 1 All ER 467.
2 King v Malcott (1852) 9 Hare 692; see Re King [1907] 1 Ch 72 at 75.

Page 528
3 Dodson v Samnell (1861) 1 Drew & Sm 575; and see King v Malcott (1852) 9 Hare 692 at 695.

Page 529
of leases/H Devolution on death/4 Liability of legatee
4 Liability of legatee
HR A[2369]
If the personal representative, in order to give effect to a specific bequest of a leasehold, assents to the property vesting
in the legatee, the latter becomes liable as an ordinary assignee and takes the property subject to such liabilities as have
not ripened into debts in the lifetime of the testator1. However, the testator's residuary estate may be liable, rather than
the specific legatee, under a covenant which was required to be performed as a condition of the testator accepting the
lease2.
HR A[2370]-HR A[2380]
1 Hawkins v Hawkins (1880) 13 Ch D 470; Re Betty [1899] 1 Ch 821.
2 See Eccles v Mills [1898] AC 360 at 373 (covenant to lay down grass within a year); Re Hughes [1913] 2 Ch 491 (covenant to erect
buildings); Re Day's Will Trusts [1962] 3 All ER 699, [1962] 1 WLR 1419 (covenant to put premises into repair).
Page 530
of leases/H Devolution on death/5 Death of a lessor
5 Death of a lessor
HR A[2381]
As on the death of a lessee, a lessor's reversionary interest in a lease devolves on death on his personal representatives,
who may assent to its vesting in any person entitled thereto1. Where the lessor dies intestate, his estate vests in the
Public Trustee until the grant of administration2. The personal representative may sue both for rent which becomes due
and for breaches of covenant committed in the lifetime of the lessor3 and after his death, until there is an assent or
conveyance.
HR A[2382]-HR A[2480]
1 Administration of Estates Act 1925, s 36.
2 Administration of Estates Act 1925, s 9, substituted by the Law of Property (Miscellaneous Provisions) Act 1994.
3 Raymond v Fitch (1835) 2 Cr M & R 588.

Page 531
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 5 Restrictions upon dealing with
leases
Chapter 5 Restrictions upon dealing with leases
Editor
John Furber
Alison Oakes
Page 532
leases/A Restrictions upon dealing with the lessee's interests
A
Page 533
leases/A Restrictions upon dealing with the lessee's interests/1 Covenants against assignment or parting with possession
1 Covenants against assignment or parting with possession
HR A[2481]
As stated above1 a lessor may validly impose restrictions upon the lessee's right to assign (or sublet) the demised
premises, and this is usually done, although the form of the covenant taken from the lessee varies from lease to lease.
HR A[2482]
1 See para HR A[1].
HR A[2483]
A covenant 'not to assign' or 'not to assign or otherwise part with' the premises is only broken by a legal assignment for
the entire residue of the term1, and where the lease is a lease of registered land, the legal estate does not pass until
registration of the transfer at the Land Registry2. An agreement for a 'non-assignable' lease entitles the lessor to an
absolute covenant against assignment, but not to a covenant against underletting or parting with possession3.
HR A[2484]
1 Gentle v Faulkner [1900] 2 QB 267, CA, Doe & Pitt v Hogg (1824) 4 Dow and Ry KB 226.
2 See the Land Registration Act 1925, s 22; Brown & Root Technology v Sun Alliance and London Assurance Co Ltd [1997] 1 EGLR 39,
CA.
3 Sweet and Maxwell v Universal News Services Ltd [1964] 2 QB 699, [1964] 3 All ER 30, CA.
HR A[2485]
Thus, a covenant 'not to assign' is not broken by a declaration of trust of the premises in favour of a third party1, or by
the deposit of the lease as security for an advance of money2, or by the grant of an underlease of part of the premises3,
or for part of the term4, or by allowing a partnership of which the tenant is a member to use the premises for business
purposes5.
HR A[2486]
Page 534
1 Gentle v Faulkner [1900] 2 QB 267, CA
2 Doe & Pitt v Hogg (1824) 4 Dow and Ry KB 226; Re Hand, ex p Cocks (1836) 2 Deac 14; Ex p Drake (1841) 1 Mont D & De G 539;
M'Kay v M'Nally (1879) 4 LR 1R 438, CA; cf Swanley Coal Co v Denton [1906] 2 KB 873, CA.
3 Russell v Beecham [1924] 1 KB 525, CA.
4 Crusoe d Blencowe v Bugby (1777) 3 Wils 234. An underlease of the whole of the premises for the whole of the term operates as an
assignment of the term, see para HR A[302].
5 Gian Singh & Co v Devraj Nahar [1965] 1 All ER 768, [1965] 1 WLR 412, PC.
HR A[2487]
A covenant 'not to assign or part with the possession' of premises goes further, and will be broken by an underlease of
the premises for part of the term or otherwise giving possession to another person, for example to an equitable assignee.
However, there is no breach of such a covenant if the lessee allows others to use the premises, while retaining legal
possession himself1. The grant of a licence will generally not amount to a parting with possession2. Where a proposed
undertenant was let into occupation of premises, prior to the execution of the underlease, it was held that there had been
a parting with possession in breach of covenant3. The retention of possession by one partner alone in the dissolution of
a partnership is not a breach of a covenant against parting with possession in a lease granted to two partners4, but there
is a breach if one partner assigns his interest to the other5.
HR A[2488]
1 The question whether there has been a parting with possession depends upon all the facts and circumstances; Lam Kee Ying Sdn Bhd v
Lam Shes Tong [1975] AC 247, [1974] 3 All ER 137, PC. Thus, the sale of a business carried on at the premises by the tenant may or may
not result in a parting with possession; see Pebbles v Crosthwaite (1897) 13 TLR 198, CA; Chaplin v Smith [1926] 1 KB 198, CA; Gian
Singh & Co v Devrey Nahar [1965] 1 All ER 768, [1965] 1 WLR 412, PC; see also Harrison v Povey (1956) 168 Estates Gazette 613;
Rainham Chemicals Works Ltd v Belvedere Fish Guano Co Ltd [1921] 2 AC 465 HL; cf Lam Kee Ying Sdn Bhd v Lam Shes Tong [1975]
AC 247, [1974] 3 All ER 137, PC.
2 See Jackson v Simons [1923] 1 Ch 373 (licence between fixed hours to use part of premises for sale of tickets to a night club); Stening v
Abrahams [1931] 1 Ch 470 (licence to erect an advertising hoarding against the front wall of a house).
3 Abrahams v MacFisheries Ltd [1925] 2 KB 18.
4 Bristol Corpn v Westcott (1879) 12 Ch D 461, CA.
5 Varley v Coppard (1872) LR 7 CP 505; Langton v Henson (1905) 92 LT 805.
HR A[2489]
A covenant not to part with the possession of premises is not broken by the lessee parting with only part of the premises
Page 535
1, although a covenant against alienating 'any part of' the premises is broken by an alienation of the whole of the
premises2, and a restriction on parting with possession is broken by an assignment3. A covenant not to share the
possession of premises is not the same as a covenant not to share occupation, but it may be broken if the tenant allows
another party to enjoy a degree of control over the premises which amounts to it having possession, albeit non-exclusive
4.
HR A[2490]-[2500]
1 Church v Brown (1808) 15 Ves 258 at 265; Grove v Portal [1902] 1 Ch 727.
2 Field v Barkworth [1986] 1 All ER 362, [1986] 1 WLR 137.
3 Marks v Warren [1979] 1 All ER 29, where it was held that a covenant not to assign, underlet or part with possession involves three
separate covenants which are not mutually exclusive, so that a breach of one may also constitute a breach of another.
4 Akici v LR Butlin Ltd [2005] EWCA Civ 1296, [2006] 1 WLR 201, overruling on this point Tulapam Properties Ltd v De Almeida
[1981] 2 EGLR 55.
HR A[2501]
In order to ensure maximum control over the occupation of demised premises, it is common practice to include in leases
a covenant restricting assigning, underletting or parting with possession of the whole or part of the demised premises
and also against allowing other persons into occupation of the whole or part of the premises and sharing occupation of
the premises. However wide the restriction in the covenant may be, the burden remains on the landlord to prove by
satisfactory evidence that there has been such a breach of covenant by a parting with possession or permitting some
other person to occupy the premises1. There is no precise test to be used in determining whether there has been a
sharing of occupation in breach of covenant, but it has been held that, where the tenant is carrying out a business, and
another person participates in that business under the supervision of the tenant, so that the tenant remains exclusively
responsible for the demised premises, then there is no sharing of occupation2.
HR A[2502]
1 See Metropolitan Properties Co Ltd v Griffiths (1981) 43 P & CR 138, CA, in which it was held that evidence that a person was
included in an electoral list, prepared in respect of premises under the Representation of the People Act 1949, was not sufficient to prove that
the person had been permitted to occupy the premises in question.
2 Mean Fiddler Holdings Ltd v Islington London Borough Council [2003] EWCA Civ 160, [2003] 19 EG 120.
Page 536
leases/A Restrictions upon dealing with the lessee's interests/2 Involuntary assignments
2 Involuntary assignments
HR A[2503]
A covenant against assignment is, as a matter of construction, usually restricted in its operation to voluntary
assignments as opposed to involuntary assignments or assignments by operation of law1. Thus, it is not broken when
the lease is taken in execution, provided the execution is bona fide2, nor where it vests in a trustee in bankruptcy3, nor
when it passes on the death of the lessee, whether as part of his personal estate4, or under a specific bequest5, nor where
it is acquired by a public body under compulsory purchase powers6, nor where the court makes a vesting order under
the Trustee Act 19257. However, the covenant is broken by an assignment of a company's lease by the liquidator in a
voluntary or compulsory liquidation8.
HR A[2504]
1 Doe d Mitchinson v Carter (1798) 8 Term Rep 57.
2 Doe d Mitchinson v Carter (1799) 8 Term Rep 300.
3 Doe d Goodbehere v Bevan (1815) 3 M & S 353 at 360; see also Weatherall v Geering (1806) 12 Ves 504; Doe d Cheere v Smith (1814)
5 Taunt 795. There is no breach of the covenant even where the lessee is adjudicated bankrupt on his own petition.
4 Seers v Hird (1791) 1 Ves 294.
5 Crusoe d Blencowe v Bugby (1771) 3 Wils 234 at 237; Doe d Goodbehere v Bevan (1815) 3 M & S 353 at 361; see also Fox v Swann
(1655) Sty 482.
6 Slipper v Tottenham and Hampstead Junction Rly Co (1867) LR 4 Eq 112.
7 Marsh v Gilbert [1980] 2 EGLR 44.
8 Cohen v Popular Restaurants Ltd [1917] 1 KB 480 (voluntary liquidation); Re Farrow's Bank Ltd [1921] 2 Ch 164, CA (compulsory
liquidation). Such an assignment is the act of the company acting through the liquidator. Cf Re Birkbeck Permanent Benefit Building Society
[1913] 2 Ch 34 (where the society was an unregistered company, and its property vested in the liquidator): the position of a trustee in
bankruptcy is also different; he does not dispose of the bankrupt's property as such, as all that property is vested in him: see Re Farrow's
Bank Ltd [1921] 2 Ch 164 at 174, CA.
HR A[2505]
Involuntary assignments or assignments by operation of law may, however, be effectively prohibited by express
stipulations. Provisions for the forfeiture of a lease in the event of the lessee's bankruptcy or liquidation, or in the event
of the term being taken into execution, are valid and are often included in leases1.
Page 537
HR A[2506]
1 R v Topping (1825) M'cle & Yo 544; Re Walker, ex p Gould (1884) 13 QBD 454; Re Johnson and Stephens, ex p Blackett (1890) 70 LT
381; Civil Service Co-operative Society v McGrigor's Trustee [1923] 2 Ch 347; see also Law of Property Act 1925, s 146(9).
Page 538
leases/A Restrictions upon dealing with the lessee's interests/3 Liability upon covenants not to assign without consent
3 Liability upon covenants not to assign without consent
HR A[2507]
Covenants by a lessee against assignment are usually expressed as covenants not to assign without the consent of the
lessor1. Such a covenant runs with the land and binds an assignee, whether mentioned2 or not3, unless the parties
indicate a contrary intention4. However, an assignment in breach of covenant is still effective to vest the leasehold
interest in the assignee, subject to any right of the lessor to forfeit the lease and claim damages for breach of covenant5.
HR A[2508]
1 For the statutory implication in such cases that consent shall not be unreasonably withheld, see para HR A[2547]. Such a covenant does
not give rise to any implied term that the lessor will take reasonable care to ensure that a proposed assignee is of good financial standing
before giving his consent: Norwich Union Life Insurance Society v Low Profile Fashions Ltd [1992] 1 EGLR 86.
2 Williams v Earle (1868) LR 3 QB 739; McEarchon v Colton [1902] AC 104, PC; see West v Dobb (1869) LR 4 QB 634 at 637; on
appeal (1870) LR 5 QB 460.
3 Goldstein v Sanders [1915] 1 Ch 549; Re Robert Stephenson & Co Ltd [1915] 1 Ch 802.
4 Re Robert Stephenson & Co [1915] 1 Ch 802 at 808. In the case of a 'new tenancy' within the meaning of Landlord and Tenant
(Covenants) Act 1995, at paras HR A[21033]ff, the burden of the covenant passes by virtue of s 3 of that Act, unless the covenant is
expressed to be personal (see s 3(6)). See para HR A[2065].
5 Old Grovebury Manor Farm Ltd v W Seymour Plant Sales and Hire Ltd (No 2) [1979] 3 All ER 504, [1979] 1 WLR 1397, CA.
HR A[2509]
The covenant binds personal representatives1 and voluntary assignees. Whether the covenant also binds an involuntary
assignee, such as a trustee in bankruptcy or execution creditor, is a question of construction of the covenant in each
case2. A trustee in bankruptcy is not an assignee of the lessee and, therefore, is not bound by a covenant which applies
only to assignees3. However, he is a successor in title to the lessee and thus is bound by a covenant by a lessee on
behalf of himself and his successors in title4. An execution creditor is in the same position as a trustee in bankruptcy
and is not bound by a covenant made by the lessee only on behalf of himself and his assignees5.
HR A[2510]-[2520]
1 Sir William More's Case (1584) Cro Eliz 26; Roe d Gregson v Harrison (1788) 2 Term Rep 425.
Page 539
2 Re Wright [1949] Ch 729, [1949] 2 All ER 605.
3 Doe d Goodbehere v Bevan (1815) 3 M & S 353; see also Re Farrow's Bank [1921] 2 Ch 164 at 174, per Lord Sterndale MR
(contrasting the position of a trustee in bankruptcy and a liquidator).
4 Re Wright [1949] Ch 729, [1949] 2 All ER 605.
5 Doe d Mitchinson v Carter (1798) 8 Term Rep 57; although it is otherwise if the judgment debtor connives in the sale; Doe d
Mitchinson v Carter (1799) 8 Term Rep 300.
HR A[2521]
The covenant does not bind an underlessee1, but if the head lessor wishes the underlessee to be bound he can either
stipulate in the lease that the underlease shall contain a covenant against assignment without the consent of the head
lessor2 or make it a term of the licence that the head lessor shall be a party to the underlease and that the covenant
against assignment by the underlessee shall be made directly with him3.
HR A[2522]
1 Villiers v Oldcorn (1903) 20 TLR 11; Mackusick v Carmichael [1917] 2 KB 581.
2 However, it seems that only the lessor, and not the head lessor, will be able to enforce such a covenant: see Amsprop Trading Ltd v
Harris Distribution Ltd [1997] 2 All ER 990, [1997] 1 WLR 1025, in which it was held that the provisions of the Law of Property Act 1925,
s 56 do not assist the head lessor. Neuberger J found that the decision and reasoning of Denning LJ in Drive Yourself Hire Co (London) Ltd v
Strutt [1954] 1 QB 250, [1953] 2 All ER 1475, CA could not survive the reasoning of the House of Lords in Beswick v Beswick [1968] AC
58, [1967] 2 All ER 1197.
3 In such a case, the underlessee's covenant will be enforceable as a matter of contract. The benefit of the covenant may pass to an
assignee of the reversion, but it seems that the burden will not pass to an assignee of the underlessee: see Amsprop Trading Ltd v Harris
Distribution Ltd [1997] 2 All ER 990, [1997] 1 WLR 1025.
HR A[2523]
Whether a covenant which does not merely restrict but absolutely prohibits assignment is a covenant which runs with
the land depends upon the construction of the lease as a whole1, and usually such a covenant will run with the land2.
HR A[2524]
1 Re Robert Stephenson & Co Ltd [1915] 1 Ch 802; cf Whitchcot v Fox (1616) Cro Joc 398; Seers v Hind (1791) 1 Ves 294.
2 See Re Robert Stephenson & Co Ltd [1915] 1 Ch 802 at 809, where it was held by Sargant J that there was not enough in the special
language of the lease under consideration (including the absolute prohibition on assignment) to negative a general presumption that a
covenant restricting assignment runs with the land. For a consideration of covenants 'running with the land' see para HR A[2029]. For the
position in the case of a 'new tenancy' within the meaning of Landlord and Tenant (Covenants) Act 1995, see para HR A[2065].
Page 540
leases/A Restrictions upon dealing with the lessee's interests/4 Covenants against underletting
4 Covenants against underletting
HR A[2525]
A covenant against underletting is not broken by the grant of a licence or by permitting lodgers to occupy premises,
because lodgers are licensees only and not underlessees1. Such a covenant is broken whenever the lessee, by the grant
of an underlease, parts with the exclusive possession of the premises or, if the covenant is so worded as to apply to part
of the premises, any part of the premises2. Advertising for a tenant is not in itself a breach of the covenant3 and there
must be a substantial parting with possession of a substantial part of the premises to constitute a breach4. The mere fact
that there is a third party in occupation of the premises, who does not claim under the lessee, is not evidence of a breach
of the covenant5, but if he appears to be tenant to the lessee this is prima facie evidence of a breach6.
HR A[2526]
1 Doe d Pitt v Lamming (1814) 4 Camp 73 at 77. A lodger is a person who is permitted to live in residential premises on terms that the
owner provides such attendances or services as require him or his servants to exercise unrestricted access to the premises: Street v Mountford
[1985] AC 809 at 818, [1985] 2 All ER 289 at 293, per Lord Templeman; see also Edwardes v Barrington (1901) 85 LT 650, HL (use of
theatre refreshment rooms and bars). For the distinction between licence and lease see para HR A[549].
2 Roe d Dingley v Sales (1813) 1 M & S 297; cf Greenslade v Tapscott (1834) 1 Cr M & R 55; Richards v Davies [1921] 1 Ch 90 (letting
of the grass keep of a farm held a breach).
3 Gourley v Duke of Somerset (1812) 1 Ves & B 68.
4 Mashiter v Smith (1887) 3 TLR 673.
5 Doe v Payne (1815) 1 Stark 86.
6 Doe d Hindley v Rickarby (1803) 5 Esp 4.
HR A[2527]
If the covenant is simply against underletting, without any reference to part of the premises, an underletting of part only
is no breach of the covenant1. However, if the lessee, having underlet part of the premises with the lessor's consent,
subsequently underlets the remainder without obtaining consent, then a covenant against underletting the premises is
broken, as the lessee has never obtained consent to the underletting of the whole2, but if the effect of the covenant is
such that it amounts to a covenant not to underlet the whole of the premises for a term of more than three years, the
covenant is not broken by the lessee underletting part to one subtenant for a period of less than three years and
subsequently underletting to another subtenant for a period of more than three years3. A covenant against underletting
any part of the premises is broken by an underletting of the whole, as it extends to a transaction whereby every part is
underlet4, and a covenant not to underlet is broken by an underletting from year to year5.
Page 541
HR A[2528]
1 Wilson v Rosenthal (1906) 22 TLR 233; Cottell v Baker (1920) 36 TLR 208; Cook v Shoesmith [1951] 1 KB 752, CA ('and I further
agree not to sublet'); Esdaile v Lewis [1956] 2 All ER 357, [1956] 1 WLR 709, CA ('no subletting allowed'). The same is the case with a
covenant not to part with possession of premises; see to para HR A[2489].
2 Chatterton v Terrell [1923] AC 578; Yorkshire Metropolitan Properties v Co-operative Retail Services [1997] EGCS 57.
3 Roberts v Enlayde Ltd [1924] 1 KB 335, CA.
4 Field v Barkworth [1986] 1 All ER 362, [1986] 1 WLR 137. The same principle applies to covenants against assignment of any part of
the premises.
5 Timms v Baker (1883) 49 LT 106.
HR A[2529]
In order to constitute a covenant against underletting, it is not necessary that express reference to underletting should be
made; it is sufficient if the covenant prohibits a disposition for part only of the term1. However, in the absence of any
reference to mere changes of occupancy or to a disposition for part of the term, words primarily importing assignment
will not include underletting2, but words which are appropriate to underletting may have their scope widened, and may
extend to assignment, if they are intended to be applicable to an alienation for the entire residue of the term3. There is a
breach of a covenant not to assign, underlet or part with the possession of the demised premises where there is a
mortgage by way of a subdemise4.
HR A[2530]-[2540]
1 Doe d Holland v Worsley (1807) 1 Camp 20 (proviso that the lessee should not assign or otherwise part with the premises or any part
thereof for the whole or any part of the term); Dymock v Showell's Brewery Co Ltd (1898) 79 LT 329, CA (proviso for re-entry if the lessee
did any act whereby the premises became vested for the whole or any part of the term in any person other than the tenant: this was held to
include a subletting from year to year). A sublease for one year from a future date is not a breach of a covenant not to sublet for more than
one year: Croft v Lumley (1858) 6 HL Cas 672.
2 Crusoe d Blencowe v Bugby (1771) 3 Wils 234 (covenant not to 'assign, transfer or set over or otherwise do or put away with' the lease
on the demised premises); Church v Brown (1808) 15 Ves 258 at 265; cf Kinnersley v Orpe (1779) 1 Doug KB 56; Russell v Beecham
[1924] 1 KB 525, CA.
3 Greenaway v Adams (1806) 12 Ves 395 (covenant not to 'let, set or demise the premises for the whole or any part of the term'). But the
words 'set or let' alone, without reference to the whole of the term, forbid underletting only and leave the lessee free to assign; Re Doyle and
O'Hara's Contract [1899] 1 IR 113.
4 Serjeant v Nash, Field & Co [1903] 2 KB 304, CA.
HR A[2541]
Page 542
In practice, covenants against underletting are usually combined with covenants which restrict the parting with
possession or occupation of the whole or part of the demised premises1.
HR A[2542]

Page 543
leases/A Restrictions upon dealing with the lessee's interests/5 Conditions of a lessor's consent to an assignment
5 Conditions of a lessor's consent to an assignment
HR A[2543]
Where a lease contains a covenant, condition or agreement against assigning, underletting or parting with possession or
disposing of the demised premises without licence or consent, the covenant, condition or agreement, except where the
lease contains an express provision to the contrary, is to be deemed to be subject to a proviso that no fine or sum of
money in the nature of a fine shall be payable for or in respect of such licence or consent1. The word 'fine' includes a
premium or foregift and any payment, consideration or benefit in the nature of a fine, premium or foregift2. It therefore
includes any valuable consideration given or required in such circumstances that, if it were money, it would be what is
commonly known as a fine3, and so, for example, it includes a stipulation by a landlord that a free public-house shall be
a house tied to a brewery for the remainder of the term assigned4, and to take in advance the whole rent for the duration
of a tenancy is to take a fine5. An undertaking to pay a sum in the nature of a fine is unenforceable6.
HR A[2544]
1 Law of Property Act 1925, s 144. This section applies to all leases, whatever their date; West v Gwynne [1911] 2 Ch 1, CA (in which the
statutory provisions of the section was considered).
2 Law of Property Act 1925, s 205(1)(xxiii).
3 Waite v Jennings [1906] 2 KB 11 at 18, CA.
4 Gardner & Co v Cone [1928] Ch 955.
5 Hughes v Waite [1957] 1 All ER 603, [1957] 1 WLR 713.
6 Comber v Fleet Electrics Ltd [1955] 2 All ER 161, [1955] 1 WLR 566. The reasoning of Vaisey J was based on lack of consideration;
he said that the matter would be different if a document had been executed under seal and also that the money would not be recoverable if it
had been paid over.
HR A[2545]
This statutory provision does not preclude the right to require payment of a reasonable sum in respect of any legal or
other expenses in relation to the licence or consent1, nor does it prevent the lessor from requiring the assignee to
covenant to pay the rent and perform the lessee's covenants during the residue of the term2, nor, in the case of a lease
granted under a building contract, does it prevent the lessor from requiring a deposit, as security for the completion of
the works3; however, it does prevent him from demanding an increased rent4. If consent is refused except on payment,
the lessee is entitled to assign without consent and to bring an action for a declaration to that effect5; but the statutory
provision does not make payment of a fine for consent illegal, and if the lessee pays it, he cannot require repayment6.
Page 544
HR A[2546]
1 Law of Property Act 1925, s 144. For a case on liability to pay costs in relation to a licence to assign, and of abortive applications for
such licence, see Goldman v Abbott [1989] 2 EGLR 78, CA.
2 See Waite v Jennings [1906] 2 KB 11, CA.
3 Re Cosh's Contract [1897] 1 Ch 9, CA.
4 Jenkins v Price [1907] 2 Ch 229; revsd on another point [1908] 1 Ch 10, CA.
5 Andrew v Bridgman [1908] 1 KB 596, CA; Waite v Jennings [1906] 2 KB 11 at 16, CA; West v Gwynn [1911] 2 Ch 1, CA; Gardner &
Co v Cone [1928] Ch 955 at 965.
6 Andrew v Bridgman [1908] 1 KB 596, CA. The Court of Appeal expressly did not decide whether the result would be different if the
payment were made under protest.
Page 545
leases/A Restrictions upon dealing with the lessee's interests/6 Unreasonable withholding of consent: statutory
provisions
6 Unreasonable withholding of consent: statutory provisions
HR A[2547]
In all leases, whenever made, containing a covenant, condition or agreement against assigning, underletting, charging or
parting with possession of the demised premises, or any part thereof, without licence or consent, such covenant,
condition or agreement is deemed notwithstanding any express provision to the contrary, to be subject to a proviso to
the effect that such licence or consent shall not be unreasonably withheld1. The proviso so implied does not preclude
the right of the lessor to require payment of a reasonable sum in respect of any legal or other expenses incurred in
connection with such licence or consent2.
HR A[2548]
1 Landlord and Tenant Act 1927, s 19(1)(a), at para HR A[20141]. This provision does not apply to leases of agricultural holdings within
the meaning of the Agricultural Holdings Act 1986, or to farm business tenancies within the meaning of the Agricultural Tenancies Act
1995: see Landlord and Tenant Act 1927, s 19(4) (as amended). The provision also does not apply to assured periodic tenancies: Housing
Act 1988, s 15(2); nor to a covenant entered into to give effect to the Leasehold Reform Act 1967, s 30(2), (5).
2 Landlord and Tenant Act 1927, s 19(1)(a).
HR A[2549]
These statutory provisions do not prevent a lessor taking an absolute covenant against assignment1. Similarly, the
provisions do not invalidate a provision that a lessee desiring to assign or sublet shall first offer to surrender the lease2,
or any other condition precedent to an assignment3. Neither do they apply in the case of a covenant not to assign
without consent, where the lease expressly provides that the landlord's consent will not be withheld in the case of an
assignment to a respectable and responsible person4. It has been held that the parties to a lease cannot curtail the
operation of these statutory provisions by stipulating circumstances in which the lessor's refusal of consent shall not be
deemed to be unreasonable5. However, in the case of a 'qualifying lease'6, the position is somewhat different, as there
are further statutory provisions whereby, if the landlord and tenant have entered into an agreement specifying (a) any
circumstances in which the landlord may withhold his licence or consent for an assignment of the demised premises or
any part of them, or (b) any conditions, subject to which any such licence or consent may be granted, then the landlord
(i) shall not be regarded as unreasonably withholding his licence or consent to any such assignment on the ground (and
it is the case) that any such circumstances exist and (ii) if he gives any such licence or consent subject to any such
conditions, shall not be regarded as giving it subject to unreasonable conditions7.
HR A[2550]-[2560]
Page 546
1 This is because the statutory provisions only apply to covenants not to assign etc without the landlord's consent, which are conditional
covenants; see eg the dicta of Romer LJ in FW Woolworth & Co Ltd v Lambert [1937] Ch 37 at 58, 59, [1936] 2 All ER 1523 at 1540, CA.
2 Adler v Upper Grosvenor Street Investment [1957] 1 All ER 229, [1957] 1 WLR 227, approved and followed by the Court of Appeal in
Bocardo SA v S & M Hotels Ltd [1979] 3 All ER 737, [1980] 1 WLR 17, CA. Such a provision may lead to an agreement to surrender, which
may be rendered void in the case of a business tenancy by the provisions of the Landlord and Tenant Act 1954, s 38 (see para HR B[601]) or
in the case of a long residential tenancy by the provisions of the Landlord and Tenant Act 1954, s 17 (see para HR E[334]); Allnatt London
Properties Ltd v Newton [1981] 2 All ER 290, followed in Tiffany Investments Ltd v Bircham & Co Nominees (No 2) Ltd [2003] EWCA Civ
1759, [2004] 21 EG 152, in which it was held that the obligation to offer a surrender was not struck down by these statutory provisions. In
Greene v Church Comms for England [1974] Ch 467, [1974] 3 All ER 609, CA, it was held that a provision requiring the offer of a
surrender without any consideration before asking for consent to assign was an 'estate contract' registrable umder the Land Charges Act
1972: cf Bircham & Co Nominees (No 2) Ltd v Worrell Holdings Ltd [2001] 47 EG 149, CA in which a requirement that the tenant, when it
wished to dispose of the lease, should first offer it to the landlord, stating the price, was held not to create any equitable proprietary interest
analogous to an option. It was held in Tiffany Investments Ltd v Bircham & Co Nominees (No 2) Ltd [2003] EWHC 143 (Ch), [2003] 2 P &
CR 381, that the obligation to make the offer arose when the lessee was about to enter into a contract to sell his lease and that, on his failure
to make such an offer, an equitable interest then arose in favour of the lessor.
3 See Bocardo SA v S & M Hotels Ltd [1979] 3 All ER 737, [1980] 1 WLR 17, and the general note to Landlord and Tenant Act 1927, s
19. In order to determine whether such a condition precedent to an assignment or underletting has been fulfilled, it is necessary to look at the
proposed transaction as a whole, and thus, for example, a proposed underlease must be read together with a proposed collateral deed, even if
the terms of the deed are personal to the parties to it: Allied Dunbar Assurance plc v Homebase Ltd [2002] EWCA Civ 666, [2003] 1 P & CR
75. See also Mount Eden Land Ltd v Towerstone Ltd [2002] 27 EG 97 (CS): where a landlord is entitled to insist on approved guarantors for
an assignee, there is no statutory requirement that the landlord should act reasonably, although requests made by the landlord for information
about the proposed guarantors must be genuinely intended to ensure his financial security.
4 Moat v Martin [1950] 1 KB 175, [1949] 2 All ER 646, CA, a decision based solely on the construction of the covenant in question.
5 Re Smith's Lease [1951] 1 All ER 346; Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751. Covenants of this sort must be
distinguished from valid covenants which, on their true construction, set out the agreement of the parties as to what alienations are not
absolutely prohibited and can be made with consent, thus restricting the circumstances in which the tenant can properly apply for consent to
an alienation: Crestfort Ltd v Tesco Stores Ltd [2005] EWHC 805 (Ch), [2005] 3 EGLR 25; Level Properties Ltd v Balls Brothers Ltd [2007]
EWHC 744 (Ch), [2007] 23 EG 166.
6 A 'qualifying lease' is any lease which is a 'new tenancy' for the purposes of Landlord and Tenant (Covenants) Act 1995, other than a
lease by which a building or part of a building is let wholly or mainly as a single private residence; Landlord and Tenant Act 1927, s 19(1E).
For the meaning of 'new tenancy' see Landlord and Tenant (Covenants) Act 1995, s 1 at para HR A[21033].
7 Landlord and Tenant Act 1927, s 19(1A) and (1B)-(1E) at para HR A[20141].
HR A[2561]
The lessee is bound to ask for any consent required before he assigns, even though it could not properly be refused1,
and he must give the lessee a reasonable time to consider the request2. If through forgetfulness or otherwise, he omits to
ask for consent, then the lease becomes liable to forfeiture for breach of covenant3, although if the omission is merely
accidental and the lessor would have had no good reason to refuse consent if asked, then it is likely that relief from
forfeiture may be granted4. It has been held5 that where a lessee fails to request the lessor's consent to a subletting in
accordance with his covenant there is a clear breach of the contractual obligation when the subletting is effected, and as
the sublessee will have induced or aided and abetted that breach of covenant, the court may grant an injunction
requiring the immediate surrender of the underlease6. As a general rule, the lessor is entitled to be told what is in
substance the true nature of the transaction to which he is asked to consent, and to withhold consent until he has been
given this information7. However, where consent for an assignment is sought, the lessor is not usually entitled to know
what premium, if any is being paid, and all the other terms of the assignment; the position in the case of a subletting is
different, as the lessor is then properly concerned with the terms of the sublease8. An obligation in the lease to provide
Page 547
details of the terms of the sublease when making an application for consent to the subletting is not always to be
construed as imposing a condition precedent to the making of the application9. A covenant restricting sub-letting often
contains an absolute prohibition against sub-letting at a premium, intended to avoid the rent payable under a sub-letting
being reduced. Such a prohibition does not prevent the tenant paying a 'reverse premium' to the sub-tenant10. A
covenant restricting sub-letting may also provide that any underlease shall be granted subject to 'like conditions and
covenants' as the head lease; this requires similarity in substance without the need for similarity in form, detail or
wording11.
HR A[2562]
1 Eastern Telegraph Co v Dent [1899] 1 QB 835, CA; Wilson v Fynn [1948] 2 All ER 40; Creery v Summersell and Flowerdew & Co Ltd
[1949] Ch 751.
2 Wilson v Fynn [1948] 2 All ER 40.
3 Barrow v Isaacs & Son [1891] 1 QB 417, CA; Lewis and Allenby (1909) Ltd v Pegge [1914] 1 Ch 782 at 785; Ellis v Allen [1914] 1 Ch
904 at 909.
4 For relief from forfeiture, see para HR A[9068].
5 Hemingway Securities Ltd v Dunraven Ltd [1995] 1 EGLR 61; Crestfort Ltd v Tesco Stores Ltd [2005] EWHC 805 (Ch), [2005] 3
EGLR 25.
6 In the Hemingway case, Jacob J also said that a covenant against alienation could be regarded as a restrictive covenant binding upon the
sublessee, so that an injunction could also be granted on that ground. In the Crestfort case, Lightman J doubted whether such a covenant
could properly be described as a restrictive covenant in the sense in which that expression is used in the law of real property; in any event, he
held that it did not bind a prospective sublessee not to take an underlease. He held that it was necessary to show that the prospective
underlessee had actual knowledge of a breach of covenant and intended that the breach should be committed (thus unlawfully interfering
with the contractual relations between landlord and tenant), in order to justify the grant of an injunction.
7 Fuller's Theatre and Vaudeville Co v Rofe [1923] AC 435 at 440; Isow's Restaurants Ltd v Greenhaven (Piccadilly) Properties Ltd
(1969) 213 Estates Gazette 505; FW Woolworth plc v Charlwood Alliance Properties Ltd [1987] 1 EGLR 53; Sood v Barker [1991] 1 EGLR
87, CA.
8 Kened Ltd and Den Norske Bank plc v Connie Investments Ltd (1995) 70 P & CR 370 at 378, CA.
9 Blockbuster Entertainment Ltd v Barnsdale Properties Ltd [2003] EWHC 2912 (Ch), [2004] L & TR 13.
10 NCR Ltd v Riverland Portfolio No. 1 Ltd [2004] EWHC 921 (Ch), [2005] 1 P & CR 3. The decision of the Court of Appeal in Allied
Dunbar Assurance plc v Homebase Ltd [2002] EWCA civ 666, [2003] 1 P & CR 75 (considered at A[2550-2560]) was distinguished in this
case.
11 Crestfort Ltd v Tesco Stores Ltd [2005] EWHC 805 (Ch), [2005] 37 EG 148.
Page 548
leases/A Restrictions upon dealing with the lessee's interests/7 Building leases: statutory provisions
7 Building leases: statutory provisions
HR A[2563]
In all leases, whenever made, containing a covenant, condition or agreement against assigning, underletting, charging or
parting with possession of the demised premises or any part thereof without licence or consent such covenant, condition
or agreements is deemed, notwithstanding any express provision to the contrary, to be subject (if the lease is for more
than forty years and is made in consideration wholly or partially of the erection, or the substantial improvement,
addition or alteration of buildings and the lessor is not a government department or local or public authority, or a
statutory or public utility company) to a proviso to the effect that in the case of any assignment, underletting, charging
or parting with possession (whether by the holders of the lease or any under-tenant whether immediate or not) effected
more than seven years before the end of the term, no consent or licence shall be required, if notice in writing of the
transaction is given to the lessor within six months after the transaction is effected1. However, these provisions do not
have effect in relation to any 'qualifying lease'2 and do not apply to an absolute covenant against assignments nor, for
example, to a proviso requiring a lessee to obtain a guarantor for any assignee3.
HR A[2564]
1 Landlord and Tenant Act 1927, s 19(1)(b). For definitions of the expressions 'statutory company' and 'public utility company' see s
25(1). This provision does not apply to mining leases; s 19(4); nor does it apply in the other cases referred to in para HR A[2548], n 1.
2 LTA 1927, s 19(1D). for the meaning of 'qualifying lease' see s 19(1E) and para HR A[2550], n 6.
3 Vaux Group plc v Lilley [1991] 1 EGLR 60.

Page 549
leases/A Restrictions upon dealing with the lessee's interests/8 Unlawful withholding of consent: statutory provisions
8 Unlawful withholding of consent: statutory provisions
HR A[2565]
Where the licence or consent of the lessor or any other person is required for the disposal to any person of premises
comprised in a tenancy, it is unlawful for the landlord or other person to discriminate against a person on grounds of sex
or race, by withholding the licence or consent for disposal of the premises to him1.
HR A[2566]
1 Sex Discrimination Act 1975, s 31(1); Race Relations Act 1976, s 24(1).
HR A[2567]
However, these provisions do not apply if: (1) the person withholding a licence or consent or a near relative of his ('the
relevant occupier') resides, and intends to continue to reside, on the premises; and (2) there is on the premises, in
addition to the accommodation occupied by the relevant occupier, accommodation (not being storage accommodation
or means of access) shared by the relevant occupier with other persons residing on the premises; and (3) the premises
are small premises1.
HR A[2568]
1 Sex Discrimination Act 1975 s 31(2); Race Relations Act 1976, s 24(2). For the meaning of 'near relative' see Sex Discrimination Act
1975, s 82(5), Race Relations Act 1976, s 78(5). For the meaning of 'small premises' see Sex Discrimination Act 1975, s 32(2); Race
Relations Act 1976, s 22(2).
HR A[2569]
There are similar statutory provisions relating to discrimination on grounds of disability1. Refusal of consent on these
unlawful grounds is not expressly stated in the relevant statutes to be unreasonable, but would presumably be held to be
so.
HR A[2570]-[2580]
Page 550
1 Disability Discrimination Act 1995, ss 22, 23.

Page 551
leases/A Restrictions upon dealing with the lessee's interests/9 Qualified duty to consent to assignment etc: statutory
provisions
9 Qualified duty to consent to assignment etc: statutory provisions
HR A[2581]
The Landlord and Tenant Act 19881 made significant changes in the law relating to the giving of consent to assignment
or underletting, in particular by imposing duties upon a person receiving any application for such consent2, by
introducing the possibility of a claim for damages against such a person for breach of such duties and by reversing the
burden of proof by requiring such a person to show that he acted unreasonably3.
HR A[2582]
1 See paras HR A[20886].
2 Previously, a provision that consent to an assignment was not to be unreasonably withheld was not construed as implying a covenant by
the lessor not to refuse consent unreasonably: See eg Treloar v Bigge (1874) LR 9 Exch 151.
3 Previously, the burden of proof in any case was on the lessee to show that consent had been unreasonably withheld: see eg Shanly v
Ward (1913) 29 TLR 714 at 715, CA.
HR A[2583]
The 1988 Act applies to all leases, whether granted before or after the Act came into force1, except secure tenancies as
defined in s 79 of the Housing Act 19852.
HR A[2584]
1 See the definition of 'tenancy' in Landlord and Tenant Act 1988, s 5(1).
2 Landlord and Tenant Act 1988, s 5(3). For secure tenancies generally see Division D.
HR A[2585]
By virtue of s 1 of the Landlord and Tenant Act 1988, in any case where:
(a) a tenancy includes a covenant on the part of the tenant not to enter into one or more of the
Page 552
following transactions, that is: assigning, underletting, charging or parting with possession of the
premises comprised in the tenancy or any part of the premises without the consent of the landlord or
some other person; but
(b) the covenant is subject to the qualification that the consent is not to be unreasonably withheld1,
whether or not it is also subject to any other qualification2 then, where there is served3 on the person
who may consent to a proposed transaction written application by the tenant for consent to the
transaction, he owes a duty to the tenant within a reasonable time4:
(i) to give consent, except in a case where it is reasonable not to give consent;
(ii) to serve on the tenant written notice of his decision whether or not to give consent
specifying in addition, if the consent is given subject to conditions, the conditions and, if the
consent is withheld, the reasons for withholding it5.
HR A[2586]
1 This must include cases where the qualification that consent is not to be unreasonably withheld is implied by virtue of the Landlord and
Tenant Act 1927, s 19(1)(a); see para HR A[2507].
2 There may be such an 'other qualification' where some condition precedent must be fulfilled (for example, as to the amount of rent to be
paid by a proposed undertenant) but it is expressly stated that the landlord's consent in relation to that matter shall not be unreasonably
withheld: see Clinton Cards (Essex) Ltd v Sun Alliance & London Assurance Co Ltd [2002] EWHC 1576 (Ch), [2002] 37 EG 154. A
condition is often imposed that there should be no underletting other than at a full market rent; in such a case, evidence of the best offer
obtained after an extensive marketing campaign should demonstrate that the condition has been satisfied: see Clinton Cards above. Where
such a condition is imposed, an application for consent to underlet, made without stating the rent to be paid, is valid, as it is open to the
landlord to request details of that rent: Norwich Union Linked Life Assurance Ltd v Mercantile Credit Co Ltd [2003] EWHC 3064 (Ch),
[2004] 04 EG 109 (CS).
3 For cases where an application is to be treated as served, see the Landlord and Tenant Act 1988, s 5(2).
4 See Midland Bank plc v Chart Enterprises Inc [1990] 2 EGLR 59 (two and a half months' delay held to be unreasonable). See also City
Hotels Group Ltd v Total Property Investments Ltd [1985] 1 EGLR 253 (lessor found to have left requests for further information too late). It
appears from the judgment of Munby J in Go West Ltd v Spigarolo [2003] EWCA Civ 17, [2003] 2 All ER 141 that, even in complicated
cases, the 'reasonable time' contemplated should be measured in weeks rather than months. However, it is not in the interests of the parties
that a decision should be rushed. In NCR Ltd v Riverland Portfolio No.1 Ltd [2005] EWCA Civ 312, [2005] 22 EG 134, it was held that in
the absence of special circumstances, a period of less than three weeks could not be categorised as an inherently unreasonable period for the
consideration of the financial and legal implications of an application for consent.
5 A decision not to give consent which is communicated in writing terminates the period of reasonable time, for these purposes, even
where negotiations and correspondence follow that refusal, during what might otherwise have been regarded as a reasonable period: Go West
Ltd v Spigarolo [2003] EWCA Civ 17, [2003] QB 1140, [2003] QB 1140, [2003] 2 All ER 141.
HR A[2587]
Giving consent to any condition subject to any condition that is not a reasonable condition does not satisfy this duty1.
HR A[2588]
Page 553
1 Landlord and Tenant Act 1988, s 1(4).
HR A[2589]
It is reasonable for a person not to give consent to a proposed transaction only in a case where, if he withheld consent
and the tenant completed the transaction, the tenant would be in breach of covenant1.
HR A[2590]-[2600]
1 Landlord and Tenant Act 1988, s 1(5). It seems that this provision is not intended to change the position established at common law, see
para HR A[2621]; if a lessee covenants not to assign without the consent of the lessor (not to be unreasonably withheld), then he is entitled
to assign without such consent if that consent has been unreasonably withheld, and is thus not in breach of covenant. If the consent has been
reasonably withheld, any assignment will be in breach of covenant.
HR A[2601]
It is for the person who owed any duty as set out above:
(a) if he gave consent and the question arises whether he gave it within a reasonable time, to show that
he did;
(b) if he gave consent subject to any condition and the question arises whether the condition was a
reasonable condition, to show that it was;
(c) if he did not give consent and the question arises whether it was reasonable for him not to do so, to
show that it was reasonable;
and if the question arises whether he served notice within a reasonable time, as required above, to show that he did1.
HR A[2602]
1 Landlord and Tenant Act 1988, s 1(6). This is the provision which reverses the burden of proof. However, while the lessor must show
reasonable grounds to justify the refusal of a consent, he is not obliged to prove that these grounds are true: Air India v Balabel [1993] 2
EGLR 66, CA.
HR A[2603]
If, in a case to which the above provisions apply, any person receives a written application by the tenant for consent to a
proposed transaction and that person:
(a) is a person who may consent to the transaction or, though not such a person, is the landlord; and
(b) believes that another person, other than a person who he believes has received the application or a
Page 554
copy of it, is a person who may consent to the transaction;
then he owes a duty to the tenant (whether or not he owes him any duty under the above provisions) to take such steps
as are reasonable to ensure the receipt within a reasonable time by the other person of a copy of the application1.
HR A[2604]
HR A[2605]
A claim that a person has broken any duty under the above provisions may be made the subject of civil proceedings in
like manner as any other claim in tort for breach of statutory duty1.
HR A[2606]
1 Landlord and Tenant Act 1988, s 4. Thus, a claim for damages may be made and in an appropriate case, it would seem that a court may
award an injunction requiring the remedy of the breach of statutory duty. In order to obtain an award of damages, the claimant must prove
loss caused by the breach of duty: Clinton Cards (Essex) Ltd v Sun Alliance & London Assurance Co Ltd [2002] EWHC 1576 (Ch), [2002]
37 EG 154. In a case where a landlord has pursued a deliberately obstructive policy in order to prevent a legitimate assignment, exemplary
or punitive damages may be awarded: Design Progression Ltd v Thurloe Properties Ltd [2004] EWHC 324 (Ch), [2004] 2 P & CR 31.
Page 555
leases/A Restrictions upon dealing with the lessee's interests/10 Qualified duty to approve consent by another: statutory
provisions
10 Qualified duty to approve consent by another: statutory provisions
HR A[2607]
It is also provided in the Landlord and Tenant Act 19881 by virtue of s 3 that in any case where:
(a) a tenancy includes a covenant on the part of the tenant not without the approval of the landlord to
consent to the subtenant assigning, underletting, charging or parting with the possession of the premises
comprised in the subtenancy or any part of the premises; but
(b) the covenant is subject to the qualification that the approval is not to be unreasonably withheld2,
whether or not it is also subject to any other qualification;
then, where there is served3 on the landlord a written application by the tenant for approval or a copy of a written
application to the tenant by the subtenant for consent to a transaction to which the covenant relates, the landlord owes a
duty to the subtenant within a reasonable time4:
(1) to give approval, except in a case where it is reasonable not to give approval
(2) to serve on the tenant and the subtenant written notice of his decision whether or not to give
approval, specifying in addition
(i) if approval is given subject to conditions, the conditions

(ii) if approval is withheld, the reasons for withholding it.
HR A[2608]
1 See para HR A[2581] for the main provisions of the LTA 1988 and their application.
HR A[2609]
There are also other provisions in s 3 relating to reasonableness and burden of proof in the same form as those contained
Page 556
in s 1, considered above1. A claim that a person had broken any duty under the provisions of s 3 may be made the
subject of civil proceedings, in like manner as any other claim in tort for breach of statutory duty2.
HR A[2610]-[2620]
1 Landlord and Tenant Act 1988, s 3(3), (4), (5); cf s 1(4), (5), (6) considered at paras HR A[2587], [2589] and [2601].
2 LTA 1988, s 4; see para HR A[2605].

Page 557
leases/A Restrictions upon dealing with the lessee's interests/11 Remedies where consent is unreasonably withheld
11 Remedies where consent is unreasonably withheld
HR A[2621]
At common law, a proviso that consent shall not be unreasonably withheld to an assignment or subletting1 was not
construed as implying a covenant on the behalf of the lessor not to refuse his consent unreasonably2. If the lessor did so
refuse his consent, the lessee was at liberty to assign or sublet without the lessor's consent3, and could obtain a
declaration from the court of his right to do so4. Generally speaking, specific performance of a contract to assign a lease
would not be granted if the lessor's consent had not been obtained, unless such a declaration had been obtained5.
HR A[2622]
1 Such a proviso may be express, or implied by virtue of Landlord and Tenant Act 1927, s 19(1)(a); see para HR A[2507].
2 See eg Treloar v Bigge (1874) LR 9 Exch 151.
3 Treloar v Bigge (1874) LR 9 Exch 151: Hyde v Warden (1877) 3 Ex D 72, CA; Sear v House Property and Investment Society (1880) 16
Ch D 387; Lewis and Allenby (1909) Ltd v Pegge [1914] 1 Ch 782; Ideal Film Renting Co v Nielsen [1921] 1 Ch 575 (where, in the lease in
question, the qualification that consent should not be unreasonably withheld was held to be not a proviso, but an express covenant by the
lessor, so that, when consent was unreasonably withheld, the lessee could not only assign without it, but could also bring an action for breach
of covenant).
4 Young v Ashley Gardens Properties Ltd [1903] 2 Ch 112, CA; Evans v Levy [1910] 1 Ch 452; Shanly v Ward (1913) 29 TLR 714, CA.
If the lessee is successful, he will be entitled to the costs of his action in the usual way: see Young v Ashley Gardens Properties Ltd [1903] 2
Ch 112, CA; West v Gwynne [1911] 2 Ch 1, CA. Where the lease has been assigned without consent, the assignee may seek a declaration
that the consent has been unreasonably withheld, and the assignor is not a necessary party to the proceedings: Theodorou v Bloom [1964] 3
All ER 399n, [1964] 1 WLR 1152.
5 See eg Re Marshall and Salt's Contract [1900] 2 Ch 202; Bickel v Courtney Investments (Nominees) Ltd [1984] 1 All ER 657, [1984] 1
WLR 795.
HR A[2623]
The position has been changed to some extent by the Landlord and Tenant Act 1988, in that damages may be obtained
for breach of the new statutory duty to give consent1. Otherwise, the position is the same and it will still often be
desirable to obtain a declaration prior to an assignment2 and the claim for damages can be pursued after the declaration
is obtained.
HR A[2624]
Page 558
2 Note that the burden of establishing reasonableness now rests on the lessor: see Landlord and Tenant Act 1988, ss 1(6), 3(5).
HR A[2625]
The county court has the same jurisdiction as the High Court to make a declaration that a lessor has unreasonably
withheld consent to the assignment of a tenancy or a subletting, charging or parting with possession of the demised
property or any part thereof, whatever the value of the demised property1.
HR A[2626]

Page 559
leases/A Restrictions upon dealing with the lessee's interests/12 Remedies for breach of the covenant
12 Remedies for breach of the covenant
HR A[2627]
Where there is a covenant against assignment or underletting, with a proviso for re-entry in the event of breach, the
lessor may re-enter and forfeit the lease and/or claim damages for the breach of covenant1. If the lessor sues for
damages, the measure of damages is the loss naturally flowing from the assignment2 or underletting3. An apprehended
breach of a covenant against assignment or underletting may be restrained by injunction4, and an unlawful assignee or
sublessee may be ordered to reassign the lease or surrender the underlease5.
HR A[2628]
1 Silcock v Farmer (1882) 46 LT 404; Works Comrs v Hill [1922] 1 KB 205. Where an assignment takes place in breach of covenant and
the lessor seeks to forfeit, he must first serve a notice under the Law of Property Act 1925, s 146, (see para HR A[8644]) on the assignee and
not the assignor: Old Grovebury Manor Farm Ltd v W Seymour Plant Sales and Hire Ltd (No 2) [1979] 3 All ER 504, [1979] 1 WLR 1397,
CA. As to relief from forfeiture, see para HR A[9068].
2 The measure of damages may depend upon whether or not the assignor has put an end to his liability upon the lessee's covenants in the
lease. The award of damages is intended to put the lessor in the same position as if that liability continued: see Williams v Earle (1868) LR 3
QB 739; Cohen v Popular Restaurants Ltd [1917] 1 KB 480.
3 If the premises are destroyed by reason of a special risk attaching to the purposes for which they are sublet, the damages will be the loss
thus caused: Lepla v Rogers [1893] 1 QB 31; cf Chapman v Mason and Liniline Co (1910) 103 LT 390.
4 McEacharn v Colton [1902] AC 104, PC; Whelan v McKinley (1921) 56 ILT 21.
5 Esso Petroleum Co Ltd v Kingswood Motors (Addlestone) Ltd [1974] QB 142, [1973] 1 All ER 1057; Hemingway Securities Ltd v
Dunraven Ltd [1995] 1 EGLR 61.
Page 560
leases/A Restrictions upon dealing with the lessee's interests/13 Grounds for refusal of consent: general propositions
13 Grounds for refusal of consent: general propositions
HR A[2629]
The Court of Appeal has set out a number of general propositions of law which should be considered when the question
whether a landlord's refusal of consent to an assignment is unreasonable falls to be considered1.
(a) The purpose of a covenant against assignment without the consent of the landlord, such consent
not to be unreasonably withheld, is to protect the lessor from having his premises used or occupied in an
undesirable way, or by an undesirable tenant or assignee2.
(b) A landlord is not entitled to refuse his consent to an assignment on grounds which have nothing
whatever to do with the relationship of landlord and tenant in regard to the subject matter of the lease3.
(c) The onus of proving that consent has been unreasonably withheld is on the tenant4.
(d) It is not necessary for the landlord to prove that the conclusions which led him to refuse consent
were justified; if they were conclusions which might be reached by a reasonable man in the
circumstances5.
(e) It may be reasonable for the landlord to refuse his consent to an assignment on the ground of the
purpose for which the proposed assignee intends to use the premises, even though that purpose is not
forbidden by the lease6.
(f) There has been a divergence of authority on the question whether it is permissible to have regard to
the consequences to the tenant if consent to the proposed assignment is withheld7. A proper
reconciliation of the two lines of authority could be achieved by saying that while a landlord needs
usually to consider only his own relevant interests, there might be cases where there was such a
disproportion between the benefit to the landlord and the detriment to the tenant if the landlord withholds
his consent to an assignment that it is unreasonable for the landlord to refuse consent8.
(g) Subject to the above propositions, it is in each case a question of fact, depending upon all the
circumstances, whether the landlord's consent to an assignment is being unreasonably withheld9.
HR A[2630]-[2640]
1 International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513 at 519, [1986] 1 All ER 321 at 325.
2 Bates v Donaldson [1896] 2 QB 241 at 247, approved by the Court of Appeal in Re Gibbs and Houlder Bros & Co Ltd's Lease Houlder
Bros & Co Ltd v Gibbs [1925] Ch 575.
3 Houlder Re Gibbs and Houlder Bros & Co Ltd's Lease Bros & Co Ltd v Gibbs [1925] Ch 575, CA; Bickel v Duke of Westminster [1977]
QB 517, [1976] 3 All ER 801, CA; Bromley Park Garden Estates Ltd v Moss [1982] 2 All ER 890, [1982] 1 WLR 1019, CA.
4 However, the burden of proof has now been reversed by the Landlord and Tenant Act 1988 and rests on the landlord: see para HR
A[2601].
Page 561
5 Pimms Ltd v Tallow Chandlers in the City of London [1964] 2 QB 547 at 564, [1964] 2 All ER 145 at 147, CA. This principle was
applied in Ponderosa International Developments Inc v Pengap Securities (Bristol) Ltd [1986] 1 EGLR 66. (It was reasonable for a landlord
to rely on the view that prospective purchasers of his interest might take of the proposed assignee even though that view might be illogical.)
However, it is not reasonable for a landlord to rely on a valuation surveyor's advice if that advice itself is not reasonable: see Luminar
Leisure Ltd v Apostle [2001] 42 EG 140. In summary, a landlord can establish that he has acted reasonably in refusing consent if he has
relied on genuine, and not unfounded, concerns as to matters relevant to the value of his interest in the premises, even if the prospect of those
concerns being realised is small: NCR Ltd v Riverland Portfolio No1 [2005] EWCA Civ 312, [2005] 22 EG 134.
6 Bates v Donaldson [1896] 2 QB 241 at 244, CA.
7 Shepherd v Hong Kong and Shanghai Banking Corpn (1822) 20 WR 459 at 460; Re Gibbs and Houlder Bros & Co Ltd's Lease Houlder
Bros & Co Ltd v Gibbs [1925] Ch 575 at 584, CA; Leeward Securities Ltd v Lilyheath Properties Ltd [1984] 2 EGLR 54 at 58, CA; cf
Viscount Tredregar v Harwood [1929] AC 72 at 78, 82; West Layton Ltd v Ford [1979] QB 593 at 605, CA, [1979] 2 All ER 657 at 663,
CA; Bromley Park Garden Estates Ltd v Moss [1982] 2 All ER 890 at 896, [1982] 1 WLR 1019 at 1027, CA.
8 International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513, [1986] 1 All ER 321, CA, was itself one of the
exceptional cases in which there was sufficient disproportion between the benefit to the landlord and the detriment to the tenant to make it
proper to have regard to the unfairness to the tenant. This principle was applied in Ponderosa International Developments Inc v Pengap
Securities (Bristol) Ltd [1986] 1 EGLR 66, but a different result reached on the facts.
9 Bickel v Duke of Westminster [1977] QB 517 at 524, [1976] 3 All ER 801 at 805; West Layton Ltd v Ford [1979] QB 593 at 604, 606,
[1979] 2 All ER 657 at 663, 664, CA. In Ashworth Frazer Ltd v Gloucester City Council [2002] 1 All ER 377 at 398, [2001] 1 WLR 2180, at
2201, 2202, HL, Lord Rodger of Earlsferry appeared to accept these propositions, but emphasised the importance of considering what the
reasonable landlord would do when asked to consent in the particular circumstances of the case.
HR A[2641]
Two further propositions have also been formulated by the Court of Appeal, derived from the case law and the
principles set out above:
(a) it will normally be reasonable for a landlord to refuse consent or impose a condition if it is
necessary to prevent his contractual rights under the headlease from being prejudiced by the proposed
assignment;
(b) it will not normally be reasonable for a landlord to seek to impose a condition which is designed to
increase or enhance the rights he enjoys under the lease1.
The propositions or basic principles described above are applicable to applications for consent to sublet as they are to
applications for consent to assign1.
HR A[2642]
1 Mount Eden Land Ltd v Straudley Investments Ltd (1996) 74 P & CR 306 at 310.
Page 562
leases/A Restrictions upon dealing with the lessee's interests/14 Grounds for refusal of consent: case law
14 Grounds for refusal of consent: case law
HR A[2643]
It will usually be unreasonable for the lessor to refuse consent to an assignment on grounds unconnected with the
personality of the proposed assignee or his proposed user of the property1. Thus, a refusal of consent is unreasonable if
the lessor's objective is to obtain some advantage for himself; for example, to obtain a surrender of the lease2 or to
prevent the assignee from giving up premises of which he is also the lessor3.
HR A[2644]
1 Re Gibbs and Houlder Bros & Co Ltd's Lease Houlder Bros & Co Ltd v Gibbs [1925] Ch 575, CA; followed in Bickel v Duke of
Westminster [1977] QB 517, [1976] 3 All ER 801 and in Jaison Property Development Co Ltd v Roux Restaurants Ltd (1996) 74 P & CR
357, CA (which contains a useful review of the case law).
2 Bates v Donaldson [1896] 2 QB 241, CA; Re Winfrey and Chattertons Agreement [1921] 2 Ch 7; Re Smith's Lease [1951] 1 All ER 346.
Bromley Park Garden Estates Ltd v Moss [1982] 2 All ER 890, [1982] 1 WLR 1019, CA (it is unreasonable to refuse consent to an
assignment for the purpose of destroying a lease or merging it with another lease in the same building, even though that might be good estate
management; such a reason for refusal is extraneous to the relationship between lessor and lessee).
3 Re Gibbs and Houlder Bros & Co Ltd's Lease Houlder Bros & Co v Gibbs [1925] Ch 575, CA
HR A[2645]
It follows that the lessor may be justified in withholding consent if in his opinion the proposed assignee is objectionable
for some personal or financial reason1. To deal with possible financial objections, it is usual for the assignee to produce
accounts and references which may be subject to close scrutiny2; if a guarantor of the assignee's obligations is put
forward, his financial standing must be considered3, although it has been said that 'an assignment to a totally
insubstantial company, even though backed by a guarantee, was quite a different thing to an assignment to a satisfactory
and responsible tenant'4. It may be reasonable for the lessor to require a guarantor as a condition of consent; the
reasonableness of such a requirement must be judged by reference to the information available to him when he imposed
it5. Where a guarantee is reasonably required, it will normally be expected to continue during the whole of the period in
which the lease remains vested in the assignee6.
HR A[2646]
1 See eg British Bakeries (Midlands) Ltd v Michael Testler & Co Ltd [1986] 1 EGLR 64; Ponderosa International Developments Inc v
Pengap Securities (Bristol) Ltd [1986] 1 EGLR 66. In both cases the court decided that refusal of consent was justified having regard to the
financial standing of the proposed assignee and, in the latter case, of a proposed guarantor.
Page 563
2 As in British Bakeries (Midlands) Ltd v Michael Testler & Co Ltd [1986] 1 EGLR 64.
3 See eg Venetian Glass Gallery Ltd v Next Properties Ltd [1989] 2 EGLR 42.
4 Warren v Marketing Exchange for Africa Ltd [1988] 2 EGLR 247, relying on Geland Manufacturing Co Ltd v Levy Estates Co Ltd
(1962) 181 Estates Gazette 209.
5 London & Argyll Ltd v Mount Cook Land Ltd [2002] 50 EG 111 (CS).
6 Landlord Protect Ltd v Dolman [2007] 18 EG 154 (a county court decision).
HR A[2647]
An investigation into the assignee's financial position is intended to determine whether he has the ability to meet the
lessee's obligations under the lease as they fall due1. However, there may be reasonable objections to a proposed
assignee's personality which have nothing to do with his financial standing. For example, consent was not unreasonably
withheld where the assignee's object was to share in the profit of a redevelopment by exploiting the nuisance value of
the remainder of the lease; this was a matter which clearly related to the personality of the assignee2. Similarly, it may
be reasonable to refuse consent on the grounds of the personality of the assignee, if the assignee will acquire statutory
rights not available to the assignor, for example, under the Leasehold Reform Act 19673. It had been suggested that
cases concerning statutory rights under that Act are different from those concerning rights under the Rent Act 1977 and
its predecessors4, but it now appears that there is no distinction between Rent Act cases and other cases5. These
decisions may be justified by reference to the effect of the proposed assignment on the value of the reversion, as it is
well established that a lessor is entitled to refuse consent to a transaction which may depreciate the value of his interest6
or the value of other property belonging to him7.
HR A[2648]
1 British Bakeries (Midlands) Ltd v Michael Testler & Co Ltd [1986] 1 EGLR 64, per Peter Gibson J.
2 Pimms Ltd v Tallow Chandlers in the City of London [1964] 2 QB 547, [1964] 2 All ER 145, CA. See also Olympia & York Canary
Wharf Ltd v Oil Property Investments Ltd [1994] 2 EGLR 48, CA (where it was held reasonable for a lessor to refuse consent to an
assignment back to the original lessee who alone was able to operate a break clause).
3 Norfolk Capital Group Ltd v Kitway Ltd [1977] QB 506, [1976] 3 All ER 787, CA; Bickel v Duke of Westminster [1977] QB 517,
[1976] 3 All ER 801, CA.
4 Lee v K Carter Ltd [1949] 1 KB 85 [1949] 2 All ER 690, CA; Swanson v Forton [1949] Ch 143, [1949] All ER 135, CA; Dollar v
Winston [1950] Ch 236 [1949] 2 All ER 1088; Thomas Bookman Ltd v Nathan [1955] 2 All ER 821, [1955] 1 WLR 815, CA. In the latter
case, a distinction was drawn between 'normal' and 'abnormal' assignments, and these cases were distinguished in the cases referred to in n 3.
5 West Layton Ltd v Ford [1979] QB 593, [1979] 2 All ER 657, CA, where a lessor was held to have acted reasonably in refusing consent
to a furnished subletting which (due to a change in the law since the grant of the lease) would have attracted the protection of the Rent Act
1977. The question has to be answered in the light of the facts and law existing when the question arises and thus the covenant may be used
to protect the lessor against a danger different to that which was contemplated at the date of the lease: Leeward Securities Ltd v Lilyheath
Properties Ltd [1984] 2 EGLR 54, CA. See also Re Cooper's Lease (1968) 19 P & CR 541, in which it was held that consent was not
unreasonably withheld when the proposed assignee would be within the protection of Pt II of the Landlord and Tenant Act 1954. Cf Deverall
v Wyndham [1989] 1 EGLR 57, where the court weighed the adverse effects of sublettings which might become protected by the Rent Act,
Page 564
against the loss caused to the lessee by a refusal of consent (in accordance with the principals set out on International Drilling Fluids Ltd v
Louisville Investments (Uxbridge) Ltd [1986] Ch 513, [1986] 1 All ER 321, CA) and held that the lessee was entitled to sublet.
6 Re Town Investments Ltd Underlease [1954] Ch 301, [1954] 1 All ER 585 (reasonable refusal of consent to an underletting for a low
rent at a premium). For a case where the court considered whether or not a subletting was at a market rent, see Blockbuster Entertainments
Ltd v Leakcliff Properties Ltd [1997] 1 EGLR 28.
7 Governors of Bridewell Hospital v Fawkner and Rogers (1892) 8 TLR 637; Re Sparke's Lease [1905] 1 Ch 456.
HR A[2649]
Some objections based on the personality of the assignee may be unreasonable: for example, his entitlement to claim
diplomatic immunity1, or his name and nationality of origin2; but it has been held reasonable to refuse consent to an
assignment to a business rival who might have an adverse effect on the lessor's trade3, provided that his trade is carried
on in adjoining or neighbouring property4.
HR A[2650]-[2660]
1 Parker v Boggon [1947] KB 346, [1947] 1 All ER 46.
2 Mills v Cannon Brewery Co Ltd [1920] 2 Ch 38.
3 Whiteminster Estates Ltd v Hodges Menswear Ltd (1974) 232 Estates Gazette 715: considered in Sportoffer Ltd v Erewash Borough
Council [1999] EGCS 37, in the light of the propositions set out in International Drillng Fluids Ltd v Louisville Investments (Uxbridge) Ltd
[1986] Ch 513, [1986] 1 All ER 321, CA.
4 See Sargeant v Macepark (Whittlebury) Ltd [2004] EWHC 1333 (Ch), [2004] 38 EG 164, at p 171, para 55.
HR A[2661]
It may be reasonable for a lessor to refuse consent on the grounds of the purpose for which the proposed assignee
intends to use the premises, even though the purpose is not forbidden by the lease1. Similarly, it may be reasonable to
refuse consent on the grounds of an apprehended breach of a user covenant, although this will depend on all of the facts
of the case. The landlord is not precluded from refusing consent merely because he will remain able to enforce the
covenant2.
HR A[2662]
1 Bates v Donaldson [1896] 2 QB 241, CA; International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513,
[1986] 1 All ER 321, CA. Cf Rayburn v Wolf (1985) 50 P & CR 463, CA (lessor held to be unreasonable in refusing consent to an
assignment of a lease of a flat to a person who would not occupy it himself until his retirement and in the meantime intended to sublet; the
lessor retained its freedom to decide whether or not to consent to future underlettings).
2 Ashworth Frazer Ltd v Gloucester City Council [2002] 1 All ER 377, [2001] 1 WLR 2180, HL overruling Killick v Second Covent
Page 565
Garden Property Co Ltd [1973] 2 All ER 337, [1973] 1 WLR 6 J 8, CA.
HR A[2663]
Consent cannot reasonably be refused merely because some subsisting breach of covenant by the lessee can be
identified; the questions usually to be considered are whether the breach is serious and whether the assignment with
consent would prejudice the lessor's position. In the case of breaches of covenants to repair, it has been held that if the
breaches are anything more than minimal, more especially if they are extensive and of long standing, it is not in general
unreasonable for a landlord to refuse his consent to an assignment unless he can be reasonably satisfied that the
proposed assignee will remedy them1.
HR A[2664]
1 Orlando Investments Ltd v Grosvenor Estate Belgravia [1989] 2 EGLR 74, CA; following Goldstein v Sanders [1915] 1 Ch 549 and
Farr v Ginnings (1928) 44 TLR 249. Thus, a lessor may require security to cover necessary work (as in Davies v Fagarazzi (1969) 213
Estates Gazette 377) or set a timetable for doing the work as a condition of consent (as Orlando Investments Ltd v Grosvenor Estate
Belgravia [1989] 2 EGLR 74). Disrepair may also justify refusal of consent to an underletting: see Crestfort Ltd v Tesco Stores Ltd [2005]
EWHC 805 (Ch), [2005] 37 EG 148. Where the lessee had made alterations of a relatively minor character which were easily remediable, it
was held there was no good reason to refuse consent: Cosh v Fraser (1964) 108 Sol Jo 116.
HR A[2665]
The lessor is entitled to be told what is in substance the true nature of the transaction to which his consent is asked and,
if the lessee declines to disclose the terms, he may refuse consent1. In the past, it appeared that if the issue of the lessor's
reasonableness came before a court, he was not confined to the grounds of refusal stated to the lessee provided the other
grounds relied upon actually acted on his mind when he refused consent2, but it seems that the position is different now
that the lessor is required by statute to state his reasons3. If the lessor advances two reasons for refusal, one of which is
good but the other is bad, his refusal may be justified by the good reason if it is sufficient in itself and is not tainted or
vitiated by the bad reason4.
HR A[2666]
1 See para HR A[2561], nn 7-8.
2 For a review of the case law, see Bromley Park Garden Estates Ltd v Moss [1982] 2 All ER 890, [1982] 1 WLR 1019, CA.
3 Landlord and Tenant Act 1988, s 1(3); Footwear Corpn Ltd v Amplight Properties Ltd [1998] 3 All ER 52, [1998] 25 EG 171; Norwich
Union Life Insurance Society v Shopmoor Ltd [1998] 3 All ER 32. The landlord can now only rely on the reasons specified. However, he
may support the reasons specified by further evidence or argument: see the speech of Lord Rodger of Earlsferry in Ashworth Frazer Ltd v
Gloucester City Council [2002] 1 All ER 377, 400, [2001] 1 WLR 2180, 2204.
4 See British Bakeries (Midlands) Ltd v Michael Testler & Co Ltd [1986] 1 EGLR 64.
HR A[2667]
Page 566
A limited company is capable of being a respectable and responsible person within the meaning of a covenant relating
to assignment unless the nature of the lease shows that it is to be held by an individual1. Thus, if personal residence is
required by the lease, it is not assignable to a company2.
HR A[2668]
1 Willmott v London Road Car Co Ltd [1910] 2 Ch 525, CA; Associated Omnibus Co Ltd v Idris & Co Ltd (1919) 148 LT Jo 157; Ideal
Film Renting Co v Nielsen [1921] 1 Ch 575; Mills v Cannon Brewery Co Ltd [1920] 2 Ch 38; Re Greater London Properties Ltd's Lease
[1959] 1 All ER 728, [1959] 1 WLR 503 (where the financial position of the company revealed by its accounts was such that it would not
have been regarded as a responsible person had it not been a wholly owned subsidiary of a large and well known company; whereas a
guarantor may often be required for a company with insufficient assets or trading record, it was held not reasonable to require a guarantor in
this case).
2 Jenkins v Price [1908] 1 Ch 10, CA.
HR A[2669]
Once consent has been given, it cannot normally be revoked1. It is not unreasonable to withhold consent where the
lessee's application is not genuine2.
HR A[2670]-[2680]
1 Mitten v Fagg [1978] 2 EGLR 40 (conditional consent to assign had been given and acted upon. The lessor subsequently discovered
facts relating to the assignee which would have justified refusal of consent. As the lessee was not at fault, it was held that the consent could
not be revoked); cf Sanctuary Housing Association v Baker [1998] 09 EG 150, where consent to an assignment had been obtained by fraud.
2 Hatfield v Anderson [1980] 2 EGLR 48, CA.

Page 567
leases/A Restrictions upon dealing with the lessee's interests/15 Conditions imposed upon consent
15 Conditions imposed upon consent
HR A[2681]
It may be reasonable to impose conditions upon the grant of a consent to an assignment or subletting, if the conditions
themselves are reasonable1. However, it is unreasonable for the lessor to seek to impose a condition which would in
effect alter the terms of the lease by imposing an extra burden upon the lessee, and in such a case the lessor will be held
to have unreasonably withheld his consent2. It is also unreasonable to require a sublessee to enter into a direct covenant
with the head lessor to pay the rent reserved by the head lease, even if the rent under the lead lease and the sublease are
the same3. In the case of a proposed further assignment by an assignee, it is unreasonable to require him to covenant to
pay the rent and perform the covenants for the residue of the lease4. It is generally reasonable for a lessor to require an
undertaking as to his reasonable costs before deciding whether or not to give his consent, but a requirement for an
indemnity as to costs is unreasonable5.
HR A[2682]
1 Examples of conditions which may be reasonable include a requirement for a guarantor or for a commitment to remedy breaches of
covenant within a specified time: See eg paras HR A[2645], [2663].
2 Young v Ashley Garden Properties Ltd [1903] 2 Ch 112, CA (proposed condition requiring the payment of any increase in rates);
Premier Rinks Ltd v Amalgamated Cinematograph Theatres Ltd (1912) 56 Sol Jo 536 (attempt to obtain a new term restricting the use of the
premises during the residue of an underlease); Mills v Cannon Brewery Co Ltd [1920] 2 Ch 38 (attempt to impose a condition requiring the
assignee to reside in the premises and personally carry on business there).
3 See Balfour v Kensington Gardens Mansions Ltd (1932) 49 TLR 29.
4 Evans v Levy [1910] 1 Ch 452. However, it may be reasonable to require such a covenant, limited to the time during which the new
assignee holds the lease and such a covenant can be required pursuant to an authorised guarantee agreement within the meaning of Landlord
and Tenant (Covenants) Act 1995, s 16 at para HR A[21135].
5 Dong Bang Minerva (UK) Ltd v Davina Ltd [1996] 2 EGLR 31, CA.
Page 568
leases/A Restrictions upon dealing with the lessee's interests/16 Position of unlawful assignee
16 Position of unlawful assignee
HR A[2683]
So long as the assignee or underlessee is in possession he is subject to the stipulations of the lease notwithstanding the
lack of the lessor's consent1. Even if the lessor contends that an assignment is in breach of covenant, it operates to vest
the term in the assignee, who is therefore the person who must be served with any necessary notice before any
proceedings for forfeiture are commenced and must be made a defendant to such proceedings2.
HR A[2684]
1 Silcock v Farmer (1882) 46 LT 404.
2 Old Grovebury Manor Farm Ltd v W Seymour Plant Sales and Hire Ltd (No 2) [1979] 3 All ER 504, [1979] 1 WLR 1397, CA.
Page 569
leases/A Restrictions upon dealing with the lessee's interests/17 Acceptance by lessor of assignee as tenant
17 Acceptance by lessor of assignee as tenant
HR A[2685]
The lessor will be debarred from insisting on the necessity of consent if he has accepted the assignee as tenant in place
of the assignor, but this acceptance is not to be inferred merely from the fact that possession has been given to the
assignee with the knowledge of the lessor and without objection on his part; this, while an important element, is not
conclusive where the facts show that the lessor did not intend to accept the assignee1. Further, the lessor is not bound to
assent to the assignment on the ground that he stood by while the assignee was spending money on the property, unless
the circumstances are such as to estop him from setting up the breach of covenant2.
HR A[2686]
1 Lord Elphinstone v Monkland Iron and Coal Co (1886) 11 App Cas 332 at 345.
2 Willmott v Barber (1880) 15 Ch D 96; Burke v Prior (1863) 15 I Ch R 106. Where a person has expended money on the property of
another with the acquiescence of that other person the law of proprietary estoppel must always be considered.
Page 570
leases/A Restrictions upon dealing with the lessee's interests/18 Licences to assign
18 Licences to assign
HR A[2687]
If the licence to assign is required to be in writing an oral licence is insuffiicient1, unless the need for written consent is
waived by the lessor2. There is no standard form of licence and it is a matter of construction whether a document
amounts to an unconditional consent3; thus it is possible that a document headed 'subject to licence' may amount to a
consent required by a lease, as a matter of the construction of the lease in all the surrounding circumstances4. A sealed
licence to assign may be held to have been delivered in escrow and thus irrevocable by the lessor5.
HR A[2688]
1 Richardson v Evans (1818) 3 Madd 218. However, if the oral licence is given for fraudulent purposes, relief will be given in equity:
Richardson v Evans (1818) 3 Madd 218; see also Walker v Bellamie (1605) Cro Jac 102.
2 Millard v Humphreys (1918) 62 Sol Jo 505, applying Richardson v Evans (1818) 3 Madd 218.
3 Thus, in Bader Properties Ltd v Linley Properties Investments Ltd (1967) 19 P & CR 620 it was held that the words used in a letter 'our
clients are willing and we are preparing the necessary documents' amounted to an unconditional consent; see also Rutter v Michael John Ltd
(1967) 201 Estates Gazette 299; Venetian Glass Gallery Ltd v Next Properties Ltd [1989] 2 EGLR 42.
4 Prudential Assurance Co Ltd v Mount Eden Land Ltd [1997] 1 EGLR 37, CA; Aubergine Enterprises Ltd v Lakewood International Ltd
[2002] EWCA Civ 177, [2002] 1 WLR 2149.
5 Venetian Glass Gallery Ltd v Next Properties Ltd [1989] 2 EGLR 42.
HR A[2689]
The licence extends only to the actual assignment or underlease which it authorises1, although it is usually expressly so
provided in the licence. If it is intended that the assignee shall not be let into possession until the assignment is
completed, this should also be expressly stated2.
HR A[2690]-[2700]
1 Law of Property Act 1925, s 143(1); see Eyton v Jones (1870) 21 LT 789. Formerly, the effect of a licence for a single assignment was
to put an end to the covenant against assignment altogether. See also s 143(2) (preservation of rights of forfeiture) and s 143(3) (licence to
one of two or more lessees and licence in respect of part of the demised property).
2 West v Dobb (1869) LR 4 QB 634.

Page 571
HR A[2701]
Where licence to an assignment is required by the lease, it is the duty of an assignor who agrees to assign the lease to
obtain that licence1. When the agreement is 'subject to the lessor's approval', the assignor is obliged to do his best to
obtain that consent, but is not obliged to take court proceedings against the lessor2. However, if the assignor could
obtain the consent but does not do so, then he is liable to pay damages to the assignee3. Standard forms of contract for
the sale of land usually define the extent of the assignor's duty4 and the consequences of the necessary consent not
being obtainable, for example, by giving the assignor a right to rescind the contract5.
HR A[2702]
1 Lloyd v Crispe (1813) 5 Taunt 249; Mason v Corder (1816) 7 Taunt 9.
2 Lehmann v McArthur (1868) 3 Ch App 496. In the absence of consent, the contract is not enforceable.
3 Day v Singleton [1899] 2 Ch 320, CA. Note that the rule in Bain v Fothergill (1874) LR 7 HL 158, considered in this case, has been
abolished by the Law of Property (Miscellaneous Provisions) Act 1989, s 3.
4 The assignor is often required contractually to use his best endeavours or reasonable endeavours to obtain the lessor's consent.
5 For consideration of the right to rescind under condition 11(5) of the National Conditions of Sale and its predecessor, see Lipmans
Wallpaper Ltd v Mason and Hodghton Ltd [1969] 1 Ch 20, [1968] 1 All ER 1123; Bickel v Courtenay Investments (Nominees) Ltd [1984] 1
All ER 657, [1984] 1 WLR 795.
Page 572
leases/B Statutory provisions relating to dealings with the lessor's interest
B
Page 573
leases/B Statutory provisions relating to dealings with the lessor's interest/1 Introduction
1 Introduction
HR A[2703]
Although in theory a lessor might covenant not to assign the reversion to a lease, in practice such covenants are not
sought or given1.
HR A[2704]
1 See para HR A[1863] for the lessor's right to assign the reversion.
HR A[2705]
However, by statute1, in certain circumstances, a lessor is obliged to give a right of first refusal to his lessees before
disposing of his interest. There are also statutory provisions whereby a person to whom a lessor's interest is assigned
must give notice to the lessee of the assignment2.
HR A[2706]
1 Landlord and Tenant Act 1987, at para HR A[20431] and considered at paras HR A[2729]-[2970].
2 LTA 1985, s 3: see also Landlord and Tenant Act 1987, ss 47, 48, at paras HR A[20789], HR A[20801] and considered at paras HR
A[2707]-[2728].
Page 574
leases/B Statutory provisions relating to dealings with the lessor's interest/2 Notice of assignment of lessor's interest
2 Notice of assignment of lessor's interest
HR A[2707]
If the interest of the lessor under a tenancy of premises which consists of or include a dwelling is assigned, the new
lessor must give notice in writing of the assignment, and of his name and address, to the lessee not later than the next
day upon which rent is payable under the lease or, if that is within two months of the assignment, the end of that period
of two months1.
HR A[2708]
1 Landlord and Tenant Act 1985, s 3(1) at para HR A[20224]. See s 3(2) for provisions dealing with assignments to trustees.
HR A[2709]
A person who fails, without reasonable excuse, to give the notice required commits a summary offence and is liable to
be fined1. The previous lessor remains liable for any breach of covenant until the notice is given2, and thus he should
take a contractual obligation from his successor to give the notice. Further, if the lessee is a qualifying tenant within the
meaning of the Landlord and Tenant Act 1987 and the assignment to the new lessor is a relevant disposal within the
meaning of that Act then the new lessor's notice must give information relating to the lessee's possible rights to acquire
the lessor's interest3. Failure to comply without reasonable excuse is a summary offence, punishable by a fine4.
HR A[2710]-[2720]
2 LTA 1985, s 3(3A), (3B).
3 LTA 1985, s 3A.
4 LTA 1985, s 3A(3).
HR A[2721]
These obligations do not arise in the case of premises let solely for business purposes, but it is still prudent for a new
lessor to give notice of the assignment to him of any lease as soon as possible1.
Page 575
HR A[2722]
1 See eg the provisions of the Landlord and Tenant Act 1927, s 23 and LTA 1954, s 66(4) whereby service of a notice by the lessee on the
last person known to him to be the lessor is effective as against the actual lessor, if no notice has been given to the lessee of the assignment
of the reversion.
HR A[2723]
There are other statutory provisions requiring a lessor of premises which consist of or include a dwelling and which are
not held under a tenancy to which Pt II of the Landlord and Tenant Act 1954 applies to, give notice to the lessee of an
address in England and Wales at which notices may be served on him by the lessee1. The sanction for failure to comply
is that any rent or service charge otherwise due from the lessee to the lessor shall be treated as not being due at any time
before the lessor complies with the requirement2.
HR A[2724]
1 Landlord and Tenant Act 1987, s 48(1), printed and annotated at para HR A[20801].
2 LTA 1987, s 48(2). An exception is made in s 48(3) in the case of an appointment of a receiver or manager by the court.
HR A[2725]
Similarly, a written demand for rent or other sums made by the lessor to a lessee of premises of the sort described above
must contain the name and address of the lessor, and, if that address is not in England and/or Wales, an address at which
notices may be served on him by the lessee1. In this case, however, the sanction for failure is that any claim for service
charges (not rent) should be treated as not being due from the lessee to the lessor at any time before the lessor complies
with the requirement2.
HR A[2726]
1 Landlord and Tenant Act 1987, s 47(1), printed and annotated at para HR A[20801].
2 LTA 1987, s 47(2). An exception is again made in the case of an appointment of a receiver or manager by the court; s 47(3).
HR A[2727]
Service at the address given pursuant to ss 47 and 48 of the Landlord and Tenant Act 1987 is sufficient service to
comply with s 196 of the Law of Property Act 19251.
Page 576
HR A[2728]

Page 577
leases/B Statutory provisions relating to dealings with the lessor's interest/3 Tenant's rights of first refusal
3 Tenant's rights of first refusal
(a) Introduction
HR A[2729]
Part I of the Landlord and Tenant Act 19871 conferred upon 'qualifying tenants' of flats rights of first refusal enabling
them to purchase the interest of their landlord if and when he proposes to dispose of it. Together with other provisions
of the same Act, it is intended to implement certain recommendations of the Nugee Committee of Inquiry into the
management of private sector blocks of flats2. Experience shows that the drafting of Pt I of the Act was in some
respects unsatisfactory3 and very substantial amendments and substitutions were made by the Housing Act 1996. These
amendments came into effect on 1 October 1996, but do not have effect in a case where a disposal was made before that
date or an 'offer notice' served before that date4. The summary of the main provisions of Pt I of the Act which follows
relates to the Act as amended by the Housing Act 1996. A more detailed consideration of these provisions can be found
in the annotations to the statute5.
HR A[2730]-[2740]
1 Part I of LTA 1987 at para HR A[20431], together with amendments and substituted sections.
2 Part II LTA 1987 printed at paras HR A[20620], considered in the text at para HR A[7380.701.19].
3 There have been more vigorous criticisms of Pt I of LTA 1987. In Denetower Ltd v Toop [1991] 3 All ER 661, [1991] 1 WLR 945, CA,
Sir Nicholas Browne Wilkinson VC described it as 'ill-drafted, complicated and confused'.
4 See the general note at the beginning of Pt I of LTA 1987 at para HR A[20431].
5 The annotations begin at HR A[20431].
(b) Tenants entitled to the right of first refusal
HR A[2741]
Rights of first refusal may arise in the case of a relevant disposal1 affecting a specified class of premises2. Part I of
LTA 1987 applies to premises if:
(a) they consist of the whole or part of a building; and

(b) they contain two or more flats held by qualifying tenants; and
Page 578
(c) the number of flats held by such tenants exceeds 50% of the total number of flats contained in the
premises3.
HR A[2742]
1 For the meaning of 'relevant disposal', see para HR A[2767].
2 See Landlord and Tenant Act 1987, s 1(1).
3 LTA 1987, s 1(2).
HR A[2743]
It seems that 'premises' for these purposes may consist of a number of buildings1.
HR A[2744]
1 Kay Green v Twinsectra Ltd [1996] 4 All ER 546, [1996] 1 WLR 1587, CA; Long Acre Securities Ltd v Karet [2004] EWHC 442 (Ch),
[2005] Ch 61, [2004] 3 WLR 866.
HR A[2745]
A 'flat' for these purposes is a separate set of premises, whether or not on the same floor, which:
(a) forms part of a building; and

(b) is divided horizontally from some other part of that building; and
(c) is constructed or adapted for use for the purposes of a dwelling1.
HR A[2746]
1 Landlord and Tenant Act 1987, s 60(1). A flat therefore includes what is usually known as a maisonette.
HR A[2747]
A person is a 'qualifying tenant' of a flat if he is the tenant of the flat under a tenancy other than:
(a) a protected shorthold tenancy as defined in s 52 of the Housing Act 19801;

Page 579
(b) a tenancy to which Pt II of the Landlord and Tenant Act 1954 applies2;
(c) a tenancy terminable on the cessation of his employment;
(d) an assured tenancy or assured agricultural occupancy within the meaning of Pt I of the Housing
Act 19883.
HR A[2748]
1 See Division C.
2 Premises let for business purposes; see Division B.
3 See Division C.
HR A[2749]
It should be noted that this definition of 'qualifying tenant'1 does not require the tenant to be resident in the flat in
question and thus an absentee or a company may be a qualifying tenant.
HR A[2750]-[2760]
1 The definition is provided by Landlord and Tenant Act 1987, s 3.
HR A[2761]
'Tenancy' includes a sublease or subtenancy and an agreement for a lease or tenancy (or for a sublease or subtenancy)1.
Curiously, a protected or statutory tenant2 is not excluded from the definition, but an assured tenant is so excluded.
HR A[2762]
2 By virtue of the Rent Act 1977; see HR C[301].
HR A[2763]
These general provisions must be read with other provisions excluding certain premises, landlords and tenants from the
operation of Pt I of the 1987 Act. It does not apply to premises if:
Page 580
(a) any part or parts of the premises is or are occupied otherwise than for residential purposes; and
(b) the internal floor area of that part or those parts (taken together) exceeds 50% of the internal floor
are of the premises (taken as a whole)1.
HR A[2764]
1 Landlord and Tenant Act 1987, s 1(3), which also provides that, for these purposes, the internal floor area of any common parts is to be
disregarded.
HR A[2765]
Further, Pt I of the Landlord and Tenant Act 1987 does not apply to any such premises at a time when the interest of the
landlord in the premises is held by an exempt landlord or a resident landlord1. There are also special provisions relating
to tenancies from the Crown2. A person is not a 'qualifying tenant' of a flat if he is the tenant not only of the flat in
question but also of at least two other flats contained in the relevant premises3. Although, as stated above, as subtenant
may be a qualifying tenant, there can only be one qualifying tenant of any flat, and thus a tenant of a flat whose landlord
is a qualifying tenant of that flat is not regarded as being a qualifying tenant4.
HR A[2766]
1 Landlord and Tenant Act 1987, s 1(4). For bodies which are 'exempt landlords', see Landlord and Tenant Act 1987, s 58(1) and for the
definition of 'resident landlord', see s 58(2), (3).
2 LTA 1987, s 56.
3 LTA 1987, s 3(2); see s 3(4) for provisions relating to tenancies held by associated companies.
4 LTA 1987, s 3(4).
(c) Relevant disposals
HR A[2767]
Generally speaking, a relevant disposal which gives rise to rights of first refusal is a disposal by the landlord of any
estate or interest (whether legal or equitable) in any premises to which Pt I of the Landlord and Tenant Act 1987
applies, including the disposal of any such estate or interest in any common parts of such premises1. A disposal now
includes a contract for or an assignment of rights under a contract for a disposal2.
HR A[2768]
Page 581
1 LTA 1987, s 4(1). For the meaning of 'premises to which Pt I of the Act applies' see para HR A[2741] and for the definition of 'disposal'
see s 4(3).
2 LTA 1987, s 4A. This was an amendment made by the Housing Act 1996.
HR A[2769]
The grant of any tenancy under which the demised premises consist of a single flat (whether with or without any
appurtenant premises) is not a relevant disposal1 and there are various other classes of disposal which are excluded2.
HR A[2770]-[2780]
1 Landlord and Tenant Act 1987, s 4(1)(a). 'Appurtenant premises' is defined at s 4(4).
2 LTA 1987, s 4(1)(b), (2) printed and annotated at para HR A[20451].
HR A[2781]
The disposal must be a disposal by the landlord. A person is the landlord in relation to any premises if he is:
(a) the immediate landlord of the qualifying tenants1 of the flats contained in those premises; or
(b) where any of those tenants is a statutory tenant, the person who, apart from the statutory tenancy,
would be entitled to possession of the flat in question2.
HR A[2782]
1 For the meaning of 'qualifying tenants' see para HR A[2747].
HR A[2783]
However, where the person who is the landlord is himself a tenant of the premises under a tenancy which is either:
(a) a tenancy for a term of less than seven years; or

(b) a tenancy for a longer term but terminable within the first seven years at the option of the superior
landlord:
then the superior landlord is also regarded as the landlord for these purposes1.
Page 582
HR A[2784]
1 Landlord and Tenant Act 1987, s 2(2). This provision might be considered to be ambiguous. However, it is submitted it does not apply
to a term of more than seven years which has less than seven years to run at the material time, and does not apply to a term containing an
option to determine exercisable during the first seven years of the term once the time for exercise of the option has expired.
(d) Landlord's obligations prior to making a relevant disposal
HR A[2785]
These are the provisions which require the landlord to give the qualifying tenants the right of first refusal. Where the
landlord proposes1 to make a relevant disposal2, affecting premises to which Pt I of the Landlord and Tenant Act 1987
applies3, he must serve an 'offer notice' on the qualifying tenants4 of the flats contained in the premises ('the constituent
flats')5. The offer notice must comply with different statutory requirements, depending upon the nature of the
transaction proposed6. Generally speaking, the purpose of an offer notice is to inform the qualifying tenants of the
property and the estate or interest in that property to be disposed of, and the principal terms of the disposal (including
the consideration required)7. The notice must state that it constitutes an offer by the landlord for disposal of that
property on those terms which may be accepted by the 'requisite majority' of the qualifying tenants8, and must specify a
time within which that offer may be accepted, being a period of not less than two months beginning with the date of the
service of the notice9. The notice must also specify a further period during which a person or persons may be nominated
by the tenants (as the person or persons who will acquire the relevant interest)10.
HR A[2786]
1 It was held in Mainwaring v Trustees of Henry Smith's Charity [1998] QB1, [1996] 2 All ER 220, CA, that 'proposes' describes a state
of mind somewhere between mere consideration of a possible course of action at one extreme and a fixed and irreversible determination to
pursue that course of action at the other.
2 For the meaning of 'relevant disposal', see HR A[2767].
3 For the meaning of 'premises to which Pt I of the Act applies', see para HR A[2741].
4 For the meaning of 'qualifying tenants', see para HR A[2747].
6 Landlord and Tenant Act 1987, s 5(2), referring to ss 5A, 5B, 5C, 5D and 5E, all printed and annotated at paras HR A[20464]ff. Usually
the disposal will be made by a contract to be completed by conveyance (see s 5A), but there are separate provisions specifying requirements
in the case of sale at auction (see s 5B), the grant of an option or right of pre-emption (s 5C) and a conveyance not preceded by a contract (s
5D). There are also specific requirements, in the case of disposal for a non-monetary consideration (s 5E).
7 See eg Landlord and Tenant Act 1987, s 5A(2).

Page 583
8 For the definition of 'requisite majority', see Landlord and Tenant Act 1987, s 18A.
9 See eg Landlord and Tenant Act 1987, s 5A(3), (4).
10 See eg Landlord and Tenant Act 1987, s 5A(5).
HR A[2787]
Where a landlord proposes to effect a transaction involving the disposal of an estate or interest in more than one
building, he must sever the transaction so as to deal with each building separately1. However, in some limited
circumstances (such as the case of an integrated development with appurtenant premises used in common), one
'building' may comprise more than one structure for these purposes2."
HR A[2788]
1 Landlord and Tenant Act 1987, s 5(3). In such a case it follows that the question of whether there is a requisite majority of qualifying
tenants must also be considered on a building by building basis; see Kay Green v Twinsectra Ltd [1996] 4 All ER 546, [1996] 1 WLR 1587,
CA.
2 Long Acre Securities Ltd v Karet [2004] EWHC 442 (Ch), [2004] 3 WLR 866, [2005] Ch 61.
HR A[2789]
If, as a result of the offer notice being served on different tenants on different dates, the period specified in the notice as
the period for accepting the offer would end on different dates, the notice shall have effect in relation to all qualifying
tenants on whom it is served as if it provided for that period to end with the latest of those dates1. A landlord who has
not served an offer notice on all the qualifying tenants on whom such a notice was required to be served shall
nevertheless be treated as having complied with his obligations:
(a) if he has served an offer notice on not less than 90% of the qualifying tenants on whom such a
notice was required to be served; or
(b) where the qualifying tenants on whom it was required to be served number less than ten, if he
served such notice on all but one of them2.
HR A[2790]-[2800]
2 Landlord and Tenant Act 1987, s 5(5). For provisions as to service, see Landlord and Tenant Act 1987, s 54 at para HR A[20824].
(e) Acceptance of landlord's offer

Page 584
HR A[2801]
Where a landlord has served an offer notice, he must not during:
(a) the period specified in the notice as the period during which the offer may be accepted; or
(b) such longer period as may be agreed between him and the requisite majority1 of the qualifying
tenants2 of the constituent flats3;
dispose of the protected interest except to a person or persons nominated by the tenants4.
HR A[2802]
1 For the definition of 'requisite majority', see Landlord and Tenant Act 1987, s 18A.
2 For the meaning of 'qualifying tenants', see para HR A[2747].
3 For the meaning of 'constituent flats', see Landlord and Tenant Act 1987, s 5(1).
HR A[2803]
In response to the landlord's offer, the requisite majority of qualifying tenants of the constituent flats may serve on the
landlord a notice (an 'acceptance notice') informing him that the persons by whom it is served accept the offer contained
in the landlord's offer notice1. The requisite majority of qualifying tenants of the constituent flats refers to the
qualifying tenants of those flats with more than 50% of the available votes2.
HR A[2804]
2 Landlord and Tenant Act 1987, s 19A(1). Detailed provisions as to the meaning of 'available votes' are to be found in s 18A(2)-(4),
printed at para HR A[20616].
HR A[2805]
Where an acceptance notice is duly served1 on the landlord, he must not during the protected period2 dispose of the
protected interest3 except to a person duly nominated4 by the requisite majority of qualifying tenants of the constituent
flats (a 'nominated person')5.
Page 585
HR A[2806]
1 For the meaning of 'duly served' see Landlord and Tenant Act 1987, s 6(3).
2 For the meaning of 'protected period', see LTA 1987, s 6(4).
3 For the meaning of 'protected interest', see LTA 1987, s 20.
4 For the meaning of 'duly nominated', see LTA 1987, s 6(5). See also s 6(6), (7) dealing with the replacement of nominated persons, etc.
5 LTA 1987, s 6(2).
(f) Failure to accept landlord's offer
HR A[2807]
Where a landlord has served an offer notice on the qualifying tenants of the constituent flats and either no acceptance
notice is duly served on the landlord or no person is nominated during the protected period the landlord may, during the
period of 12 months beginning with the end of that period, dispose of the protected interest to such person as he thinks
fit1, provided that the deposit and consideration required are not less than those specified in the offer notice and that the
other terms correspond to those specified in the offer notice2. The landlord's ability to dispose of the protected interest
during this 12-month period extends only to the estate or interest which was the subject of the offer notice, and not to
any disposal of any other estate or interest (unless the disposal is not a relevant disposal)3.
HR A[2808]
2 LTA 1987, s 7(3). See s 7(2) in the case of an offer notice relating to a proposed sale by public auction.
3 LTA 1987, s 7(4).
(g) Acceptance of landlord's offer
HR A[2809]
The landlord has further obligations in the event that an acceptance notice is duly served on him and a person is duly
nominated by the requisite majority of qualifying tenants of the constituent flats. The primary obligation is that he must
not dispose of the protected interest except to the nominated persons, save in accordance with the provisions of the Act1
Page 586
. However, within the period of one month beginning with the date of service of notice of nomination2, the landlord
may serve notice on the nominated person indicating an intention no longer to proceed with the disposal of the protected
interest3; if he does not serve such notice he is then obliged to proceed with the disposal in accordance with the
provisions of the Act.
HR A[2810]-[2820]
2 For service of a notice of nomination, see LTA 1987, s 6(5).
3 Landlord and Tenant Act 1987, s 8(3)(a). Such a notice is a 'notice of withdrawal' for the purposes of the Act: s 8(4). For notices of
withdrawal by landlord, see LTA 1987, s 9B.
HR A[2821]
Generally speaking1, the landlord must, within the period of one month beginning with the date of the service of the
notice of nomination, send to the nominated person a form of contract for the acquisition of the protected interest on the
terms specified in the landlord's offer notice2, If he fails to do so the Act applies as if he had given notice of withdrawal
at the end of that period3. If he complies, the nominated person must, within the period of two months beginning with
the date on which the contract is sent (or such longer period as may be agreed), either serve notice on the landlord
indicating an intention no longer to proceed with the acquisition of the protected interest or offer an exchange of
contracts4.
HR A[2822]
1 The summary which follows does not apply in the case of a proposed sale by auction: Landlord and Tenant Act 1987, s 8A(1).
2 LTA 1987, s 8A(2).
3 LTA 1987, s 8A(3). For notice of withdrawal by landlord see LTA, s 9B
4 LTA, s 8A(4). To offer an exchange of contracts, the nominated person must sign the contract and send it to the landlord, together with
the requisite deposit (being a deposit of an amount determined by or under the contract or an amount equal to 10% of the consideration,
whichever is the less).
HR A[2823]
If the nominated person either serves a notice indicating an intention no longer to proceed or fails to offer an exchange
of contracts within the specified period then the Act applies as if he had given a notice of withdrawal1. If the nominated
person offers an exchange of contracts within the specified period, but the landlord fails to complete the exchange
within the period of seven days, beginning with the day on which he received that person's contract, he is treated as if he
had given notice of withdrawal2.
Page 587
HR A[2824]
1 Landlord and Tenant Act 1987, s 8A(5). For notice of withdrawal by nominated person see LTA 1987, s 9A.
2 LTA 1987, s 8A(6). For notice of withdrawal by landlord, see LTA, s 9B.
HR A[2825]
There are further detailed provisions dealing with sale at auction1, disposal for non-monetary consideration2, disposals
in pursuance of an option or right of pre-emption3 and covenants affecting the landlord's power to dispose of the
protected interest4.
HR A[2826]
1 Landlord and Tenant Act 1987, s 8B.
2 LTA 1987, s 8C
3 LTA 1987, s 8D.
4 LTA 1987, s 8E.
(h) Notice of withdrawal and lapse of landlord's offer
HR A[2827]
There are provisions for service of notices of withdrawal by both landlord and nominated person and for the
consequences of the service of such notices.
HR A[2828]
Where the landlord is obliged to proceed1 the nominated person may serve a notice of withdrawal on the landlord
indicating his intention no longer to proceed with the acquisition of the protected interest2, and if at any time the
nominated person becomes aware that the number of qualifying tenants of the constituent flats desiring to proceed with
the acquisition of the protected interest is less than the requisite majority of qualifying tenants of those flats, he must
forthwith serve a notice of withdrawal3. Where notice of withdrawal is given by the nominated person, the landlord
may, during the period of 12 months beginning with the date of service of the notice, dispose of the protected interest to
such person as he thinks fit4, subject to the following restrictions:
Page 588
(a) that the deposit and consideration required are not less than those specified in the offer notice, or if
higher, those agreed between the landlord and the nominated person (subject to contract); and
(b) that the other terms correspond to those specified in the offer notice5.
HR A[2829]
1 See Landlord and Tenant Act 1987, s 8(3)(b).
2 LTA 1987, s 9A(1).
3 LTA 1987, s 9A(2). Tenants cannot contract out of their right to withdraw; see Mainwaring v Henry Smith's Charity Trustees (No 2)
[1997] 1 EGLR 93, CA.
4 LTA 1987, s 9A(3).
5 LTA 1987, s 9A(8). For restrictions in a case where the proposed sale was by auction, see LTA 1987, s 9A(4).
HR A[2830]-[2840]
In the event of the service of a notice of withdrawal by the nominated person, the liability of the nominated person (and
the qualifying tenants who served the acceptance notice) to pay the costs of the landlord incurred in connection with the
disposal depends upon the date of the service of the notice of withdrawal1.
HR A[2841]
1 See Landlord and Tenant Act 1987, s 9A(6), (7).
HR A[2842]
Similarly where the landlord is obliged to proceed he may serve a notice of withdrawal on the nominated person1.
Where the landlord serves a notice of withdrawal he is not entitled to dispose of the protected interest during the period
of 12 months beginning with the date of service of the notice2. In the event of the service of a notice of withdrawal by
the landlord his liability to pay the costs of the nominated person (and the qualifying tenants who served the acceptance
notice) incurred in connection with the disposal depends upon the date of the service of the notice of withdrawal3.
HR A[2843]
1 Landlord and Tenant Act 1987, s 9B(1).
2 LTA 1987, s 9B(2). If, after the expiry of the 12-month period, the landlord again proposes to dispose of a protected interest, the
Page 589
provisions of the Act will apply afresh to that proposed disposal.
3 See LTA 1987, s 9B(3), (4).
HR A[2844]
These provisions relating to the service of notices of withdrawal by the landlord or the nominated person do not apply
after a binding contract for the disposal of the protected interest has been entered into by the landlord and the nominated
person or has otherwise come into existence between the landlord and the nominated person by virtue of any provisions
of Pt I of the Landlord and Tenant Act 19871.
HR A[2845]
1 Landlord and Tenant Act 1987, s 9A(8), 9B(5).
HR A[2846]
There are also provisions enabling the landlord to serve a notice on the qualifying tenants if the premises have ceased to
be premises to which Pt I of the Landlord and Tenant Act 1987 applies, and on service of such a notice the provisions of
the Act cease to have effect in relation to the disposal1.
HR A[2847]
1 See Landlord and Tenant Act 1987, s 10. These provisions do not apply if a binding contract has been entered into.
(i) Failure by landlord to comply with obligations
HR A[2848]
In the early years of the operation of Pt I of the Landlord and Tenant Act 1987, relevant disposals were often made
(whether deliberately or inadvertently) without the landlord complying with his obligations. Failure to comply without
reasonable excuse is now a criminal offence1; however, such failure does not affect the validity of the disposal2, but
there are extensive and important provisions enabling the requisite majority of qualifying tenants to enforce their rights
against the purchaser from a landlord who has failed to comply with his obligations3.
HR A[2849]
1 Landlord and Tenant Act 1987, s 10A, printed and annotated at para HR A[20539].
Page 590
2 See LTA 1987, s 10A(5).
3 These provisions are to be found in LTA 1987, ss 11-17, introduced by the Housing Act 1996 and replacing their statutory predecessors.
HR A[2850]-[2860]
These rights of the requisite majority of qualifying tenants arise where a landlord had made a relevant disposal affecting
premises to which at the time of the disposal Pt I of the Landlord and Tenant Act 1987 applied and either:
(a) no notice was served by the landlord under s 5 with respect to that disposal; or
(b) the disposal was made in contravention of any provision of ss 6-10;
and the premises are still premises to which Pt I applies1.
HR A[2861]
HR A[2862]
In these circumstances, the requisite majority of the qualifying tenants of the flats contained in the premises affected by
the relevant disposal have the following rights:
(a) the right to information as to the terms of the disposal1;

(b) the right of qualifying tenants to take the benefit of a contract (when the original disposal consisted
of entering into a contract)2;
(c) the right of qualifying tenants to compel sale by the purchaser (the transferee under the original
disposal)3;
(d) the right of qualifying tenants to compel the grant of a new tenancy by a superior landlord4.
HR A[2863]
2 LTA 1987, ss 11(2), 11B; see s 4A, which makes Pt I of the LTA 1987 applicable to contracts.
3 LTA 1987, ss 11(2), (3), 12B.
4 LTA 1987, ss 11(2), 12C. These provisions apply where the original disposal consisted of the surrender by the landlord of a tenancy
held by him: LTA 1987, s 12C(1).
Page 591
HR A[2864]
Qualifying tenants are also given rights against subsequent purchasers from the first purchaser1 and there are provisions
enabling a nominated person to withdraw from a proposed compulsory sale pursuant to the above provisions2. Rights
enjoyed by qualifying tenants against a purchaser or subsequent purchaser can be terminated in the event that the
premises cease to be premises to which the Landlord and Tenant Act 1987 applies3.
HR A[2865]
2 LTA 1987, s 14.
3 LTA 1987, s 17.
HR A[2866]
The court has power, on the application of any person interested, to make an order requiring any person who has made
default in complying with any duty imposed on him by any provision of Pt I of the Landlord and Tenant Act 1987 to
make good his default1. A leasehold valuation tribunal has jurisdiction to hear and determine questions arising under
specified provisions of LTA 19872.
HR A[2867]
1 Landlord and Tenant Act 1987, s 19. There is an enforceable duty on a landlord to comply with a purchase notice served pursuant to
what is now LTA 1987, s 12A; Kay Green v Twinsectra Ltd [1996] 1 WLR 1587, [1996] 2 EGLR 43 CA. However, the court has a
discretion under s 19, which was not exercised in Michaels v Harley House (Marylebone) Ltd [1999] 1 All ER 356, CA; see the annotations
to this section at HR A[20618].
2 LTA 1987, s 13 in which the relevant provisions are specified.
(j) Notices served by prospective purchasers
HR A[2868]
There are provisions enabling prospective purchasers to serve notices, with a view to ensuring that rights of refusal do
not arise, in the event that an insufficient number of tenants serve notices in response1. A prudent purchaser may think
it worthwhile to serve these notices, but the existence of these provisions does not relieve the landlord from his own
duty to serve notice under the Landlord and Tenant Act 19872.
Page 592
HR A[2869]-[2980]
1 Landlord and Tenant Act 1987, s 18 at para HR A[20614].
2 See Mainwaring v Trustees of Henry Smith's Charity [1998] QB1, [1996] 2 All ER 220, CA.
Page 593
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent
Chapter 6 Rent
Editors
Jonathan Karas
Alison Oakes
Page 594
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/A The nature of rent
A
Page 595
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/A The nature of rent/1
Historical introduction
1 Historical introduction
(a) Types of rent
HR A[2981]
There are three kinds of rent, namely rent service, rent charge and rent seck1.
HR A[2982]
1 Littleton's Tenures, s 213.
(b) Rent service
HR A[2983]
A 'rent service' is a rent reserved on a lease or grant of lands as incidental to their tenure1. This was the only kind of rent
originally known to the common law. A right of distress was inseparably incident to it, as long as it was payable to the
lord who was entitled to the fealty of the tenant2.
HR A[2984]
1 Littleton's Tenures, s 213.
2 See paras HR A[3]-[5], and [5022] ff.
(c) Rent charge
HR A[2985]
A rent charge is a certain annual sum charged upon land and granted by deed or will by the owner of the land to some
other person1. It is not incident to the tenure, and the grantee of the rent charge takes no reversion, but is given an
express power to distrain for rent.
Page 596
HR A[2986]
1 Co Litt 143b; Bac Abr tit Rent (A), 2; Littleton's Tenures, s 221; Monypenny v Monypenny (1861) 9 HL Cas 114 at 137, 138.
(d) Rent seck
HR A[2987]-[2988]
A rent seck is a bare rent reserved by a deed or will without any express power of distress. It differs only from a rent
charge in the fact that it is not accompanied by such a power1.
HR A[2989]
1 A power of distress was later given by statute: Landlord and Tenant Act 1730, s 5.
(e) Other historical terminology
HR A[2990]-HR A[3000]
Although every species of rent is comprised in the above division, the common law recognised yet other rents known by
particular names, such a rents of assize (which were certain rents at which freeholders or copyholders of a manor held
under the lord from time immemorial) and chief rent (which were similar rents paid by freeholders). Both rents of assize
and chief rents were sometimes called quit rents because thereby the tenant went 'quit' and free from all other services1.
HR A[3001]
1 2 Co Inst 19.
(f) Modern terminology
HR A[3002]
In general it is no longer possible to create a rent charge1. The most important surviving type of rent charge is an 'estate
rent charge'. This is a rent charge created for the purpose:
Page 597
(a) of making covenants to be performed by the owner of the land affected by the rent charge
enforceable by the rent owner against the owner for the time being of the land; or
(b) of meeting, or contributing towards, the cost of the performance by the rent owner of covenants for
the provision of services, the carrying out of maintenance or repairs, the effecting of insurance or the
making of any payment by him for the benefit of the land affected by the rent charge or for the benefit of
that or other land (provided the rent charge represents a reasonable payment for the performance of such
covenants)2.
In the context of the modern law of landlord and tenant it is 'rent service' which is important and it is this that is
commonly referred to simply as 'rent'. It is this sort of rent with which this chapter deals.
HR A[3003]
1 Rentcharges Act 1977, s 2(1).
2 See Rentcharges Act 1977, ss 2(4), (5).

Page 598
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/A The nature of rent/2 The
nature of rent
2 The nature of rent
HR A[3004]
Rent is the recompense paid by the lessee to the lessor for the exclusive possession of corporeal hereditaments. It must
be reserved on the demise1 and historically has been regarded as issuing out of the lands demised2.
HR A[3005]
1 See Duke of Westminster v Store Properties Ltd [1944] Ch 129.
2 Holdsworth History of English Law vol VII, p 262.
HR A[3006]
Although rent originally consisted of the performance of services to the landlord, in modern times it is conceived of as a
payment which the tenant is bound by contract to make to the landlord1. However, rent in its correct sense even in
modern times has four distinguishing qualities2, being:
(a) a periodical sum;

(b) paid in return for the occupation of land;
(c) issuing out of the land; and
(d) for non-payment of which distress is leviable.
As is indicated above, rent need not consist of the payment of money: it may consist in the render of chattels3 or in the
performance of services4 but it must be certain5. Although the landlord may reserve to himself as a rent part of the
produce of the land (such as a corn rent6) or a rent assessed by reference to the profits from the land (for instance, a
royalty assessed by reference to the quantity of minerals worked7) the lessor cannot reserve as a rent the right to use the
demised land itself because reservation of the actual use of the land is repugnant to the grant for which the rent is
payable8.
HR A[3006.1]
1 Holdsworth History of English Law vol VII, p 262; Property Holding Co Ltd v Clark [1948] 1 KB 630 at 648; see also C H Bailey Ltd v
Memorial Enterprises Ltd [1974] 1 All ER 1003, [1974] 1 WLR 728; United Scientific Holdings Ltd v Burnley Borough Council [1978] AC
904.
Page 599
2 Escalus Properties Ltd v Robinson [1995] 2 EGLR 23 at 25, CA, per Nourse LJ.
3 Co Litt 142a; Pitcher v Tovey (1692) 4 Mod Rep 71; Lanyon v Carne (1669) 2 Saund 161; see also Montague v Browning [1954] 1
WLR 1039, CA (in context of Rent Acts).
4 Co Litt 96A; Vyvyan v Arthur (1823) 1 B & C 410 (taking corn to be ground in landlord's mill); Doe d Tucker v Morse (1830) 1 B & Ad
365 (carrying coals); Doe d Edney v Benham (1845) 7 QB 976 (cleaning a church); Duke of Marlborough v Osborn (1864) 5 B & S 67 (work
with horses and cart); Montague v Browning [1954] 1 WLR 1039 (cleaning a synagogue).
6 Master of St Cross Hospital v Lord Howard de Walden (1795) 6 Term Rep 338 at 343.
7 Coal Commission v Earl Fitzwilliam's Royalties Co [1942] Ch 365; see also R v Westbrooke; R v Everist (1847) 10 QB 178 at 203;
Daniel v Gracie (1844) 6 QB 145; Edmonds v Eastwood (1858) 2 H & N 811; Barrs v Lea (1864) 33 LJ Ch 437.
8 Co Litt 142a.
HR A[3007]
Leases are contractual in their origin. In principle, the rights and obligations of the parties in respect of rent will be
determined as a matter of the construction of the contract, just as payment obligations under any other contract1. Where,
however, a tenant is in breach of his obligation to pay rent, the landlord is not obliged to 'mitigate' his losses by taking
steps to terminate the lease. If the lease remains in force, the landlord is entitled to the rent and other sums falling due,
but if the landlord elects to determine the tenancy, the landlord is not entitled to rent or damages for loss of future rent.
Accordingly, in practice it cannot be considered unreasonable for a landlord to choose to allow the lease to continue and
he will not be disentitled from receiving rent because of a failure to 'mitigate' his loss2.
HR A[3007.1]
1 See HR A[3006] and United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904.
2 Reichman v Beveridge [2006] EWCA 1659, [2007] 08 EG 138.

Page 600
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/A The nature of rent/3 Rent
issues from a corporeal hereditament
3 Rent issues from a corporeal hereditament
HR A[3008]
Rent can only be reserved upon a corporeal hereditament: because the possibility of distraining is one of the essential
qualities of rent, it cannot be reserved out of incorporeal hereditaments, as a landlord cannot distrain upon these1.
Similarly, a sum payable in respect of a licence to use land cannot be rent since no premises are demised upon which
distress can take place2. However, rent may be reserved out of a remainder or reversion since the lessor may distrain on
the property when it falls into possession3.
HR A[3009]
1 Co Litt 47a; Butt's Case (1600) 7 Co Rep 23a at 24; (though the Crown can apparently reserve rents out of incorporeal hereditaments,
since it can distrain on any lands of the tenant (Co Litt 471, n 284). See para HR A[5026] in relation to distress.
2 Hancock v Austin (1863) 14 CBNS 634; compare Selby v Greaves (1868) LR 3 CP 5984.
3 Co Litt 47a at 142a.
HR A[3010]-HR A[3020]
A single rent reserved in respect of the whole demised land issues or becomes due out of every part of the land, and
therefore the lessor can distrain for it on any part1. But in a single lease separate rents may be reserved in respect of
different parts of the demised premises2 and may be made payable at different times3.
HR A[3021]
1 Hargrave v Shewin (1826) 6 B & C 34; Curtis v Spitty (1835) 1 Bing NC 756 at 760.
2 Knight's Case (1588) 5 Co Rep 54b at 55a; Gilbert on Rent, pp 34, 35.
3 Coomber v Howard (1845) 1 CB 440. See para HR A[3103] ff generally.

Page 601
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/A The nature of rent/4 Rent
not necessary to a demise
4 Rent not necessary to a demise
HR A[3022]
Although it is necessary for there to be a demise for there to be a rent, rent is not a necessary incident of a demise at
common law1. Thus, a lease may be rent free2: a lease or tenancy creates a term of years absolute which may take
effect in possession or reversion whether or not at a rent3.
HR A[3023]
1 Knight's Case (1588) Co Rep 54b.
2 Ashburn Anstalt v Arnold [1989] Ch 1, CA (overruled on a different point in Prudential Assurance Co v London Residuary Body [1992]
2 AC 386); AG Securities Ltd v Vaughan [1990] 1 AC 417 at 430, per Fox LJ (reversed on a different point in the House of Lords).
3 Law of Property Act 1925, s 205(1)(xxvii).

Page 602
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/B Reservation of rent
B
Page 603
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/B Reservation of rent/1
Generally
1 Generally
(a) Method of reservation
HR A[3024]
It is usual for leases to contain a 'reddendum', ie an express reservation of rent to the landlord. However, a reservation of
rent may also be implied from a covenant to pay rent1.
HR A[3025]
1 Drake v Munday (1631) Cro Car 207; Harrington v Wise (1596) Cro Eliz 486; Doe d Rains v Kneller (1829) 4 C & P 3.
HR A[3026]
Conversely, where a demise is expressed to be at a given rent without an express covenant to pay, the obligation to pay
will be implied. The words 'yielding' and 'paying' in a lease create a covenant to pay rent during the term either
expressly1 or implicitly2, but any other words clearly indicative of the intention that a specified rent shall be paid are
sufficient for there to be an implied agreement on the part of the tenant to pay the rent.
HR A[3027]
1 Newton v Osborn (1653) Sty 387; Porter v Swetnam (1654) Sty 406; Helier v Casbard (1665) I Sid 266; SC sub nom Helier v Casebert
1 Lev 127; Steward v Wolveridge (1832) 9 Bing 60 at 69, revsd on other grounds sub nom Wolveridge v Steward (1833) 1 Cr & M 644;
Royton Industries Ltd v Lawrence [1994] 1 EGLR 110 at 111 (cf Platt on Covenants (1829) pp 53, 55 and Platt on Covenants (1847) p 87).
2 Paradine v Jane (1647) Aleyn 26; Anon (1670) 1 Sid 447 (p 19); Harper v Burgh (1677) 2 Lev 206; Webb v Russell (1789) 3 Term Rep
393 at 402; Vyvyan v Arthur (1823) 1 B & C 410; Iggulden v May (1804) 9 Ves 325 at 330; Church v Brown (1808) 15 Ves 258 at 264.
Page 604
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/B Reservation of rent/2 Rent
must be capable of ascertainment with certainty
2 Rent must be capable of ascertainment with certainty
HR A[3028]
Rent must be certain or be capable of being ascertained with certainty1. For this purpose it is sufficient if by calculation
and upon the happening of certain events it becomes certain; thus, the rent need not be fixed at the date of the grant of
the lease provided that it is certain at the date when it is due2. Further, it is possible for rent to be payable
retrospectively: thus rent may be determined after the date on which it becomes due3. Accordingly, it is possible to
grant a lease at a rent to be determined by arbitration4.
HR A[3029]
1 Co Litt 142a; Parker v Harris (1692) 1 Salk 262; Watson v Waud (1853) 8 Exch 335 at 339 (new demise where uncertain rent
afterwards fixed); Treseder-Griffin v Co-operative Insurance Society Ltd [1956] 2 QB 127. See too para HR A[5048] (distress).
2 Re Knight, Ex parte Voisey (1882) 21 Ch D 442.
3 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 at 934-935.
4 Daly v Duggan (1839) 1 I Eq R 311.
HR A[3030]-HR A[3040]
Likewise, provided that rent can be ascertained with certainty from time to time, it does not matter that the rent is of a
fluctuating amount1. In modern times, it is common for leases of any substantial length to contain provisions for rent
review so that the rent payable will be periodically revised to take account of the changing value of the property. Full
consideration of the law which has been built up relating to rent reviews is contained in paras Chapter 72.
HR A[3041]
1 Co Litt 96a; Kendall v Baker (1852) 11 CB 842 (rent varying with price of wheat); A-G for Ontario v Canadian Niagara Power Co
[1912] AC 852, PC (rent varying with amount of electrical horse power generated); Greater London Council v Connolly [1970] 2 QB 100
(increase by reference to amount stated in notice); cf Beachway Management v Wisewell [1971] Ch 610.

Page 605
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/B Reservation of rent/3 Rent:
incident to reversion
3 Rent: incident to reversion
HR A[3042]
Rent is incident to the reversion, thus even if not expressly reserved to the heirs of the lessor the benefit of the right to
receive rent goes with the reversionary estate in the land1. Where there is an express reservation of rent slight
inaccuracies in wording which might indicate that the rent would not go with the reversionary estate will be overlooked
'for the law uses all industry imaginable to conform the reservation to the estate'2.
HR A[3043]
1 Law of Property Act 1925, s 141, see para HR A[20116]); Landlord and Tenant (Covenants) Act 1995, s 3, see para HR A[21052]. See
also Whitlock's Case (1609) 8 Co Rep 69b at 71a and Scribes West Ltd v Relsa Anstalt [2004] EWCA Civ 1744, [2005] 02 EG 100 (CS).
2 Sacheverell v Froggatt (1671) 1 Vent 161 at 162; Drake v Munday (1631) Cro Car 207.
HR A[3044]
Rent must be reserved to the landlord himself (though it is possible that the Crown may be able to reserve rent to a
stranger1). Rent reserved to a stranger is not a true rent2: rent is recompense for the use of land by the tenant; thus rent
purportedly reserved to a stranger cannot be distrained for3. However, a sum purportedly reserved to a person other than
the landlord by way of rent may be recoverable as a sum payable under a contract (subject to the principles relating to
privity of contract).
HR A[3045]
1 See Co Litt 143b.
2 Errington v Errington and Woods [1952] 1 KB 290 at 296, CA (payment of mortgage instalments to third party mortgagee was not
rent).
3 See Jewel's Case (1588) 5 Co Rep 3a; Littleton's Tenures, s 346; Co Litt 143b. See also Oates v Frith (1615) Hob 130; Cole v Sury
(1627) Lat 264; Deering v Farrington (1674) 1 Mod Rep 113; Dollen v Batt (1858) 4 CBNS 760 at 768; Gilbertson v Richards (1859) 4 H &
N 277 at 295.
HR A[3046]
Page 606
Similarly, no rent can be reserved upon the assignment of a lease, since no reversion remains to the assignor; but in this
case, also, the purported reservation may take effect as a contract to pay a sum1.
HR A[3047]
1 Whitton v Bye (1618) Cro Jac 486; ------ v Cooper (1768) 2 Wils 375; Smith v Mapleback (1786) 1 Term Rep 44l; Parmenter v Webber
(1818) 8 Taunt 593; Langford v Selmes (1857) 3 K & J 220.
Page 607
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/B Reservation of rent/4
Quasi-rents and other payments which are not true rents
4 Quasi-rents and other payments which are not true rents
(a) Generally
HR A[3048]
As indicated in the preceding paragraphs, rents purportedly reserved to a stranger or upon the assignment of a lease are
not true rents, though such sums may be recoverable under the terms of the contract between the parties1. Other
examples of payments which are not rent include:
(a) payments reserved on the grant of a licence to use premises2;

(b) sums reserved upon a mere agreement for lease3, at least where the agreement is not specifically
enforceable4;
(c) payments reserved on a lease of incorporeal hereditaments5 (though the lease leaves a reversion in
the owner to which the payments in the nature of rent are attached and the right to receive them passes to
the assignee of the reversion6);
(d) payments reserved on the lease of chattels7;
(e) payments in a lease which are covenanted to be paid but which are not reserved as or agreed to be
rent8;
(f) payments by way of a premium for the grant of a lease (even if payable by annual instalments)9.
It had previously been thought that an agreement after the demise for an increase in 'rent' could only be made by way of
a surrender and re-grant at the higher rent if the payment was to be truly a rent10. However, it is now clear that that it is
possible for an agreement to vary the rent to be made between landlord and tenant without a new lease being granted11.
HR A[3049]
1 See paras HR A[3044]-[3047].
2 Hancock v Austin (1863) 14 CBNS 634; but it will be a question of construction whether the agreement is really the grant of a licence or
a demise see eg Selby v Greaves (1868) LR 3 CP 594 and Street v Mountford [1985] AC 809; see generally paras HR A[549] ff.
3 Howlett v Tarte (1861) 10 CBNS 813; Marquis of Camden v Batterbury (1860) 7 CBNS 864.
4 Walsh v Lonsdale (1882) 21 Ch D 9, CA and HR A[908]. Cf Hegan v Johnson (1809) 2 Taunt 148; Dunk v Hunter (1822) 5 B & Ald
322; Regnart v Porter (1831) 7 Bing 451.
5 Jewel's Case (1588) 5 Co Rep 3a (a fair); Dean and Chapter of Windsor v Gover (1671) 2 Saund 302 and Gardiner v Williamson (1831)
2 B & Ad 336, 339 (tithes); Buszard v Capel (1828) 8 B & C 141 at 150, affd sub nom Capel v Buszard (1829) 6 Bing 150 Ex Ch
(easements).
Page 608
6 Lord Hastings v North Eastern Rly Co [1898] 2 Ch 674 at 678; affd [1899] 1 Ch 656 at 665, CA. A payment reserved on the grant of an
easement by a tenant will cease with the tenancy: Jones v Dorothea Co (1887) 58 LT 80.
7 See Spencer's Case (1583) 5 Co Rep 16a.
8 Smith v Mapleback (1786) 1 Term Rep 441 at 445; Cox v Harper [1910] 1 Ch 480, CA (payment on account of goodwill); Marquis of
Breadalbane v Robertson 1914 51 Sc LR 156 (payment of part of insurance premium not reserved as rent); cf Escalus Properties Ltd v
Robinson [1998] QB 231, [1995] 4 All ER 852.
9 Hill v Booth [1930] 1 KB 381, CA cf Samuel v Salmon and Gluckstein Ltd [1946] Ch 8 (annual payment for use of land was rent even
though described as a premium).
10 Hoby v Roebuck and Palmer (1816) 7 Taunt 157; Donellan v Read (1832) 3 B & Ad 899 at 905; Lambert v Norris (1837) 2 M & W
333; Foquet v Moor (1852) 7 Exch 870; Phillips v Miller (1875) LR 10 CP 420, Ex Ch; Duke of Westminster v Store Properties Ltd [1944]
Ch 129.
11 Jenkin R Lewis Ltd v Kerman [1971] Ch 477, CA; Friends' Provident Life Office v British Railways Board [1996] 1 All ER 336;
compare Beegas Nominees Ltd v BHP Petroleum Ltd [1998] EGCS 60, CA.
(b) Rent payable in respect of land and other things
HR A[3050]-HR A[3060]
Where a single rent is reserved on a lease of land and incorporeal hereditaments1 or on a lease of land and chattels2, the
rent will be treated as issuing out of the land alone3. If the title to the land and chattels are severed, either the rent will
be apportioned, or a new agreement will be inferred under which the tenant takes the land at a reasonable proportion of
the rent from the person entitled to take it and agrees to pay the remainder as compensation to the person entitled to the
chattels4.
HR A[3061]
1 Smith v Bowles (1617) 2 Roll Abr 451.
2 Collins v Harding (1597) Cro Eliz 606 at 607; Farewell v Dickenson (1827) 6 B & C 251.
3 Read v Lawnse (1561) 2 Dyer 212b; Farewell v Dickenson (1827) 6 B & C 251 at 257; Brown v Peto [1900] 1 QB 346; affd [1900] 2
QB 653, CA; Munster and Leinster Bank v Hollinshead [1930] IR 187, CA.
4 Salmon v Matthews (1841) 8 M & W 827 at 833; and see Hoare & Co v Hove Bungalows Ltd (1912) 56 Sol Jo 686, CA. See paras HR
A[3481]ff in relation to apportionment generally.
Page 609
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/C Increase and reduction of
rent
HR A[3062]
The parties to a lease may reserve a rent and agree a formula for the ascertainment of the rent from time to time during
the term1. However, the parties may agree during the course of the term of the lease that the rent reserved should be
varied.
HR A[3063]
1 See para HR A[3030]; and para HR A[3581] on rent reviews.
HR A[3064]
If the lease is in writing, under the old common law a covenant could not be discharged otherwise than by deed; thus an
agreement for reduction of rent had to be contained in a deed or in an enforceable instrument. Accordingly, such an
agreement generally requires to be in writing1 and either contained in a deed or enforceable by reason of
consideration2. However, the doctrine of promissory estoppel affects this general rule and it is clear that it is possible
for there to be a binding agreement for the reduction of rent in the absence of a deed, writing or consideration where
circumstances give rise to an estoppel3. The mere payment and acceptance of rent at a reduced rate does not operate as
a new demise4; however, surrounding circumstances may be such that a surrender and re-grant may be inferred5.
HR A[3065]
1 O'Connor v Spaight (1804) 1 Sch & Lef 305 at 306; Hilton v Goodhind (1827) 2 C & P 591.
2 See Fitzgerald v Lord Portarlington (1835) 1 Jo Ex Ir 431; Crowley v Vitty (1852) 7 Exch 319; Morgan v Rainsford (1845) 8 I Eq R
299.
3 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130; see also Brikom Investments Ltd v Carr [1979] QB 467.
4 Clarke v Moore (1844) 1 Jo & Lat 723 at 729; Crowley v Vitty (1852) 7 Exch 319; see also Jenkin R Lewis Ltd v Kerman [1971] Ch 477,
CA; Friends' Provident Life Office v British Railways Board [1996] 1 All ER 336.
5 Parker v Briggs cited in (1893) 37 Sol Jo at 452; see paras HR A[7910]ff for surrender generally.
HR A[3066]
Page 610
It appears that an increase in rent can be agreed verbally1; but there must be consideration, a deed or an estoppel for an
agreement to increase the rent to be enforceable. An increased rent can also be agreed upon without it necessarily being
inferred that there has been a surrender and re-grant2. It has been suggested that an agreement for an increased rent
would not pass with the reversion unless the agreement could be construed as a surrender or re-grant3. However, since
such an agreement to increase the rent would appear to amount to an agreement 'with reference to the subject-matter of
the lease'4 or a 'covenant falling to be complied with by the tenant of premises demised by the tenancy'5, the burden of
such an agreement will pass with the reversion6.
HR A[3067]
1 Donellan v Read (1832) 3 B & Ad 899 at 905. See too para HR A[5030] (distress).
2 Doe d Monck v Geekie (1844) 5 QB 841; Kelly v Pattersson (1874) LR 9 CP 681; Delmege v Mullins (1875) IR 9 CL 209, ExCh; Jenkin
R Lewis Ltd v Kerman [1971] 1 Ch 477, CA; Friends' Provident Life Office v British Railways Board [1996] 1 All ER 336. See para HR
A[2125] ff especially para HR A[2147] for the extent to which an assignee of the term may bind the original tenant by varying the lease.
3 See Lambert v Norris (1837) 2 M & W 333; see Law of Property Act 1925, s 121 for remedies for recovery of annual sums charged on
land.
5 Landlord and Tenant (Covenants) Act 1995, s 28
6 Law of Property Act 1925, s 141 at para HR A[20116]; Landlord and Tenant (Covenants) Act 1995, s 3 at HR A[21052].
Page 611
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/D Penal rents
D
Page 612
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/D Penal rents/1 Generally
1 Generally
HR A[3068]
A penal rent is a rent payable in the event of the tenant breaching some obligation contained in the lease. The term
'penal rent' is used both to describe a penalty within the strict meaning of that word but also a clause providing in effect
for liquidated damages1. Where the effect of the 'penal rent' is that the lease provides for a penalty, the party entitled to
the benefit of the clause is not entitled to recover more than his actual losses and the penal rent cannot be distrained
for2. Where the 'penal rent' is in substance a provision for liquidated damages, the measure of damages payable will be
determined under the clause regardless of whether this represents the true loss of the landlord3 and the sum will payable
exactly as reserved and can be the subject of distress4.
HR A[3069]
1 Rolfe v Peterson (1772) 2 Bro Parl Cas 436; Farrant v Olmius (1820) 3 B & Ald 692; Jones v Green (1829) 3 Y & J 298; Smith v Ryan
(1844) 9 ILR 235; Wright v Tracey (1873) IR 7 CL 134; Re Earl of Mexborough and Wood (1882) 47 LT 516; Lord Elphinstone v Monkland
Iron and Coal Co (1886) 11 App Cas 332.
2 Pollitt v Forrest (1847) 11 QB 949.
3 See paras HR A[3080] and HR A[3082].
4 Pollitt v Forrest (1847) 11 QB 949.

Page 613
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/D Penal rents/2 Penalty or
liquidated damages
2 Penalty or liquidated damages
HR A[3070]-HR A[3080]
The law now adopted for determining whether an additional sum payable in the event of a breach of covenant is a
penalty or liquidated damages are those adopted in the case of other contracts. The law has been summarised in the
following propositions1:
(a) Although the parties to a contract who use the words 'penalty' or 'liquidated damages' may prima
facie be supposed to mean what they say, the expression used is not conclusive.
(b) The essence of a penalty is a payment of money stipulated as in terrorem of the offending party;
the essence of liquidated damages is a genuine pre-estimate of damage.
(c) The question whether a sum stipulated is a penalty or liquidated damages is a question of
construction to be decided upon the terms and inherent circumstances of each particular contract, judged
of at the time of the making of the contract, not as at the time of breach.
(d) To assist the task of construction various tests have been suggested which, if applicable to the case
under consideration, may prove helpful or even conclusive. Such are:
(i) It will be held to be a penalty if the sum stipulated for is extravagant and unconscionable in
amount in comparison with the greatest loss which could conceivably be proved to have followed
from the breach.
(ii) It will be held to be a penalty if the breach consists only in not paying a sum of money, and
the sum stipulated is a sum greater than the sum which ought to have been paid.
(iii) There is a presumption (but no more) that it is a penalty when a single lump sum is made
payable by way of compensation, on the occurrence of one or more or all of several events, some
of which may occasion serious and others but trifling damage.
On the other hand:
(iv) It is no obstacle to the sum being a genuine pre-estimate of damage, that the consequences
of the breach are such as to make precise pre-estimation almost an impossibility. On the contrary,
that is just the situation when it is probable that pre-estimated damage was the true bargain
between the parties.
HR A[3081]
1 Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 at 86-88.
Page 614
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/D Penal rents/3 Duration for
which 'penal' rent is payable
3 Duration for which 'penal' rent is payable
HR A[3082]
If the increased rent is made payable as 'rent' (being in the nature of liquidated damages rather than a penalty), and if it
has once become payable, it will continue to be payable periodically during the residue of the term1 notwithstanding
that the breach of covenant has been remedied (for instance, where land which has been ploughed up in breach of
covenant has been laid down to grass again2). However, it is possible for the parties to agree and a lease to be construed
so that the increased rent should be payable only while the breach of covenant continues3.
HR A[3083]
1 Bowers v Nixon (1848) 12 QB 558n; and see Farrant v Olmius (1820) 3 B & Ald 692.
2 Birch v Stephenson (1811) Taunt 469 at 478.
3 Domvile v Forde (1873) IR 7 CL 534.
HR A[3084]
A receipt of the original rent will not in itself be treated as a waiver of the landlord's claim to the increased rent1.
HR A[3085]
1 Denton v Richmond (1833) 1 Cr & M 734 at 742.

Page 615
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/D Penal rents/4 Reservation of
'penal' rent and tenant's 'right' to breach covenant
4 Reservation of 'penal' rent and tenant's 'right' to breach covenant
HR A[3086]
Prima facie the tenant is bound to observe his covenants, and the mere circumstance that a penal rent is reserved does
not give him the option of breaking the covenant and paying the increased rent1. In general, the tenant has no such
option where a single sum is made payable2 or where the landlord has a right of re-entry on breach of the covenant3. If,
however, the increased rent is payable throughout the remainder of the term, this is an indication that the tenant is to
have the right to break the covenant and render himself liable to the additional rent4. Where the tenant does not have the
option of breaking the covenant, the landlord is entitled to have the breach of covenant restrained by injunction5; and if
the landlord has the right of re-entry, he is entitled either to exercise this right and forfeit the lease, or to require
payment of the increased rent6.
HR A[3087]
1 French v Macale (1842) Dr & War 269 at 274, 284; Bray v Fogarty (1870) 4 Ir Eq 544. Similarly, a provision for the reduction of rent
while the tenant observes a 'tied house' convenant does not entitle him to pay the full rent and disregard the tie: Hanbury v Cundy (1887) 58
LT 155; and see Hardy v Martin (1783) 1 Cox Eq Cas 26; Bringloe v Goodson (1839) 8 Scott 71.
2 City of London v Pugh (1727) 4 Bro Parl Cas 395; French v Macale (1842) Dr & War 269.
3 See Barret v Blagrave (1800) 5 Ves 555.
4 In such a case the parties themselves have fixed the recompense for the act in question: Woodward v Gyles (1690) 2 Vern 119; Rolfe v
Peterson (1772) 2 Bro Parl Cas 436; French v Macale (1842) Dr & War 269 at 277; Gerrard v O'Reilly (1843) 3 Dr & War 414 at 430; Legh
v Lillie (1860) 6 H & N 165. See also Aylet v Dodd (1741) 2 Atk 238 at 239; Benson v Gibson (1746) 3 Atk 395 at 396; Jones v Green
(1829) 3 Y & J 298 at 304.
5 French v Macale (1842) Dr & War 269.
6 Weston v Metropolitan Asylum District Managers (1882) 9 QBD 404, CA; Doe d Antrobus v Jepson (1832) 3 B & Ad 402.
Page 616
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/D Penal rents/5 Examples
5 Examples
HR A[3088]
Where a tenant agreed to pay an additional rent for every ton of hay and straw sold off the premises during the last 12
months of the tenancy and the additional rent was more than twice the loss to the landlord as a result of the sale, this
was held to be a penalty1. On the other hand, where a tenant covenanted not to plough up pasture but in the event that
he did so covenanted to pay an additional rent per acre, the increased rent was recoverable2. Increased rents may also be
reserved where the tenant suffers the land to be occupied by other persons3 or ceases to reside at the premises4 or
carries on specified trades5.
HR A[3089]
1 Pollitt v Forrest (1847) 11 QB 949, Ex Ch.
2 Rolfe v Peterson (1772) 2 Bro Parl Cas 436; Birch v Stephenson (1811) 3 Taunt 469; Farrant v Olmius (1920) 3 B & Ald 692; see also
Skipworth v Green (1724) 8 Mod Rep 311; Aldridge v Howard (1842) 4 Man & G 921; Rush v Lucas [1910] 1 Ch 437.
3 Greenslade v Tapscott (1834) 1 Cr M & R 55; Ponsonby v Adams (1770) 2 Bro Parl Cas 431, HL.
4 Ponsonby v Adams (1770) 2 Bro Parl Cas 431, HL.
5 Weston v Metropolitan Asylum District Managers (1882) 9 QBD 404, CA.

Page 617
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/D Penal rents/6 Agricultural
holdings
6 Agricultural holdings
HR A[3090]-HR A[3100]
In the case of penal rents reserved in respect of agricultural holdings, the landlord may not recover any sum in excess of
the damage suffered1.
HR A[3101]
1 Agricultural Holdings Act 1986, s 24, F[765].

Page 618
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/E Time and mode of payment
E
Page 619
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/E Time and mode of
payment/1 When rent is payable
1 When rent is payable
HR A[3102]-HR A[3103]
The reddendum fixes the periods when the rent is to be paid. If no periods for payment are fixed, a rent reserved will
generally be payable yearly at the end of the year if the tenancy is a fixed term or annual tenancy or at the end of each
period if the tenancy is a periodic tenancy: the rent will not be payable until the end of the period and cannot be
demanded before1. Where the time for payment is left indefinite, evidence may be given of contemporaneous or
subsequent dealings of the parties to show that the rent was to be payable earlier than the end of the year2.
HR A[3104]
1 Re St Andrew's Allotment Association's Trusts, Sargeant v Probert [1969] 1 All ER 147, [1969] 1 WLR 229 at 235. See Cole v Sury
(1627) Lat 264; Turner v Allday (1836) Tyr & Gr 819; Coomber v Howard (1845) 1 CB 440; Collett v Curling (1847) 10 QB 785.
2 Gore v Lloyd (1844) 12 M & W 463.
HR A[3105]
If it is intended that rent should be payable in advance for the first payment or during the term either generally or for the
last period of the tenancy, then the lease must make express provision for this1. A landlord may wish to ensure that the
rent is payable in advance for the last period of the term so as to give provide the remedy of distress for rent in respect
of that period before the expiration of the lease2.
HR A[3106]
1 See Finch v Miller (1848) 5 CB 428; Hopkins v Helmore (1838) 8 Ad & El 463; see also Holland v Palser (1817) 2 Stark 161; Allen v
Bates (1833) 3 LJ Ex 39.
2 Witty v Williams (1864) 12 WR 755; as to a clause allowing the tenant to retain a half-year's rent in hand, see ------- v Nicholls (1774)
Lofft 393.
HR A[3107]
A properly drafted reddendum should also specify the days on which the payments are to be made1 and the day for the
first payment. Where the day for first payment is not mentioned, the first payment will be due on such of the specified
rent days as first occurs2.
Page 620
HR A[3108]
1 See para HR A[3141] as to the 'usual' quarter days.
2 Hill v Grange (1555) 1 Plowd 164 at 171; Co Litt 217b.
HR A[3109]
If the first payment is to cover a greater or lesser time that the usual period specified in the lease this should be
expressly stated1. The lease may provide for rent to be paid in respect of a period prior to execution2.
HR A[3110]-HR A[3120]
1 See Hutchings v Scott (1837) 2 M & W 809 at 810.
2 Bradshaw v Pawley [1979] 3 All ER 273.
HR A[3121]
If the rent is made payable half-yearly or quarterly and no specific days are mentioned, the payment will be in equal
portions on the half-yearly or quarterly days, computed from the commencement of the term1.
HR A[3122]
1 Tomkins v Pinsent (1702) 2 Ld Raym 819; Gilbert on Rent p 50; see Harrington v Wise (1596) Cro Eliz 486.
HR A[3123]
Slight inaccuracies in the specified days of payment will not, however, prevent the landlord from recovering the full
aggregate rent for the term; if necessary for the purpose of making up the full payment, one day of payment will be
reckoned after the expiration of the term1.
HR A[3124]
1 Hopkins v Helmore (1838) 8 Ad & El 463.

Page 621
HR A[3125]
If the rent reserved is payable on specified days or within so many days after, it is not absolutely due until the expiration
of the days of grace. If, however, the lease ends on one of the days of payment, the last payment becomes due on the
last day of the term1.
HR A[3126]
1 Blunden's Case (1598) Cro Eliz 565; Pilkington v Dalton (1598) Cro Eliz 575; Clun's Case (1613) 10 Co Rep 127a; Glover v Archer's
Case (1614) 4 Leon 247; Barwick v Foster (1610) Cro Jac 227 at 233; Biggin v Bridge (1676) 3 Keb 534.
HR A[3127]
Occasionally, leases will be found where one or other party may elect how the rent is to be paid. However, the election
will need to be notified to the other party. Thus where rent was payable 'quarterly, or half-quarterly, if required', the
landlord, after receiving the rent quarterly, could not distrain for a half-quarter's rent without first demanding that the
rent be payable half-quarterly1.
HR A[3128]
1 Mallam v Arden (1833) 10 Bing 299. See para HR A[5062].
HR A[3129]
It is possible for the parties to agree variations of the time for payment under a lease, though to be enforceable such
variations must comply with the necessary formalities for the variation of the terms of a lease or be enforceable by
reason of an estoppel1.
HR A[3130]-HR A[3140]
1 Mitas v Hyams [1951] 2 TLR 1215 (oral arrangement evidenced in writing).

Page 622
payment/2 Usual days
2 Usual days
HR A[3141]
The usual quarter days in England are now Lady Day (25 March), Midsummer Day (24 June), Michaelmas Day (29
September) and Christmas Day (25 December). However, in leases made prior to the revisions to the calendar made by
the Calendar (New Style) Act 1750 and the Calendar Act 1751 and sometimes in leases which make express reference
to the 'old' quarter days, the quarter days will fall 11 days after the equivalent modern usual quarter day1. Rent payable
on the 'two usual feasts of the year' will be payable at Lady Day and Michaelmas2, but evidence of a custom of the
country as to the meaning of the expression used is admissible to explain a parol demise3.
HR A[3142]
1 See 45 Halsburys Laws (4th edn) 1101-1102.
2 Harrington v Wise (1596) Cro Eliz 486.
3 Doe d Hall v Benson (1821) 4 B & Ald 588 at 589; cf Den v Peters v Hopkinson (1823) 3 Dow & Ry KB 507.
Page 623
payment/3 Demands for rent
3 Demands for rent
HR A[3143]
At common law, no formal demand for rent is necessary before the rent becomes due1.
HR A[3144]
1 Re St Andrew's Allotment Association's Trusts, Sargeant v Probert [1969] 1 All ER 147, [1969] 1 WLR 229; Railtrack plc v Ohajah
[2000] EGCS 88, CA.
HR A[3145]
Where premises consist of or include a dwelling and are not held under a tenancy to which Pt II of the Landlord and
Tenant Act 1954 applies there are statutory provisions requiring certain information to be specified in any demand1.
These provisions apply not only where the dwelling house is the only property demised but also where the dwelling
house is included in a larger letting (for instance, one to which the Agricultural Holdings Act 1986 applies)2. In cases in
which these provisions apply, where any written demand is given to a tenant, the demand must contain:
(a) the name and address of the landlord; and

(b) if that address is not in England and Wales, and address in England and Wales at which notices
(including notices in proceedings) may be served on the landlord by the tenant3.
HR A[3146]
1 Landlord and Tenant Act 1987, ss 46 and 47.
2 Lindsey Trading Properties Inc v Dallhold Estates (UK) Property Ltd (1993) 70 P & CR 332, CA.
3 LTA 1987, s 47(1).
HR A[3147]
Where the tenant of premises is given such a demand but the demand does not contain this information, any part of the
amount demanded which consists of a service charge is to be treated for all purposes as not being due from the tenant to
the landlord at any time before the information is furnished by the landlord1. This does not apply at any time where by
Page 624
virtue of an order of any court, there is in force an appointment of a receiver or manager whose functions include the
receiving of service charges from the tenant2.
HR A[3148]
2 LTA 1987, s 47(3).

Page 625
payment/4 Dwelling houses
4 Dwelling houses
(a) Rent not due until landlord supplies address
HR A[3149]
In addition to the requirement that landlords of dwelling houses must include certain information in demands for rent
(see the preceding paragraph), a landlord of premises which consist of or include a dwelling and which are not held
under a tenancy to which Part II of the Landlord and Tenant Act 1954 applies, must give notice to the tenant of an
address in England and Wales at which notices (including notices in proceedings) may be served on him by the tenant1.
If the landlord fails to give such a notice, any rent or service charge otherwise due from the tenant to the landlord will
be treated for all purposes as not being due from the tenant to the landlord at any time before the landlord gives such a
notice2 (whether or not the rent accrued prior to the Act coming into force3). Once a notice is served, however, arrears
of rent which have fallen due prior to the notice will be recoverable4.
HR A[3150]-HR A[3160]
1 Landlord and Tenant Act 1987, ss 46 and 48(1); Lindsey Trading Properties Inc v Dallhold Estates (UK) Property Ltd (1993) 70 P &
CR 332, CA; Rogan v Woodfield Building Services Ltd [1995] 20 EG 132, CA.
3 Hussain v Singh [1993] 31 EG 75.
4 Hussain v Singh [1993] 31 EG 75; Lindsey Trading Properties Inc v Dallhold Estates (UK) Property Ltd (1993) 70 P & CR 332, CA;
Rogan v Woodfield Building Services Ltd [1995] 20 EG 132, CA.
HR A[3161]
These provisions do not apply where by virtue of an order of any court, there is in force an appointment of a receiver or
manager whose functions include the receiving of rent or service charges from the tenant1.
HR A[3162]

Page 626
payment/5 Time for payment of rent
5 Time for payment of rent
HR A[3163]
The lessee has the whole of the rent day in which to pay his rent, and the rent is not in arrear until after midnight on that
day1. Rent falling due on a Sunday may be lawfully paid on that day and is, therefore, in arrear on Monday2. On the
other hand, rent due on a Bank Holiday is not payable until the following day3. It should be noted, however, that where
a formal demand for rent is required prior to the enforcement of a right of re-entry, it should be made before sunset on
the day that the rent is due4.
HR A[3164]
1 Dibble v Bowater (1853) 2 E & B 564; see Duppa v Mayo (1669) 1 Wms Saund 275 at 287 (see 1 Wms Saund ed 1871, p 455); Cutting
v Derby (1776) 2 Wm Bl 1075 ay 1077; Re Aspinall, Aspinall v Aspinall [1961] Ch 526.
2 Child v Edwards [1909] 2 KB 753.
3 Banking and Financial Dealings Act 1971, s l.

Page 627
payment/6 Early payments
6 Early payments
HR A[3165]
A payment made before the rent day is not a payment of rent but a sum in gross and voluntary1: it is an advance to the
lessor, with an agreement that on the day when the rent becomes due such advance will be treated as a fulfilment of the
obligation to pay rent2. Although at law such a payment will not discharge the obligation to pay rent3, such a payment
will provide the tenant with an equitable defence to any further claim in respect of the rent by the person who has
received it4. If the landlord receives prepayment and dies before the rent day, his personal representatives must account
to the person beneficially entitled on his death for an apportioned part from the date of death to the rent day5.
HR A[3166]
1 Lord Cromwel v Andrews (1583) Cro Eliz 15; Clun's Case (1613) 10 Co Rep 127a.
2 De Nicholls v Saunders (1870) LR 5 CP 589 at 594.
3 Lord Cromwel v Andrews (1583) Cro Eliz 15.
4 Lord Rockingham v Penrice (1711) 1 P Wms 177; see 1 Swan 345, n(a); Nash v Gray (1861) 2 F & F 391.
5 Lord Rockingham v Penrice (1711) 1 P Wms 177; Re Aspinall, Aspinall v Aspinall [1961] Ch 526.
HR A[3167]
An early payment will not discharge the tenant as against any person who, before the rent is due, has acquired the
landlord's estate if the tenant has been given notice of the assignment1; similarly, it has been held that the payment of
rent by a tenant to a judgment debtor, after registration of a writ of elegit by the judgment creditor with notice to the
tenant, did not discharge the tenant2. On the other hand, if the tenant has no notice of the assignment of the reversion,
the assignee cannot recover that part of the rent which became due to him before notice of the assignment was given to
the tenant3.
HR A[3168]
1 De Nicholls v Saunders (1870) LR 5 CP 589 at 594.
2 Lord Ashburton v Nocton [1915] 1 CH 274, CA.

Page 628
3 Cook v Guerra (1972) LR 7 CP 132; Law of Property Act 1925, s 151 at para HR A[20126]. A mortgagee as a purchaser is affected by
constructive notice of the tenant's rights, and is so bound by an agreement made prior to the mortgage as to the lease between the mortgagor
and lessee, such as an agreement to commute the rent to one lump sum payment (Green v Rheinberg (1911) 104 LT 149 CA); see also Grace
Rymer Investments Ltd v Waite [1958] Ch 831, CA).
Page 629
payment/7 By whom rent is payable
7 By whom rent is payable
HR A[3169]
In order that the tenant (or assignee) may obtain a good discharge the rent must be paid:
(a) by him or by his agent for and on his own account with his prior authority or subsequent
ratification1;
(b) by the tenant's assignee2;
(c) by the tenant's spouse where the Family Law Act 1996 applies3;
(d) by his guarantor4.
Payment of rent by one of these categories of person pro tanto releases the others5.
HR A[3170]-HR A[3180]
1 Simpson v Eggington (1855) 10 Exch 845; Smith v Cox [1940] 2 KB 558; Richards v De Freitas (1974) 29 P & CR 1.
5 Milverton Group Ltd v Warner World Ltd [1995] 2 EGLR 28.
HR A[3181]
If payment is made by persons who are strangers to the contract and who are not in the above categories, the tenant will
not be discharged1. Thus, a landlord was not obliged to accept payment by the receiver of a tenant company where the
receiver was occupying the premises under licence and it was unclear whether the receiver was tendering the rent on
behalf of the tenant company2.
HR A[3182]
1 Richards v De Freitas (1974) 29 P & CR 1; see also Bessa Plus Plc Lancaster [1997] EGCS 42.
Page 630
2 Richards v De Freitas (1974) 29 P & CR 1; see also para HR A[5487] (distress).
(a) The original tenant
HR A[3183]
At common law the rent is payable by the original tenant from the commencement of the term until its expiry: the
liability of the original tenant rests upon privity of estate as well as privity of contract while the term remains vested in
him1. After the term has been assigned, however, the original tenant's liability rests upon privity of contract, subject to
the provisions of the Landlord and Tenant (Covenants) Act 19952.
HR A[3184]
1 See HR A[30]-[40], HR A[42]-[45].
2 See HR A[2125]. Landlord and Tenant (Covenants) Act 1995, s 17 imposes restrictions on the recovery of 'fixed charges': see HR
A[2161]ff.
HR A[3185]
A tenant is no less a tenant by reason of his holding the lease on trust for others. Accordingly, where a lease is vested in
a trustee, the trustee's liability for rent is not limited to the extent of the trust assets in the trustee's hands, and the trustee
tenant is liable to pay the rent in full in the absence of some agreement (enforceable contractually or by estoppel) to the
contrary1.
HR A[3186]
1 Perring v Draper [1997] EGCS 109.
HR A[3187]
The provisions of the Landlord and Tenant (Covenants) Act 1995 now regulate the position of the original tenant
following an assignment: generally, the original tenant will be released from liability1.
HR A[3188]

Page 631
(b) Assignees
HR A[3189]
An assignee of the term is obliged to pay rent to the landlord by reason of his privity of estate with the landlord1. The
landlord must accept payment from a lawful assignee and tender by such an assignee will discharge the assignee (and
the original tenant where the original tenant remains liable)2.
HR A[3190]-HR A[3200]
2 Re House Property and Investment Company [1954] Ch 576 at 586, per Roxburgh J; see also Milverton Group Ltd v Warner World Ltd
[1995] 2 EGLR 28.
(c) Family Law Act 1996
HR A[3201]
Where the tenant's spouse is entitled to occupy the property by virtue of the Family Law Act 1996, any payment or
tender made by that spouse in or towards satisfaction of any liability of the other spouse in respect of rent is as good as
if made or done by the other spouse1.
HR A[3202]
1 Family Law Act 1996, s 30(3).
(d) Sureties
HR A[3203]
Where a surety pays the rent due under the lease, there will be a good discharge of the liability of other persons also
liable for the rent1; however, there will only be a good defence to a claim for rent where the payment has been
appropriated by the landlord to the rent for which the claim is made and not to other instalments of rent1. Where a
surety has paid the rent it is probable that the landlord will no longer be entitled to forfeit for the non-payment of that
rent by the tenant2. A surety's liability is a secondary liability: it will be discharged if the primary obligation of the
principal debtor is discharged3.
Page 632
HR A[3204]
1 Milverton Group Ltd v Warner World Ltd [1995] 2 EGLR 28, CA.
2 Milverton Group Ltd v Warner World Ltd [1995] 2 EGLR 28, CA. Cf London & County (A & D) Ltd v Wilfred Sportsman Ltd [1971]
Ch 764, Buckley LJ (reversed on a different point on appeal).
3 See generally Chitty on Contract (27th edn, 1994) vol 2, paras 042-043ff.
HR A[3205]
Where an original lessee has had to discharge the liability of a defaulting assignee, he is entitled to recoup himself from
the sureties of the defaulting assignee by virtue of the principle of subrogation1. On the other hand, if the surety
discharges the obligations of the principal debtor, the principal debtor will be obliged to indemnify the surety2.
HR A[3206]
1 Kumar v Dunning [1989] QB 193 at 201, CA; Becton Dickinson UK Ltd v Zwebner [1989] QB 208.
2 See generally Chitty on Contract (27th edn, 1994) vol 2, paras 42-065ff.
HR A[3207]
The guarantor of a principal debtor will usually be liable for as long as the principal debtor is liable: thus, at common
law, a guarantor of the rent payable under a lease is normally liable for the duration of the lease whether or not the
lessee assigns his interest1. The position is now, however, affected by the Landlord and Tenant (Covenants) Act 19952.
In the absence of express provision, the liability of the surety will not survive the contractual termination date of the
lease even though the lease is continued by virtue of the provisions of Pt II of the Landlord and Tenant Act 19543.
HR A[3208]
1 For examples of the construction of surety clauses, see West Horndon Industrial Park Ltd v Phoenix Timber Group plc [1995] 1 EGLR
77; Johnsey Estates Ltd v Webb [1990] 1 EGLR 80.
2 See Chapter 4.
3 A Plesser & Co Ltd v Davis (1983) 267 Estates Gazette 1039, following Junction Estates Ltd v Cope (1974) 27 P & CR 482. Cf GMS
Syndicate Ltd v Gary Elliott [1982] Ch 1. See also William Hill (Southern) Ltd v Waller [1991] 1 EGLR 271.
Page 633
HR A[3209]
The surety cannot normally revoke his guarantee since the consideration has moved once and for all1. This may lead to
indeterminate liability in the case of a yearly tenancy which neither the landlord nor the tenant wishes to determine2.
Further, a surety is not entitled to rely upon his own wrong to avoid liability: thus, where a surety guaranteed an
assignee's liability under a licence to assign and the licence contained a provision that if the assignment was not
registered within a specified period the licence became null and void, the surety was not able to escape liability when
the assignment was not registered because the failure to register was a breach of the assignee's and principal's
obligations3. However, the surety may be discharged by a material variation in the principal obligation4.
HR A[3210]-HR A[3220]
1 Lloyd's v Harper (1880) 16 Ch D 290, 319, CA.
2 Cf Wingfield v De St Croix (1919) 35 TLR 432.
3 Cerium Investments Ltd v Evans [1991] 1 EGLR 80, CA.
4 Holme v Brunskill (1878) 3 QBD 495, CA. See also Howard de Walden Estates Ltd v Pasta Place Ltd [1995] 1 EGLR 79, Morland J;
Metropolitan Properties Co (Regis) Ltd v Bartholomew [1995] 1 EGLR 65, Mitchell J. See generally Chitty on Contract (27th edn, 1994)
vol 2, para 42-052ff.
HR A[3221]
A successor in title to the original lessor can sue the surety without an assignment of the benefit of the guarantee since a
surety covenant is one which 'touches and concerns' the land1. If it is clear from the guarantee itself that it was for the
benefit of the original lessor only, the benefit of the guarantee will be incapable of assignment2.
HR A[3222]
1 Kumar v Dunning [1989] QB 193, CA; see para HR A[1947].
2 Cf Sheers v Thimbleby & Son (1897) 76 LT 709, CA.
HR A[3223]
It is possible to make express provision for the release of sureties. This may be made conditional, for instance, upon the
provision of acceptable substitute sureties1.
HR A[3224]
Page 634
1 Grovewood (L E) Ltd v Lundy Properties Ltd (1993) 69 P & CR 507.

Page 635
payment/8 To whom rent is payable
8 To whom rent is payable
(a) The lessor and his agents
HR A[3225]
The rent is payable either to the lessor, or to his agent expressly or impliedly authorised to receive it1.
HR A[3226]
1 Goodland v Blewith (1808) 1 Camp 477; Browne v Powell (1827) 4 Bing 230 at 232; Hitchings v Thompson (1850) 5 Exch 50.
HR A[3227]
The lessee is entitle to continue to make payment to the person authorised to receive payments until he has notice that
the authority is withdrawn1.
HR A[3228]
1 Cf Drew v Nunn (1879) 4 QBD 661, CA.
(b) Personal representatives
HR A[3229]
On the death of the lessor, the rent is payable to his personal representatives until the reversion becomes vested by their
assent or by conveyance to some other person1.
HR A[3230]-HR A[3240]
1 Administration of Estates Act 1925, ss 1-3.

Page 636
(c) Joint tenants
HR A[3241]
Where the lessors are joint tenants, any one of them can sue and give a receipt for the entire rent1. On the death of any
joint tenant, the entire rent its due to the survivors2.
HR A[3242]
1 Robinson v Hofman (1828) 4 Bing 562, 565.
2 Henstead's Case (1594) 5 Co Rep 10a.
(d) Assignees
HR A[3243]
Upon an assignment of the reversion the assignee becomes entitled to receive the rent1; but until the tenant has been
given notice of the assignment, rent may be properly paid to the assignor2.
HR A[3244]
1 Law of Property Act 1925, s 141; Landlord and Tenant (Covenants) Act 1995, s 3. See generally paras HR A[1907]ff.
HR A[3245]
It is possible for the lessor to assign the right to receive the rent without assigning the reversion1. In such a case the
assignment operates as the assignment of a chose in action2. For the assignee to recover the rent from the tenant in his
own name, notice of the assignment must be given to the tenant3. An assignment of future rent will only entitle the
assignee to the rents as they become due: thus, if the tenancy is surrendered, the assignee has no further entitlement to
rent4. An assignee of the rents alone can sue for the sums due5 but cannot recover it by distress except in the name of
the landlord, since the person distraining must have a reversion6. Further, if the landlord agrees that another person may
receive the rents and such an agreement is not supported by consideration, such an agreement amounts to a mere
authority to the tenant to pay the rent to the other person which is revocable on notice7.
HR A[3246]
Page 637
1 Knill v Prowse (1884) 33 WR 163; IRC v John Lewis Properties plc [2002] 1 WLR 35 at 13 per Lightman J (on appeal [2002] EWCA
Civ 1869, [2003] 2 WLR 1196).
2 Knill v Prowse (1884) 33 WR 163.
4 See Southwell v Scotter (1880) 49 LJQB 356.
5 Robins v Coxe and Warwick (1661) 1 Lev 22; Allen v Bryan (1826) 5 B & C 512; Williams v Hayward (1859) 1 E & E 1040 at 1050;
Knill v Prowse (1884) 33 WR 163.
7 Re Whitting, ex p Hall (1879) 10 CH D 615, CA; Venning v Bray (1862) 2 B & S 502.
(e) Judgment creditors
HR A[3247]
Where rent is due and owing to a judgment debtor, the judgment creditor can obtain the right to receive it by a garnishee
order1. The rent must actually be due for such an order to be obtained 2. A judgment creditor may also obtain the
appointment of a receiver by way of equitable execution, whether or not a charge has been imposed by the court on the
land of the judgment debtor3.
HR A[3248]
1 See the detailed provisions of RSC Ord 49. See also Mitchell v Lee (1867) 8 B & S 92.
2 Jones v Thompson (1858) EB & E 63; cf Tapp v Jones (1875) LR 10 QB 591.
3 See Supreme Court Act 1981, s 37.
(f) Superior landlords
HR A[3249]
Where a tenant is in arrear of rent, a superior landlord may require a subtenant to make future payments of rent to him
under the provisions of s 6 of the Law of Distress Amendment Act 19081.
Page 638
HR A[3250]-HR A[3260]

Page 639
payment/9 Estoppel by payment of rent
9 Estoppel by payment of rent
HR A[3261]
Payment of rent is a recognition of the title of the person to whom it is pay1 and operates as an estoppel against the
tenant if he disputes such title. However, payment of rent will not necessarily create a tenancy2. The tenant may show
that the payment has been made by mistake or as a result of fraud or misrepresentation, and that the real title is with
someone else; however, this is not open to him where the tenant originally received possession from the payee3.
HR A[3262]
1 Doe d Jackson v Wilkinson (1824) 3 B & C 413; Cooper v Blandy (1834) 1 Bing NC 45; Cooke v Rickman [1911] 2 KB 1125. See paras
HR A[130]-[140].
2 See paras HR A[202]-[204]; Strahan v Smith (1827) 4 Bing 91; cf Meredith v Gilpin (1818) 6 Price 146.
HR A[3263]-HR A[3265]
Where rent has been paid to a person not entitled to the reversion, the tenant is liable to pay it over again to the
reversioner1, unless the reversioner is estopped from claiming it: where, for instance, the payment has been made on the
reversioner's representation as to the person entitled to receive it2. However, if rent has been paid to a person not
entitled to the rent and the reversioner subsequently claims the rent, the tenant may recover the rent from the person to
whom he has previously paid the rent3. The reversioner may at his option himself sue the adverse receiver in an action
for money had and received4 rather than pursue the tenant.
HR A[3266]
1 Williams v Bartholomew (1798) 1 Bos & P 326.
2 White v Greenish (1861) 11 CBNS 209.
3 Newsome v Graham (1829) 10 B & C 234; Barber v Brown (1856) 1 CBNS 121; compare Finck v Tranter [1905] 1 KB 427.
4 Gledhill v Hunter (1880) 14 Ch D 492 at 495.

Page 640
payment/10 How rent is payable
10 How rent is payable
(a) Cash
HR A[3267]
Rent may be paid in the same manner as any other debt. Thus, where the rent is expressed in terms of money, generally
a landlord may refuse to accept payment otherwise in coins which are legal tender for the amount of the rent, Treasury
notes or Bank of England notes1. This right may be waived2 (though where there is a lease in writing, evidence of an
antecedent oral agreement by the landlord to accept a bill was not admissible3). Likewise, the parties may agree that
payment may be made in a particular way4.
HR A[3268]
1 See Beevers v Mason (1978) 37 P & CR 452, CA. See also Treseder-Griffin v Co-operative Insurance Society [1956] 2 QB 127, CA.
2 Henderson v Arthur [1907] 1 KB 10, CA.
3 Henderson v Arthur [1907] 1 KB 10, CA.
4 Treseder-Griffin v Co-operative Insurance Society [1956] 2 QB 127, CA.
(b) Cheques and postal payment
HR A[3269]
As has been indicated1, the landlord may waive his entitlement to be paid in cash either expressly or by implication2.
The tenant's cheque, unless objected to by the landlord or otherwise agreed, will amount to a conditional payment3. If,
however, the cheque is dishonoured the landlord's remedies remain entire4. Further, if the rent is remitted by post this is
done at the tenant's risk, unless the landlord has expressly or impliedly authorised this method of payment5. But even
where remittance by post has been authorised, the tenant must exercise due care in posting6. Where payment of rent by
post is authorised, the rent is paid when the cheque is posted but if the landlord does not present the cheque, the
obligation to pay is not discharged7.
HR A[3270]-HR A[3280]
Page 641
2 Beevers v Mason (1978) 37 P & CR 452; Luttenberger v North Thoresby Farms Ltd [1992] 1 EGLR 261.
3 Day v Coltrane [2003] EWCA Civ 342 at [8], [2003] 1 WLR 1379 at [8].
4 See generally, Chitty on Contracts (27th edn, 1994) vol 1, para 21-061.
5 See Warwicke v Noakes (1791) Peake 98; Norman v Ricketts (1886) 3 TLR 182, CA; Luttges v Sherwood (1895) 11 TLR 233;
Pennington v Crossley & Son (1897) 13 TLR 513, CA.
6 Official Solicitor to the Supreme Court v Thomas [1986] 2 EGLR 1 at 5, CA.
7 Hawkins v Rutt (1793) Peake 248.
HR A[3281]
Where an unindorsed cheque appears to have been paid by the banker on whom it is drawn, it is evidence of receipt by
the payee of the sum payable by the cheque1.
HR A[3282]
1 Cheques Act 1957, s 3.
(c) Payment to bank
HR A[3283]
It is not unusual now for there to be agreement that payment of rent may be made by standing order to the landlord's
bank. Further, it is possible for a landlord to waive his right to accept cash1 by directing the tenant to pay the rent into
his bank account2. Where this occurs, payment is made when the money is transferred to the landlord's account and not
when the landlord's bank notifies the landlord that payment has been made3.
HR A[3284]
2 Compare Breed v Green (1816) Holt NP 204.
3 Eyles v Ellis (1827) 4 Bing 112.

Page 642
HR A[3285]
Where the tenant transfers money to the landlord's account, it will not be taken as having been accepted if it is returned
to the tenant as quickly as possible1: thus, a landlord may avoid waiving a breach of covenant by returning the money
promptly so that objectively considered the tenant would not suppose that the rent had been accepted2. However, if the
landlord does not return the money, it will be inferred that the payment has been accepted3.
HR A[3286]
1 Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850, HL.
2 John Lewis Properties plc v Viscount Chelsea [1993] 2 EGLR 77 at 85, per Mummery J.
3 Pierson v Harvey (1885) 1 TLR 430; see also Antaios Compania SA v Salen Rederierna AB [1983] 2 Lloyd's Rep 473.
(d) Bills of exchange and promissory notes
HR A[3287]
The acceptance of a bill of exchange or a promissory note by the landlord will not in itself amount to the payment of
rent1 nor prevent the landlord exercising his remedies2. Further, since the bill or note is no satisfaction of the debt, a
judgment thereon will be no satisfaction until it results in payment3. However, it is possible for agreement to be made to
the contrary4 and the taking of a bill of exchange may be evidence from which it can be inferred that there was such
agreement5.
HR A[3288]
1 Davis v Gyde (1835) 2 Ad & El 623; see also Harris v Shipway (1744) Bull NP, 182a; Palfrey v Baker (1817) 3 Price 572; Davidson v
Allen (1886) 20 LR Ir 16 at 23.
2 Davis v Gyde (1835) 2 Ad & El 623; Harris v Shipway (1744) Bull NP, 182a.
3 Drake v Mitchell (1803) 3 East 251 (and see Camberfort v Chapman (1887) 19 QBD 229 at 232).
4 See Howell v Lewis (1836) 7 C & P 566.
5 Palmer v Bramley [1895] 2 QB 405, CA.
(e) Wages Act 1986

Page 643
HR A[3289]
Since the repeal of the Truck Act 1831 on 1st January 1987 by the Wages Act 1986, an agreement for the deduction
from wages in respect of rent for premises demised to an artificer need no longer be in writing1.
HR A[3290]-HR A[3300]
1 Compare Truck Act 1831, s 23.

Page 644
payment/11 Where rent is payable
11 Where rent is payable
HR A[3301]
The tenant's covenant to pay rent1 puts upon the tenant an obligation to seek out and pay the person to be paid (provided
that he is within the jurisdiction) and to pay or tender to him the money2. The obligation of the tenant upon his covenant
may be contrasted with the rule relating to the formal demand for rent (a prerequisite to forfeiture) which must be made
upon the land demised3.
HR A[3302]
1 See paras HR A[3024]-[3027].
2 Haldane v Johnson (1853) 8 Exch 689
3 See para HR A[8604]. See too para HR A[3163] (time for payment of rent).
Page 645
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/F Information to be provided
by landlord
F
Page 646
by landlord/1 Landlord and Tenant Act 1987
1 Landlord and Tenant Act 1987
(a) Dwelling houses
HR A[3303]-HR A[3304]
The requirement of this statute are dealt with at paras HR A[3149]ff.

Page 647
by landlord/2 Rent payable weekly
2 Rent payable weekly
(b) Rent books and prescribed information in relation to residential premises
HR A[3305]
Under the Landlord and Tenant Act 19851, where a tenant or statutory tenant has a right to occupy any premises as a
residence in consideration of a rent payable weekly, it is the duty of the landlord to provide a rent book or other similar
document for use in respect of the premises. This requirement does not apply when the rent includes a payment in
respect of board and the value of the board to the tenant forms a substantial part of the whole rent2. It appears that these
provisions apply even where the tenancy is for a term of years where the rent is payable weekly. Further, it also appears
that these provisions apply to licensees where the consideration is payable weekly since a 'tenant' for these purposes
includes a person with a contractual right to occupy premises3.
HR A[3306]
1 Landlord and Tenant Act 1985, s 4(1) at para HR A[20226]. See R (Dewa) v Marylebone Magistrates' Court [2004] EWHC 1022
(Admin).
2 LTA 1985, s 4(2).
3 LTA 1985, s 4(3).
HR A[3307]
The rent book required under these provisions must contain information which is prescribed1. Further, where the
landlord is a company, written particulars of the directors and secretary of the company must be supplied to the tenant,
if the tenant makes a written request to that effect2. The tenant's request may be served on the agent of the company
named in the rent book or on the person who receives the rent; it is the duty of such person to forward the request to the
landlord as soon as may be3.
HR A[3308]
1 LTA 1985, s 5; Rent Book (Forms of Notice) Regulations 1982, SI 1982/1474, as amended by Rent Book (Forms of Notice)
(Amendment) Regulations 1990, SI 1990/1067.

Page 648
3 LTA 1985, s 6(2).
HR A[3309]
A landlord or any other person who fails to comply with these requirements is guilty of an offence and is liable on
summary conviction to a fine not exceeding level 4 on the standard scale1. A person other than the landlord charged
with such an offence in relation to the provision of a rent book or the information contained in a rent book may show as
a defence that he neither knew nor had reasonable cause to suspect that any requirement had not been complied with2. If
the landlord is convicted of these offences or any other person is convicted of an offence of failing to supply
information where the landlord is a company, and the offence continues for more than 14 days after conviction he is
guilty of a further offence3.
HR A[3310]-HR A[3320]
1 Landlord and Tenant Act 1985, s 7(1), (3).
2 LTA 1985, s 7(2).
3 LTA 1985, s 7(4).
HR A[3321]
Under the provisions of the Housing Act 1985, every rent book or similar document used in relation to a dwelling by or
on behalf of the landlord must contain, (a) a summary in the prescribed form of the overcrowding provisions in Pt X of
the Housing Act 1985, and (b) a statement of the number of the permitted number of persons in relation to that
dwelling1. A failure to comply with these provisions will render the landlord guilty of an offence punishable by a fine
not exceeding level 1 on the standard scale2.
HR A[3322]
1 Housing Act 1985, s 322; Housing (Prescribed Forms) Regulations 1990, SI 1990/447.
2 HA 1985, s 322(2).
HR A[3323]
Notwithstanding these duties upon the landlord, failure to provide a rent book does not disentitle the landlord from
recovering rent by court action1.
HR A[3324]
Page 649
1 Shaw v Groom [1970] 2 QB 504, CA.

Page 650
by landlord/3 Statement of rates in demands and receipts for rent
3 Statement of rates in demands and receipts for rent
HR A[3325]
Every document which contains a demand or receipt for rent which includes a sum for rates paid or payable under any
statutory enactment by the owner instead of the occupier must state either the annual or half-yearly, quarterly, monthly
or weekly amount of such rates paid or payable in accordance with the last demand received by the owner from the
rating authorities at the time of making his demand or giving receipt in respect of the hereditament in question1. The
expressions 'demand for rent' and 'receipt for rent', include a rent-book, rent-card and any document used for the
notification or collection of rent due or for the acknowledgment of the receipt of rent2. It is an offence not to provide the
statement, the penalty for contravention of which is a fine not exceeding level 1 on the standard scale for each offence,
recoverable on summary conviction3. These provisions do not apply to weekly lettings at inclusive rentals in any
market established under or controlled by statute4.
HR A[3326]
1 Statement of Rates Act 1919, s l.
2 SRA 1919, s 2.
3 SRA 1919, s l and Criminal Justice Act 1982, s 46.
5 SRA 1919, s l(2).

Page 651
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/G Deductions allowed
HR A[3327]
A tenant may only make deductions from the rent:
(a) where authorised by the lease;

(b) where authorised by statute;
(c) where he has a right to set off sums due to him from the landlord against the rent.
Particular rules relating to underlessees are dealt with below1.
HR A[3328]
1 See paras HR A[3329] ff.

Page 652
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/G Deductions allowed/1
Deductions authorised under lease
1 Deductions authorised under lease
HR A[3329]
Where the lessee is expressly authorised under the lease to make deductions from the rent, the balance represents all that
is due to the lessor under the reservation of rent, and it is only the balance that he is entitled to recover, whether by
distress or by action1.
HR A[3330]-HR A[3340]
1 Dallman v King (1837) 4 Bing NC 105.

Page 653
Deductions authorised by statute
2 Deductions authorised by statute
HR A[3341]
Certain deductions from rent are authorised by statute. Whether a deduction is authorised and (if so) and the
circumstances in which the deduction may be made (and the extent of the deduction) will be a question of construction
of the statute in each case1. The following are examples.
HR A[3342]
1 See eg Sloan Stanley Estate Trustees v Barribal (1994) 44 EG 237 (construction of right of deduction under the (now repealed) Land
Drainage Act 1976).
(a) Income and Corporation Taxes Act 1988
HR A[3343]
There are limited circumstances in which a tenant is required to deduct income tax from rent payable to his landlord1.
HR A[3344]
1 In relation to rent payable in connection with mines and quarries etc, see Income and Corporation Taxes Act 1988, s 119. In relation to
rent payable in respect of electric line wayleaves, see ICTA 1988, s 120. The provisions of Income and Corporation Taxes Act 1988, s 23
under which the revenue could require derivative lessees to pay the tax of a lessor in default and to deduct the tax so paid from rent due were
repealed by Finance Act 1995. The provisions of Income and Corporation Taxes Act 1988, s 43 requiring the tenant to deduct income tax
from rent payable to a non-resident have likewise been repealed.
(b) Rates
HR A[3345]
This is dealt with at paras HR A[7147]ff.
(c) Land improvement charge

Page 654
HR A[3346]
Where a tenant pays a charge under the Improvement of Land Act 1864, he may deduct the amount from the rent
payable by him to the landowner, except where he has joined in the application for the loan giving rise to the charge or
has duly consented1.
HR A[3347]
1 Improvement of Land Act 1864, s 67; see generally, 1(2) Halsburys Laws (4th edn) 523.
(d) Expenses of local authorities
HR A[3348]
Under the Public Health Act 1936 a local authority may recover from owners of premises certain expenses incurred by
them in the exercise of their powers under the Act of any enactment repealed by that Act or under an agreement with the
authority. The authority may by order declare such expenses recoverable by instalments and then the instalments are
recoverable from the owner or occupier, but the occupier is entitled to deduct the amount from the rent for the premises
(and the sum so recovered cannot at any time exceed the amount due from the occupier on account of rent1). This
statutory right of deduction may be modified by covenant between the landlord and the tenant2.
HR A[3349]
1 Public Health Act 1936, s 291.
2 See Allum v Dickinson (1882) 9 QBD 632, CA; Aldridge v Ferne (1886) 17 QBD 212, DC; Skinner v Hunt [1904] 2 KB 452, CA.
(e) Highways Act 1980
HR A[3350]-HR A[3360]
Where a highway authority incurs expenditure on certain works, the expenditure is in certain circumstances recoverable
from occupiers as well as owners1. In those circumstances, the occupier of premises by whom the sum due is paid is
entitled to deduct from the rent payable by him in respect of the premises (a) if he holds the premises at a rent not less
than the rack rent, an amount equal to three quarters of the said sum, or (b) if he holds the premises at a rent less than
the rack rent, such proportion of an amount equal to three-quarters of the sum as the rent at which he holds the premises
bears to the rack rent2. Where a deduction from rent payable to a landlord is made under these provisions, and the
landlord himself holds the premises under a lease for a term of which less than 20 years is unexpired, the landlord is
Page 655
entitled to deduct from any rent payable by him under the lease such proportion of the amount deducted from the rent
payable to him as the rent payable by him bears to the rent payable by him, and so on in succession with respect to
every landlord holding the premises for a term of which less than 20 years remains unexpired and who is both receiving
and liable to pay rent in respect thereof3.
HR A[3361]
1 See Highways Act 1980, s 152 (removal of projections from buildings), s 153 (powers in relation to outwards opening doors), ss 212
and 237 (street works), s 305 (recovery of expenses).
2 Highways Act 1980, Sch 13, para 1.
3 Highways Act 1980, Sch 13, para 2.
HR A[3362]
This statutory right of deduction may be modified by covenant between the landlord and the tenant1.
HR A[3363]
1 See Allum v Dickinson (1882) 9 QBD 632, CA; Aldridge v Ferne (1886) 17 QBD 212, DC; Skinner v Hunt [1904] 2 KB 452, CA.
(f) Coastal protection
HR A[3364]
A tenant may deduct from rent instalments of charges made by him under the provisions of the Coast Protection Act
19491.
HR A[3365]
1 Coast Protection Act 1949, s 10(3).
(g) Insolvency
HR A[3366]
Page 656
There are specific rules in relation to insolvency which allow set-off of sums due to insolvent parties1.
HR A[3367]
1 See Insolvency Act 1986, s 323; Insolvency Rules 1986, r 4.90. See generally Chapter 12 in relation to insolvency.
(h) Agricultural Holdings Act 1986
HR A[3368]
Where compensation for disturbance or for any improvement due under the Agricultural Holdings Act 1986, or any
enactment repealed by that Act, or under custom or agreement, to a tenant has been ascertained before distraint is
levied, the tenant may set off the amount of the compensation against the rent, and the landlord may only distrain for the
balance1.
HR A[3369]
1 Agricultural Holdings Act 1986, s 17; see HR F[722].
(i) Landlord and Tenant Act 1927
HR A[3370]-HR A[3380]
The tenant is entitled to deduct compensation for improvements due to him under the Landlord and Tenant Act 1927
from any money due to the landlord under or in respect of the tenancy1.
HR A[3381]
1 Landlord and Tenant Act 1927, s 11(2); see HR B[362].

Page 657
Set-off
3 Set-off
(a) Generally
HR A[3382]
Set-off is a word well known and established in its meaning; it is something which provides a defence because the
nature and quality of the sum so relied upon are such that it is a sum which is proper to be dealt with as diminishing the
claim which is made, and against which the sum so demanded can be set off1.
HR A[3383]
1 See Re A Bankruptcy Notice [1934] Ch 431, 437 per Lord Hanworth MR cited by Morris LJ in Hanak v Green [1958] 2 QB 9,16.
(b) At common law
HR A[3384]
At common law, there is no general right to set-off against the rent sums due from the landlord to the tenant. However,
where the tenant carries out works of repair which are the responsibility of the landlord, the tenant has a right to recoup
his expenditure out of future rents payable by him to the landlord1. Further, it seems that where the tenant has paid
money at the request of the landlord in respect of some obligation of the landlord connected with the land demised, the
tenant may set such sum off against the rent2. This right, however, only arises where there is a certain sum which the
tenant has paid3.
HR A[3385]
1 See generally Taylor v Beal (1591) Cro Eliz 222; Waters v Weigall (1795) 2 Anst 575; Lee-Parker v Izzet [1971] 3 All ER 1099. In
relation to arrears of rent now see Asco Developments Ltd v Gordon (1978) 248 Estates Gazette 683.
2 Lee-Parker v Izzet [1971] 3 All ER 1099.
3 See British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] QB 137.
(c) Statutes of set-off

Page 658
HR A[3386]
Where in the course of judicial proceedings there is a claim for rent, a tenant with a cross-claim against the landlord for
a sum both due and payable, which is either liquidated or capable of being quantified by reference to ascertainable facts
which do not in their nature require estimation or valuation may set off such a claim under the Acts of Set Off1. A
set-off under statute only arises in the course of judicial proceedings2. It is a procedural device designed to avoid
circuity of actions and enabling the parties to have their various disputes tried in one action instead of two or more3.
HR A[3387]
1 Insolvent Debtors Relief Act 1729, s13 as amended by the Debtors Relief Amendment Act 1735. See per Morris LJ in Hanak v Green
[1958] 2 QB 9, 17, CA; see also BICC plc v Burndy Corpn [1985] Ch 232, 247, CA per Dillon LJ; Aectra Refining and Marketing Inc v
Exmar NV [1994] 1 WLR 1634, 1648-1650, CA per Lord Hoffman; Stein v Blake [1996] AC 243 per Lord Hoffman.
2 Insolvent Debtors Relief Act 1729, s13 as amended by the Debtors Relief Amendment Act 1735. See also Fuller v Happy Shopper
Markets Ltd [2001] 1 WLR 1681, [2001] 25 EG 159. Lightman J (cf dicta in Federal Commerce & Navigation Co Ltd v Molena Alpha Inc
[1978] QB 927).
3 Fuller v Happy Shopper Markets Ltd [2001] 1 WLR 1681, [2001] 25 EG 159, para 21, per Lightman J.
(d) Equitable set-off
HR A[3388]
It was once thought that there was no equitable right of set-off against rent1. However, it is now clear that a tenant has a
right to set-off against rent cross-claims which arise not only out of the same contract as the claim (ie the lease), but also
where the cross-claim arises directly out of the relationship of landlord and tenant or out of an agreement for lease2, or
otherwise where there is a sufficiently close connection between the transaction giving rise to the cross-claim for the
equitable doctrine of set-off to apply3. A set-off may be raised in defence to a claim for rent even though the
cross-claim is unliquidated4. A tenant's right of set-off will also prevent a landlord distraining for the rent5. However, a
tenant has no right to set off a contingent or future liability on the part of the landlord against the rent6. Further, it has
been held that a claim for damages for breach of Article 85 of the Treaty of Rome cannot be set off against licence fees
due under an agreement for lease7 or against rent8.
HR A[3389]
1 Hart v Rogers [1916] 1 KB 646.
2 British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] QB 137; Smith v Muscat [2003] EWCA Civ 962,
[2003] 1 WLR 2853; Bluestorm Ltd v Portvale Holdings Ltd [2004] EWCA Civ 289, [2004] 08 LS Gaz R 31.
Page 659
3 Melville v Grapelodge Developments Ltd (1978) 254 Estates Gazette 1193; see also Cleghorn v Durrant (1858) 22 JP 419; Star Rider
Ltd v Inntrepreneur Pub Co [1998] 1 EGLR 53 and Fuller v Happy Shopper Markets Ltd [2001] 1 WLR 1681, [2001] 25 EG 159, paras 22
and 26, per Lightman J. See generally The Teno [1977] 2 Lloyd's Rep 289.
4 British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] QB 137; The Teno [1977] 2 Lloyd's Rep 289.
5 Eller v Grovecrest Investments Ltd [1995] QB 272, [1994] 4 All ER 845.
6 Sloan Stanley Estate Trustees v Barribal [1994] 2 EGLR 8.
7 Star Rider Ltd v Inntrepreneur Pub Co [1998] 1 EGLR 53; Gibbs Mew plc v Gemmell [1999] 1 EGLR 43, [1999] 01 EG 117, CA.
8 Courage Ltd v Crehan [1999] 2 EGLR 145, CA. But see Crehan v Inntrepreneur Pub Co CPC [2004] EWCA Civ 637, 148 Sol Jo LB
662.
HR A[3390]
A tenant's right to set off a claim for damages for breach of covenant in the lease or in an agreement, the burden of
which runs with the reversion, will bind the person entitled to the reversion at the date of the breach and also bind
assignees of the reversion who seek to recover sums accruing before the assignment1. It has been held, however, that an
equitable right of set off only extends to the rights of the landlord accrued before the assignment and does not affect the
assignee's right as reversioner to sue for rent accruing after the assignment2.
HR A[3391]
1 Smith v Muscat [2003] EWCA Civ 962, [2003] 35 LS Gaz R 37. See also Lotteryking Ltd v AMEC Properties Ltd [1995] 2 EGLR 13,
[1995] 28 EG 104; cf Reeves v Pope [1914] 2 KB 284; Kemra (Management) Ltd v Lewis [1999] CLY 3729, County Court.
2 Edlington Properties Ltd v J H Fenner and Co Ltd [2005] EWHC 2158 (QB), [2006] 1 All ER 98, [2006] EWCA Civ 403. See too
Smith v Muscat [2003] EWCA Civ 962, [2003] 1 WLR 2853 and Mortgage Corporation v Ubah (1996) 73 P & CR 500. The court held that
this was the law both before and after the Landlord and Tenant (Covenants) Act 1995.
HR A[3392]
Rent paid under a mistake may be recoverable by the tenant1. Where rent is so recoverable, in principle, there appears
to be nothing to prevent the rent recoverable being set off against the rent due from the tenant2.
HR A[3393]
1 See, for instance, Nurdin & Peacock plc v D M Ramsden & Co Ltd (No 2) [1999] 1 All ER 941, [1999] 1 WLR 1249, Neuberger J.
2 Fuller v Happy Shopper Markets Ltd [2001] EGCS 25, Lightman J.

Page 660
(e) Exclusion of right of set-off
HR A[3394]
A right of set-off may be excluded by clear words1. Where a lease provides that rent should be paid 'without any
deduction or set-off whatsoever' this will be sufficiently clear2. In some contexts a requirement that rent be paid by
direct debit may be sufficient to exclude a right off3. A provision seeking to exclude a right of set-off in a lease is not
affected by s 3 of the Unfair Contract Terms Act 19774. However, a provision that rent will be paid 'without any
deduction' will not be so clear as to exclude a right of set-off5.
HR A[3395]
1 Hong Kong and Shanghai Banking Corpn v Kloeckner & Co AG [1990] 2 QB 514 at 521.
2 Electricity Supply Nominees Ltd v IAF Group plc [1993] 3 All ER 372, [1993] 1 WLR 1059; Star Rider Ltd v Inntrepreneur Pub Co
[1998] 1 EGLR 53.
3 Esso Petroleum Co Ltd v Milton [1997] 2 All ER 593, [1997] 1 WLR 938, CA; Star Rider Ltd v Inntrepreneur Pub Co [1998] 1 EGLR
53 at 55M-56A; Gibbs Mew plc v Gemmell [1999] 01 EG 117 at 125, CA.
4 Electricity Supply Nominees v IAF Group plc [1993] 3 All ER 372, [1993] 1 WLR 1059; Star Rider Ltd v Inntrepreneur Pub Co [1998]
1 EGLR 53.
5 Connaught Restaurants Ltd v Indoor Leisure Ltd [ 1994] 4 All ER 834, [1994] 1 WLR 501.
(f) Landlord's entitlement to set off rent against sums due to tenant
HR A[3396]
Where sums are due from the landlord to a tenant under a transaction or pursuant to a relationship which is closely
related to the lease, then the landlord may be entitled to set off rent due to him from the tenant against those sums1.
HR A[3397]
1 Khan v Islington London Borough Council [1999] EGCS 87, CA (landlord entitled to set off rent due to it against compensation due to
tenant under Land Compensation Act 1973, s 29 (home loss payment)).
Page 661
Underlessees and tenants of mortgagors
4 Underlessees and tenants of mortgagors
(a) Common law
HR A[3398]-HR A[3400]
At common law, an undertenant is entitled to deduct from his own rent arrears of rent due to the superior landlord which
have been demanded from him and which he has paid1. There need not be a threat of immediate distress by the superior
landlord; it is sufficient that the superior landlord has demanded the rent and is entitled to distrain2.
HR A[3401]
1 Sapsford v Fletcher (1792) 4 Term Rep 511; Wilkinson v Cawood (1797) 3 Anst 905; Sturgess v Farrington (1812) 4 Taunt 614; Jones v
Morris (1849) 3 Exch 742; Doe v Hare (1833) 2 Cr & M 145; O'Donoghue v Coalbrook and Broadoak Co Ltd (1872) 26 LT 806.
2 Carter v Carter (1829) 5 Bing 406 at 409.
HR A[3402]
The rule is the same in the case of a rent charge enforceable by distress which the lessee has paid on demand,
notwithstanding that there was no personal liability on the lessor to pay it: in such a case it is the duty of the lessor to
make the payment in order to protect the lessee1.
HR A[3403]
1 Taylor v Zamira (1816) 6 Taunt 524; Whitmore v Walker (1848) 2 Car & Kir 615; Lord Irnham's Lessee v Luttrell (1775) Wallis 243.
HR A[3404]
The same rule applies in the case of a mortgage where a lease has been granted by a mortgagor which is not binding on
the mortgagee and the lessee pays rent to a mortgagee who has threatened to assert his legal remedy1.
HR A[3405]
Page 662
1 Johnson v Jones (1839) 9 Ad & El 809; Underhay v Read (1887) 20 QBD 209, CA.
HR A[3406]
In these circumstances where the undertenant pays sums due from his immediate landlord, the payment is treated as
being a payment of so much of the rent due or growing due to the immediate landlord, and the immediate landlord is
only entitled to distrain for the balance1.
HR A[3407]
1 Sapsford v Fletcher (1792) 4 Term Rep 511; Carter v Carter (1829) 5 Bing 406; Graham v Allsopp (1848) 3 Exch 186 at 189. See also
Boodle v Cambell (1844) 7 Man & G 386.
(b) Law of Distress Amendment Act 1908
HR A[3408]
Where a subtenant makes a payment directly to the superior landlord under the provisions of the Law of Distress
Amendment Act 1908, he discharges his liability to his immediate landlord to the extent that he makes payment to the
superior landlord and a deduction must (accordingly) be made1.
HR A[3409]
1 See Law of Distress Amendment Act 1908, s 6; see para HR A[5283]; and para HR A[20096] where s 6 is set out.
Page 663
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/H Suspension of rent
H
Page 664
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/H Suspension of rent/1
Generally
1 Generally
HR A[3410]-HR A[3420]
A tenant's liability to pay rent is suspended when he is evicted by the landlord or by any person claiming by title
paramount to the landlord (albeit that eviction by a person claiming by title paramount will not be a breach of the
landlord's usual qualified covenant for quiet enjoyment1) Generally, however, a tenant's liability to pay rent continues
while the lease continues despite any acts of third parties2 or changes in the condition of the demised premises, in the
absence of provision in the lease to the contrary or any statutory restriction on the recovery of rent.
HR A[3421]
2 Paradine v Jane (1647) Aleyn 26; Tasker v Bullman (1849) 3 Ex 351.

Page 665
Eviction
2 Eviction
(a) Eviction of lessee by lessor
HR A[3422]
The lessee is not liable for rent accruing due after he has been evicted from the premises either by the landlord or by
persons claiming under the landlord1 so long as the eviction continues2.
HR A[3423]
1 Boodle v Cambell (1844) 7 Man & G 386; Selby v Browne (1845) 7 QB 620; Newport v Hardy (1845) 2 Dow & L 921. See too London
& County (A & D) Ltd v Wilfred Sportsman Ltd [1969] 1 WLR 1215, 1225-1226 Buckley J (revsd on different grounds [1971] Ch 764).
2 Tomlinson v Day (1821) 2 Brod & Bing 680; Prentice v Elliott (1839) 5 M & W 606.
HR A[3424]
If the landlord bring an action for possession for forfeiture, he cannot claim rent due after the service of the writ and his
remedy is for damages or mesne profits for the detention of the premises by the tenant1. However, where the landlord
evicts the tenant and the lease is not determined, this does not in itself discharge the tenant from his covenants other
than for the payment of rent or put an end to the tenancy2.
HR A[3425]
1 See Birch v Wright (1786) 1 Term Rep 378; Jones v Carter (1846) 15 M & W 718. See paras HR A[8966]ff for the effect of forfeiture
generally. See also Pellatt v Boosey (1862) 31 LJCP 281.
2 Morrison v Chadwick (1849) 7 CB 266; Newton v Allin (1841) 1 QB 518.
(b) Eviction by title paramount
HR A[3426]
Similarly, a lessee is not liable for rent accruing due after he has been evicted from the premises by a person with title
Page 666
paramount to the landlord1. Eviction by title paramount is eviction by someone with title superior both to that of the
lessor and the lessee against which title neither lessor nor lessee has a defence2.
HR A[3427]
1 Cuthbertson v Irving (1859-60) 4 H & N 742.
2 Neale v Mackenzie (1836) 1 M & W 747 at 759, per Denman CJ; see generally para HR A[6804] in relation to title paramount
(covenants for quiet enjoyment).
(c) Eviction in exercise of public powers?
HR A[3428]
Where the tenant is temporarily deprived of enjoyment of the premises by the exercise of public powers, he will remain
liable for the rent. Accordingly, if the Crown in pursuance of statutory powers or in the exercise of the prerogative in
time of war requisitions the premises and occupies them, the tenant's liability for rent will continue: there is no eviction
by title paramount since the acts of the Crown do not have the necessary characteristics of permanence and
wrongfulness1.
HR A[3429]
1 Whitehall Court Ltd v Ettlinger [1920] 1 KB 680; Matthey v Curling [1922] 2 AC 180; Crown Lands Comrs v Page [1960] 2 QB 274.
HR A[3430]
Further, the tenant remains liable to his landlord even where the premises are destroyed by fire during the period of
requisition1.
HR A[3431]
1 Matthey v Curling [1922] 2 AC 180.
HR A[3432]
Likewise, there is no eviction by title paramount when part of the demised premises is demolished by the appropriate
local authority pursuant to statutory powers as a dangerous structure1.
Page 667
HR A[3433]-HR A[3440]
1 Popular Catering Association v Romagnoli [1937] 1 All ER 167.

Page 668
Eviction by trespassers
3 Eviction by trespassers
(a) What constitutes eviction
HR A[3441]
To constitute eviction sufficient for rent to be suspended in accordance with the principles described in the preceding
paragraphs, it is not necessary that there should be an actual physical expulsion from any part of the premises. Any act
of a permanent character done by the landlord or his agent (or by a person with title paramount) with the intention of
depriving the tenant of the enjoyment of the demised premises, or any part thereof will operate as an eviction1. Thus,
there may be an eviction if the landlord enters and uses the premises, even though the tenant remains in possession2.
Similarly, there may be an eviction where a head landlord induces undertenants to leave by notice to quit so that the
premises are left unoccupied3. A threat of eviction may be sufficient: thus, if a person with title paramount threatens to
evict the tenant, and the tenant attorns tenant to the evictor, the tenant may set up the eviction as a defence to an action
for rent by the lessor4, subject to his proving the evictor's title5.
HR A[3442]
1 Upton v Townend (1855) 17 CB 30, per Jervis CJ; Henderson v Mears (1859) 7 WR 554; Baynton v Morgan (1888) 22 QBD 74; Crown
Lands Comrs v Page [1960] 2 QB 274. See also Wheeler v Stevenson (1860) 6 H & N 155; notes to Salmon v Smith (1669) 1 Wms Saund
202.
2 Smith v Raleigh (1814) 3 camp 513; Griffith v Hodges (1824) 1 C & P 419 at 420.
3 Burn v Phelps (1815) 1 Stark 94.
4 Poole Corpn v Whitt (1846) 15 M & W 571; Carpenter v Parker (1857) 3 CBNS 206 at 234, 235.
5 Jordan v Twells (1735) Lee temp Hard 171; Simons v Farren (1834) 1 Bing NC 272; Poole Corpn v Whitt (1846) 15 M & W 571.
HR A[3443]
On the other hand, a mere trespass is not sufficient to amount to an eviction1 nor is interference by the landlord with an
easement2.
HR A[3444]
1 Hunt v Cope (1775) 1 Cowp 242; Newby v Sharpe (1878) 8 Ch D 39 at 51, CA.
Page 669
2 Williams v Hayward (1859) 1 E & E 1040 (see also Harris v Morrice (1842) 10 M & W 260: alteration to tolls after demise, not an
eviction).
HR A[3445]
The mere abandonment of the premises by the tenant does not affect his liability to pay the rent. If, however, the
landlord subsequently enters and uses the premises for his own purposes, this is equivalent to an eviction, and he cannot
recover rent subsequently accruing due1. Likewise, if the landlord relets the premises to another tenant who goes into
possession, this operates as an eviction of the previous tenant, from whom the landlord cannot recover any rent which
falls due after reletting2, even in respect of a subsequent period when the premises are unoccupied3. However, it is
possible for the landlord to protect himself by reletting the premises on the tenant's account, and giving him notice
accordingly3. There will be no eviction if the landlord merely enters for the purposes of protecting the house4, or if he
puts in a caretaker for the same purpose5, of if he puts up a notice with a view to reletting6.
HR A[3446]
1 Bird v Defonvielle (1846) 2 Car & Kir 415; Gray v Owen [1910] 1 KB 622 (where, however, the landlord recovered damages for breach
of agreement of tenancy).
2 Hall v Burgess (1826) 5 B & C 332 at 333; Pellatt v Boosey (1862) 31 LJCP 281; Edward H Lewis & Son Ltd v Morelli [1948] 1 All ER
433. See also Highway Properties Ltd v Kelly Douglas & Co Ltd (1971) 17 DLR (3d) 710 overruling (1968) 1 DLR (3d) 626.
3 Walls v Atcheson (1826) 3 Bing 462.
4 Smith v Raleigh (1814) 3 Camp 513; Griffith v Hodges (1824) 1 C & P 419; see also Relvok Properties Ltd v Dixon (1972) 25 P & CR 1.
5 Bird v Defonvielle (1846) 2 Car & Kir 415.
6 Redpath v Roberts (1800) 3 Esp 225.
(b) Changes in the state of premises
HR A[3447]
Unless the lease contains express provision to the contrary1 and with certain statutory exception2, the tenant takes the
demised premises subject to any defects existing in them at the time of the letting, and to any events which subsequently
affect their value. The mere fact that the premises have become unfit for the contemplated use will no relieve the tenant
of his obligation to rent. The only exception to this general proposition is a change of circumstances which may result in
the frustration of the lease3.
HR A[3448]
Page 670
1 See Bennett v Ireland (1858) EB & E 326; Johnstone v Swan Estates Ltd [1942] Ch 98; Saner v Bilton (1878) 7 Ch D 815; Manchester
Bonded Warehouse Co v Carr (1880) 5 CPD 507.
2 See eg Housing Act 1985, s 189.
HR A[3449]
Thus, it is the general rule that the tenancy continues in existence and the rent continues to be payable notwithstanding
that, in the case of an unfurnished dwellinghouse or flat, it is at the time of the letting1 or subsequently becomes unfit
for habitation2; or that the land is of no value3; or, in the case of agricultural land, that it is unsuitable for the intended
use4; or, in the case of a building lease, that the building contemplated is prohibited at least where such prohibition is
unlikely to continue throughout the term5 (albeit that it is possible that the obligation to build may in exceptional
circumstances be suspended6); or that the premises are subsequently destroyed by fire7. This is the rule in the case of
fire even if the tenant's repairing obligations do not apply where there has been a fire8, and even if the landlord refuses
to lay out insurance money which he has received in rebuilding9. Consequently the landlord will not in these
circumstances be restrained from suing for the rent10. Rent, however, will stop if furnished lodgings are destroyed
through fire11.
HR A[3450]-HR A[3460]
1 Hart v Windsor (1843) 12 M & W 68; Manchester Bonded Warehouse Co v Carr (1880) 5 CPD 507; Cruse v Mount [1933] Ch 278. But
see Housing Act 1985, s 189; and compare the provisions of the Landlord and Tenant (War Damage) Acts 1939 and 1941 (para HR
A[7380.275]).
2 Arden v Pullen (1842) 10 M & W 321 at 328; Murray v Mace (1874) IR 8 CL 396 (cf Collins v Barrow (1831) 1 Mood & R 112).
3 Earl of Meath v Cuthbert (1876) IR 10 CL 395.
4 Sutton v Temple (1843) 12 M & W 52 at 62; and see Cheater v Cater [1918] 1 KB 247, CA (field dangerous as a result of yew trees
overhanging it) cf Connolly v Baxter (1819) 2 Stark 525.
5 Cricklewood Property and Investment Trust Ltd v Leightons Investment Trust Ltd [1945] AC 221.
6 If John Lewis Properties plc v Viscount Chelsea [1993] 2 EGLR 77 is to be followed.
7 Monk v Cooper (1727) 2 Stra 763; Baker v Holtzaffell (1811) 4 Taunt 45; Izon v Gorton (1839) 5 Bing NC 501; Marshall v Schofield &
Co (1882) 52 LJQB 58, CA; Matthey v Curling [1922] 2 AC 180.
8 Belfour v Weston (1786) 1 Term Rep 310; Hare v Groves (1796) 3 Anst 687.
9 Leeds v Cheetham (1827) 1 Sim 146; Lofft v Dennis (1859) 1 E & E 474; see paras HR A[6968]ff in relation to insurance.
10 Baker v Holtzaffell (1811) 4 Taunt 45; Leeds v Cheetham (1827) 1 Sim 146.
Page 671
11 Packer v Gibbins (1841) 1 QB 421.
HR A[3461]
Similarly, there is no suspension if the premises are harmed or destroyed by enemy action1; or if the premises are
carried away by a flood2 or inundated with fresh water3; or if the premises are occupied by an alien enemy4 or
requisitioned in time of war5. Likewise where the tenant is prohibited by law from using the premises for the purposes
for which they intended, this will not result in a suspension of rent if the lease itself is not tainted with illegality6.
HR A[3462]
1 Simper v Coombs [1948] 1 All ER 306; Denman v Brise [1949] 1 KB 22.
2 Carter v Cummins (1665) cited in 1 Cas in Ch at 84.
3 Since, it is said, the lessee has the fish and usually the land can be reclaimed; but the case is different in case of the invasion of the land
by the sea over which the public have rights to fish and where the land cannot be reclaimed (see 1 Roll Abr 236).
4 Paradine v Jane (1647) Aleyn 26.
5 See Swift v Macbean [1942] 1 KB 375.
6 London and Northern Estates Co v Schlesinger [1916] 1 KB 20; Hewett v Quick Despatch Ltd (1940) 67 L1 L Rep 130.
HR A[3463]
There will, likewise be no suspension of rent in the event that by the landlord's neglect of an obligation to repair, the
premises have become useless to the tenant1. Similarly in the case of a mining lease, a fixed rent reserved by a mining
lease continues to be payable throughout the term, notwithstanding that the minerals have been worked2, or are not
worth the cost of working3. If, however, no rent is fixed, but the lessee has covenanted to get a minimum amount of
minerals, he is not liable to pay royalty on this amount if in fact it does not exist in the land4.
HR A[3464]
1 Surplice v Farnsworth (1844) 7 Man & G 576; Hart v Rogers [1916] 1 KB 646; Christie v Wilson [1915] SC 645 cf Kirkman v Jervis
(1839) 7 Dowl 678. However, it is now established that a tenant may set off damages resulting from the landlord's breach of covenant
against the rent (see para HR A[3384]).
2 Marquis of Bute v Thompson (1844) 13 M & W 487 at 493.
3 Mellers v Duke of Devonshire (1852) 16 Beav 252; Ridgway v Sneyd (1854) Kay 627 at 636; Strelley v Pearson (1880) 15 ChD 113 at
119.
Page 672
4 Lord Clifford v Watts (1870) LR 5 CP 577 at 587, 588. See para HR A[3587] for royalty rents.
Page 673
Express provisions suspending payment of rent
4 Express provisions suspending payment of rent
HR A[3465]
It has long been common expressly to provide that rent shall be suspended or extinguished in the event of damage of the
premises by fire1. However, such a proviso will not be implied, even where the tenant's covenant to repair expressly
excludes fire damage2 and even where the tenant pays the cost of insurance3 and the landlord has received the money
after a fire4. A proviso for the suspension of rent will only apply in the express events mentioned in the proviso5.
Similarly, how far payments to be made under a lease fall within the scope of such a proviso will be a matter of
construction6.
HR A[3466]
1 See Bennett v Ireland (1858) EB & E 326; Johnstone v Swan Estates Ltd [1942] Ch 98.
2 Compare Belfour v Weston (1786) 1 Term Rep 310; Hare v Groves (1796) 3 Anst 687.
3 Cleveland Shoe Co Ltd v Murray's Book Sale's (King's Cross) Ltd (1973) 229 Estates Gazette 1465, CA.
4 Leeds v Cheetham (1827) 1 Sim 146; Lofft v Dennis (1859) 1 E & E 474; (see paras HR A[6968]ff in relation to insurance).
5 Saner v Bilton (1878) 7 Ch D 815; Manchester Bondeed Warehouse Co v Carr (1880) 5 CPD 507.
6 P & O Property Holdings Ltd v International Computers Ltd [1999] 18 EG 158 (insurance payments and service charges reserved as
rent not within the scope of proviso).
(a) Statutory restrictions on the recovery of rent
HR A[3467]
A number of statutory preconditions to the recovery of rent are dealt with at paras HR A[3145] and HR A[3149]. It
should be noted that a failure by the landlord to provide a rent book in compliance with his statutory duty does not
relieve the tenant of his liability to pay rent1.
HR A[3468]
Page 674
1 Shaw v Groom (1970) 2 QB 504; see paras HR A[3305]ff regarding rent books.
HR A[3469]
There have from time to time been statutory restrictions upon the recovery of rent. The provisions of the Rent Act 1977
are dealt with in Division C1. A reserve power by statutory instrument to limit rents or prevent increases of rent for
dwellings is contained in s 31 of the Landlord and Tenant Act 19852.
HR A[3470]-HR A[3480]
1 See HR C[301]ff.
2 See HR A[20322].
Page 675
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/I Apportionment
I
Page 676
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/I Apportionment/1 Generally
1 Generally
HR A[3481]
Apportionment of rent occurs in two sorts of circumstances: (a) where there has been a division of the reversion or the
term ('apportionment in respect of estate'); and (b) where rent is payable in arrear it may be apportionable under the
Apportionment Act 18701 ('apportionment in respect of time').
HR A[2481.1]

Page 677
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/I Apportionment/2
Apportionment in respect of estate
2 Apportionment in respect of estate
HR A[3482]
Rent is apportionable in respect of the demised premised either (a) where the reversion has been severed so that that rent
is payable to different persons or (b) because the lessee has ceased to be in possession of the whole demise.
(a) Severance of reversion
HR A[3483]
Rent is apportionable upon a severance of the reversion, whether this takes place by act of the parties or by operation of
law1. Thus, rent is apportionable where the reversion is severed by grant of part to a stranger or to the lessee2; by the
grant of the whole of the land to two or more different persons3; and where the interest of the landlord in part of the
land is severed on his death4. In order for the apportionment to be binding on the lessee, the apportionment must be
made with the consent of the lessee5, by order of the court5 or under statutory powers6. Where there are co-lessees both
should be parties to an action for apportionment7. The provisions under the Landlord and Tenant (Covenants) Act 1995
for apportionment upon assignment of the reversion are dealt with above8.
HR A[3484]
1 Littleton's Tenures, s 122; Co Litt 148a; Collins and Harding's Case (1597) 13 Co Rep 57; See Hartley v Maddocks [1899] 2 Ch 199;
Mitchell v Mosley [1914] 1 Ch 438, 455, CA. See generally para HR A[3004] concerning the necessity of a reversion for there to be rent.
2 West v Lassells (1601) Cro Eliz 851; Ewer v Moyle (1600) Cro Eliz 771 (devise of different parcels leases at an entire rent to different
persons).
3 Swansea Corpn v Thomas (1882) 10 QBD 48.
4 Moodie v Garnance (1617) 3 Bulst 153; Salmon v Matthews (1841) 8 M & W 827; Hoare & Co v Hove Bungalows Ltd (1912) 56 Sol Jo
686, CA.
5 Bliss v Collins (1822) 5 B & Ald 876; Swansea Corpn v Thomas (1882) 10 QBD 48, 51. See Collins and Harding's Case (1597) 13 Co
Rep 57.
7 Stafford v City of London (1718) 1 Stra 95.

Page 678
(b) Tenant ceasing to have possession
HR A[3485]
The rent is apportionable where the lessee ceases to have possession of part of the demised premises, provided this is
not due to unlawful eviction by the lessor. Thus it is apportionable where the lessee surrenders part of the premises1; or
where the lessor re-enters upon part for a forfeiture under a special condition for re-entry allowing this to be done2; or
where the lessee is evicted from part by a person lawfully claiming under title paramount3; or where a part of the
premises is destroyed by an inundation of the sea4. The lessee claiming an apportionment on any of these grounds must
prove the apportioned value of the land withdrawn from the demise5 ascertained at the date of such withdrawal and not
at the date on which the lease was granted6; and the right to apportionment depends on the person claiming it being in
possession of the land, whether as original lessee or assignee; that is, the rent must be payable under a contract real, or
under a contract arising out of privity of estate7. Where the lessee has assigned the lease and is sued on his personal
contract, at common law it is possible that the surrender of part of the premises by the assignee does not relieve the
original tenant from liability upon the contract for the rent8. However, the Landlord and Tenant (Covenants) Act 1995
now regulates the liability of the original tenant; this is dealt with above9.
HR A[3486]
1 Collins and Harding's Case (1597) 13 Co Rep 57; Smith v Malings (1608) Cro Jac 160; Co Litt 148a.
2 Walker's Case (1587) 3 Co Rep 22a at 22b; Co Litt 148a.
3 Walker's Case (1587) 3 Co Rep 22a; Smith v Malings (1608) Cro Jac 160. See Stevenson v Lambard (1802) 2 East 575; Doe d Vaughan
v Meyler (1814) 2 M & S 276; Tomlinson v Day (1821) 2 Brod & Bing 680; Hartley v Maddocks (1899) 47 WR 573. See para HR A[3426]
(suspension of rent where eviction by title paramount).
4 1 Roll Abr 236.
5 Smith v Malings (1608) Cro Jac 160.
6 Salts v Battersby [1910] 2 KB 155.
7 West v Lassels (1601) Cro Eliz 851; see Walker's Case (1587) 3 Co Rep 22a.
8 Stevenson v Lambard (1802) 2 East 575; see Baynton v Morgan (1888) 22 QBD 74, CA; and also Friends Provident Life Office v British
Railways Board [1996] 1 All ER 336. Cf Swansea Corpn v Thomas (1882) 10 QBD 48.
(c) Unlawful eviction

Page 679
HR A[3487]
There is no apportionment in favour of a landlord who unlawfully evicts the tenant from part of the demised premises,
and no part of the rent is recoverable so long as the eviction continues1. Further, the landlord cannot recover in an
action for use and occupation in respect of the part of the premises retained by the tenant2. Similarly, where the lease
includes land and chattels and the tenant is unlawfully evicted from the land, there is no apportionment (the rent issuing
out of the land)3.
HR A[3488]
1 Morrison v Chadwick (1849) 7 CB 266; Furnivall v Grove (1860) 8 CBNS 496; London & County (A & D) Ltd v Wilfred Sportsman Ltd
[1969] 1 WLR 1215, 1225-1226 Buckley J (revs on different grounds [1971] Ch 764). See para HR A[3422] for suspension of rent on
unlawful eviction.
2 Upton v Townend (1855) 17 CB 30; see Reeve v Bird (1834) 1 Cr M & R 31 at 36; Hutchinson v Taylor (1884) 77 LT Jo 120 (county
court); Wilson v Burne (1889) 24 LR Ir 14 at 27, CA; contra Stokes v Cooper (1814) 3 Camp 514 n; Smith v Raleigh (1814) 3 Camp 513. See
paras HR A[3566]ff for use and occupation.
3 Emott v Cole (1591) Cro Eliz 255; Read v Lawnse (1561) 2 Dyer 212b cf Salmon v Matthews (1841) 8 M & W 827 (where title to the
land and the chattels is severed).
(d) Tenant unable to take possession
HR A[3489]
Where part of the premises is held by a third person rightfully claiming under a title adverse to the lessor, so that the
lessee cannot obtain possession, the result is the same as in the case of unlawful eviction by the lessor: no part of the
rent is recoverable1. It was similarly the case where the lease was by parol and part of the premises was held under a
prior lease made by the same lessor, since the parol lease carried no interest in the reversion2. But where the later lease
was under seal, it carried the reversion in the part of the premises already let, as well as the immediate possession of the
rest, and the whole rent was recoverable3. Now, however, it appears that an oral lease may carry an interest in the
reversion in certain circumstances: in those circumstances, the whole rent would be recoverable.
HR A[3490]-HR A[3500]
1 Holgate v Kay (1844) 1 Car & Kir 341.
2 Neale v Mackenzie (1836) 1 M & W 747, Ex Ch; Watson v Waud (1853) 8 Exch 335 at 339.
3 Ecclesiastical Comrs of Ireland v O'Connor (1858) 9 ICLR 242.

Page 680
(e) Statutory powers of apportionment
HR A[3501]
By the Secretary of State
An order of apportionment of a rent reserved by a lease, or any such other rent or payment as in mentioned in the
Inclosure Act 1854, may be made by the Secretary of State for the Environment or the Secretary of State for Wales
under ss 10-14 of that Act, on the application of any person interest in the rent or payment, or any part thereof, or in any
land in respect of which the rent is payable, without the concurrence of any other person1. Where any apportioned part
of the rent or payment does not exceed the annual sum of £5, the minister may require its redemption2 forthwith3. An
order of apportionment may provide that the amount apportioned to any part of the land in respect of the rent or
payment payable is nil4.
HR A[3502]
2 See Rentcharges Act 1977, ss 8-10 which for the purposes of Landlord and Tenant Act 1927, s 20 (as amended) have effect with the
necessary modifications.
3 Landlord and Tenant Act 1927, s 20 (amended by Rentcharges Act 1977, Sch 1, para 3; Housing Act 1980, s 143(1).
4 Landlord and Tenant Act 1927, s 20(1A) (added by Housing Act 1980, s 143(3)).
HR A[3503]
Under the Agricultural Holdings Act 1986
Apportionment may take place under the provisions of s 33 of the Agricultural Holdings Act 19861.
HR A[3504]
1 See HR F[830].
HR A[3505]
Compulsory purchase
Where part of the land comprised in a lease is compulsorily acquired, the rent payable is apportioned by statute between
the land acquired and the remained1. In default of agreement between landlord and tenant and the acquiring authority,
Page 681
the apportionment may be made by the Land Tribunal2. Specific performance may be granted of an agreement for
assignment and apportionment entered into between the acquiring authority and the lessee without the consent of the
lessor, but such an apportionment does not bind the lessor3.
HR A[3506]
1 Compulsory Purchase Act 1965 s 19.
2 CPA 1965.
3 Slipper v Tottenham and Hampstead Junction Rly Co (1867) LR 4 Eq 112.
HR A[3507]
Landlord and Tenant Act 1954, Pt I
Where part only of premises demised qualify for protection under Pt I of the Landlord and Tenant Act 1954, the tenancy
while continuing after the term date does so only in respect of the premises which do qualify for protection and the rent
is apportioned1.
HR A[3508]
1 See Landlord and Tenant Act 1954, s 3 at HR E[269].
HR A[3509]
School sites
Special provisions also applied on the conveyance of part of a lease for the provision of a school site1.
HR A[3510]-HR A[3519]
1 School Sites Acts 1841, 1844 and 1849.

Page 682
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/I Apportionment/3
Apportionment in respect of time
3 Apportionment in respect of time
(a) Generally
HR A[3520]
At common law rent cannot be apportioned in respect of time1. Thus where rent fell due at fixed periods in arrear, and
the tenancy determined before the due date, the whole rent due for the period was lost2. The position now, however, is
governed by the Apportionment Act 1870 which was retrospective in effect3.
HR A[3521]
1 Clun's Case (1613) 10 Co Rep 127a, 127b.
2 Grimman v Legge (1828) 8 B & C 324 per Bayley J; Slack v Sharpe (1838) 8 Ad & El 366; Walls v Atcheson (1826) 3 Bing 462.
3 See Apportionment Act 1870 at paras HR A[20058]ff; Capron v Capron (1874) LR 17 Eq 288; Re Cline's Estate (1874) LR 18 Eq 213;
Hasluck v Pedley (1874) 19 Eq 271 (cf Jones v Ogle 1872) 8 Ch App 192.
(b) Apportionment Act 1870: scope
HR A[3522]
All rents are to be considered as accruing from day to day, and are apportioned in respect of time accordingly1. A
variable rent (if payable at a fixed time) falls within the Act: in such a case it will be assumed to accrue at a uniform rate
over the period in respect of which it is payable; but (in the case of a royalty rent payable for minerals) the rent cannot
be apportioned on the basis of the amount or value of the mineral got before the event necessitating apportionment2.
The Act applies to the right to receive rent as well as to the liability to pay it3. The Act, however, only operated where
rent is payable in arrear: thus where rent is payable in advance but the lease ends before the end of the period for which
rent is payable, the landlord is entitled to the whole of the rent for the period for which rent is payable4. The Act may
also be excluded by agreement5.
HR A[3523]
1 Apportionment Act 1870, s 2 at para HR A[20058.1].

Page 683
2 Coal Commission v Earl Fitzwilliam's Royalties Co [1942] Ch 365.
3 Glass v Patterson [1902] 2 IR 660.
4 Ellis v Rowbotham [1900] 1 QB 740; see also Re Aspinall [1961] Ch 526; Capial & City Holdings Ltd v Dean Warburg [1989] 1 EGLR
90.
5 Apportionment Act 1870, s 7 at para HR A[2059]; see Re Meredith, Stone v Meredith (1898) 67 LJ Ch 409.
(c) Apportionment Act 1870: operation
HR A[3524]
Rent is considered as accruing from day to day1. The apportioned part of any such rent is payable or recoverable in the
case of a continuing rent when the entire portion of such apportioned part shall become due and payable and not before;
and in the case of rent determined by re-entry, death, or otherwise, the rent becomes payable when the next entire
portion of the same would have been payable, if it had not so determined and not before2: in other words, the day for
payment of the apportioned rent is not accelerated3.
HR A[3525]
3 Re United Club and Hotel Co Ltd (1889) 60 LT 665; Re Lucas, Parish and Hudson (1885) 55 L J Ch 101, CA; Foster and McWilliams v
Cunningham [1956] NI 29.
HR A[3525.1]
The Apportionment Act also applies on the assignment of the term between two quarter days (on which rent is payable):
in such circumstances, the assignor alone is liable to the landlord for rent in respect of the period down to the date of the
assignment and (notwithstanding the covenant to pay the whole quarters rent in arrear on the quarter day) the assignee is
liable for the rent referable to the period after the date of the assignment1. Further, it is only the assignor (and not the
assignee) who is liable for such rent which was in arrear prior to the assignment to the assignee1.
HR A[3526]
1 Parry v Robinson-Wyllie (1987) 54 P & CR 187. See para HR A[2227].
HR A[3527]-HR A[3528]
Page 684
As indicated at para HR A[3525], the Act only applies to rent payable in arrear: it does not apply to rent payable in
advance. Thus, if a tenancy is determined by forfeiture where rent is payable in advance, the landlord is entitled to
recover the whole rent for the quarter in which the forfeiture occurs.
HR A[3529]
On the other hand, where rent is payable in arrear, an apportionment of rent can be against a tenant whose liability for
rent ceases1 or changes in its character2 between two rent days; and after the day when the entire portion of the rent has,
or would have, fallen due, the proportionate part is recoverable against the tenant as rent due under the lease3. Thus, a
lessee who surrenders his lease between two rent days is liable for rent up to the surrender, and a lessee on whom a
lessor lawfully re-enters is liable for rent up to the re-entry. On the other hand, it appears that the tenant may not be
liable if he is wrongfully evicted4.
HR A[3530]-HR A[3540]
1 See Swansea Bank v Thomas (1879) 4 Ex D 94; Hartcup & Co v Bell (1883) Cab & El 19; Re Johnson and Stephens ex p Blackett
(1894) 70 LT 381; Elvidge v Meldon (1889) 24 LR Ir 91 (eviction by title paramount).
2 Special provision apply in the case of bankruptcy and insolvency, see Chapter 12.
3 Re Wilson ex p Lord Hastings (1893) 62 LJQB 628, 632.
4 See Clapham v Draper (1885) Cab & El 484, Mathew J.
(d) Remedies
HR A[3541]
It is provided that all persons and their respective heirs, executors, administrators and assigns, and also the executors,
administrators and assigns respectively of persons whose interests determine with their own deaths, have the same
remedies, at law and in equity, for recovering the apportioned part of the rent, when payable, as they would have had for
recovering the entire portions if they had (at common law) been entitled to them1. However, persons liable to pay rents
reserved out of or charged on lands or other hereditaments of any tenure, and the same lands or other hereditaments,
cannot be resorted to specifically for any such apportioned part of an entire or continuing rent; but the entire or
continuing rent, including the apportioned part, is recoverable by the heir or other person who, if the rent had not been
apportionable, would have been entitled to such entire or continuing rent and the apportioned part is recoverable from
the heir or other person by the executors or other parties entitled under the Act1. These provisions are intended to
protect the position where there is a succession to the reversion2.
HR A[3542]
Page 685
2 Swansea Bank v Thomas (1879) 40 LT 558 at 560 per Kelly CB.

Page 686
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/J Recovery of rent and
limitation
J
Page 687
limitation/1 Recovery of rent
1 Recovery of rent
HR A[3543]
Rent may be recovered by distress or by action. Distress is dealt with below1. An action for rent may be brought on an
express2 or implied3 convenant to pay rent. An action for rent is an action for a debt due under a contract and it is not
necessary to show that the tenant has been in occupation of the land4. As with any other contract, the sum will not be
payable if the lease provides that payment is subject to condition precedent which still remains to be performed by the
landlord5. The effect of insolvency on the landlord's right to recover rent by action is dealt with below6.
HR A[3544]
4 Bellasis v Burbrick (1697) 1 Salk 209.
5 Brook v Fletcher (1877) 37 LT 100 (obtaining superior lessor's licence); Fox v Slaughter (1919) 35 TLR 668 (putting premises in state
of repair).
6 See HR A[7381]ff.
HR A[3545]-HR A[3546]
Where rent has not been fixed, the action is one for use and occupation, which is dealt with at para HR A[3566].
(a) Forum
HR A[3547]
Proceedings for rent may be started in the High Court or a county court. The county court now has unlimited
jurisdiction in regard to claims for arrears of rent1. Actions may not be started in the High Court unless the value of the
claim is £15,000 or more2.
A claim with an estimated value of less than £50,000 will generally be transferred to the county court3.
Page 688
HR A[3548]
1 See generally county courts Act 1984, s 15 as amended by the Courts and Legal Services Act 1990.
2 See CPR 7 PD 2.1.
3 See CPR Pt 29 PD 2.3.
(b) Interest
HR A[3549]
Interest may be recovered under the provisions of the lease. Alternatively, interest may be recovered under the statute1.
HR A[3550]-HR A[3560]
1 Supreme Court Act 1981, s 35; county courts Act 1984, s 69.
(c) Limitation period for recovery of rent
HR A[3561]
No action may be brought or distress made to recover arrears of rent or damages in respect of arrears or rent after the
expiration of six years from the date on which arrears became due1. This applies even where the rent is due under an
instrument seal2 and to guarantors of a tenant's obligation to pay rent under a the lease under seal, though the limitation
period in relation to guarantors runs from when payment is due from the guarantor (for instance, upon demand if that is
what the lease provides) and not when the tenant's default occurs3.
HR A[3562]
2 LA 1980, s 8(2).
3 Romain v Scuba TV Ltd [1996] 23 EG 126.

Page 689
HR A[3563]
For the effect of non-payment of rent upon the landlord's right to possession see Chapter 151.
HR A[3564]
1 See paras HR A[9904] ff.

Page 690
limitation/2 Protection of service personnel
2 Protection of service personnel
HR A[3565]
Where the tenant is a serviceman or servicewoman to whom the relevant provisions of the Reserve and Auxiliary Forces
(Protection of Civil Interests) Act 1951 apply, the court's leave is required before the landlord may levy distress or
proceed to execution on or otherwise to the enforcement of a judgment for rent, or for the recovery of land in default of
payment of rent. The Act, however, does not apply to tenancies created after the tenant began to perform the relevant
period of service.
Page 691
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 6 Rent/K Action for use and
occupation
(a) The nature of the claim
HR A[3566]
Where a person has been in occupation of land without an agreement fixing an amount of rent the landlord may bring an
action against the occupier for use and occupation to recover a sum in reasonable satisfaction for the lands held or
occupied. Historically pleaded as an assumpsit or debt, the action lies at common law1 and is quasi-contractual, based
on the breach by the occupier of an implied term to pay a fair and reasonable rent for the enjoyment of the land
occupied2. Accordingly, it has been said that the remedy lies only where 'the defendant is not a trespasser setting up an
adverse title, and where there are no circumstances that negative the implication of a contract'3. It is available only
where the occupation is with the permission of the owner, and where the court is able to find an intention to create legal
relations. Indeed, it has been said that there must be an intention to create a relationship of landlord and tenant4. It is
however doubtful whether this is in fact essential to found a claim5 and, although the occupation must be by
permission, such permission may be either express or implied6.
HR A[3567]
1 The common law action was subsumed by the Distress for Rent Act 1737, s 14, which was intended to remedy contemporary difficulties
in pleadings when recovering rents for tenancies that were not created by a formal lease under seal. This section was repealed by the Statute
Law (Repeals) Act 1989, Sch 1, Pt I, Group 5, because it was felt that it was an unnecessary relic of the old forms of action.
2 Thetford Corpn v Tyler (1845) 8 QB 95.
3 Phillips v Homfray (1883) 24 ChD 439 at 461, per Bowen LJ. The restriction is of little practical importance today. In such
circumstances the owner of land will have an action for wrongful use and occupation or mesne profits against the trespasser and it is now
accepted that a landowner may elect to claim damages on either a restitutionary or compensatory basis. See Ministry of Defence v Ashman
(1993) 25 HLR 513 CA; Ministry of Defence v Thompson (1993) 25 HLR 552, CA. See also, generally, the discussion in Elvin and Karas
Unlawful Interference with Land (1995) paras 1-030-1-034.
4 Morris v Tarrant [1971] 2 QB 143, [1971] 2 All ER 920; A-G v De Keyser's Royal Hotel Ltd [1920] AC 508 at 532, 533.
5 Dean & Chapter of Rochester v Pierce (1808) 1 Camp 466; Bevereley v Lincoln Gas Light and Coke Co (1837) 6 Ad & El 829.
6 Bevereley v Lincoln Gas Light and Coke Co (1837) 6 Ad & El 829.
HR A[3568]
An action for use and occupation lies where a tenant holds over following the expiry of an agreement, where the holding
over is by consent or where a fresh agreement has been made1. Similarly, occupation in anticipation of an intended
Page 692
lease will render the occupier liable to pay compensation2 unless the lease goes off through the fault of the landlord3. In
contrast there will be no liability where the terms of the occupation indicate that there was no implied promise to pay.
Accordingly a demise on the express condition that liability for rent will not accrue until the landlord has put the
premises in repair will not render the occupier liable to compensate the landlord4. On that basis also an accidental
holding over for a short period by virtue only of the retention of keys does amount to evidence of use and occupation
such as to make a tenant liable for a whole quarter's rent5. Nor will the action lie against a tenant of premises protected
by the Rent Act 1977 holding over after receipt of a notice to quit6; the statutory tenancy that will arise prevents the
continued occupation from being referable to the grant of a new tenancy7.
HR A[3569]
1 See eg Bayley v Bradley (1848) 5 CB 396; Davis v Morgan (1825) 4 B & C 8. The holding over may be in such circumstances that a
yearly tenancy is created (Hellier v Sillcox (1850) 19 LJQB 295) or otherwise (Hurley v Hanrahan (1867) 15 WR 990).
2 Coggan v Warwicker (1852) 3 Car & Kir 40; Smith v Eldridge (1854) 15 CB 236; Dawes v Dowling (1874) 31 LT 65.
3 Rumball v Wright (1824) 1 C & P 589.
4 Fox v Slaughter (1919) 35 TLR 668.
5 Gray v Bompas (1862) 11 CBNS 520.
6 Crook v Whitbread (1919) 88 LJKB 959.
7 Similarly, the mere fact that landlord continues to accept rent from a tenant protected by the RA 1977 affords no evidence of the
creation of a new contractual tenancy: Morrison v Jacobs [1945] KB 577, [1945] 2 All ER 430, CA. The same principles will apply to
statutory periodic tenancies arising by virtue of HA 1988, s 5.
HR A[3570]
In order to maintain an action for use and occupation the landlord must have the legal estate in the land occupied by the
tenant1. For that reason a beneficiary cannot generally maintain an action for use and occupation2. A legal title by
estoppel is, however, sufficient where, for instance, the landlord has let the premises to the tenant or rent has already
been received from the tenant. In appropriate circumstances therefore a beneficiary3 or, for example, an auctioneer who
has entered into an agreement with a tenant as principal4 may sue for compensation.
HR A[3571]
1 Cobb v Carpenter (1809) 2 Camp 13n; Harris v Booker (1827) 4 Bing 96; Morgell v Paul (1828) 2 Man & Ry KB 303; Sloper v
Saunders (1860) 29 LJ Ex 275.
2 Howe v Scarrott and Sharp v Scarrott (1859) 4 H & N 723.
3 Dolby v Iles (1840) 11 Ad & El 335 (tenant paid rent to beneficiary and recognised beneficiary's title); Hull v Vaughan (1818) 6 Price
Page 693
157 (beneficiary let tenant into possession of premises).
4 Fisher v Marsh (1865) 6 B & S 411. Contrast the position where the auctioneer is known only to let as agent: Evans v Evans (1835) 3
Ad & El 132.
(b) The meaning of occupation
HR A[3572]
Whilst an action for use and occupation lies only if the defendant has possession of the premises in the capacity of
tenant1, it seems that actual occupation throughout the period of possession is not necessary2. Provided the tenant once
entered the premises without any period for the tenancy being fixed and might have continued to occupy had he chosen
to do so, he will be liable for the period during which he has legal possession. Occupation by a subtenant3 or co-tenant4
is sufficient occupation for these purposes. Evidence of sufficient occupation might be found in the erection of a board
for letting the premises5 or sending in persons to clean and decorate the premises6.
HR A[3573]
1 Edge v Strafford (1831) 1 Cr & J 391; Clarke v Webb (1834) 1 Cr M & R 29; How v Kennett (1835) 3 Ad & El 659 at 666; Woolley v
Watling (1837) 7 C & P 610; Lowe v Ross (1850) 5 Exch 553.
2 Pinero v Judson (1829) 6 Bing 206 (legal possession sufficient).
3 Bull v Sibbs (1799) 8 Term Rep 327; Neale v Swind (1832) 2 Cr & J 377.
4 Christy v Tancred (1840) 7 M & W 127; Electric Telegraph Co v Moore (1861) 2 F & F 363.
5 Sullivan v Jones (1829) 3 C & P 579.
6 Smith v Twoart (1841) 2 Man & G 841; Town v D'Heinrich (1853) 13 CB 892.
(c) The measure of compensation
HR A[3574]
Compensation for use and occupation is recoverable as damages based upon the value of the occupation1. In
determining what is a reasonable rent for the enjoyment of the land the court will examine the actual value of the
occupation to the particular occupier2. The court will not assess compensation based upon the rent that might have been
agreed with an incoming tenant for a hypothetical letting without a fixed term or security of tenure2. If a rent has been
agreed that will be the appropriate measure, unless it can be shown as a matter of fact that the value of the occupation
does not accord with such a rent3. Similarly, where an agreement can be implied by virtue of a tenant holding over upon
the expiry of his tenancy, in the absence of contrary evidence the holding over will be presumed to be at the rent
formerly payable under the tenancy4. Such a presumption may, however, be rebutted by evidence of a higher rent
Page 694
agreed with a third party4 or alternatively by evidence that the value of the premises had declined since the date upon
which the rent was fixed4. Since the action is based on occupation, it is not permissible to recover in it a rent payable in
advance5. Moreover, the landlord can only recover sums on a day to day basis in respect of the period of actual
occupation6. Where the tenant has entered under a contract fixing the period of occupation, however, compensation is
recoverable in respect of the whole contractual term7.
HR A[3575]
1 Tomlinson v Day (1821) 2 Brod & Bing 680.
2 Cathedral and Metropolitan Church of Christ Canterbury (Dean and Chapter) v Whitbread plc (1995) 72 P & CR 9.
3 Tomlinson v Day (1821) 2 Brod & Bing 680. See also Lewisham London Borough Council v Masterson [1999] PLSCS 273, CA.
4 Thetford Corpn v Tyler (1845) 8 QB 95.
5 Angell v Randall (1867) 16 LT 498.
6 Slack v Sharpe (1838) 8 Ad & El 366; Packer v Gibbins (1841) 1 QB 421.
7 Smallwood v Sheppards [1895] 2 QB 627 at 629. See also Pinero v Judson (1829) 6 Bing 206; Jones v Reynolds (1836) 7 C & P 335.
(d) The duration of liability
HR A[3576]
Liability for use and occupation will continue for so long as the tenant remains in possession of the premises with the
permission of the landlord. It follows, therefore, that compensation for use and occupation cannot be recovered
subsequent to the determination of the agreement or tenancy. The landlord will thus not be entitled to recover such
sums:
(a) from the date of issue and service of a writ for possession1;
(b) for any date after the tenant is evicted from the premises with the intention of terminating the
tenancy, either by the act of the landlord2 or by title paramount3; and
(c) from the date upon which the landlord accepts an effective surrender of the tenancy4.
HR A[3577]
1 Jones v Carter (1846) 15 M & W 718; Franklin v Carter (1845) 1 CB 750; Birch v Wright (1786) 1 Term Rep 378.
2 See eg Soulsby v Neving (1808) 9 East 310; Newby v Sharpe (1878) 8 Ch D 39; Henderson v Mears (1859) 1 F & F 636.
Page 695
3 Newport v Harley (1845) 14 LJQB 242.
4 Whitehead v Clifford (1814) 5 Taunt 518.
(e) Application of the Limitation Act 1980
HR A[3578]
The Limitation Act 1980 applies in respect of actions for compensation for use and occupation of premises. First,
recovery of sums is limited to within six years of the date upon which rent became due and payable1. Second, the tenant
will have a good defence where he has not been in occupation of the premises or done anything from which the
existence of a tenancy may be implied for a period of six years prior to the action2.
HR A[3579]-[3580]
1 Limitation Act 1980, s 19. See para HR A[20203] and HR A[3561].
2 Leigh v Thornton (1818) 1 B & Ald 625.

Page 696
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews
Chapter 7 Rent reviews
Editor
Michael Barnes
Page 697
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/A Nature and purpose
of rent reviews
A
Page 698
of rent reviews/Nature and purpose
Nature and purpose
HR A[3581]
It is of the nature of most leases, particularly of commercial property, that the tenant is permitted a substantial period of
occupation. It has been common for leases of offices or shops to be granted for a period of 25 years, although today
tenants favour the greater flexibility offered by shorter terms. Obviously, a single and unchanging rent can be specified
for the whole of the term. Over the last few decades economic conditions have rendered such an unchanging rent
provision inappropriate. Two factors have combined to create this result. One is the general inflation which came to
characterise western economies from the 1960s onwards. Falls in the value of money could mean that at the end of a
25-year term a rent, fixed at an annual sum, would be unchanged in nominal terms but would have become only a
fraction of the initial value in real terms. The other factor is that, irrespective of general inflation, the value of property
has fluctuated substantially in real terms1. In times of economic boom rents, particularly of good commercial property,
have tended to outpace general inflation, while the early 1990s saw a dramatic fall in some rental levels.
HR A[3582]
1 See per Sir Nicholas Browne-Wilkinson in British Gas Corpn v Universities Superannuation Scheme Ltd [1986] 1 All ER 978, [1986] 1
WLR 398. See para HR A[3628] for a consideration of the commercial purpose of rent reviews when used as an aid to their construction.
HR A[3583]
The corrective mechanism in leases to deal with the impact of the above factors has been the widespread inclusion of
rent review provisions1. Their purpose is to allow the rent to be adjusted from time to time so as to reflect the impact of
inflation and of changes in real rental values. There is some reason to believe that we have entered a period of reduced
inflation and less volatility, but few landlords would be prepared to gamble on decades of price stability by omitting
rent review provisions from new leases2.
HR A[3584]
1 The practice was explained in the following way by Lord Salmon in United Scientific Holdings Ltd v Burnley Borough Council [1978]
AC 904 at 948: 'In a period of acute inflation, such as we have experienced for the last 20 years or so, and may well continue to experience
for many years to come, what is a fair market rent at the date when a lease is granted will probably become wholly uneconomic within a few
years. Tenants who are anxious for security of tenure require a term of reasonable duration, often 21 years or more. Landlords, on the other
hand, are unwilling to grant such leases unless they contain rent revision clauses which will enable the rent to be raised at regular intervals to
what is then the fair market rent of the property demised. Accordingly, it has become the practice for all long leases to contain a rent revision
clause providing for a revision of the rent every so many years. Leases used to provide for such a revision to be made every 10 years. Now
the period is normally every seven and not infrequently every five years. To my mind, it is totally unrealistic to regard such clauses as
conferring a privilege upon the landlord or as imposing a burden upon the tenant. Both the landlord and the tenant recognise the obvious,
viz., that such clauses are fair and reasonable for each of them. I do not agree with what has been said in some of the authorities, namely, that
Page 699
a rent revision clause is for the benefit of the landlord alone and not at all for the benefit of the tenant. It is plainly for the benefit of both of
them. It is for the benefit of the tenant because without such a clause he would never get the long lease which he requires; and under modern
conditions, it would be grossly unfair that he should. It is for the benefit of the landlord because it ensures that for the duration of the lease
he will receive a fair rent instead of a rent far below the market value of the property which he demises. Accordingly, the landlord and the
tenant by agreement in their lease provide that at stated intervals during the term the rent should be brought up to what is then the fair market
rent. The revision clause itself lays down the administrative procedure or machinery by which the fair market rent shall be ascertained.'
2 See eg R Bootle The Death of Inflation (1996).
HR A[3585]
The practice of including rent review provisions in leases is not entirely new. There is an instance of a ground lease
granted in New Zealand in 1886 with a 50-year term and rent reviews at intervals of ten years1. In 1959 the court
ordered the inclusion of a rent review provision in a lease ordered to be granted under Part II of the Landlord and
Tenant Act 19542. The lease in one of the early leading cases on rent reviews to come before the courts was granted in
19623. The principle in Walsh v Lonsdale, fundamental to aspects of the land law, concerned a lease granted in 1879
where the annual rent was linked to the number of looms which the tenant put into the premises from time to time4. As
the years have passed, rent review clauses have tended to become longer and more complex and draftsmen have tried
increasingly to cover all eventualities, a process engendered in part by the many problems of construction which have
arisen and the many decided cases on the subject. Many commercial contracts contain mechanisms for adjusting the
price paid for land, goods or services at regular intervals. However, a lease is more than a contract and rent has special
features not shared by other contractual payments. For instance, it is probable that a party to an ordinary contract who is
faced by a fundamental breach of contract by the other party may be bound in certain circumstances to accept that the
contract has been brought to an end and may be confined to a remedy in damages. A landlord is never obliged to accept
that the lease has come to an end merely because of a breach by the tenant of its terms. The innocent landlord may
always stand back and insist that the full rent due continues to be paid and that the tenant observes the other terms of the
contract. This special feature of leases explains the importance of mechanisms for amending the rent5.
HR A[3586]
1 Re Lund's Lease (1926) 45 NZLR 541, cited in Clark and Castle's Rent Review Manual (1997).
2 Re No 88 High Road, Kilburn, Meakers Ltd v DAW Consolidated Properties Ltd [1959] 1 All ER 527, [1959] 1 WLR 279. See also
Coventry City Council v J Hepworth & Son Ltd (1982) 46 P & CR 170 (lease granted in 1953).
3 United Scientific Holdings v Burnley Borough Council [1978] AC 904, [1977] 2 All ER 62. In Leigh v Certibilt Investments Ltd [1988]
1 EGLR 116 a rent review clause contained in a lease granted in 1965 was categorised as a very primitive form of rent review clause.
4 Walsh v Lonsdale (1882) 21 Ch D 9.
5 Reichman v Beveridge [2007] 08 EG 138. See generally on the subject of contractual breaches and remedies White & Carter (Councils)
Ltd v McGregor [1962] AC 413.
Page 700
of rent reviews/Types of rent review
Types of rent review
HR A[3587]
Various mechanisms have been used to provide for the regular variation of rents during the term.
(a) The simplest method is a provision for a specified increased rent to come into effect during various
stages of the term, either at regular intervals or on the occurrence of some specified event1. While such
provisions have the merit of certainty and simplicity their effect is that they cannot anticipate changes in
property value over the period of the lease which may be greater or less than the specified increases.
(b) A further method, which also has the virtue of simplicity, is to link the rent payable to some
published external index of changing values. It may be provided that the rent shall rise in line with a
general index of prices such as the Index of Retail Prices issued by the government2. The index chosen
may be one which aims to reflect only changes in property value. The advantage of the latter form of
indexation is that overall changes in prices may occur quite differently from changes in the value of
commercial property. If an indexation method is chosen care should be taken to make provision for what
is to occur if the index in question ceases to be published or its form or composition is significantly
altered. It is a matter of degree whether changes to a published index are such that the index as originally
published has ceased to exist3. There has been an unsuccessful attempt to link the amount of rent to the
value of gold4, although there seems no reason in principle why a rent should not be linked to the value
of some currency thought to be more stable than sterling5.
(c) A rent may be based on the receipts received by the tenant from the use which he makes of the
land. For example, the rent may vary in accordance with the turnover from the tenant's business, in
accordance with his profits or in accordance with the amounts which he obtains from subletting the
property. An early example of this practice was the system of 'corn rents' payable by tenants of property
owned by the Colleges of Oxford and Cambridge. The system was that the amount of corn payable as
rent remained fixed but, as the price of corn would vary with general price levels, so the true value of the
rent was in a crude sense indexed to general price levels6. A further example was found in the practice in
many leases where the tenant paid a fixed or dead rent and an additional rent, often called a royalty,
based on the amount of income earned each year7. More modern examples are rent linked to gross
takings by the tenant of a motorway service area8, or to receipts from the use of premises for
professional football9, but the principle is the same as in older leases where the rent was linked to the
number of looms which the tenant brought onto the premises10 or to the amount of brick clay worked or
bricks manufactured11.
(d) A rent may be based on a specified percentage of the open market value of the freehold reversion
with vacant possession at the review date12. A model form of such a rent review provision has been
published by the Incorporated Society of Valuers and Auctioneers. It is used particularly for rent reviews
of residential property and for cases where the review is to be to a ground rent only.
(e) In principle, there is no reason why a lease should not provide that the rent shall be a sum specified
by the landlord at his discretion and notified to the tenant (or, presumably, the other way round, ie
notified by the tenant)13. Such an arrangement seems scarcely practicable in a commercial context, and
may be confined in practice to landlords acting under the constraint of being public authorities.
(f) By far the most common form of rent review provision is that which specifies that the rent is to be
Page 701
adjusted at regular intervals during the term by reference to the open market rental value of the premises
at the time of the review. Within this basic formulation there is room for much variation. For example,
the frequency of the reviews may be different, with five-yearly intervals being the most commonly found
example14; the review may be upwards only or upwards and downwards; one party or both may be
entitled to call for a review; the reviews may be automatic or may have to be triggered by a notice served
by one or other party15; various assumptions may have to be made on matters such as the existence of
improvements carried out by the tenant; and the means of resolving differences may be different, the
usual modes being by arbitration or expert determination.
The examples of forms of rent review given above are not intended to be exhaustive of those encountered in practice. In
principle the parties are free to choose whatever form of review they wish. A further example is that the parties may
provide that on each review the rent is to be a proportion of the cost of building anew at the review date premises
equivalent to the premises as demised. The rent review will then become largely an exercise in quantity surveying
technique, although disputes of principle could still remain such as whether the new building cost was to include value
added tax. The parties may provide for a mixed form of valuation and indexation. In one case a rent was to rise by the
same proportion as the general rise over the relevant period of rents in the locality of premises used for a like purpose to
that of the demised premises16.
HR A[3588]
1 Eg in Horford Investments Ltd v Lambert [1976] Ch 39, [1974] 1 All ER 131 leases were granted for 21 years with a specified increase
in rent after 7 and 14 years. In Fawke v Viscount Chelsea [1980] QB 441, [1979] 3 All ER 568 it was held that a lease ordered to be granted
under Pt II of the Landlord and Tenant Act 1954 should contain a rent increasing by fixed amounts at specified times, and that the rent could
be at a reduced rate until repairs were carried out by the landlord. In Inntrepreneur Pub Co (CPC) Ltd v Price [1998] EGCS 167 the lease
provided that the landlord was entitled to require an additional review when he released the tenant from certain covenants.
2 Eg in Blumenthal v Gallery Fine Ltd (1971) 220 Estates Gazette 31.
3 In Cumshaw Ltd v Bowen [1987] 1 EGLR 30 a rent was indexed based on the published index of retail prices. It was held that changes in
the 'basket' of goods and services and in weightings of various components of the basket did not affect the nature of the index, so that it
could still be applied. On the other hand, it was held in Wyndham Investments Ltd v Motorway Tyres and Accessories Ltd [1991] 2 EGLR
114 that where the base figure of an index had changed the review provisions became ineffective. In addition to the Retail Price Index
published by the UK government, an index is published by the European Commission intended to provide a common basis by reference to
which the rate of inflation in member states can be measured and compared. The government also publish an index which does not include
changes in certain elements such as mortgage interest rates and which is said by some economists to give a more accurate picture of the true
rate of inflation.
4 Treseder-Griffin v Co-operative Insurance Society Ltd [1956] 2 QB 127, [1956] 2 All ER 33.
5 See Multiservice Bookbinding Ltd v Marden [1979] Ch 84, [1978] 2 All ER 489 (mortgage repayments linked to value of the Swiss
franc).
6 Such leases were regulated by the (now repealed) University and Colleges (Leases), etc, Act 1575.
7 Marquis of Bute v Thompson (1844) 9 JP 457, 153 ER 202 (dead rent payable even if no coal mined); Lord Clifford v Watts (1870) LR 5
CP 577 (no rent payable when mine not worked by tenant since no dead rent reserved).
8 Tucker v Granada Motorway Services [1979] 2 All ER 801, [1979] 1 WLR 683.
Page 702
9 SB Property Co Ltd v Chelsea Football & Athletic Co Ltd (1992) 64 P & CR 440.
10 Walsh v Lonsdale (1882) 21 Ch D 9.
11 Daniel v Gracie (1844) 6 QB 145, 115 ER 56.
12 Durley House Ltd v Viscount Cadogan [2000] 1 WLR 246, [2000] 09 EG 183. Such a provision can raise problems of interpretation
which are similar to those encountered in the usual form of rent review proceeding by reference to open market rental value: see para HR
A[3786].
13 Greater London Council v Connolly [1970] 2 QB 100, [1970] 1 All ER 870; see also A-G for Alberta v Huggard Assets Ltd [1953] AC
420, [1953] 2 All ER 951 (amount of the royalty on petroleum and natural gas taken from Crown land to be prescribed by Regulations made
by the Governor); but cf Dresden Estates Ltd v Collinson [1987] 1 EGLR 45 at 47, where Glidewell LJ said that a tenancy agreement itself
could not give a landlord a power to alter a rent unilaterally.
14 When inflation was at its peak there was a movement in favour of a three-yearly rent review pattern. Seven-yearly reviews are not
uncommon. Leases sometimes provide for a 'review of reviews' in the sense that one party may require an arbitration or other means of
determination of the periodicity of further reviews depending on the practice prevailing at the time. Such provisions are obviously most
appropriate in longer leases. In United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, [1977] 2 All ER 62 Lord Salmon
referred to the historical process by which the periodicity of rent reviews has been reduced: see the citation in para HR A[3583], n 1.
15 In Royal Bank of Scotland plc v Jennings [1997] 1 EGLR 101 it was pointed out that it was a fairly common feature of rent review
provisions in leases that the landlord is given the option whether or not to invoke the rent review machinery.
16 British Railways Board v Mobil Oil Co Ltd [1994] 1 EGLR 146.
HR A[3589]
In practice, the majority of rent review provisions are upwards only in the sense that the rent on each review can only go
up and can never fall1. The effect is that on a review if rents have fallen since the previous review the rent remains the
same until the next rent review. There seems no clear logic behind this practice. It has been ascribed to various causes
such as the general expectation that rents will rise not fall and to the need of institutional landlords, such as pension
funds, to be sure that the value of their investment will not fall. Where the question has come before the courts in
connection with the terms of new leases under Pt II of the Landlord and Tenant Act 1954, the tendency has been to
order upwards and downwards reviews2; and in times of an oversupply of property (what is sometimes called a tenants'
market) tenants can press more strongly for such a provision. The subject of upwards or upwards and downwards
reviews is considered again later in connection with the machinery of rent reviews3. There have been suggestions that
the Government might promote legislation to compel rent reviews to be upwards or downwards. The most obvious
difficulty caused by upwards only rent reviews may be where a tenant is not permitted to underlet the premises, save at
a rent at least equal to the rent currently payable under the headlease. If rental values have fallen so that in the absence
of a downwards adjustment on a rent review the tenant is paying a rent above the prevailing market rent, he will not be
able to underlet the premises at the same rent at least unless he pays a capital sum, or reverse premium, to the
underlessee. It seems that landlords are willing, voluntarily, to avoid restrictions on underletting of the type which
causes the difficulty just mentioned.
HR A[3590]-[3600]
1 A variant is that the lease may provide a minimum or 'floor' rent below which the rent can never fall, even though on a particular review
Page 703
it may fall below that determined on the previous review. See Norwich Union Life Insurance Society v A-G [1995] NPC 86 [1995] EGCS 85,
PC for a similar commercial practice in New Zealand.
2 Stylo Shoes v Manchester Royal Exchange (1967) 204 Estates Gazette 803; Janes (Gowns) Ltd v Harlow Development Corpn [1980] 1
EGLR 52, 253 Estates Gazette 799. See HR B[561] for a fuller consideration of the matter.
HR A[3601]
Some large landlords and some firms of solicitors have their own standard form of rent reviews which can be adapted to
meet the needs of particular cases. The Law Society and the Royal Institution of Chartered Surveyors have published
model forms of rent reviews. These are of a fairly straightforward nature with variations depending on whether it is
desired that the reviews are upwards and downwards or upwards only and on whether in default of agreement the rent is
to be determined by an arbitrator or an expert. The Incorporated Society of Valuers and Auctioneers have also published
precedents. One of these provides for a reviewed rent as a return on freehold value in the sense that the rent on each
review is a specified percentage of the then open market value of the freehold with vacant possession. Reviews on this
last basis may be most appropriate to residential premises or to premises where a ground rent only is to be the basis of
the review. The use of one or other of the various model forms, which are fairly straightforward in nature, avoids the
difficulties of interpretation which surround some provisions in more complex forms1.
HR A[3602]
1 Precedents are also contained in Encyclopedia of Forms and Precedents (3rd edn).
Page 704
of rent reviews/Certainty
Certainty
HR A[3603]
A tenant must know the amount of rent which he is required to pay. Earlier authorities on rent reviews were concerned
with how the requirement of certainty was to be squared with the imprecise nature of many rent review provisions. For
example, the courts have in general refused to enforce an agreement to negotiate1, and an option to review a rent at such
rent as might be agreed has been held to be void for uncertainty2. The law does not recognise an agreement to agree.
However, whatever the deficiencies in the formula for determining the amount of the reviewed rent or in the machinery
for determining it, the current tendency is to try to give effect to the expressed wish of the parties that there should be a
review. This accords with the maxim id certum est quod certum reddi potest3. It follows that in considering rent reviews
generally, and particularly on questions of certainty, the two essential matters to consider are (a) the basis for the
assessment of the reviewed rent and (b) the machinery which governs when and how the review is to take place. These
matters are often referred to as the formula and the machinery respectively.
HR A[3604]
1 Courtney and Fairbairn Ltd v Tolaini Brothers (Hotels) Ltd [1975] 1 All ER 716, [1975] 1 WLR 297.
2 King's Motors (Oxford) Ltd v Lax [1969] 3 All ER 665, [1970] 1 WLR 426. See Orby v Mohun (1706) Freem Ch 291, 23 English
Reports 944, where a lease at 'ancient and accustomed rents' was held to be void in the absence of any formula or mechanism for
ascertaining what these rents were.
3 Ie that is certain which can be rendered certain. A modern statement of the principle as applied to the law of contract is that of Lord
Diplock in Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 at 478, [1982] 3 All ER 1: 'A contract is complete as a contract as soon
as the parties have reached agreement as to what each of its essential terms is or can with certainty be ascertained.'
HR A[3605]
Rent reviews have been upheld as operative even where no real formula has been provided by the parties. The court
may have recourse to an implication to remedy the deficiency. Thus, where the parties provided that the reviewed rent
should be such as should be agreed between them it was said that the clause could be saved by the insertion of the word
'fair' before the word 'rent'. The court would then decide what was fair in the absence of agreement1. In another case it
was said that the court would, if necessary, ascertain by inquiry what rent the landlord and tenant would, as willing
negotiators anxious to reach agreement, arrive at for each review period2. Earlier cases where no operative review was
held to exist must be considered with caution in the light of these decisions3. Furthermore, the court will readily imply
words into a formula in a rent review clause so as to arrive at what is the clear intention of the parties4. A disregard of
some physical factor may be implied in order to make sense of the formula5. Some words may have to be added in
order to give commercial efficacy to the express provision6. For example, where only a landlord can apply for the
appointment of a third party to determine the rent in default of agreement but no time limit for the application is
specified, it may be necessary to imply a term that the application is made within a reasonable time from the date on
Page 705
which it can first be made7. Sometimes a duty to act within a reasonable time may be inherent in the language of the
rent review clause so that the duty arises in that way as a matter of construction of the language which is present rather
than by way of the formal implication of a term8. It may be necessary to imply a term which somewhat adapts that
which has been expressed in order that the intention behind the rent review as a whole shall be applied to circumstances
not foreseen when the review clause was drafted, for example to accommodate the effect of the late service of a notice
initiating the review where time is not of the essence9. Some words may have to be implied into the rent review clause
to show that the provision is to operate in an upwards only direction10. The process of implying a term should not be
used where it is not necessary to do so in order to give commercial efficacy to the rent review provisions, so that, for
example, there is no implied term that interest will be payable on the amount of a reviewed rent in respect of the period
from the review date until the date when the amount is actually determined and paid11. A number of the matters
considered later in the context of the hypothetical lease and the machinery of review are in a sense concerned with the
implication of terms. Examples are the assumption that a willing lessor and a willing lessee exist and the assumption
that a tenant has complied with the repairing obligations in his lease12. Other matters illustrate the principle that a term
will not readily be implied, for example, the absence of an implied term that interest will be paid on rent arrears
following a delay in determining the reviewed rent just mentioned and the absence of an implied term that a notice
initiating the rent review must be served at a particular time13. It is a general principle that a term will not be implied
where it contradicts or varies an express term14. Thus, where the parties have provided a comprehensive code for the
service of documents under a rent review clause, for example by incorporating statutory provisions dealing with service,
it is unlikely that any further term will be implied relating to this same subject matter15. A court may be willing to
apply what has been called radical surgery in the construction of a rent review clause where that is necessary to give a
meaning which is certain to a provision which is on the face of it absurd16.
HR A[3606]
1 Beer v Bowden [1981] 1 All ER 1070, [1981] 1 WLR 522n.
2 Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 All ER 1077, [1981] 1 WLR 505. It was said in Central & Metropolitan
Estates Ltd v Compusave (1983) 266 Estates Gazette 900 that the existence in a lease of a rent review clause (inserted by an order for
rectification) predicated a review to a fair and reasonable rent. A feature of cases where the parties have omitted any formula or criteria for
ascertaining the reviewed rent is that the court may hold that the rent is to be determined subjectively as that which is fair and reasonable
having regard to any particular circumstances affecting the actual landlord and tenant as opposed to a rent determined objectively as the open
market rent: see para HR A[3682].
3 Weller v Akehurst [1981] 3 All ER 411, [1981] 1 EGLR 105 (held that where no formula was specified for ascertaining the reviewed
rent there should be no review but the previous rent remained payable); King v King (1980) 255 Estates Gazette 1205. See also McLeod &
Russel (Property Holdings) Ltd v Emerson (1985) 51 P & CR 176; F & G Sykes (Wessex) Ltd v Fine Fare Ltd [1967] 1 Lloyd's Rep 53, CA.
4 An example is Toyota (GB) Ltd v Legal and General Assurance (Pensions Management) Ltd (1989) 59 P & CR 435, [1989] 2 EGLR
123. In this case a lease for 16 years and a reversionary lease for a further 34 years were granted. A review was due in the fifteenth year. It
was held by process of implication that the reviewed rent must be ascertained as that appropriate to an unexpired residue of 35 years not of
one year. See para HR A[3722] for a general discussion on the length of the hypothetical lease.
5 Jefferies v O'Neill [1984] 1 EGLR 106.
6 An instance is Dukeminster (Ebbgate House One) Ltd v Somerfield Property Co Ltd [1997] 2 EGLR 125, discussed in para HR
A[3727], n 3.
7 Barclays Bank plc v Savile Estates Ltd [2002] EWCA Civ 589, [2002] 2 EGLR 16. The existence of an implied term may have further
consequences. For example, as in the case cited, a breach of the implied term where it concerns a time limit may mean that the other party to
Page 706
the lease may serve a notice making time of the essence. This matter is considered further at para HR A[4183], and in note 5 to para HR
A[4184].
8 Iceland Foods Ltd v Dangoor [2002] 21 EG 146.
9 See Henniker-Major v Smith (Daniel) (a firm) [1991] 1 EGLR 128.
10 Great Bear Investments Ltd v Solon Co-operative Housing Services Ltd [1997] EGCS 177. See para HR A[4224].
11 Trust House Forte Albany Hotels Ltd v Daejan Investments Ltd [1980] 2 EGLR 123. Today, an arbitrator has power to award interest
in such cases under s 49 of the Arbitration Act 1996.
12 See para HR A[3686] (willing lessor) and para HR A[3762] (assumption as to repair).
13 See para HR A[4167]. For a modern exposition of the circumstances in which a term will be implied see Philips Electronique Grand
Public SA v British Sky Broadcasting Ltd [1995] EMLR 472.
14 See eg Broome v Pardess Co-Operative Society of Orange Growers Ltd [1940] 1 All ER 603, per MacKinnon LJ at p 612.
15 W X Investments Ltd v Begg [2002] EWHC 925 (Ch), [2002] 1 WLR 2849.
16 Pearl Assurance plc v Shaw [1985] 1 EGLR 92.
HR A[3607]
Equally, the court will remedy deficiencies in machinery. The modern law follows from a decision of the House of
Lords on the exercise of an option in a lease to acquire the freehold reversion at a value to be ascertained by two
valuers, one appointed by each party, but where one party refused to appoint a valuer. It was held that the court should
itself hold an inquiry into the value of the freehold1. There are two requisites which have to be satisfied before the
Court will itself step in to remedy the deficiency in machinery. The first is that there is an objective basis on which the
court can carry out the valuation in question. It is enough that some general phrase such as 'a fair and reasonable rent'
can be implied as the objective criterion or basis. The other requisite is that the component of the machinery which has
broken down is 'inessential'. What is meant in this context is that the parties have not, as an essential term of their
agreement, specified that the valuation must be carried out by one particular person who alone has some special
qualification or knowledge which would enable him to carry out that task. It is not enough in order to make the
provision essential that one person is named; he must have some special knowledge or skill which enables him to carry
out the valuation in a way which other persons, including the court on the receipt of evidence, could not2. Where the
machinery breaks down in respect of an arbitration clause the court has a statutory power to remedy the deficiency3.
Where the machinery is defective in relation to the appointment of an expert it seems that the court will remedy the
deficiency either by implying a term that a party is bound so to act as to make the procedure efficacious or by itself
directing an inquiry as to the amount of the reviewed rent4. Where time is of the essence in relation to a time limit in a
rent review clause and the machinery of the review fails because a party has not taken a particular step in time the court
has no power to step in and substitute a machinery of its own. To do so in these circumstances would be to override the
plain contractual intention of the parties5. One form of uncertainty which may render a rent review clause
unenforceable is a failure to state, expressly or by implication, the date for the review or reviews6.
HR A[3608]
Page 707
1 Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444, [1982] 3 All ER 1; Re Malpass [1985] Ch 42. In R & A Millett (Shops) Ltd v
Leon Allan International Fashions Ltd [1989] 1 EGLR 138 a rent review clause in an underlease provided that the rent should be a specified
fraction of that reviewed in the headlease as fixed in the manner provided in the headlease. The headlease was surrendered and a new
headlease granted. It was held, applying the 'welcome breath of fresh air' introduced by Sudbrook Trading Estate Ltd v Eggleton [1983] 1
AC 444, [1982] 3 All ER 1, that the rent review in the underlease could have effect with the court ordering an inquiry into what rent would
have been payable under the original headlease as the fair market rent had that lease not ended by surrender. In some cases a breakdown of
the machinery of review can be avoided by process of construction of the rent review provisions. In Ashworth Frazer Ltd v Gloucester City
Council [1997] 26 EG 150, [1997] EGCS 7 an element of the rent review was that the rent should become 8% of the rack rents receivable by
the lessee. The lessee was himself in occupation of the premises, and contended that this element of the review provisions could not be
applied because no rack rent was receivable by him. It was held that the word 'receivable' was to be construed as meaning 'capable of being
received', and that a valuation of the rent could proceed on this basis.
2 Thus, in Re Malpass [1985] Ch 42, a valuation was to be carried out by the District Valuer. He declined to carry out the valuation in
question. It was held that the court was itself able to order an enquiry as to what was the correct value. An example of a person having a
special knowledge or experience, so that a valuation by him and by him alone is an essential term, is where the shares of a company are to be
valued by a person who is an auditor of the company and thus has a special knowledge not available to others: see the observations of Lord
Fraser in Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 at p 484.
3 See Arbitration Act 1996, s 18.
4 Royal Bank of Scotland plc v Jennings (1996) 75 P & CR 458, [1997] 1 EGLR 101. This case related to a situation in which the parties
had provided for a rent review but under the terms of the rent review clause only the landlord could initiate the procedure for determining the
reviewed rent in case of a failure to agree. The first question was whether the clause gave to the landlord an option to decide whether or not
there should be a review. If this was its true meaning the court could not intervene where the landlord failed to initiate the procedure since all
he was doing was to exercise his right that there should not be a review. However, if on its true construction the clause provided for a review
in any event the function of the landlord in carrying out the procedural steps was a function of machinery, and this could be remedied in
accordance with the principle in Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444, [1982] 3 All ER 1. The second construction was
held to be correct. The question that was not fully answered was whether the correct way in which to remedy the failure of the machinery
was (a) by ordering the landlord to initiate the proceedings to have an expert appointed or (b) by the court itself deciding the amount of the
reviewed rent on evidence. The Judge at first instance favoured the former course. The Court of Appeal, while not saying that this was
necessarily wrong, appeared to think that the second course might be preferable. In Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC
444, [1982] 3 All ER 1 Lord Diplock rejected the possibility of the party in default being ordered to appoint a valuer but only because both
parties had waived the right to this process. In Addin v Secretary of State for the Environment [1997] 1 EGLR 99 there was an upwards and
downwards rent review with a provision that the rent should be that specified in a notice given by the landlords and either agreed or
determined by an independent surveyor. It was held that the rent review was automatic and did not depend on the option of the landlords
over whether to serve the notice. It was not necessary to decide what would happen if the landlords refused to serve a notice. It is doubtful
whether in the light of these authorities Harben Style Ltd v Rhodes Trust [1995] 1 EGLR 118 is to be regarded as correctly decided. See also
Wolverhampton & Dudley Breweries plc v Trusthouse Forte Catering Ltd (1984) 272 Estates Gazette 1072 on the implication of a term into
the specified machinery necessary to give efficacy to it. Nonetheless, if on the clear language of the lease it is only the landlord who may
institute a rent review and it is intended that he alone is to have that right, then the case falls into the first of the two categories mentioned
earlier in this note and the tenant has no means of compelling a review if the landlord does not want one. This is so even though the review,
if it were operated, would allow a decrease as well as an increase in the rent: see Hemingway Realty Ltd v Clothworkers of the City of
London [2005] EWHC 299 (Ch), [2005] 2 EGLR 36. See also para HR A[4049].
5 Weller v Akehurst [1981] 3 All ER 411, [1981] 1 EGLR 105. See paras HR A[4110]ff, for time limits generally in rent review clauses.
HR A[3609]
Rectification may be an appropriate remedy in relation to rent review clauses. The normal general principles apply,
namely that a party seeking rectification must provide convincing evidence that there has been a common mistake in the
rent review clause as drawn or that he was under a unilateral mistake which was known to the other party1. In
accordance with these principles a lease may be rectified so as to insert a rent review clause2, or so as to insert a
Page 708
provision for arbitration in default of agreement3. However, in the absence of a common mistake or unilateral mistake
of the type mentioned rectification is not available4. Recent examples of these principles being applied so as to rectify
rent review clauses include rectification by the insertion of the dates of review which had been omitted in error5 and
rectification so as to render rent reviews upwards only and not upwards and downwards6. It must be borne in mind that
rectification is an equitable discretionary remedy (its status being that of a mere equity as opposed to an equitable
interest) and may not be ordered against someone who is a bona fide purchaser of the property affected without notice
of the mistake which gives rise to the claim for rectification. This principle is of particular significance as regards leases
where the reversion or the lease may have been transferred since the initial mistake. However, where there is registered
title to the lease the right of the landlord to rectification may be an overriding interest within the meaning of the Land
Registration Act 1925 and so may be enforceable for that reason even though an assignee is a purchaser for value
without notice7. If a tenant has made an overpayment of rent due to a mistake of fact or of law he may be able to
recover the amount overpaid under the principles of the law of restitution8. Proceedings to recover rent, or other sums,
paid in error may become more frequent now that money paid under error of law may be recoverable9. There are, of
course, many other general aspects of the law that may be relevant to the operation of rent review provisions, for
example the doctrine of estoppel by convention10.
HR A[3610]-[3620]
1 Riverlate Properties Ltd v Paul [1975] Ch 133, [1974] 2 All ER 656; Joscelyne v Nissen [1970] 2 QB 86, [1970] 1 All ER 1213. It
appears that actual knowledge of the error of the mistaken party is necessary on the part of the non-mistaken party if rectification is to be
obtained in the case of a unilateral mistake: The Nai Genova v The Nai Superba [1984] 1 Lloyd's Rep 353, CA. However, actual knowledge
may include states of mind such as where a person shuts his eyes to the obvious or wilfully and recklessly fails to make such inquiries as an
honest and reasonable man would make: Baden v Société Générale pour Favoriser le Development du Commerce et de l'Industrie en France
SA [1983] BCLC 325; Agip (Africa) Ltd v Jackson [1990] Ch 265; Commission for the New Towns v Cooper (Great Britain) Ltd [1995] 2
EGLR 113; Scott v City and County of Swansea [2001] EGCS 10. The reason that a unilateral mistake can be the basis of rectification when
the party who is not mistaken stands by and does not point out to the other party the mistake of that party is that it would be against good
conscience (what is sometimes described as unconscionable) to allow a party to benefit from the mistake of the other party in these
circumstances. In such a case, in order to support a claim for rectification the mistaken party must provide convincing proof that the conduct
of the other party fell below the requirements of good conscience: Chartbrook Limited v Persimmon Homes Limited [2007] 11 EG 160.
2 Central & Metropolitan Estates Ltd v Compusave (1983) 266 Estates Gazette 900.
3 Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 All ER 1077, [1981] 1 WLR 505.
4 Landsdown Estates Group Ltd v TNT Roadfreight (UK) Ltd [1989] 2 EGLR 120.
5 Stavrides v Manku [1997] EGCS 58.
6 Brimican Investments Ltd v Blue Circle Heating Ltd [1995] EGCS 18.
7 Nurdin & Peacock plc v DB Ramsden & Co Ltd [1999] 1 EGLR 119, [1998] EGCS 123.
8 Nurdin & Peacock plc v DB Ramsden & Co Ltd (No 2) [1999] 1 All ER 941, [1999] 1 WLR 1249.
9 Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349, [1998] 4 All ER 513, HL.
10 See Riverside Housing Association v White [2006] 14 EG 176, where the doctrine of estoppel by convention did not operate because it
was sought to be used as a sword and not a shied. The decision of the Court of Appeal is under appeal to the House of Lords. See also HR
A[4123.1].
Page 709
HR A[3621]
There appear, therefore, to be two underlying principles regarding certainty in rent review clauses. First, in the absence
of any clear or expressed formula for ascertaining the reviewed rent the court will imply a term that the parties intended
that the rent should be reviewed to that which is fair and reasonable at the review date. Secondly, if there is no
machinery for ascertaining the reviewed rent the court will either imply a term so as to provide an effective machinery
or will itself carry out an inquiry as to the rent. In the light of these principles it will be rare today that a rent review will
fail altogether by reason of uncertainty.
Page 710
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/B General approach
to rent reviews
B
Page 711
to rent reviews/Construction generally
Construction generally
HR A[3622]
The courts have worked out a series of principles which govern the construction of contracts. These may be examined in
specialist texts on the subject and are as applicable to rent reviews as to any other contractual document1. A problem
which often arises in connection with rent reviews, as with many other contracts, is the extent to which events
antecedent to the execution of the lease can be used as an aid to ascertaining the meaning of the rent review clause. The
general principle is that recourse can be had to the matrix of fact within which the lease was made for this purpose2.
The meaning of the clause has to be ascertained as that which would be conveyed to a reasonable person having all the
background knowledge which would have been available to the parties in the situation in which they were at the time of
the grant of the lease. This is what is meant by the matrix of fact and, subject to the exception next mentioned, it
includes all matters which would have affected the way in which the language of the document would have been
understood by a reasonable man3. The exception is that the previous negotiations of the parties are not admissible as an
aid to construction3. A further principle is that a rent review clause, like all contracts in English law, is the outcome of a
consensus of minds, so that what has to be ascertained is not what one or other party subjectively intended the clause to
mean but rather what, looked at objectively, it does mean4. For this reason evidence of the subjective intention of one
party as to the meaning of the clause is not admissible. There are many instances of these principles being applied to
rent review provisions in leases. For example, in one case the court looked at an agreement for lease and draft lease to
give meaning to a reference in the lease which, read in isolation, was inexplicable5. In another case the court took into
account the fact that the landlords had incurred expense in fitting out the premises for the needs of the tenants in
deciding the terms of the hypothetical lease6. In the case of leases, which may last for a substantial period, and which
may be assigned many times during the term, the difficulty may be to know how a transferee of the lease or of the
reversion is to find out those surrounding circumstances which occurred prior to the grant of the lease and which may in
principle radically affect the meaning of the lease which he has acquired or to which his reversion is subject. It is
perhaps not self-evident that principles which govern the construction of a short-term contract should also govern the
construction of a lease intended to last for a century.
HR A[3623]
1 See eg 12 Halsbury's Laws 'Deeds and other Instruments'; Lewison on the Interpretation of Contracts (2nd edn, 1997).
2 Prenn v Simmonds [1971] 3 All ER 237, [1971] 1 WLR 1381, HL; Reardon Smith Line Ltd v Hansen-Tangen [1976] 3 All ER 570,
[1976] 1 WLR 989 HL.
3 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98, [1998] 1 WLR 896, HL; BCCI v Ali [2001]
UK HL 8, [2002] 1 AC 251, [2001] 1 All ER 961; Chartbrook Limited v Persimmon Homes Limited [2007] 11 EG 160.
4 See eg per Lord Cairns in Cundy v Lindsay (1878) 3 App Cas 459 at 465. In Commission for the New Towns v Cooper (Great Britain)
Ltd [1995] Ch 259, [1995] 2 EGLR 113 at 117 Stuart-Smith LJ referred to the ordinary rule that it is the objective intention of the parties
which determines the construction of a contract and not the subjective intention of one of them.
Page 712
5 Ladbroke Group plc v Bristol City Council [1988] 1 EGLR 126.
6 Lister Locks Ltd v TEI Pension Trust Ltd [1982] 2 EGLR 124; see also Guys 'n Dolls Ltd v Sade Bros Catering Ltd [1984] 1 EGLR 103.
HR A[3624]
Other ordinary principles of construction are to be applied. A consideration of the surrounding circumstances should not
be used to defeat the plain intention of the parties as derived from the words used1. Conduct by the parties subsequent
to the grant of the lease is not generally admissible for purposes of construction2. Maxims of general application to the
construction of contracts such as the contra proferentem rule or the eiusdem generis rule may be of assistance3. There
are many general principles established by the courts to assist in the interpretation of contracts which will apply to the
construction of rent review clauses as to any contract. For example, the meaning of a word or expression used in a
contract is normally that meaning which the word or expression bore at the date of the making of the contract4. The
principle that the conduct of parties under a contract is not relevant to a question of the construction of the contract has
been applied in the context of a rent review provision5.
HR A[3625]
1 Coventry City Council v J Hepworth & Son Ltd (1982) 46 P & CR 170; FLC Management Ltd v Ganton House Investments Ltd [1991] 1
EGLR 132.
2 Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235, [1973] 2 All ER 39.
3 See Skillion plc v Keltec Industrial Research Ltd [1992] 1 EGLR 123 in which the application of the eiusdem generis rule was
considered but rejected. The application of the contra proferentem rule was a part of the reasoning of Simon Brown LJ in Bickenhall
Engineering Co Ltd v Grandmet Restaurants [1995] 1 EGLR 110, [1994] EGCS 146, a decision of the Court of Appeal on whether time is
of the essence in a rent review clause considered further in para HR A[4143], n 7.
4 An illustration of the principle is that the expressions 'victualler' and 'coffee house' used in a user clause in a lease granted for 125 years
in 1950 are to be given the meaning which they had in 1950: Joint London v Mount Cook Land Limited [2005] EWHC 507 (Ch), [2005] 42
EG 234.
5 Riverside Housing Association v White [2006] 14 EG 176, per Peter Gibson LJ at paragraph 41.
Page 713
to rent reviews/Commercial purpose
Commercial purpose
HR A[3626]
It is frequently said that rent review clauses should be construed in accordance with their commercial purpose1. This
statement is perhaps no more than a reiteration in this particular context of the wider principle of the construction of
contracts that a meaning which is most aptly and literally derived from the words used but which flouts business
common sense may be rejected in favour of a meaning which accords with business common sense and is at least a
possible meaning to be derived from the words used2. The method of construction involved is sometimes called a
purposive approach in that it concentrates on the assumed purpose of the rent review clause. A purposive approach to
statutory construction has long been favoured by the courts3. In private law the process has been described as a shift
towards commercial interpretation4. Of course, a primary difficulty in the way of this approach to construction is to
identify the commercial purpose of rent review clauses over and beyond the simplistic proposition that the purpose is to
have the rent reviewed. If the commercial purpose can be ascertained the next difficulty is to know the extent to which
the ordinary and natural meaning of the words used can be modified in favour of a meaning which corresponds to that
commercial purpose.
HR A[3627]
1 See eg Bailey (CH) Ltd v Memorial Enterprises Ltd [1974] 1 All ER 1003, [1974] 1 WLR 728, where Megaw LJ said in the context of a
rent review clause that it was accepted that a commercial document between commercial parties ought to be construed as far as possible to
give effect to commercial good sense, and see the reference to a commercial construction of a rent review clause in Chancebutton Ltd v
Compass Services UK & Ireland Ltd [2004] 2 EGLR 47 at para 34, per Lawrence Collins J.
2 A well-known recent formulation of the principle is that of Lord Diplock in The Antaios [1985] AC 191, [1984] 3 All ER 229, where he
said that if a detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion which flouts
business common sense it must be made to yield to business common sense.
3 See Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 at 880, per Lord Diplock. In The Antaios [1985] AC
191 at 201 Lord Diplock said that he deprecated the extension of the expression 'purposive construction' from the interpretation of statutes to
the interpretation of private contracts. In reality, however, the underlying approach is the same in both instances, namely an attempt to
elucidate the meaning to be given to the words used by the draftsman by reference to that which is assumed to be his purpose in using the
language which he did use. Lord Steyn in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, [1997] 2 WLR 945
at 964 adverted to the differences between the processes of interpretation in regard to public statutes and private contracts, referring to
material on United States law. He also referred to the shift towards a commercial interpretation of contracts generally over the last few
decades.
4 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 770, [1997] 2 WLR 945 at 964, per Lord Steyn.
HR A[3628]
There have been a number of judicial expressions of the purpose of rent review clauses. One well-known dictum is to
Page 714
the effect that the general purpose of a provision for rent review is to enable the landlord to obtain from time to time the
market value which the premises would command if let on the same terms as those of the actual lease on the open
market at the review dates. The purpose is to reflect the changes in the value of money and the real increases in the
value of the property during a long term1. A further, and very similar, general explanation is that rent review clauses
have the purpose of affording landlords relief in respect of increases in property values or falls in the value of money by
providing for a valuer to assess the up-to-date rent for the demised premises at successive review dates. It is said that in
making that assessment the valuer will be achieving the intended purpose of keeping the rent in line with current
property values having regard to the current value of money if he assesses the up-to-date rent on the same terms (other
than the amount of rent itself) as the terms of the actual lease2. It appears from these and similar observations that the
commercial purpose of rent review clauses in leases, against which a disputed meaning of the language used is to be
measured, is that of bringing at specified dates the rent into line with the current value of money and with real property
values, a purpose which is generally to be effected by inquiring what rent the premises would fetch on those dates if let
in the open market on terms as near as possible to the terms of the actual lease.
HR A[3629]
1 British Gas Corpn v Universities Superannuation Scheme Ltd [1986] 1 All ER 978, [1986] 1 WLR 398, per Sir Nicholas
Browne-Wilkinson V-C. That the purpose as stated by the Vice Chancellor is correct was stated to be axiomatic by Leggatt LJ in the Court
of Appeal in Parkside Clubs (Nottingham) Ltd v Armgrade Ltd [1995] 2 EGLR 96. However, it has been said in the Court of Appeal that it is
not correct to assume that commercial parties to a commercial lease invariably intend that the rent should not in real terms fall below the
market rent initially agreed upon: see Philpot's (Woking) Ltd v Surrey Conveyancers Ltd [1986] 1 EGLR 97 at 48, per Nourse LJ.
2 Basingstoke and Deane Borough Council v Host Group Ltd [1988] 1 All ER 824, [1988] 1 WLR 348, per Nicholls LJ. Such general
statements of the purposes of a rent review should not be pressed to support further propositions which are not in the statement since rent
reviews and their express terms may take many forms. For example, it was said in Hemingway Realty Ltd v Clothworkers of the City of
London [2005] EWHC 507 (Ch), [2005] 2 EGLR 36 that such statements did not indicate that the insertion of a rent review into a lease
carried with it a presumption that the machinery had to be operated at each review date or must be capable of being operated by both parties
to the lease. On this last question, see HR A[3608], fn 4, and HR A[4223].
HR A[3630]-[3640]
The limitations on recourse to the commercial purpose of rent review clauses as an aid to their interpretation can be seen
in the second difficulty mentioned in para HR A[3626]. There may some cases in which the language used by the
parties cannot reasonably bear a meaning which accords with the assumed commercial purpose. In such cases the duty
of the court is not to rewrite the contractual provisions but to apply the stated meaning notwithstanding the apparent
lack of commercial justification. The language which the parties have used cannot be rewritten so as to make the
contract conform to business common sense1. Another way of stating the principle is to say that it is only where there is
some uncertainty as to the meaning of a particular provision that one can resolve the uncertainty by looking at the
commercial purpose of the provision2. There is a distinction between rejecting a provision because it is absurd or
nonsensical and rejecting it merely because it does not accord with commercial common sense. It is not credible to
believe that parties provided for a result which is absurd. On the other hand, they may have provided for a result which
seems to have no commercial justification because there was some quid pro quo allowed in the negotiations or in the
mind of one of the parties which brought about the uncommercial provision. The correct overall approach is: (a) to
ascertain the commercial purpose of the rent review clause, as explained above; (b) to attribute to the clause a meaning
consistent with that purpose if the language can reasonably bear that meaning; and (c) to give to the clause a literal and
non-commercial meaning if that is the only meaning which the language of the clause can reasonably bear3. The
questions discussed here illustrate the wider question which arises again and again in issues of the disputed meaning of
contracts. The issue is whether, and to what extent, the ordinary and literal meaning of an expression used in a contract
Page 715
can be rejected in favour of some other meaning on the ground that the first meaning is on the face of it to some degree
unreasonable and unfair. No final judicial answer has been given on this issue, and the formulations of principle, and
still more the actual results, found in the decided cases vary.
HR A[3641]
1 Co-operative Wholesale Society Ltd v National Westminster Bank plc [1995] 1 EGLR 97, per Hoffmann LJ; Bellow Properties Ltd v
Trinity College Cambridge [2000] EGCS 97 (see fn 2 to para HR A[3866]).
2 British Home Stores plc v Ranbrook Properties Ltd [1988] 1 EGLR 121 at 123, per Warner J; Glofield Properties Ltd v Morley (No 2)
[1989] 2 EGLR 118, per Nourse LJ. In Parkside Clubs (Nottingham) Ltd v Armgrade Ltd [1995] 2 EGLR 96 at 98 Leggatt LJ said that it was
not correct to override the ordinary meaning of a rent review clause so as to arrive at a meaning which was more reasonable than that
provided by the ordinary use of the words.
3 The process involved was clearly explained by Hoffmann LJ in MFI Properties Ltd v BICC Group Pension Trust Ltd [1986] 1 All ER
974 at 976: 'But there will also be cases in which the language used by the parties shows beyond doubt that they intended an assumption for
which, to a third party who knows nothing of the negotiations, no commercial purpose can be discerned. In such circumstances the court has
no option but to assume that it was a quid pro quo for some other concession in the course of negotiations. The court cannot reject it as
absurd merely because it is counterfactual and has no outward commercial justification. On the other hand, if the language is capable of
more than one meaning, I think the court is entitled to select the meaning which accords with the apparent commercial purpose of the clause
rather than one which appears commercially irrational.'
HR A[3642]
The importance of the commercial purpose as an aid to construction can be seen in the resolution of two issues which
frequently arose in the construction of rent review clauses. Rent review provisions commonly provide that the reviewed
rent shall be that which would be obtained on an assumed or hypothetical letting of the demised premises at the review
date with the terms of that hypothetical letting being the same as those of the actual lease save as to the rent. The last
words are necessary since the only purpose of the assumed letting is to determine an up-to-date rent. The actual lease
may have a number of further rent reviews due before it ends, for example, at a first review after five years of a 25-year
term there may be three further rent reviews due. The rent appropriate to the hypothetical letting will depend on whether
that letting is taken to contain rent reviews, the general principle being that a tenant is likely to pay more for a longer
term without reviews. Commercial common sense supposes that the hypothetical letting at the fifth year shall contain
three rent reviews since the actual lease will contain three further reviews. However, a rent review provision is a
provision as to rent so that, where the lease provides that the hypothetical lease shall contain the same terms as the
actual lease 'save as to rent', a literal construction leads to the conclusion that the hypothetical lease is not to contain rent
reviews. In an early decision just such a construction was adopted1. However, in a later decision, approved by the Court
of Appeal, the correct approach was held to be (a) clear and unambiguous words which require that rent review
provisions are not included in the hypothetical lease must be given effect, and (b) subject to this it is proper to give
effect to the underlying purpose of a rent review clause and to construe the words so as to give effect to that purpose by
requiring future rent reviews to be taken into account as a part of the hypothetical lease2. The current principles of
construction on this question therefore illustrate both aspects of the commercial purpose approach to construction,
namely that a rent review clause will be construed in accordance with its commercial purpose unless clear words dictate
an opposite meaning3.
HR A[3643]
Page 716
1 National Westminster Bank plc v Arthur Young McLelland Moores & Co (a firm) [1985] 2 All ER 817, [1985] 1 WLR 1123.
2 British Gas Corpn v Universities Superannuation Scheme Ltd [1986] 1 All ER 978, [1986] 1 WLR 398, approved by the Court of
Appeal in Equity & Law Life Assurance Society plc v Bodfield Ltd [1987] 1 EGLR 124. See also Arnold v National Westminster Bank plc
[1991] 2 AC 93, [1991] 3 All ER 41. An example of a decision where clear and unambiguous words required that the hypothetical lease did
not contain any rent review provisions is Pugh v Smiths Industries Ltd (1982) 264 Estates Gazette 823.
3 The principles explained in this paragraph are further considered in para HR A[3926], and the notes to that paragraph contain a
summary of the main cases on the subject.
HR A[3644]
The second example, both of the commercial purpose approach to construction and of the limits of that approach, arises
out of a relatively recent development in rent review clauses. At times of falling rents and falling demand (as in the
early 1990s) many landlords were willing to grant an extended rent free period at the beginning of the term followed by
a higher rent. The higher rent ultimately payable is often called a headline rent because it is the only rent actually fixed
by the lease. Attempts were made to frame rent review provisions in such a way as to require that the reviewed rent
should be assessed as a headline line, that is the rent which would be payable after an extended rent free period. On the
face of it this is commercially unfair to the tenant since he would pay a rent assessed as though he enjoyed a rent free
period whereas in truth he enjoyed no rent free period1. A commercial purpose approach to construction dictates that
where possible a rent review clause should be interpreted so as not to require the assessment of a headline rent. Even so,
in some cases the language will so clearly and unequivocally point to a headline line being intended that no other
construction is possible. These principles were applied by the Court of Appeal in four cases heard together, the result
being that in three cases a headline rent construction was rejected but in one case it was held to be correct2. This is a
subject of some complexity which is discussed in some detail later3.
HR A[3645]
1 Eg under a new lease granted for five years a rent might be fixed at either (a) £8,000 per year or (b) one year rent free and then £10,000
per year for four years. In each case the tenant would pay a total of £40,000 rent over the five-year term. The effect of a rent review
provision which required a headline rent to be assumed would be that the tenant, following the review, would pay the headline rent of
£10,000 per year for each of the five years, ie £50,000 in all. It should be noted that the two rent provisions in (a) and (b) above, although
approximately equivalent, are not necessarily precisely equivalent in economic terms since the £40,000 total rent is paid at different times
over the five-year period. An illustration of the unfairness involved is Curry's Group plc v Martin [1999] 3 EGLR 165 in which an expert
determined a headline rent as that payable on a rent review of a shop at a figure which substantially exceeded the true rental value, a process
which he himself described as inequitable but which he was constrained to adopt by the terms of the lease.
2 Co-operative Wholesale Society Ltd v Westminster Bank plc; Scottish Amicable Life Assurance Society v Middleton Potts & Co;
Broadgate Square plc v Lehman Bros Ltd; Prudential Nominees Ltd v Greenham Trading Ltd [1995] 1 EGLR 97.
3 The whole subject of rent-free periods and their treatment in rent reviews is examined in greater detail in paras HR A[3928]ff. The four
cases above are explained in detail in para HR A[3961] and the notes to it.
HR A[3646]
The two examples given in the last two paragraphs of the use of the commercial purpose of rent reviews as an aid to
their interpretation involved the courts laying down a presumption as to how certain provisions commonly found in rent
review clauses should be applied. A note of caution should be sounded in relation to such presumptions. While they
Page 717
may be a valuable general guide they do not provide a mechanistic route to a correct meaning. In all cases the ultimate
test must be the exact language used by the parties to the lease considered in its context. An illustration of this point is
that in the very case in which the Court of Appeal approved the general approach of a lower court on the question of
whether the hypothetical lease should contain its own provisions for rent review that court nonetheless concluded on the
language of the lease before it that notwithstanding the general approach and presumption the hypothetical lease was
not to contain provisions for rent review1. In other words the decision illustrates both the presumption and the
circumstances in which it may be rebutted. The two presumptions appear to be founded on the conception of the courts
of what is fair between the parties. Such considerations have not always resulted in presumptions. It may seem fair that
if there is to be a rent review at all it should be capable of operating upwards or downwards, so that at a time of falling
rental values the tenant should be entitled to have his rent decreased to the prevailing level of rental value. The courts
have declined to hold that there is a presumption that a rent review clause provides for upwards and downwards, as
opposed to upwards only, rent reviews2. Sometimes, the issue arises of whether a rent review at the specified dates is
mandatory on the parties or is exercisable by the landlord alone and at his option. This is a matter of the interpretation
of the language used and there is no presumption either way even when the review is upwards or downwards3.
HR A[3647]
1 Equity Law Life Assurance Society plc v Bodfield Ltd [1987] 1 EGLR 124. See paras HR A[3642] and [3926].
2 The Melanesian Mission Trust Board v Australian Mutual Provident Society [1996] NPC 188.
3 Hemingway Realty Ltd v Clothworkers of the City of London [2005] EWHC 507 (Ch), [2005] 2 EGLR 36. See also HR A[3608], fn 4,
and HR A[4223].
Page 718
to rent reviews/Presumption of reality
Presumption of reality
HR A[3648]
The courts have developed a further tool to be used in construing rent review clauses, the so-called presumption of
reality. The presumption is that in the absence of express words or a clear implication to the contrary the premises are to
be valued at the review date as they actually were at that date, on the terms of the actual lease, and in the circumstances
as they actually existed at that date1. The presumption is itself said to flow from the commercial purpose of rent review
clauses explained above, namely to review the rent at intervals in accordance with the then rental value of the premises
on the terms of the actual lease2. Nearly all rent review clauses require that certain hypotheses are made which are of
their nature contrary to the real situation. The presumption of reality has a further role to play. It means that the
hypotheses are not taken further than is strictly required in order to adhere to the terms of the rent review clause. It is
not correct to go further into consequential and speculative hypotheses not required by the terms of the lease2. It may
occur that there is a provision in the actual lease to be incorporated into the hypothetical lease but the meaning of that
provision is uncertain and the uncertainty may have an effect on value. The question arises as to whether it is the duty of
the arbitrator to determine the meaning of the clause in question or to proceed on the basis that the hypothetical parties
would themselves be in some doubt as to its meaning and that the rent under the hypothetical lease would be ascertained
in the light of that doubt. The second solution is probably theoretically correct since it reflects as far as can be the actual
position in which parties to a hypothetical lease at the review date would find themselves, those parties not at that date
having the benefit of the decision of an arbitrator or the courts on the meaning of the obscure or disputed clause.
HR A[3649]
1 See eg per Hoffmann LJ in Co-operative Wholesale Society Ltd v Westminster Bank plc [1995] 1 EGLR 97 at 99. See also British
Airways plc v Heathrow Airport Ltd [1992] 1 EGLR 141 at 144, per Mummery J; Basingstoke and Deane Borough Council v Host Group
Ltd [1988] 1 All ER 824, [1988] 1 WLR 348. See para HR A[3628]; St Martin's Property Ltd v Citycorp Investment Bank Properties Ltd
[1998] EGCS 161.
2 Cornwall Coast Country Club v Cardgrange Ltd [1987] 1 EGLR 146. An illustration of what is meant is that an hypothesis required by
most rent review clauses it that the actual tenant is no longer in occupation of the premises. It is not necessary to go on from this and to
speculate what has happened to him, for instance whether he has moved to other premises.
HR A[3650]-[3660]
The presumption of reality has a number of ramifications when it comes to applying rent review provisions. The
premises to be valued will generally be as they were at the review date. The length of the hypothetical lease will
generally be the unexpired residue of the actual lease at the review date. The terms and covenants of the hypothetical
lease, such as the user and alienation provisions, will generally be the same as those of the actual lease. The surrounding
circumstances, for instance the existence of a planning permission or licences required for certain uses, will generally be
taken to be as they were at the review date1. These and other matters are considered separately below. Some aspects of
construction considered in connection with the commercial purposes approach could also be justified in connection with
Page 719
the presumption of reality approach, for example the rule that where the actual lease contains further rent reviews the
hypothetical lease will contain the same rent review pattern2. It is not clear whether the presumption of reality applies
with equal force in all circumstances3.
HR A[3661]
1 In MFI Properties Ltd v BICC Group Pension Trust Ltd [1986] 1 All ER 974 at 976 Hoffmann J said 'In general, the purposes of such
clauses would point to a prima facie assumption that the parties intended the hypothetical letting to be for the residue of the actual lease held
by the tenant on the same terms and in the same circumstances which actually exist at the relevant date.'
2 A practical example of the importance of the presumption of reality is that a landlord and tenant may enter into a number of separate
leases of adjoining properties each with rent review provisions. When it comes to a review of the rent under each lease the other leases are a
part of the actual surrounding circumstances and must be taken to be in existence. The actual tenant as the occupier under these other leases
may be a potential lessee whose bid may increase the rent for the premises whose rent is being reviewed. He might be a species of special
purchaser. See British Airways plc v Heathrow Airport Ltd [1992] 1 EGLR 141. The question of who may be in the market and the effect of
a special purchaser and of the actual tenant being in the hypothetical market is considered below: see paras HR A[3702]ff.
3 There is a suggestion in the decision of Neuberger J in Canary Wharf Investments (Three) v Telegraph Group Ltd (25 June 2003,
unreported) that the potency of the presumption may be less when it is applied to the determination of the length of the hypothetical lease:
see para HR A[3722].
HR A[3662]
There are, however, substantial limitations to the presumption of reality. Most rent review clauses contain express
provisions which require certain assumptions to be made or contain matters to be disregarded, and these are generally
contrary to reality. Such assumptions are sometimes described as 'counter-factual'. A prime instance is the provision
often found that the reviewed rent shall be determined ignoring the effect on value of any improvements to the premises
carried out by the tenant. It is obviously unjust that a tenant shall be required to pay rent for an improvement which he
has himself carried out at his own expense. The presumption of reality can be seen at its strongest in connection with
improvements. If there is no express provision to the contrary the tenant will be required to pay a reviewed rent which
includes the value of his own improvements since these improvements are in reality a part of the demised premises to be
valued at the review date1. An express provision requiring a disregard of tenants' improvements is therefore required. A
further express provision commonly encountered is the required assumption that the tenant has complied with all his
covenants in the lease. Thus, where the premises are in disrepair what has to be valued is not the premises as they are in
reality but as they would have been had the tenant complied with his repairing obligations2. These two common express
departures from reality accord with commercial good sense3. A further example of an expressly required departure from
reality is a provision that a particular planning permission shall be assumed to exist4.
HR A[3663]
1 Ponsford v HMS Aerosols Ltd [1979] AC 63, [1978] 2 All ER 837.
2 Even in the absence of an expressly required assumption that the premises have been properly repaired by the tenant the same result may
be achieved, ie an assumption of repair, by applying the principle that a person cannot benefit from his own wrong. If a tenant could leave
premises in disrepair in breach of covenant and then obtain a lower rent on a rent review because of the dilapidated state of the premises he
would be benefiting from his own wrong (subject, presumably, to a claim against him for damages which would include the loss of rent by
Page 720
the landlord). See Harmsworth Pensions Funds Trustees Ltd v Charringtons Industrial Holdings Ltd (1985) 49 P & CR 297. See also para
HR A[3762].
3 See MFI Properties Ltd v BICC Group Pension Trust Ltd [1986] 1 All ER 974 at 976, per Hoffmann J.
4 See para HR A[3989]. A provision that the premises are to be valued on the basis that they are let for a specified use may require the
assumption, contrary to reality, that a planning permission exists which authorises the specified use. This matter is also examined in para HR
A[3989].
Page 721
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/C Hypothetical lease
C
Page 722
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/C Hypothetical
lease/General
General
HR A[3664]
As explained earlier, the assumption of a hypothetical lease granted on a specified date is the basis of most rent
reviews1. On the review date the premises are subject to the actual lease which contains in it the rent review provisions.
The process involved is generally that it is assumed, contrary to reality, that the actual lease does not exist and that, also
contrary to reality, the premises are let on the review date by hypothetical parties on a hypothetical lease2. It is the rent
which would be agreed for this hypothetical lease which is normally the reviewed rent, or the basis of the reviewed
rent3. The lease assumed to be granted for these purposes is called sometimes 'the hypothetical lease', sometimes 'the
assumed lease', and sometimes 'the notional lease'. In this narrative it will be called the hypothetical lease, and is to be
compared with the subsisting or real lease, which will be called the actual lease. The hypothetical lease may be an
underlease4.
HR A[3665]
1 Other possibilities, described above, include rent reviews based on some published index of prices or on some proportion of the turnover
or income from the property.
2 The hypothesis of an assumed transaction in property is not, of course, unique to rent reviews. For example, hypothetical sales have to
be imagined when property is to be valued on a certain date for the purposes of assessing compensation for compulsory purchase: see Land
Compensation Act 1961, s 5.
3 The reviewed rent may be derived from the rent which would be agreed. For instance, a tenant may be required to pay not the whole but
a proportion of the rent determined at each review as the full market rent in recognition of his having carried out work to the premises at the
start of the tenancy. An example is Royal Exchange Assurance v Bryant Samuel Properties (Coventry) Ltd [1985] 1 EGLR 84 where the
reviewed rent was to be 75% of the full market rent.
4 Where the actual lease is an underlease the hypothetical lease should also be assumed to be an underlease. The point may be of practical
significance since there may be circumstances where the rent which can be obtained for an underlease is less than that which could be
obtained for a headlease on identical terms, the reason being that an underlessee may regard his position as somewhat less secure than that of
a headlessee. For instance, an underlessee may have to protect his interest by seeking relief against forfeiture where the headlease has been
forfeited even though the underlessee is not implicated in the breach of covenant which gave rise to the forfeiture.
HR A[3666]
The essence of most rent reviews is therefore to find the open market rent of the demised premises at the review date by
the process of a hypothetical letting. Unfortunately, the language used in rent review clauses to achieve this simple
purpose is extremely varied. A good precedent is the language used in the Landlord and Tenant Act 1954 for
ascertaining the rent under new tenancies of business premises, namely the rent at which the premises might reasonably
be expected to be let in the open market by a willing lessor1. This may be conveniently referred to as the open market
rent or simply the market rent. There is no distinction to be drawn between these two expressions, and the omission of
Page 723
the word 'open' does not require the assumption of a restricted market2. A characteristic of the market is that anyone
who is interested may bid3.
HR A[3667]
1 See LTA 1954, s 34(1) at HR B[553].
2 In Sterling Land Office Developments Ltd v Lloyds Bank plc [1984] 2 EGLR 135 Harman J rejected the argument that a failure to
include the word 'open' meant that the rent had to be fixed within a closed and circumscribed market to which only certain bidders were
admitted.
3 In IRC v Clay [1914] 3 KB 466 at 475 Swinfen Eady LJ said that a value, ascertained by reference to the amount obtainable in an open
market, showed an intention to include every possible purchaser.
HR A[3668]
Other expressions which are sometimes encountered are the rack rent, or the highest rent reasonably obtainable, or the
best rent reasonably obtainable, or the full market rent. A rack rent means a rent representing the full value of the land
and buildings, and is sometimes contrasted with a ground rent, which is a rent attributable to the value of the ground or
site without any buildings on it. The best view is that all these expressions mean the same thing, and that in terms of
valuation any nuances which may attach to the variety of expressions used make no difference to the end result1. There
is one word the existence or otherwise of which may have some effect. It is the word 'reasonably' in an expression such
as 'the best rent reasonably obtainable'. It seems that the inclusion of the word excludes the possibility that the rent may
be inflated by a freak bid such as sometimes occurs2. A question which has not been resolved is whether in determining
what is the market rent it is necessary to disregard entirely the financial standing or strength of covenant of any possible
tenant3.
HR A[3669]
1 In Royal Exchange Assurance v Bryant Samuel Properties (Coventry) Ltd [1985] 1 EGLR 84 the expression used was 'seventy-five per
cent of the full current market rack rental value of the demised premises'. It was said that the word 'market' did not add anything of great
significance to 'rack' and that 'rack' did not add anything of great significance to 'market'. Nor was any significance attached to the word
'full'. In Daejan Investments Ltd v Cornwall Coast Country Club [1985] 1 EGLR 77 it was said that in the phrase 'the highest rent at
which...the premises might reasonably be expected to be let' the word 'highest' added only emphasis since even without that word the rent
would be the highest rent obtainable. The word 'best' should presumably be interpreted in the same way.
3 In general, the higher the financial standing of a tenant the lower the rent a landlord will be willing to accept. The landlord is
compensated for the lower rent by the increased security of continuing to receive the income stream from the property. This security means
that a higher capital sum will be obtained on a sale of the freehold subject to the lease. What is not clear is whether on a rent review the rent
has to be fixed as that which any tenant would offer as opposed to that which a tenant of the best standing would offer.
HR A[3670]-[3680]
Page 724
It follows that normally what has to be ascertained is the rent which would be obtained in the market on a hypothetical
letting and irrespective of any actual circumstances which affect the relationship between the actual landlord and the
actual tenant. Such an ascertainment is sometimes described as objective. The use of expressions such as 'a reasonable
rent for the demised premises' or 'a fair rent for the demised premises' does not alter the process as just explained1. For
example, a reasonable rent for the demised premises is not to be reduced because the demised premises include
improvements carried out by the tenants at their own expense2. Even in the context of an expression such as 'such rent
as may be agreed between the landlords and the tenant, being a fair and reasonable market rent' it has been held that an
objective determination of the rent is appropriate3.
HR A[3681]
1 Ponsford v HMS Aerosols Ltd [1979] AC 63, [1978] 2 All ER 837; Cuff v J & F Stone Property Co Ltd [1979] AC 87, note, [1978] 3
WLR 256, Megarry J. See also 99 Bishopsgate Ltd v Prudential Assurance Co Ltd [1985] 1 EGLR 72 where the Court of Appeal rejected the
suggestion that because the rent review clause referred to a fair yearly rent it was necessary to adjust the rent ascertained as the market rent.
The expression 'fair rent' is reminiscent of the concept of fair rents introduced by the Rent Act 1977 where it meant a market rent ascertained
on the assumption that there was no scarcity of the type of premises in question. It is best avoided in commercial leases. It may be noted that
in the passage from United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, [1977] 2 All ER 62 (cited in the notes to para
HR A[3583]) Lord Salmon equated the meaning of a fair rent to that of an open market rent.
2 Ponsford v HMS Aerosols Ltd [1979] AC 63, [1978] 2 All ER 837.
3 ARC Ltd v Schofield [1990] 2 EGLR 52.
HR A[3682]
There are two circumstances in which the objective approach is not applied and the task of the valuer is to fix the rent
by reference to that which it would be reasonable for the parties to agree, a rent which may or may not be the same as
the market rent and the ascertainment of which may involve subjective considerations based on the particular facts of
the relationship between the actual landlord and the actual tenant. One circumstance is, of course, where the parties have
expressly provided for this mode of determination, using words such as a rent which is fair and reasonable between the
parties1. The other circumstance is where the parties have provided for a rent review but have not specified any formula
or guidance or criteria for the ascertainment of the rent2.
HR A[3683]
1 A statutory example of a sum having to be arrived at on the basis of what is fair and reasonable, ie a decision which involves an element
of subjective judicial opinion, is the provision in para 7 of Sch 2 to the Telecommunications Act 1984, where the compensation for the
laying of telecommunications cables under a person's land is to be such 'as it appears to the court to be fair and reasonable if the agreement
had been given willingly': see Mercury Communications Ltd v London & India Dock Investments Ltd [1994] 1 EGLR 229. A further
example of the possible need for a subjective assessment of value is where the court awards damages in lieu of an injunction following a
breach of an obligation such as a restrictive covenant and assesses the damages on the basis of what would be a fair price negotiated between
the parties for the voluntary release of the obligation: see Wrotham Park Estates v Parkside Homes [1974] 2 All ER 321, [1974] 1 WLR 798.
2 Instances of a subjective approach being held to be appropriate where no formula or criteria has been specified are Thomas Bates & Son
Ltd v Wyndham's (Lingerie) Ltd [1981] 1 All ER 1077, [1981] 1 WLR 505; Central Metropolitan Estates Ltd v Compusave (1983) 266
Estates Gazette 900; Lear v Blizzard [1983] 3 All ER 662. The principle expressed in the text is based on the rationalisation of these three
Page 725
authorities by Millett J in ARC Ltd v Schofield [1990] 2 EGLR 52. However, there seems no compelling or logical reason to conclude that
where the parties have not specified a formula they necessarily intended a subjective approach to valuation as opposed to the objective
approach more usually encountered in rent review clauses.
Page 726
lease/Willing lessor and willing lessee
Willing lessor and willing lessee
HR A[3684]
An actual lease requires a real landlord and a real tenant. In the same way the assumption of a hypothetical lease
requires the assumption of a hypothetical lessor and a hypothetical lessee. These persons are hypothetical in that they
are not real persons or actual corporate bodies, nor are their characteristics to be taken to be those of any particular real
person or corporate body. They are not the actual landlord or the actual tenant under the actual lease. They have been
aptly described as abstractions1. On the other hand, certain facts have to be attributed to these hypothetical entities. For
example, where the hypothetical lease is of premises which are a part of a larger building and the lease contains
obligations on the landlord in relation to the remainder of the building, such as to keep it in structural repair, it is a
necessary attribute of the hypothetical lessor that he owns or has an interest in the remainder of the building such that he
can fulfil his obligations. If the hypothetical lease is an underlease the hypothetical underlessor must be taken to have a
tenancy of the premises sufficient to enable him to grant the underlease2. In the case of a hypothetical underlease the
reality of the headlease out of which the hypothetical underlease is created can be taken into account including the
actual personality of the head lessor3. The two hypothetical parties are often called the willing lessor and the willing
lessee.
HR A[3685]
1 Evans (FR) (Leeds) Ltd v English Electric Co Ltd (1977) 36 P & CR 185, [1978] 1 EGLR 93, per Donaldson J.
3 Forte & Co Ltd v General Accident Life Assurance Ltd (1986) 54 P & CR 9, [1986] 2 EGLR 115 at 119.
(a) Willing lessor
HR A[3686]
The willing lessor is therefore an abstract and hypothetical entity with the right to grant a lease on the terms of the
hypothetical lease. He is not affected by personal characteristics which may affect actual lessors, such as a cash flow
problem or importunate mortgagees. He is not someone to whom it is a matter of indifference whether he lets the
premises on the valuation date, so that he is ready to wait for the market to improve. Nor is he to be taken as someone
who is desperate to let at once, as might a person who could only stave off bankruptcy by a quick letting. He is someone
who wants to let the premises at a rent which is appropriate to all the factors which affect the marketability of premises
of the particular category into which they fall, for example geographical location, the extent of the local labour market,
the availability of local services and the market rent of competitive premises, that is other premises which would be
considered as viable alternatives by a potential tenant1. An analogy may be drawn with the concept of a willing seller
Page 727
who has been said to be someone who is prepared to sell provided a fair price is obtained in all the circumstances of the
case. A willing seller does not mean someone who is an anxious seller, that is someone who is prepared to sell at any
price and on any terms2. Rent review clauses usually state that the hypothetical letting is by a willing lessor3. However,
even if this expression is not used the very concept of a market rent necessarily imports the existence of a hypothetical
landlord who is willing to let the premises, ie a willing lessor4. Where a transaction is relied upon as evidence of the
rental value of the demised premises there is no presumption that that transaction was one effected in the open market
by a willing lessor. However, in the absence of acceptable evidence to the contrary a tribunal or court is entitled to infer
that the transaction was entered into at arm's length in the normal course of the market5.
A willing lessor will of course negotiate with the willing lessee to obtain the highest rent possible. For example, in the
course of the negotiations he may threaten to offer the lease to someone else. It appears that there may be limits to what
a willing lessor can contend in the negotiations and he may not be entitled to assert that he should be paid a higher rent
than he might otherwise obtain because there is some more remunerative use to which he could put the premises, such
as separating them into parts for separate lettings or redeveloping and selling the premises6. The important point to bear
in mind is that whatever negotiating tactics are used, the hypothetical willing lessor and willing lessee are assumed at
the end of the day to reach agreement on the rent.
HR A[3687]
1 The text is taken in the main from the classic formulation of Donaldson J in Evans (FR) (Leeds) Ltd v English Electric Co Ltd (1977) 36
P & CR 185, [1978] 1 EGLR 93. It has stood the test of time and has been applied in many rent reviews over the past two decades. The case
went to the Court of Appeal and the judgment of Donaldson J was approved without significant further comment or elaboration.
2 IRC v Clay [1914] 3 KB 466 at 478, per Pickford LJ.
3 LTA 1954, s 34(1) refers to the premises being let in the open market by a willing lessor.
4 Dennis & Robinson Ltd v Kiossos Establishment (1987) 54 P & CR 282, [1987] 1 EGLR 133, per Dillon LJ.
5 Windward Properties Ltd v Government of St Vincent and The Grenadines [1996] 1 WLR 279 at 285-286.
6 See Marklands Ltd v Virgin Retail Ltd [2004] 2 EGLR 43.
(b) Willing lessee
HR A[3688]
The willing lessee is also an abstract and hypothetical entity. He is a hypothetical person actively seeking premises to
fulfil needs which the demised premises could fulfil. He will take account of similar factors to the willing lessor, but he
also will be unaffected by liquidity problems or any other personal characteristics which might affect the actual lessee
or any actual person or corporate body1. Despite his abstract character it will usually be necessary to attribute certain
characteristics to the willing lessee. The nature of the demised premises, which are of a type that he is taken to be
actively seeking, may dictate certain characteristics. If the premises are large and likely to command a substantial rent
the willing lessee will necessarily be someone with the financial capacity to take such premises. If the premises have a
location, layout and facilities sought by tenants in a particular sector of the market, such as large organisations
Page 728
providing financial services, it may be concluded that the willing lessee would be someone from that sector. Where the
permitted use of the premises is narrowly restricted under the terms of the hypothetical lease the willing lessee would
normally have the characteristics of someone who would be interested in occupying premises for the particular use
permitted. It is immaterial whether the rent review clause expressly requires the assumption of a willing lessee or is
silent on the point. In either case a lessee has to be assumed, otherwise there could be no hypothetical letting, and that
lessee is taken to be a willing lessee2. It is essential to distinguish clearly between the actual lessee and the hypothetical
willing lessee. This distinction can become of some importance when the rent review provisions in the lease describe
the lessee as having certain attributes, for instance that a licence of some sort has been granted to him. It is necessary to
decide as a matter of construction whether the attribute applies to the actual lessee or to the hypothetical willing lessee.
The answer to the question may be important for the purpose of ascertaining the rent since if the hypothetical willing
lessee is taken to have the benefit of a licence or other attribute he may for that reason be willing to pay a higher rent3.
HR A[3689]
1 Evans (FR) (Leeds) Ltd v English Electric Co Ltd [1978] 1 EGLR 93, per Donaldson J. The judge added that the willing lessee would be
unaffected by factors such as governmental or other pressures to boost or maintain employment in the area. However, it is possible that such
pressures would affect the thinking of a hypothetical willing lessee and might even affect the amount of rent which he was willing to pay. If
that is the case then there seems no logical reason to ignore matters such as those mentioned. They are matters of general effect and are not
the personal characteristics of any particular actual person in the same way as, for example, liquidity problems are. See also British Airways
plc v Heathrow Airport Ltd [1992] 1 EGLR 141.
2 Dennis & Robinson Ltd v Kiossos Establishment [1987] 1 EGLR 133; Law Land Company Ltd v Consumers' Association Ltd [1980] 2
EGLR 109. Section 34(1) of the Landlord and Tenant Act 1954 has no express reference to a willing lessee.
3 In Parkside Clubs (Nottingham) Ltd v Armgrade Ltd [1995] 2 EGLR 96 the lease required it to be assumed that the necessary licences to
run the premises as a casino and licensed restaurant had been granted to 'the tenant'. It was held that this referred to the actual tenant and not
to the hypothetical willing lessee. The valuation effect of such an assumption may depend on whether the actual tenant can be regarded as a
potential bidder for the lease in the hypothetical market, a subject which is discussed in para HR A[3706].
HR A[3690]-[3699]
If premises are actually put on the market it is possible that, due to the unattractive nature of the premises, or the terms
of the lease being offered, or the lack of demand, or a combination of these or other factors, there would be no letting.
However, the nature of rent reviews means that there will always be a hypothetical letting: in other words the
hypothetical negotiations between a willing lessor and a willing lessee will always result in a letting at a rent. An
important factor in deciding what that rent will be is the level of demand for the premises. It may be that apart from the
willing lessee, whose existence has to be assumed, there would be no other person who would be interested in taking the
premises. In that case the willing lessee will be in a good negotiating position with no competitors for the lease so that
the rent agreed is likely to be at a reduced level which reflects this negotiating strength1. On the other hand, if there
would be a number of real persons who would be interested in taking the lease being offered there will be competition
and the willing lessee will have to outbid any competitors in order to secure the lease. Clearly, this situation is likely to
result in an increased level of rent. The practical point is that the assumed existence of a willing lessee does not remove
the need to ask what real persons (if any) would be competitors of the willing lessee2. The answer to this question may
have an important bearing on the amount of rent which would be agreed on the hypothetical letting. For this reason,
valuers who advise on or determine the reviewed rent often address with care the question of who would be in the
market in addition to the willing lessee3.
Page 729
HR A[3700]
1 It is possible to argue that if the hypothetical willing lessee would be the only person in the market the rent should be fixed at a very low
or even nominal figure since that is all the willing lessor would be able to secure and all that the willing lessee would have to pay to obtain
the lease. Such rents are not unknown in the real world even as regards commercial property. In the recession of the early 1990s, landlords
were sometimes willing to let office property which was difficult to dispose of at very low or nominal rents for a period in order to relieve
themselves of the burden of maintenance and outgoings. In fact, the argument ignores the reality of rental negotiations. The willing lessee
would not know, or could not be sure, that he was the only person in the market, and in any negotiations the willing lessor would not reveal
the fact that there was no competitor for the lease. Consequently, the willing lessee might generally be willing to offer more than a nominal
or very low rent in order to be sure that he got the lease. While the legal framework is clear the practical application of these principles is a
matter for valuers experienced in the realities of the market place.
2 It is essential to avoid confusion in this area between what is hypothetical and what is real: (a) the letting is hypothetical, as explained
above; (b) the willing lessee is a hypothetical person, as also explained; (c) however, if there was such a hypothetical marketing of premises
there might be real persons, person A or company B, who would in such circumstances be interested in bidding for the lease against the
hypothetical willing lessee. These persons are real. The question of whether there would be such real persons in the market can be proved by
evidence, including evidence from the real persons themselves. Consequently, in rent reviews it is possible for there to be evidence from
particular companies that if the demised premises had been on the market at the review date they would, or would not, have been interested
in taking a lease of those premises. While a tenant may be able to show that certain named persons or companies would not be interested in
taking a lease of the premises it is rarely possible to show that no-one would be interested. A feature of the marketing of a lease of premises
is that persons sometimes show an interest when it would not have been possible to foresee the interest of such persons. The importance of
distinguishing between real and hypothetical potential lessees is illustrated by the decision of the Court of Appeal in Parkside Clubs
(Nottingham) Ltd v Armgrade Ltd [1995] 2 EGLR 96 (discussed in para HR A[3689], n 4) where the issue was whether an assumption of the
existence of a gaming licence applied to the actual lessee or to the hypothetical willing lessee. A clear analysis of the position was given by
Bingham LJ in James v British Crafts Centre [1987] 1 EGLR 139 at 141, where he said: 'Thus, the operation of any rent review clause
involves a fusion of the actual and the hypothetical. The rent to be determined is that actually to be paid by the actual lessee under the lease
in question or his successor in title, but the measure of that rent is determined by reference to what would be paid by a hypothetical willing
lessee to a hypothetical willing lessor if the premises were available on the open market, which of course they are not. Depending on the
wording of the clauses in question difficulties may arise (as they do here) in determining where the actual ends and the hypothetical begins.'
This observation was in the context of deciding the extent to which restrictive provisions on use relating to the named actual lessee should be
imported into the hypothetical lease: see paras HR A[3884]ff.
3 See fn 2.
HR A[3701]
The hypothetical willing lessee, as well as being willing to take a lease, must also be taken to be willing to take a lease
of the premises on the terms prescribed as those of the hypothetical lease. The fact that the terms are such as would not
normally be found in the market or that most lessees would not be willing to take a lease on those terms, for example a
lease of an unusual duration or with a particularly restricted user clause, does not prevent the assumed existence of a
willing lessee willing to take a lease on those terms1. Of course, any terms which are unusually burdensome or of an
unusual benefit to a lessee may be reflected in the amount of the rent2.
HR A[3701.1]
1 In BLCT Ltd v J Sainsbury Plc [2003] EWCA Civ 884, [2004] 2 P & CR 32, there had been a rent review of a large supermarket where
the evidence was that tenants of such premises were normally only willing to take leases at a premium (called key money) and a reduced
rent. The arbitrator held that the rent determined on the review should be that which would be paid by such a tenant, ie a reduced rent by
reason of a premium being paid. Such a conclusion appears to be contrary to principle and should not be regarded as setting any precedent
for other cases since it misunderstands the nature of a willing lessee as someone who is willing to pay a full rent even if no one else would be
Page 730
willing to do so. Leave to appeal to the High Court was refused on paper, but in accordance with general principle and the limited nature of
the right of appeal this must not be regarded as any implicit endorsement of the correctness of the approach taken by the arbitrator.
2 An example would be rent reviews in the hypothetical lease at unusually long intervals, as discussed in HR A[4505].
(c) Special purchaser
HR A[3702]
A question which sometimes arises is whether in assessing the open market rent a bid which would be made by a
special purchaser can be taken into account. In this context a special purchaser means some person who, by reason of
his special position, would be willing to pay a higher rent for the premises than would the generality of the market1. A
good illustration of a special purchaser is someone who owns an interest in or occupies premises adjoining the premises
being valued and because of this would pay an extra rent which others would not because of the opportunity to expand
his business into the premises to be valued. Another instance would be a subtenant in occupation of a part of the
premises to be valued who might find it commercially or financially advantageous to acquire a headlease of the
premises. The principle is that unless the rent review clause excludes any potential bid from a special purchaser that bid
should be taken into account in assessing the open market rent2. It is generally fallacious to reason that a special
purchaser would have to offer only a nominal sum above all others in the market in order to secure the hypothetical
lease. Generally the additional rent he would have to offer, or his overbid as it is termed, would need to be more
substantial than this3. If the actual tenant is to be regarded as a possible bidder in the hypothetical market he might be
regarded as a special purchaser because of his previous occupation of the premises and a special need to remain in
them4. For this reason, rent review clauses often contain a specific provision requiring that any effect on rent of the
occupation of the actual lessee is to be disregarded5. It must be emphasised that where there would be a special
purchaser in the market for the hypothetical lease the lease is still assumed to be granted to the hypothetical willing
lessee; the relevance of the existence of the special purchaser is that the willing lessee would have to outbid the special
purchaser in order to secure the hypothetical lease6. Where there is an express exclusion of a special purchaser it is
necessary to consider with some precision the exact words used. The exclusion may be of any bid which might be made
by a special purchaser. In that case the special purchaser must be taken not to be in the market to acquire the
hypothetical lease. He is not, therefore, someone whom the willing lessee has to outbid in order to secure the lease. On
the other hand, his existence is not as such to be ignored, and the willing lessee might in principle wish to acquire the
lease in order to pass it on by assignment or subletting to the special purchaser7. The rental bid of the willing lessee
might be affected by the prospect which he saw of a subsequent disposal of the lease to a special purchaser. On the other
hand, the express provision in the rent review clause might require that there be disregarded not just the bid but the very
existence of a special purchaser. In that event the reasoning just explained would not apply.
HR A[3703]
1 In the Appraisal and Valuation Manual, issued by the Royal Institution of Chartered Surveyors, at para 4.2.18(b) a special purchaser is
defined as one to which the property, or the interest in the property, being valued has a particular attraction which it does not have for the
market in general. It is there observed that in almost all cases the special purchaser either is the owner of an interest in land which has or
could have a particular relationship with the property being valued, eg the owner of an interest in a nearby or adjacent property, or is the
owner of another interest in the property being valued. It is possible that a person could be a special purchaser without any interest in the
property being valued or in nearby property. He might have some family or nostalgic connection with the property which would lead him to
outbid the rest of the market.
2 IRC v Clay [1914] 3 KB 466. In this case what had to be ascertained was the value of a house which was worth £750 as a private
Page 731
residence. It adjoined a nurses' home whose owners desired to extend their use into the house to be valued, and they would have paid £1,000
to obtain that house for that purpose. It was held by the Court of Appeal that the house was correctly valued at £1,000, account being taken
of what the adjoining owners as special purchasers would have paid. The valuation formula in s 25(1) of the Finance (1909-10) Act 1910
referred to an assumed sale by a willing seller in the open market. There was no exclusion of a bid by a special purchaser. An example of a
statute which to some extent excludes any account being taken of a special purchaser is rule (3) in s 5 of the Land Compensation Act 1961.
In s 9(1) of the Leasehold Reform Act 1967, where the value of the freehold has to be ascertained, an exclusion is made of any bid which the
actual tenant in occupation might make. The tenant in occupation would be a special purchaser because he could by acquiring the freehold
secure for himself the marriage value that the merged freehold and leasehold interests would enjoy (ie the value of the freehold
unencumbered by the lease would be greater than the aggregate of the values of: (a) the freehold encumbered by the lease; and (b) the lease).
The principle that the existence of a special purchaser is to be taken into account unless it is expressly excluded is just since if such a
potential lessee would exist on a letting of the demised premises there is no reason why the landlord should be deprived on a rent review of
such extra rent as the existence of such a person would provide.
3 IRC v Clay [1914] 3 KB 466. There are usually two reasons why the offer made by a special purchaser would be more than just a
nominal amount higher than that of the rest of the market. The first reason is that the special purchaser would not know with any precision
what the rest of the market would bid, so that his overbid would have to leave a significant margin which would make him reasonably sure
of securing the interest being valued. It cannot be assumed that the sale would be by auction where the special purchaser would know the
next highest bid which he had to beat. The second reason is that speculators might acquire the interest with a view to disposing of it to the
person known to have a special interest.
6 In theory this should lead to two questions to be asked by the valuer: (a) how much the special purchaser would offer to outbid the rest
of the market; and (b) how much the willing lessee would offer to outbid both the rest of the market and the special purchaser. In practice,
valuations are rarely so refined that such questions are separately addressed.
7 The willing lessee would then be in a position akin to that of the speculators referred to in IRC v Clay [1914] 3 KB 466.
HR A[3704]
Experience shows that if premises are put on the market to be let occasionally a tenant appears who is willing to pay a
wholly exceptional or freak rent. He does so not because he is a special purchaser in the sense just described but for
irrational and often unknown reasons. It seems that if the rent review clause refers to a rent at which the premises might
reasonably be let on the open market the use of the word 'reasonably' excludes such a freak offer1. If that word is not
used it is arguable that account can be taken of a freak offer. The point is probably of little practical importance, since it
will nearly always be impossible for a landlord to demonstrate that if the premises had been let on the review date there
would have been such a freak bid.
HR A[3705]
1 Ponsford v HMS Aerosols Ltd [1979] AC 63 at 83 and 77, per Lord Fraser and Viscount Dilhorne.
(d) The actual lessee
HR A[3706]
Page 732
Unless the rent review clause expressly or impliedly directs otherwise the actual lessee can in principle be considered as
a possible potential lessee of the premises in the hypothetical market. There may be cases where he would be a potential
lessee, for example where he is the lessee of adjoining premises1. In such a case he may also, of course, be a special
purchaser in the sense explained above2. If the actual lessee would be in the market the hypothetical willing lessee
would have to outbid him3. The actual lessee may have characteristics, besides that of being a lessee of adjoining
premises, which would make his presence in the hypothetical market something which affected the rent; for instance he
may be the holder of a licence needed for a particular use of the premises such as a gaming use, or there may even be a
provision in the lease which requires it to be assumed that the actual lessee holds such a licence4. The fact that there is
no rule of law which prevents the actual lessee being in the hypothetical market does not mean that he would
necessarily be in that market. Whether he would actually be in that market is a matter of evidence and inference, and is
a question of fact. The evidence of the actual lessee of what he would do if there was no actual lease and the premises
were on the market to be let may be decisive of this question5. Rent review clauses often direct that the effect on rent of
occupation by the actual lessee is to be disregarded6. One reason why the actual lessee might be in the market for the
hypothetical lease is that he wished to preserve or receive benefits obtained from his previous occupation. The existence
of a disregard provision of the nature just mentioned therefore eliminates one factor which might otherwise bring the
actual lessee into the market. There may still be other factors which would bring him into the market, such as the fact
that he held a separate lease of adjoining premises.
HR A[3707]
1 First Leisure Trading Ltd v Dorita Properties Ltd [1991] 1 EGLR 133; British Airways plc v Heathrow Airport Ltd [1992] 1 EGLR 141.
The reasoning of Scott J in Cornwall Coast Country Club v Cardgrange Ltd [1987] 1 EGLR 146 at 152, concluding that in that case the
actual lessee could not be a potential lessee of the premises under the hypothetical letting, is not to be taken as establishing that the actual
lessee could never be in the hypothetical market. The reason given by Scott J for his conclusion was that to envisage the actual lessee in that
case as a potential lessee in the hypothetical market would be to create further hypotheses not prescribed by the rent review clause such as
that the actual lessee had a gaming licence which would entitle him to operate a casino at the premises. It is the absence of the need for such
further hypotheses which normally means that the actual lessee can be regarded as a possible bidder in the hypothetical market.
3 In Cornwall Coast Country Club v Cardgrange Ltd [1987] 1 EGLR 146 Scott J recognised that this was the consequence of the actual
lessee being in the hypothetical market. For an instance of such an overbid see Secretary of State for the Environment v Reed International
plc [1994] 1 EGLR 22.
4 See Parkside Clubs (Nottingham) Ltd v Armgrade Ltd [1995] 2 EGLR 96. In such cases there are several questions to consider: (a) It
has to be decided whether the assumption (ie of a licence or other attribute) applies to the actual lessee or to the hypothetical willing lessee.
(b) If the assumption applies to the actual lessee it has to be decided whether he is to be regarded as being in the hypothetical market. As
stated in the text of this paragraph the answer is that in principle he can be so regarded. (c) There has to be assessed the effect on rent which
would ensue from the fact that the actual lessee or the hypothetical lessee has the attribute in question. If the attribute would increase the rent
which would be offered, for example the existence of a gaming licence, and the actual lessee is to be regarded as being in the hypothetical
market, the result in valuation terms may be much the same whether it is the actual or the hypothetical lessee to whom the attribute applies.
If it is the hypothetical lessee he would increase his rental bid accordingly. If it is the actual lessee he would increase his rental bid but the
hypothetical lessee would have to outbid him.
5 An illustration of this point is that when government offices were being moved out of central London and a rent review occurred of
premises let to a government organisation it was often asserted that if the premises were vacant and on the market the government itself
would not be a potential bidder for the premises.
6 This is considered in paras HR A[4007]ff.

Page 733
lease/The valuation date
The valuation date
HR A[3708]
A valuation of property must take place by reference to a specified date. Property values fluctuate, sometimes rapidly,
over time, and so to speak of a property having a value has little meaning unless a date is specified1. In rent review
clauses it is usually specified that the rental value of the premises is to be ascertained as at the rent review date, that is
the date from which the new and reviewed rent will become payable2. If no date is specified it will be implied that the
rental value is to be that at the review date3. If there is any ambiguity in the express words used they will be construed
as meaning that the rental value is to be ascertained by reference to the review date4. Where it is the value at the review
date which is to be assessed it is usually not practical to agree the reviewed rent before that date since the value of
property at a given date cannot be known with any certainty before that date arrives. In one case, it was provided that an
expert appointed to determine the reviewed rent should make his valuation not less than 14 days before the review date.
It was not stated in express terms what was to be the valuation date. It appears that the expert was expected to do his
best to assess in advance what would be the market value at the review date5. It is necessary to distinguish between: (a)
the date by reference to which, or 'as at' which, the rent is to be assessed (the valuation date); and (b) the date on which
the rent is actually assessed by agreement, arbitration or other method6. Since the latter date is nearly always later than
the former date in practice the revised rent is often determined at a date which is substantially later than the review date.
In theory this should make no difference to the amount of the rent determined since the rental value of a property on a
given date should be the same however large the gap between that date and the date on which the rent is actually
determined. In practice, delay is sometimes said to favour the landlord in a rising market since it is thought that
psychologically those responsible for the determination of the rent will be influenced by a rising level of rents after the
valuation date. For the same reason delay could be said to favour the tenant in a falling market. The question of whether
there can be taken to be a 'heads of terms' stage, that is an informal and non-legally binding agreement, prior to the
legally binding lease or agreement for lease at the valuation date is considered later7.
HR A[3709]
1 A vivid illustration is that in the late 1980s there was a rapid escalation of office rents in London, while in the early 1990s there was an
equally dramatic fall in rents. In other fields of valuation the ascertainment of the correct valuation date has been seen to be a subject of
cardinal importance. In the valuation of property for the purposes of assessing compensation for compulsory purchase the courts have
established the date of the expropriation as the valuation date: Birmingham City Corpn v West Midland Baptist (Trust) Association (Inc)
[1970] AC 874, [1968] 1 All ER 205. The principle that a value of property must relate to a given date is not, of course, confined to land.
Values of other assets such as shares can fluctuate even more rapidly than land and in some cases a time of day as well as a date needs to be
specified.
2 In some cases the lease may specify a different date, but this is generally linked in some way to the review date, eg one month before the
review date.
3 Glofield Properties Ltd v Morley (No 2) [1989] 2 EGLR 118. The reason is that the purpose of a rent review provision is that the
reviewed rent is to be assessed by reference to rental values prevailing at the beginning of the period in respect of which the reviewed rent is
to become payable.
Page 734
4 Glofield Properties Ltd v Morley (No 2) [1989] 2 EGLR 118. In that case the rent review clause directed that the reviewed rent should
be determined by agreement or, in default of agreement, by an independent surveyor 'as being at the time of such determination the annual
rental value of the demised premises in the open market'. Despite these words it was held by the Court of Appeal that the rent should be
determined on values prevailing at the review date and not at the substantially later date on which the independent surveyor actually carried
out the process of determination. It was said that the ascertainment would only be on values prevailing at the latter date when the parties had
clearly and unequivocally provided that such should be the case. The words used were not so clear and unequivocal. The previous decision
of the Court of Appeal in London and Manchester Assurance Co Ltd v G A Dunn & Co (1983) 265 Estates Gazette 39 and 131 is not a
binding authority to the contrary. See also Touche Ross & Co v Secretary of State for the Environment (1982) 46 P & CR 187, [1983] 1
EGLR 123.
5 McDonalds Property Co Ltd v HSBC Bank plc [2001] 36 EG 181.
6 In Henniker-Major v Smith (Daniel) (a firm) [1991] 1 EGLR 128 a rent review was specified at the end of the fifth year of the term. It
was to be initiated by a notice served by the landlord in the six months prior to the end of the fifth year and the reviewed rent was to be by
reference to values current at the expiration of the year of the term in which the notice was served. The landlord served notice during the
sixth year of the term. Since time was not of the essence the notice was valid. It was held that the rent was to be reviewed by reference to
values current at the end of the fifth not the sixth year of the term. See also paras HR A[4041]ff.
HR A[3710]-[3720]
Where property is to be valued as at a certain date it is necessary to consider what evidence can be adduced to establish
the value as at that date. There are three basic principles to be applied.
(a) Regard may be had to (i) any events which have occurred or circumstances which existed at any
time prior to and up to the valuation date, and (ii) any expectation of future events which exists at the
valuation date. Of course, the events, circumstances or expectations must be relevant to the value of the
property. They must also be matters which would be known in the hypothetical market at the valuation
date, since if they would not be known they could not affect the hypothetical negotiations1. Prior events
and circumstances which are relevant may include transactions on comparable properties and general
events which affect value such as changes of government. Expectations of future events often affect
property values at a given date. Expected macro-economic events such as changes in interest rates or in
property taxation can have this effect. Anticipated local events, for instance the opening of a new road,
can have an effect on property in the locality.
(b) The second principle is that generally events which occur after the valuation date must be left out
of account2. The hypothetical willing lessor and willing lessee cannot know of these events when they
agree a rent. In so far as these events were foreseeable at the valuation date their anticipated effect may
be relevant under the first principle.
(c) The third principle is that transactions concerning comparable properties may be taken into account
even though the transaction takes place after the valuation date3. The reason is that such transactions can
clearly have a probative value in determining the rent which would be obtained for the premises being
valued on the valuation date. If a transaction which is otherwise an excellent comparable occurs a few
days after the valuation date it would not be rational to exclude it as having no probative value in relation
to the likely rent of the premises to be valued on the valuation date. This third principle might be thought
to be an exception to the second principle. In a sense it is, but it must be emphasised that the
post-valuation date comparable is admissible as evidence of value not because it would be known to the
hypothetical lessor and lessee on the valuation date but because it is an indication of the rental value on
the valuation date irrespective of such knowledge. Since a transaction after the valuation date is
admissible it must follow that events which occur between the valuation date and the date of the
Page 735
comparable transaction may be considered where they affect the rent for the comparable. Again, such
events are not considered because they would be known to the hypothetical parties but because the
weight to be attached to the post-valuation date comparable may be affected by the events. It is
sometimes considered that a post-valuation date comparable is of less evidential weight than a
pre-valuation date comparable because the former type of comparable would not be known to and so
could not affect the minds or the negotiations of the parties to the hypothetical lease4.
Confusion is sometimes caused by a failure to distinguish between on the one hand the valuation of property as at a
given date and on the other hand the assessment of damages. In the latter case a court or tribunal is entitled and bound to
have regard to all relevant facts known at the date of the assessment of the damages. If a person claims damages for
personal injuries and at the time of the injury the medical prognosis is uncertain a court assessing damages will consider
what has happened as regards the injury by the time of the assessment of damages. In one often cited case an arbitrator
had to assess the compensation for loss of profit suffered by a mining company when they were prevented from
working coal under a certain piece of land. It was held to be proper to have regard to the fact that the price of coal had
risen between the date of the notice which prevented the mining of coal and the date on which the matter was decided
by the arbitrator. The reason is that the assessment of loss of profit for the purposes of deciding the compensation
payable was akin to assessing damages. Indeed a loss of anticipated profits is often a head in a damages claim. Such an
assessment is quite different from the ascertainment of the value of property at a specified date5. In the same way when
compensation has to be assessed for a loss of anticipated profits as a result of the compulsory acquisition of land on
which a profitable business is carried on the tribunal assessing the compensation must have regard to events between the
date of the acquisition of the land and the date when the tribunal makes its decision6.
HR A[3721]
1 Lynall v IRC [1972] AC 680, [1971] 3 All ER 914; Cornwall Coast Country Club v Cardgrange Ltd [1987] 1 EGLR 146.
2 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580, [1977] 2 All ER 293; Duvan Estates Ltd v
Rossette Sunshine Savouries Ltd [1982] 1 EGLR 20; Gaze v Holden [1983] 1 EGLR 147. A similar question arises in the operation of the
rating hypothesis, which is of a letting of premises from year to year at a given date. There seems no logical reasoning why the principle
should be different as regards rent reviews and rating valuations. One context in which the issue arises is the use of the profits method as a
method of valuation: see HR A[4432]. Using this method, it is necessary to produce estimates of the future revenues, costs and profits of a
business as a means of assessing what rent a tenant would be willing to pay for a lease of the premises at which he could carry out that
business. It has been said in this context that the use of hindsight, that is the use of the actual returns and costs after the valuation date from
the actual carrying out of the business, may be not only permissible but required. In the Lands Tribunal in Hong Kong it was said in China
Light and Power Company Ltd v Commissioner of Rating and Valuation [1994] CPR 618:
'"Both valuers..." approaches involve exercising various degrees of hindsight. Hindsight may be
available to a valuer depending on the statutory or other terms of reference. Where hindsight can
be used it is obviously desirable, if the material is available, to achieve greater accuracy by using
actual figures, rather than falling back on assumption-based projections. This Tribunal has for
many years encouraged valuers to take advantage of hindsight where, as a matter of law, that
course is permissible. At times valuers too readily ignore post-relevant date evidence, by
self-imposed rules of practice, which have no basis in law.'
It is not easy fully to reconcile this observation with the principles specified in HR A[3710]-A[3720].
3 Melwood Units Pty Ltd v Comrs Main Roads [1979] AC 426 at 436, PC, per Lord Russell; Segama
Page 736
NV v Penny Le Roy Ltd [1984] 1 EGLR 109. (The decision of Staughton J in this case contains a
valuable review of the main authorities on post-valuation date events.) The limitations in practice of
using post valuation date evidence are illustrated by the decision in Preferred Mortgages Ltd v
Countrywide Surveyors Ltd [2005] 31 EG 81 (CS) in which, in the context of an action for damages
against a valuer who had valued a residential property, the court obtained no assistance from the use of
later transactions which were 'devalued' back to the valuation date by reference to a house price index
covering a wide area. In rent reviews of offices, a frequent practice is to adjust the rent derived from
comparables, whether before or after the valuation date, by using indices of office rental values prepared
by leading firms of surveyors, and such a process certainly cannot be rejected in principle in all cases.
4 The law as stated in these three principles was said to be accurate in Currys Group plc v Martin
[1999] 3 EGLR 165 at p172. The three principles may be illustrated by an example. Suppose that the rent
review requires an assessment of the open market rental value as at 24 June of one shop (the subject
property) in a parade of 12 similar shops. One of the other shops was let on 1 June at a rent of £40 psf.
Two other shops are let on 1 October at a rent of £30 psf. In April a new shopping parade opened in the
near vicinity and there were rumours of a new road being built. In September three shops in the parade
closed due to lack of demand. In November a party unexpectedly gained control of the local council with
policies thought to be antagonistic to business. In an arbitration held in December the position regarding
evidence is as follows.
(a) The opening of the new shopping parade can be taken into account as it was a relevant
pre-valuation date event. Its effect may be to depress the rent of the subject property because of
increased competition.
(b) The effect on rent of the anticipation of a new road can be taken into account.
(c) The letting at £40 psf on 1 June can be taken into account as a pre-valuation date event.
(d) The new party gaining control of the Council in November cannot be taken into account
since it is a post-valuation date event.
(e) The two lettings on 1 October can be taken into account since they are post-valuation date
comparables.
(f) The closure of the three shops in September can be taken into account to the extent only that
it throws light on the level of rents obtained in the October lettings. The closure may have
produced the fall in rents between June and October. To that extent it will favour the landlords
since the closure was not known at the valuation date. It may therefore explain, or help to explain,
why a rent of £40 psf is appropriate for the subject property based on the June comparable and
why that rent is not thrown into doubt by the two post-valuation date comparables.
In the example (a), (b) and (c) illustrate the first principle, (d) illustrates the second principle and (e) and
(f) illustrate the third principle.
The application of the principles may also be illustrated by an actual example. In Currys Group plc v
Martin the lease of shop premises on the second floor of a shopping development provided for a rent
review at 13 January 1993. The review was determined by an expert, who relied heavily on the letting of
three other shops also on the second level of the development. Two of the lettings had been effected prior
to the review date, and one after that date. By April 1994, when the expert made his determination, it was
known that the tenants of all three units had experienced financial difficulties, and that the shops had
closed. The expert decided to ignore these last facts. It was held that, as a matter of law, he was correct to
do so. The taking into account of the first two lettings may be regarded as the application of the first
principle, and the taking into account of the third letting may be regarded as the application of the third
principle. The ignoring of the closure of the shops is an application of the second principle. There is a
degree of harshness in the application of these rules, logical as it may be to do so. In the above case, the
tenants had the fact of the last comparable used against them even though the letting was later than the
review date. However, they could not rely on subsequent events, the financial difficulties of the tenant
Page 737
and the closure of the shop, which they said reduced or eliminated the weight to be given to the
transaction as a comparable and as a guide to the market rent.
5 Bwllfa and Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426.
6 See eg Buildings and Land Director v Shun Fung Ironworks Ltd [1995] 2 AC 111, [1995] 1 All ER
846, PC. The assessment would be for disturbance under rule (6) of s 5 of the Land Compensation Act
1961.
Page 738
lease/Duration of the hypothetical lease
Duration of the hypothetical lease
HR A[3722]
The length of the term of the hypothetical lease is also a matter which may be of cardinal importance to a valuer. The
length of lease favoured by tenants varies in accordance with the type of property being let and the prevailing fashion1.
The rent obtainable for a long lease of premises may be substantially different to that obtainable for a much shorter
term. One factor which may reduce the rent payable for a short term is that the tenant may have in the lease repairing
obligations which require him to replace expensive apparatus such as central heating systems and lifts. If the term is a
long one the cost of this can be written off over the whole term and the tenant who has carried out the replacement will
be able to enjoy the fruits of what he has done over the term. With a short term the tenant may have to incur the
expenditure but have only a short period to enjoy the benefit of it. Three guiding principles can be discerned as to length
of the hypothetical lease.
(a) The primary rule is, of course, that the length will be that specified in the rent review clause. Rent
review clauses contain various formulations. One commonly used is that the term of the hypothetical
lease at a rent review is to be the unexpired residue of the actual lease at that review. In such a case the
length of the hypothetical lease will progressively reduce as review succeeds review in the actual lease.
A further common type of provision is that the term of the hypothetical lease is to be the same as that of
the actual lease. This creates certain difficulties of interpretation which are discussed under the third of
the three principles. Sometimes it is specified that the hypothetical lease is for a term equal to that due to
elapse before the next rent review in the actual lease, something which may require the assumption on
reviews of a series of short leases. A provision often encountered is that the length of the hypothetical
lease is to be that of the unexpired residue of the actual lease but subject to a minimum period of, say, ten
years. Such a formula avoids the difficulty that as the actual lease nears its end the hypothetical lease
becomes one of a very short duration. Of course, the parties can insert whatever they wish for these
purposes. A well drawn rent review clause will specify with precision what is the length of the
hypothetical lease for the purposes of each rent review. A provision that it is the unexpired residue of the
actual lease at the review in question, subject to a minimum term which avoids very short leases, may be
considered to be the most fair stipulation. It must be ascertained as a matter of construction whether the
rent review clause really does specify the length of the hypothetical lease. A direction that the
hypothetical lease is to be on the 'terms' of the actual lease does not necessarily mean that it is for the
unexpired residue of the actual lease. The meaning of the word 'terms' depends on its context and it may
not include the duration of a lease2.
(b) If the rent review clause does not specify the length of the term of the hypothetical lease the term
will be likely to be implied to be of a length equal to the unexpired residue of the actual lease at the
review in question. This is said to be a consequence of the presumption of reality, that is the principle
that the rent fixed at a review should so far as possible be based on the real circumstances existing at the
review. Thus, if an actual lease of 21 years has ten years to run at a review the hypothetical lease would
be for a period of ten years3. In some cases a more complex term may need to be implied4. The
implication of a hypothetical term equal to the unexpired residue of the actual lease is not inevitable. A
possible alternative implication is that the length of the hypothetical lease will be such as might
reasonably be expected to be agreed between a willing lessor and a willing lessee in all the
Page 739
circumstances. Probably the latter form of implication requires special circumstances to justify it5. A
direction that the length of the hypothetical lease is to be a term not exceeding the unexpired residue of
the actual lease may lead to the same conclusion as just mentioned6.
(c) Rent review clauses sometimes provide that the hypothetical letting at each rent review shall be 'for
a term equivalent to the term hereby granted' or some similar wording. Such words will be construed as
meaning that the hypothetical lease is for a term of the same length as the actual lease but with that term
computed from the date on which the term of the actual lease started. For example, in a lease of 21 years
from 1 July 1977 the hypothetical lease for the purposes of a rent review at the tenth year in 1987 would
be a lease for a term of 21 years from 1 July 1977 and not from 1 July 19877. The result is that words of
the type just quoted have the same practical effect as if the wording were 'for a term equivalent to the
unexpired residue of the lease'. The construction adopted by the courts does not seem to be the most
natural meaning of the words. The justification for the construction is said to be that the hypothetical
letting should reflect as closely as possible the real situation at each review, the real situation being that
the actual lease then has an unexpired residue to run. It is possible to argue that the construction elevates
the presumption of reality to a status where it overrides the natural and ordinary meaning of the language
which the parties have used. A conclusion that the length of the hypothetical lease will be equal to the
unexpired residue of the actual lease at each rent review is not inevitable and some authorities indicate a
different solution8. If the draftsman of a rent review clause wishes that the hypothetical lease on each
review should be for a term which is the same in duration as the actual lease he should use words such as
'for a term equivalent to the term hereby granted [or just 'for X years'] commencing at the date of the rent
review.'
HR A[3723]
1 In recent years tenants of office premises have come to favour shorter terms, or terms with a right for the tenant to end the lease before
its expiry date.
2 Brown (Cyril) v Gloucester City Council [1998] 1 EGLR 95.
3 Norwich Union Life Assurance Society v Trustee Savings Banks Central Board [1986] 1 EGLR 136.
4 See Toyota (G B) Ltd v Legal and General Assurance (Pensions Management) Ltd [1989] 2 EGLR 123.
5 Prudential Assurance Co Ltd v Salisburys Handbags Ltd [1992] 1 EGLR 153; Brown (Cyril) v Gloucester City Council [1998] 1 EGLR
95. The latter case concerned a lease of a vacant site let for 125 years with rent reviews at intervals of five years and the rent to be 10% of
the full rental value of a site with notionally developed buildings. It was held that the duration of the hypothetical lease of the buildings was
to be that which might reasonably be expected. In Westside Nominees Ltd v Bolton Metropolitan Borough Council [2000] L & TR 533
Neuberger J followed the Brown decision and held that, on the second rent review under a lease of 125 years with rent reviews every 14
years, the hypothetical term was to be a term for such length as might be expected to be obtained in the open market and not a term equal to
the unexpired residue of the actual lease, ie some 97 years.
6 Milshaw Property Co v Preston Borough Council [1995] EGCS 186.
7 Norwich Union Life Insurance Society v Trustee Savings Bank Central Board [1986] 1 EGLR 136; The Ritz Hotel (London) Ltd v Ritz
Casino Ltd [1989] 2 EGLR 135; Lynnthorpe Enterprises Ltd v Smith (Sidney) (Chelsea) Ltd [1990] 2 EGLR 131; British Gas plc v Dollar
Land Holdings plc [1992] 1 EGLR 135; St Martin's Property Ltd v Citicorp Investment Bank Properties Ltd [1998] EGCS 161;
Chancebutton Ltd v Compass Services UK & Ireland Ltd [2004] 2 EGLR 47. The last decision indicates that the same principle applies if the
term of the actual lease is computed from a date substantially earlier than the date of the grant of the lease, so that when a lease was granted
in 1989 for a term of 25 years (less one day) from 24 June 1982 and the hypothetical letting was for a term equal to the term originally
Page 740
granted under the lease, the term of the hypothetical lease on each rent review was a term of 25 years (less one day) from 24 June 1982.
8 See the decisions cited in note 5 above, and see the decision of Neuberger J in Canary Wharf Investments (Three) v Telegraph Group
Ltd (25 June 2003, unreported).
HR A[3724]
The hypothetical lease may be one under which the tenancy has the potentiality of some statutory extension. The most
obvious case is the qualified right to a new tenancy accorded to tenants occupying premises for the purposes of a
business under Pt II of the Landlord and Tenant Act 1954. The valuation of the rent under the hypothetical lease should
take account of such a potential benefit available to the hypothetical willing lessee1. The right to a new tenancy under
the 1954 Act is qualified in that the landlord is entitled to oppose the grant of a new tenancy on specified grounds such
as an intention to redevelop the premises, and the rights of the tenant depend on certain procedural steps being taken by
him in good time. The task of the valuer is not to assess what new tenancy would be likely to be granted at the end of
the hypothetical lease, but rather to consider what effect (if any) on the rent agreed for the hypothetical lease would be
made by the prospect of a new tenancy. If the actual lease is one which is 'contracted out' of the Landlord and Tenant
Act 19542, it is likely that a contracting out term will also be a part of the hypothetical lease, and in that event no
question of a new lease ordered under statute arises. Of course, the rent review clause may specify that no account is to
be taken of the possibility of statutory protection for the hypothetical lessee3.
HR A[3725]
1 Pivot Properties Ltd v Secretary of State for the Environment (1980) 41 P & CR 248, [1980] 2 EGLR 126.
2 Ie by an agreement to that effect approved by the court under LTA 1954, s 38(4).
3 See eg Toyota (GB) Ltd v Legal & General Assurance (Pension Management) Ltd (1989) 59 P & CR 435, [1989] 2 EGLR 123.
Page 741
lease/Premises to be valued
Premises to be valued
(a) The presumption of reality
HR A[3726]
The next essential task for the valuer is that he should know precisely that which in physical terms he is to value. As is
always the case the answer must lie in the terms of the rent review clause. In most cases it is directed that the valuation
is to be of the demised premises. However, there is nothing to prevent the parties agreeing that the value is to be, or is to
be based on, that of other premises altogether. In one case the reviewed rent was to be a multiple of the rental value per
square foot of a different and hypothetical building in the same locality as the demised premises1. The purpose behind
such a provision will usually be the difficulty, as perceived at the date of the lease, in finding good actual comparable
properties in order to find the rental value at each review. A difficulty with specifying as the basis of review the rental
value of a hypothetical or notional property is to know with certainty the physical characteristics which that
hypothetical property is to be assumed to have. Where the actual demised premises have some characteristic which
affects their value, for instance a substantial open yard area which can be used for loading and unloading vehicles, it
will generally be assumed that the hypothetical premises have the same or a similar physical characteristic even though
this characteristic is not typical of properties of the sort let2. The hypothetical property should therefore be described
with some precision3. It is possible to stipulate that the rent review is to proceed by reference to some actual other
property as opposed to some hypothetical property. A further possibility is that the landlord is given an option to decide
whether the review shall be by reference to the demised premises or to some notional property4. Where a tenant
occupies together with the premises let to him and as part of the holding other premises of which the landlord is not the
owner those other premises may become a part of the demised premises by accretion and will be valued on a rent
review5.
HR A[3727]
1 Standard Life Assurance Co v Oxoid Ltd [1987] 2 EGLR 140. The hypothetical building was described as 'a standard single industrial
building in the same locality as the demised premises and of like age'. Such formulations can give rise to their own difficulties of
interpretation and questions may be raised, as in the above case, of what is the same locality as the demised premises and what is the size of
the hypothetical building. See also Standard Life Assurance v Unipath Ltd [1997] 2 EGLR 121.
2 See Lansdown Estates Group Ltd v TNT Roadfreight (UK) Ltd [1989] 2 EGLR 120. See also the last note.
3 A further illustration of the difficulties which can arise where the specification of the hypothetical property is imprecise is afforded by
Dukeminster (Ebbgate House One) Ltd v Somerfield Properties Co Ltd [1997] 2 EGLR 125 where the notional property was a warehouse of
50,000 sq ft within a 35-mile radius of Ross-on-Wye, which was the location of the demised premises. The landlord wished to select a
location for the notional warehouse within the specified radius which would throw up the highest rental value. It was held that the landlord
was not entitled to select the location. Instead, commercial sense had to be given to the definition of the hypothetical property by adding the
words 'situated either where the demised premises are situated or in a location comparable thereto'.
4 See Dukeminster (Ebbgate House One) Ltd v Somerfield Properties Co Ltd [1997] 2 EGLR 125.
Page 742
5 Kensington Pension Developments Ltd v Royal Garden Hotel (Oddenino's) Ltd [1990] 2 EGLR 117.
HR A[3728]
Where there is the usual provision that the reviewed rent is to be ascertained by reference to the value of the demised
premises there is a presumption that the hypothetical letting is to be of those premises as they stood at the review date1.
This presumption is an aspect of the more general presumption of reality which is applied to the interpretation of rent
review clauses2. If the lease contains no express direction as to what is to be valued the prima facie conclusion will be
that the valuer must value the demised premises as they stood at the review date3. The presumption has a number of
ramifications. If the tenant has improved the property at his own expense since the grant of the lease then in the absence
of a provision to the contrary the premises will still be valued as they were at the review date, that is with the benefit of
the improvements, since that was their actual condition at the review date4. If the valuation is directed to be on the basis
that the premises are available to be used for some specified purpose the physical state of the premises will still be taken
to be as it was at the review date and not as notionally adapted to serve that purpose5. On the other hand, where it is to
be assumed that a property is in a particular use at the valuation date it is also to be assumed that any works needed to
enable that use to be lawfully carried out have been done6. The distinction between the two situations is that in the first
case the direction is that the premises are available to be used for a particular purpose whereas in the second case the
direction is that the premises are to be assumed actually to be in use for a particular purpose.
HR A[3729]
1 Laura Investment Co Ltd v Havering London Borough Council [1992] 1 EGLR 155; Goh Eng Wah v Yap Phooi Yin [1988] 2 EGLR
148, PC; Braid v Walsall Metropolitan Borough Council [1998] EGCS 41 (where the presumption was reiterated but rebutted).
2 The presumption of reality as a general principle of construction is discussed in paras HR A[3648]-[3663]. The presumption of reality is
a similar concept to that contained in the description of valuation rebus sic stantibus (matters being taken to be as they actually are).
Legislation enacted between the grant of the lease and a rent review date may affect the rental value of the premises on that review date. An
example might be requirements imposed by the Disability Discrimination Act 1995 which could impose expenditure on the hypothetical
tenant. Sometimes this point is met by a provision in the rent review clause that the premises are deemed at each review date to comply with
all statutory requirements then in force.
3 Ravenseft Properties Ltd v Park [1988] 2 EGLR 164.
4 Ponsford v HMS Aerosols Ltd [1979] AC 63, [1978] 2 All ER 837. The question of express requirements to disregard the effect of
improvements is considered at paras HR A[3766]ff.
5 Trust House Forte Albany Hotels Ltd v Daejan Investments Ltd [1980] 2 EGLR 123. However, it may be necessary to assume that there
exists a planning permission for the use specified: see para HR A[3989].
6 In Little Hayes Nursing Home Ltd v Marshall (1993) 66 P & CR 90 premises were to be valued for the purposes of an option in a lease
to acquire the freehold on the supposition that they were used as a home for the elderly. Such a use required registration under the Registered
Homes Act 1984. It was held that any work which would be necessary in order to obtain registration under the Act had been carried out.
HR A[3730]-[3740]
The presumption is, of course, no more than a prima facie guide to interpretation. It must give way not only to an
express provision to the contrary, such as an express requirement to disregard improvements effected by the tenant, but
Page 743
also to other indications in the lease which suggest a different result. The rent review clause may state that the valuation
is to be of only a part of the totality of the premises which are then demised1. Where the rent review clause does contain
a provision of this last type, for instance that the valuation is to be of a site demised not including buildings which have
been erected on it, the presumption of reality may still have a part to play since the condition of the site will generally
be taken to be that in which it was at the review date. On this reasoning improvements carried out by the tenant to the
site as such would have to be taken into account2. A particular way in which the parties sometimes depart from reality
is that they prescribe what is to be taken as the floor area of the demised premises. The purpose is to obviate the need
for a remeasurement at the date of each review. In such a case the demised premises at the review date are to be taken to
have the floor area as stipulated even though an actual remeasurement may show that the true area is different. Apart
from an express provision requiring a departure from the actual physical state of the property an implication to that
effect may be required in order to give commercial efficacy to the rent review clause. A term was implied in one case so
as to require that the position of an access to the property should be disregarded since without the implication no effect
could be given to the commercial purpose of the clause which was the assessment of a rent in the open market3.
HR A[3741]
1 In Ipswich Town Football Club Co Ltd v Ipswich Borough Council [1988] 2 EGLR 146 the demised premises at the date of the review
comprised a sports ground and buildings on it erected by the tenant. Since the lease as a whole distinguished at various points between the
sports ground and the buildings on it and the rent review clause required a determination of the rental value of the sports ground it was held
that the value of the buildings was not to be included. The decision may therefore be regarded as a case in which the presumption was
rebutted by an overall examination of the language of the lease. The question of rent reviews to ground rents is considered at para HR
A[3808].
2 Sheerness Steel Co plc v Medway Ports Authority [1992] 1 EGLR 133. The reasoning of the Court of Appeal in this case is not founded
on the presumption of reality but the result is wholly consistent with it.
3 Jefferies v O'Neill (1983) 46 P & CR 376, [1984] 1 EGLR 106.
HR A[3742]
Many leases are granted with a variety of ancillary rights given to the tenant. It is right in principle that the hypothetical
lease should be taken to be granted with the same ancillary rights. In most cases the actual lease will expressly specify
the ancillary rights, such as, in the case of a lease of a single floor of a building, rights of access through the remainder
of the building, rights of support from the remainder of the building, and rights to connect into electricity, water and
other service conduits through the rest of the building. There is no difficulty in reproducing these rights in the
hypothetical lease. In order to achieve this the hypothetical willing lessor who will grant these ancillary rights has to be
assumed to have the characteristic of an owner of the rest of the building which will enable him to grant the rights1.
HR A[3743]
HR A[3744]
Page 744
Ancillary rights in favour of a lessee can arise other than by way of an express grant. The effect of s 62 of the Law of
Property Act 1925 is that such rights may be passed to the lessee1. Also such rights can be implied as against the
landlord2. Ancillary rights arising by statute or by way of implied grant should attach to the hypothetical lease. In
principle an implied reservation of rights in favour of the hypothetical willing lessor can arise but such rights are rarer in
practice3.
HR A[3745]
1 LPA 1925, s 62 provides that every conveyance of land passes with it all liberties, privileges, easements, rights and advantages
appertaining to the land or enjoyed with the land at the time of the conveyance. A conveyance includes a lease. Its purpose is to avoid the
need to set out general words to this effect in every conveyance.
2 This may occur pursuant to the rule in Wheeldon v Burrows (1879) 12 Ch D 31, under which there is implied in favour of the lessee
easements over the retained land of the landlord which are continuous and apparent or necessary to the reasonable enjoyment of the land
granted and had been, and were at the date of the lease, used by the landlord for the benefit of the demised premises.
3 A reservation of rights in favour of the landlord will generally only be implied (a) in the case of an easement of necessity and (b) in the
case of an easement necessary to carry out the common intention of the parties.
(b) Fixtures and chattels
HR A[3746]
Items which have been brought onto the demised premises between the date of the lease and the date of the rent review
can be classified into one of three categories: (a) chattels, (b) fixtures, and (c) objects which have become part and
parcel of the land itself1. The first category is obvious and comprises chattels which have never been affixed to or
annexed to the land. The objects remain for use as chattels and in physical terms can be readily removed from the land.
Items in the second and third categories have, by reason of their degree of annexation to the land and the purpose of the
annexation, become in law a part of the land itself2. The distinction between the second and third categories is that for
an object to be a fixture, that is in the second category, it must be capable of being removed from the land both without
losing its usefulness and without causing substantial physical harm to the land or building to which it has been annexed.
Another way of putting the same point is to say that a fixture is something which was affixed to the land so as to
become an accessory to the land or building. The idea of a fixture does not comprise that which has been made a part of
the building itself in the course of its construction3.
HR A[3747]
1 Elitestone Ltd v Morris [1997] 2 All ER 513, [1997] 1 WLR 687, HL. The threefold classification was commended by Lord Lloyd
([1997] 2 All ER 513 at 517). The items or objects brought onto the land are always chattels at the time when this occurs. The question is
whether they lose their status as chattels and fall into one or other of the second and third categories.
2 The principle that a chattel which is sufficiently annexed to land becomes a part of the land or a part of the realty is of ancient origin. It
is sometimes expressed by reference to the latin expressions, quicquid plantatur solo, solo cedit or inaedificatum solo, solo cedit. The same
principle was applied in Roman law and in the Civil law, and in Scotland is known as the principle of accession. The same principle applies
Page 745
to the second and third categories of items. The distinction between the two categories is, however, important when it comes to rent reviews,
as is explained later in the text.
3 See Boswell v Crucible Steel Co [1925] 1 KB 119 at 123, per Atkin LJ. The classification may be illustrated by an example. Suppose
that a tenant of an office building (a) brings in desks, chairs, computers and books, (b) installs demountable partitions attached to the walls
and floors, and (c) replaces the existing windows with new double glazed windows. The desks, chairs, etc are chattels. The partitions are
fixtures in that they are annexed to the building but may be readily removed and re-used without harm to themselves or to the building. The
new windows are objects which have become part and parcel of the land itself since they cannot be removed without losing their usefulness
and without causing substantial harm to the building. Sometimes (and confusingly) objects in the third category are described as landlord's
fixtures: see para HR A[3749], n 5.
HR A[3748]
It is important to keep clearly in mind two distinct principles of law. The first is the principle that objects may become
in law a part of the realty by reason of the degree and purpose of their annexation to the land1. Items within the second
and third of the above categories become a part of the realty in accordance with this principle. The other principle is that
in certain circumstances a person may be entitled to remove items from the land even though they have become a part of
the realty in accordance with the first principle2. Whether a person can do so depends, in the absence of express
provision, on the relationship between the parties, and different rules govern the relationship of landlord and tenant, of
vendor and purchaser and of mortgagor and mortgagee3. In regard to the relationship of landlord and tenant the relevant
rule is that a tenant may during or at the end of the lease remove what are termed tenant's fixtures. These are fixtures
annexed by the tenant for the purposes of his trade, as ornamental or domestic fixtures or for agricultural purposes4. It
should be noted that the rule permits removal only of fixtures, namely objects which fall into the second of the three
categories. A major source of confusion in this area of the law is the tendency to run together the two distinct principles
of law mentioned. A further expression sometimes used is landlord's fixtures. This is best understood to mean objects in
the second category which have been annexed to the premises during the lease by the landlord. They are not, of course,
removable by the tenant5. Further confusion is sometimes caused by the use of the word 'fittings' often as part of the
compendious phrase 'fixtures and fittings'. There is no precise legal definition of a fitting, and it usually connotes either
a chattel or a fixture depending on the nature and purpose of any physical annexation to the demised premises.
HR A[3749]
1 Both the degree and the purpose of the annexation must be considered. The degree of annexation necessary to render a chattel a part of
the realty will depend on the nature of the chattel. Thus, an ordinary dwelling house is likely to become a part of the realty even though it
rests on the ground by virtue of its own weight and without any further physical fixing: Reid v Smith (1905) 3 CLR 656; Elitestone Ltd v
Morris [1997] 2 All ER 513, [1997] 1 WLR 687, HL. The importance of the purpose of annexation is illustrated by the well-known instance
cited by Blackburn J in Holland v Hodgson (1872) LR 7 CP 328 at 325 to the effect that stones placed in position without mortar or cement
to form a dry stone wall become a part of the land whereas the same stones, if deposited in a builder's yard and for convenience sake
standing on top of each other to form a wall, would remain chattels. Useful guidance on the question of whether ordinary household items,
such as fitted carpets and kitchen units, are chattels or fixtures was given by the Court of Appeal in TSB Bank plc v Botham [1996] EGCS
149, sub nom Botham v TSB Bank plc (1997) 73 P & CR D1 CA.
2 The importance of distinguishing between the two principles of law is explained in Bain v Brand (1876) 1 App Cas 762 at 767, per Lord
Cairns, and in Elitestone Ltd v Morris [1997] 2 All ER 513, [1997] 1 WLR 687, HL.
3 The principles applicable to the various relationships are summarised in Megarry and Wade The Law of Real Property (5th edn, 1984)
pp 735-738.
4 See paras HR A[1641]ff. An illustration is Webb v Frank Bevis Ltd [1940] 1 All ER 247, CA, in which a shed built by the tenant on a
concrete floor and attached to it by iron straps was held to be a trade fixture and to be removable by the tenant at the end of the term. This
Page 746
decision illustrates the two questions which need to be asked, namely (a) whether the object remains a chattel or becomes a fixture and so
part of the realty and (b) whether the tenant is entitled to remove it on the basis that it is a tenant's fixture. If the shed had fallen into the third
category it would have been part and parcel of the land and so would not have been a fixture at all and would not have been removable.
5 The expression 'landlord's fixture' has at least four meanings: (1) Its best meaning is that stated in the text. (2) Another meaning is
fixtures annexed to the land by the tenant but which he is not entitled to remove because they do not come into one of the classes mentioned
such as trade fixtures. It is rare for items to come within this meaning. (3) A third meaning is items which were a part of the demised
premises at the grant of the lease. (4) A fourth meaning is that of objects which have become part and parcel of the land, ie the third of the
above categories. The expression was explained in this last sense by Lord Denning MR in New Zealand Government Property Corpn v HM
& S Ltd [1982] QB 1145, [1982] 1 All ER 624. Because of the ambiguities of meaning and in order to avoid confusion it is probably best to
avoid use of the expression.
HR A[3750]-[3760]
The rule which governs that which is to be valued on a rent review can only be understood by reference to the above
principles and by a clear understanding of the threefold classification of items which have been brought onto the
property1. The rule may itself be varied by an express provision in the lease but such express variations are unusual2.
Rent reviews are often said to be of 'the demised premises' and in such a case reference must be made to the definition
of the demised premises which is often included in a lease. This process could lead to an alteration in the rule which
would otherwise apply. More usually a reference in the lease to the demised premises will confirm the ordinary rule3.
The rule may be explained by reference to the three categories.
(a) The premises to be valued are to be taken not to include any of the tenant's chattels. These belong
to the actual tenant and he is assumed to have removed them.
(b) The premises to be valued are to be taken not to include any tenant's fixtures in the sense of that
expression just explained. The actual tenant has a right to remove these during or at the expiration of the
lease and he is taken to have exercised this right4. This rule is plainly just in that there is no reason why
the landlord should get the valuation benefit of items introduced by the tenant and which the tenant is
entitled to remove. Of course, any landlord's fixtures (again in the sense explained above) are to be
valued in determining the reviewed rent.
(c) Items in the third category, ie those which have become part and parcel of the land itself, are
properly regarded as tenant's improvements if they have been introduced into the premises by the tenant.
The valuation consequences of such improvements are considered below as a separate topic, but the
general principle is that these are taken to be a part of the demised premises to be valued unless there is
an express provision in the rent review clause which requires that their effect on value is to be
disregarded5. Such an express provision is frequently found.
(d) It is possible that the tenant has carried out alterations to the premises which are not improvements
and which reduce, or may reduce, the rental value of the premises. These alterations, provided they are
not tenant's fixtures, will become part and parcel of the land. In principle the valuation for rent review
purposes should take account of such alterations unless (1) the alterations were carried out in breach of
covenant, in which case they should be disregarded on the principle that a person cannot benefit from his
own wrong, or (2) there is an express provision that the effect on value of such depreciatory alterations is
to be disregarded. Such an express provision is often found, either in the rent review clause itself or in a
licence which permits the alterations6. Licences to carry out alterations which may adversely affect the
value of the demised premises sometimes contain a requirement that the tenant will remove the
alterations and restore the property at the end of the term if the landlord so requires. A provision of this
nature should not in principle affect the position at a rent review date which necessarily occurs during the
term. Furthermore, such a provision contained in a licence will not normally be imported into the terms
of the hypothetical lease7.
Page 747
HR A[3761]
1 The ambiguities in the use of the word fixture and the imprecise usage of the word sometimes encountered were noted by Lord Lloyd in
Elitestone Ltd v Morris [1997] 2 All ER 513, [1997] 1 WLR 687, HL.
2 There could be an express provision that the value of tenant's fixtures was to be taken into account in the valuation, although this would
seem generally to be unfair to the tenant.
3 In New Zealand Government Property Corpn v HM & S Ltd [1982] QB 1145, [1982] 1 All ER 624, the repairing covenant in the lease
was an obligation to 'keep the demised premises and the appurtenances thereof including the Landlord's fixtures' in good repair. This was
said to indicate that the tenant's fixtures were not to be regarded as a part of the demised premises.
4 New Zealand Government Property Corpn v HM & S Ltd [1982] QB 1145, [1982] 1 All ER 624. Tenant's fixtures may be removed (and
are taken to have been removed for the purposes of a rent review) even though they were installed by a tenant pursuant to an obligation to
the landlord: Mowats Ltd v Hudson Bros Ltd (1911) 105 LT 400, CA; Young v Dalgety plc [1987] 1 EGLR 116. See also Ocean Accident &
Guarantee Corpn v Next plc [1996] 2 EGLR 84.
6 There is a possible view that the meaning of improvements is so wide that it can encompass works which actually reduce the rental
value of the demised premises provided that they are of some benefit to the tenant. This is discussed in para HR A[3770].
7 Pleasurama Properties Ltd v Leisure Investments (West End) Ltd [1986] 1 EGLR 145.
(c) Repairs and improvements
HR A[3762]
Most leases contain a provision that the tenant shall keep the premises in proper repair1. The state of repair can
obviously affect the value of the premises on a rent review. The principle is that the tenant is to be assumed to have
complied with his covenant at the review date, so that the premises are assumed to be in a state of repair which accords
with the contractual obligation2. The effect of the Leasehold Property (Repairs) Act 1938 (under which the consent of
the court is required in certain circumstances before a landlord can take proceedings to enforce a repairing obligation) is
not to be taken into account in considering the notional state of repair of the premises on the assumption that the tenant
has complied with his repairing obligations3. To the extent that the premises are not in fact in proper repair there is
therefore a departure from the presumption of reality. The justification for the principle is that if it were otherwise the
tenant would be benefiting from his own wrong4. If the landlord has failed to comply with an obligation to repair placed
on him the same justification does not apply, so that the premises would have to be valued in their actual state of
disrepair. There is often an express provision in rent review clauses that the tenant is to be assumed to have complied
with all his covenants, and this will apply to a repairing obligation as to all other covenants.
HR A[3763]
Page 748
1 The language used in such covenants is very varied. A typical obligation would be to keep the premises in good and tenantable repair.
The nature of such covenants and the distinction between what is repair and what goes beyond repair and is an improvement is considered in
paras HR A[7380.32]ff.
2 Harmsworth Pension Funds Trustees Ltd v Charringtons Industrial Holdings Ltd [1985] 1 EGLR 97; Little Hayes Nursing Home Ltd v
Marshall (1993) 66 P & CR 90.
3 Ladbroke Hotels Ltd v Sandhu (1995) 72 P & CR 498, [1995] 2 EGLR 92.
4 It is probably not the case that a tenant would ultimately benefit from his own wrong even if he did secure a lower rent because he had
failed to keep the premises in repair in accordance with his covenants. He would still be liable to pay damages to the landlord for breach of
covenant, and in such a case leave to bring an action for damages under the Leasehold Property (Repairs) Act 1938 would, when needed, be
likely to be granted. The principle can still be justified in that it avoids uncertainty and the prospect of further litigation. The same principle
probably applies where the court is required to determine a rent for a new tenancy to be granted under Pt II of the Landlord and Tenant Act
1954: see Family Management v Gray [1980] 1 EGLR 46.
(d) Improvements
HR A[3764]
Where the tenant has carried out improvements to the premises at his own expense an initial impression of that which is
just suggests that he should not have to pay rent for his own improvements. In other words the value of the
improvements should be disregarded on a rent review. However, in the absence of a provision in the rent review clause
to this effect the rule is that the rental value is to be ascertained taking account of the improvements. The reason is that
the improvements when effected become part and parcel of the realty and of the demised premises and a direction in a
rent review clause to find the rental value of the demised premises must, in the absence of a stipulation to the contrary,
include the value of the improvements1.
HR A[3765]
1 Ponsford v HMS Aerosols Ltd [1979] AC 63, [1978] 2 All ER 837; Laura Investment Co Ltd v Havering London Borough Council
[1992] 1 EGLR 155. The rule is sometimes cited as an example of the presumption of reality: see paras HR A[3662] and HR A[3728].
HR A[3766]
There is often an express provision that the value of improvements carried out by the tenant is to be disregarded when
finding the open market value of the demised premises. There are statutory provision to this effect in the Landlord and
Tenant Act 1954, which applies where the court has to determine the rent to be paid under a new tenancy ordered to be
granted of business premises1. One means of applying the same rule to a rent review clause is simply to incorporate the
statutory provisions. If this is done it must be borne in mind that the Act limits the types of improvement which are to
be disregarded. The statutory disregard does not apply to improvements carried out not under the current tenancy and
more than 21 years ago, and the disregard only applies where the premises have been comprised in tenancies to which
the Act applies at all times since the improvement was completed2. The statutory provisions are printed and discussed
elsewhere3. It should also be borne in mind that the current statutory provisions are drafted so as to accord with the
machinery of the Act. For instance, there is a reference to the date of the making of an application for a new tenancy
under the Act. If the statutory provisions are to be incorporated into a rent review clause good drafting therefore
Page 749
requires that appropriate modifications are made4. The statutory provision as enacted in 1954 were substantially
modified in 19695 and in some older leases it may be necessary to decide whether it was the original or the amended
version which is to apply6. If it is concluded that the effect on rent of certain improvements is to be disregarded due to
an express provision to that effect, whether based on the provisions of the Landlord and Tenant Act 1954 or otherwise,
there remains the question of how effect is to be given to this disregard as a matter in part of law and in part of valuation
technique. This is a subject which is considered separately later7.
HR A[3767]
1 Landlord and Tenant Act 1954, s 34(1)(c), (2).
2 See LTA 1954, s 34(2)(a), (b).
3 See HR B[553].
4 See the observations of Slade LJ in Brett v Brett Essex Golf Club Ltd [1986] 1 EGLR 154 at 157. However, if the current statutory
provisions are applied without modification in a rent review clause it is probable that the court would find a means of applying them with
any necessary modifications being achieved by process of construction or by the implication of terms.
6 See Brett v Brett Essex Golf Club Ltd [1986] 1 EGLR 154, in which it was held by the Court of Appeal that the reference was to the
former unamended version of the Act even though the lease was granted after the amendments had been effected. There is no presumption
that a reference in a contract to legislation means the legislation in its original or its amended form and in each case it is a matter of ordinary
construction to decide which was intended. In a lease granted today it is most unlikely that the reference would be construed as being to the
pre-1969 form of s 34 of the Landlord and Tenant Act 1954. In a lease granted before the 1969 amendment the reference to the 1954 Act
will be to that Act in its original form unless there is a specific reference to possible future amendments, eg 'as the same may from time to
time be amended'.
HR A[3768]
Where the lease contains an express requirement to disregard the effect on value of improvements by reference to its
own specific language and not that in the Landlord and Tenant Act 1954 it is necessary, if the improvement is to be
disregarded1, that it falls clearly within the language of the particular clause. This subject is best discussed by
considering: (a) the meaning of improvements; (b) who has to have carried out the improvements; (c) when they have to
have been carried out; (d) who has to have paid for them; (e) the question of improvements which have been carried out
pursuant to an obligation to the landlord; and (f) the need for the consent of the landlord.
HR A[3769]
1 Reference is frequently made to disregarding improvements. This is usually not strictly accurate since most rent review clauses require
that what is to be disregarded is the effect on value of improvements rather than the improvements themselves. How the value effect of an
improvement is to be disregarded is a matter partly of law and partly of valuation technique, and is something discussed later in para HR
Page 750
A[4484]. In practice, it seems to make no difference whether the rent review clause refers to disregarding improvements or disregarding the
effect on value of improvements.
HR A[3770]-[3780]
It has been held that under the Landlord and Tenant Act 1927 an improvement means that which improves the premises
from the point of view of the tenant1. This is in the context of a statutory provision referring to covenants against the
making of improvements and a deemed proviso that consent is not to be unreasonably withheld2. It is a consequence of
this meaning that works carried out by the tenant may be an improvement even though they do not add to the letting
value of the premises and, indeed, even though they reduce the letting value of the premises3. The question is whether
the meaning established for the purposes of the above legislation is to be applied to provisions in rent review clauses of
the nature here under discussion. The purpose of a provision requiring a disregard of improvements suggests that a
different meaning is normally intended. That purpose is that the tenant should not have to pay an additional rent for that
which he has himself done and paid for. If there is no additional rent because the work has not improved the rental value
of the premises there is no purpose in applying the provision. The better view is that in the present context an
improvement means physical works carried out to the demised premises which have increased their rental value4. It
should be emphasised that the question explored in this paragraph relates to an exceptional case. In most cases works of
improvement carried out by the tenant will not only make the premises more beneficial and useful from his point of
view but will also increase their rental value.
HR A[3781]
1 Woolworth & Co Ltd v Lambert [1937] Ch 37, CA.
3 This consequence was expressly recognised by Slesser LJ in Lambert v F W Woolworth & Co Ltd (No 2) [1938] Ch 883.
4 A tenant may lawfully carry out alterations to the premises which reduce their rental value. Whether or not these are to be disregarded
will depend on whether there is a further provision in the lease which specifies that such alterations are to be disregarded: see para HR
A[3750].
HR A[3782]
A point which may be of more practical importance is to distinguish between improvements and (a) fixtures attached to
the premises by the tenant and (b) repairs. The first distinction has already been explained1. Where there is an express
requirement to disregard improvements the distinction may not matter since if the work is an improvement it will be
disregarded by virtue of the express provision and if it is the affixation of a fixture it will be disregarded in accordance
with the rule that for rent review purposes the tenant is to be assumed to have removed tenant's fixtures. The second
distinction may be of greater practical impact. If the work is no more than the fulfilment of the tenant's duty to repair
under the covenants in the lease then the valuation effect of the work must be taken into account. If the work goes
beyond repair and is an improvement then its valuation effect will fall to be disregarded under the express provision. A
repair is something which remedies a physical deterioration in the premises and which in its nature, scale, extent and
cost is not beyond what an ordinary person would regard as repair2. In practice, the distinction between repairs and
improvements arise in two situations. The first is that just mentioned where a tenant has carried out work which he
alleges goes beyond repair and is an improvement which he says must be disregarded by reason of an expressly required
Page 751
disregard of improvements. The second, and probably more commonly encountered, situation is where the tenant has
not carried out certain work and the landlord contends that it is work of repair which ought to have been carried out and
must for valuation purposes be assumed to have been carried out3.
HR A[3783]
2 Post Office v Aquarius Properties Ltd [1985] 2 EGLR 105 per Hoffmann J; [1987] 1 All ER 1055, CA. See para HR A[7380.28]. An
illustration of the problem might be that in an office building the air conditioning system was old and often broke down. The tenant decided
to replace it with a new and improved system. If the work amounted to repair the value of the new system should be taken into account at the
next rent review. However, the tenant could argue that under the repairing covenant he was obliged only to carry out immediate or 'patching
up' repairs to the old system and that the installation of the new system was an improvement to be disregarded at the next rent review.
However, there is no principle that because a building has only a short 'commercial life' the tenant is obliged only to carry out temporary and
inadequate repairs rather than a proper repair to a proper standard: Ladbroke Hotels Ltd v Sandhu [1995] 2 EGLR 92. Such questions can
have a significant effect on the level of the market rent. In Secretary of State for the Environment v Euston Centre Investments Ltd (No 2)
[1994] EGCS 167 an arbitrator had assumed that a tenant had removed all asbestos within a large office building because to do so was
required under his repairing obligation whereas on a true construction of the covenant all that was required was to remove those parts of the
asbestos which had been physically damaged in some way. The award was therefore remitted to the arbitrator for further consideration.
Where the demised premises include items of mechanical or electrical plant (air conditioning systems, boilers etc) and the tenant's repairing
obligation extends to such items, as will usually be the case, the problems discussed earlier in this note of whether the duty to repair involves
the replacement of the item in question may be approached with the aid of published guides, for example the Chartered Institute of Building
and Services Engineers (CIBSE) publications. These are general guides only and cannot provide an automatic answer to the issue of whether
the particular item in question has reached the end of its working life. That issue can usually only be resolved in the event of a dispute by a
consideration of such factors as the standard of initial construction of the original item, its maintenance history, its record of breakdowns and
its current condition. Such considerations may indicate a longer or shorter working life than that indicated by general guides: see Fluor
Daniel Properties Ltd v Shortlands Investments Ltd [2001] EGCS 8.
3 The decisions in Secretary of State for the Environment v Euston Centre Investments Ltd [1994] EGCS 167 and Land Securities v
Westminster City Council (No 2) [1995] 1 EGLR 245 are instances of the second type of situation.
HR A[3784]
The disregard provision will normally specify who it is must have carried out the improvement if it is to be disregarded.
In nearly all cases an improvement carried out by the tenant, or by a predecessor in title as tenant under the lease where
there has been one or more assignments, is to be disregarded. A question which sometimes arises is whether an
improvement carried out by a subtenant is to be disregarded when the rent review is under the head lease. A well drawn
disregard provision will refer to improvements carried out by the tenant or by a subtenant, or will contain some phrase
such as improvements carried out by anyone deriving title from the tenant which will bring in improvements carried out
by a subtenant. The justice of the case generally demands that if improvements effected by the tenant are to be
disregarded so also should improvements effected by a subtenant. However, in some leases the express disregard
provision extends only to work carried out by the tenant, and other provisions in the lease may show that a distinction is
generally drawn between tenants and subtenants. In such a case an improvement carried out by a subtenant would have
to be taken into account on a rent review conducted under the head lease1.
HR A[3785]
Page 752
1 The importance of the distinction between tenants and subtenants in the context of a disregard provision can be seen from Daejan
Investments Ltd v Cornwall Coast Country Club [1985] 1 EGLR 77, where there was a requirement to disregard any addition to the value of
the premises attributable to the existence of a gaming or Justices' licence the benefit of which belonged to the tenant. It was held that the
disregard did not apply to the value effect of a licence held by a subtenant.
HR A[3786]
Difficulty may arise when the provision in the rent review clause states that what are to be disregarded are
improvements to be carried out by the tenant. The expression 'carried out' is that used in the Landlord and Tenant Act
19541. Of course, the exact language of the rent review clause must be considered in all cases and the wording can vary.
It is sometimes provided that improvements are only to be disregarded when they have been carried out and paid for by
the tenant. The additional requirement of payment may make a difference. However, where the provisions in question
state only that the improvements have been carried out by the tenant, the position is reasonably clear. The tenant need
not have physically done the works himself. Obviously the works may have been carried out by contractors on his
behalf. The general principle is that a tenant will satisfy the requirement that the improvements in question have been
carried out by him if he can establish that he either personally effected the works himself or got a third party to do them.
The latter possibility will generally be satisfied if the tenant can show that he has made an arrangement with a third
party, typically, but not necessarily, a contract, under which the third party agreed with the tenant to do the specific
works involved in effecting the improvements2.
HR A[3787]
1 S 32(2).
2 Durley House Ltd v Viscount Cadogan [2000] 1 WLR 246, [2000] 1 EGLR 60; Scottish & Newcastle Breweries plc v Sir Richard
Sutton's Settled Estates [1985] 2 EGLR 130.
HR A[3788]
In one sense, where a third party does the works, the tenant has arranged for them to be carried out rather than carried
them out himself. This does not prevent the test being satisfied. It is quite natural in such a case to regard both the tenant
and the third party as having carried out the works. There is perhaps a further qualification in that, if the tenant has
arranged for a third party to carry out the works, it is probably necessary that the tenant has retained some involvement
in the overall process if he is to be said to have carried out the works. That involvement may be identifying, supervising
or financing the works1. It is not necessary that the tenant has paid for the whole or any part of the works unless the
contractual provision in the rent review clause expressly requires this2. If there is a provision requiring that the works
have been paid for by the tenant, further problems may arise. It may be that the tenant has paid for a part of the works or
has contributed towards the overall cost. It may be that the works are carried out under some arrangement whereby the
tenant gives consideration for the carrying out of the works but does not directly pay for them. It is not clear how a
requirement of payment by the tenant is to be applied in such circumstances. Further guidance may be obtained on the
general point under discussion from the authorities on the meaning of the landlord intending to demolish and
reconstruct the premises under the Landlord and Tenant Act 1954, where it has been held that a landlord can show the
requisite intention even though the works are carried out under a building lease to be granted by him3. There may be
some event, such as a provision in a deed, which estops the landlord from contending that it was someone other than the
tenant who carried out the improvement4.
Page 753
HR A[3789]
1 Durley House Ltd v Viscount Cadogan [2000] 1 WLR 246, [2000] 09 EG 183. This decision concerned a rent review clause which
incorporated the 'disregard' provisions in the Landlord and Tenant Act 1954, s 34. The principles to be derived from the case apply expressly
to a case where the rent review clause states that improvements are to be disregarded when 'carried out by the tenant'. The facts were that the
tenant of serviced apartments had contracted with a third party whereby the third party was to improve and manage the premises with the
gross takings shared between the two parties. It was held that in these circumstances the tenant could be said to have carried out the works so
that they fell to be disregarded on a rent review.
2 Durley House Ltd v Viscount Cadogan [2000] 1 WLR 246, [2000] 09 EG 183.
3 S 30(1)(f). See Gilmour Caterers Ltd v St Bartholomew's Hospital Governers [1956] 1 QB 387. See also para HR B[514].
4 Daejan Investments Ltd v Cornwall Coast Country Club (1984) 50 P & CR, [1985] 1 EGLR 77.
HR A[3790]
The ordinary case is where the tenant has carried out the improvement during the current tenancy. Possible difficulties
arise where the tenant has carried out the work but either during a previous tenancy or prior to and in contemplation of
the grant of the current tenancy. Three sets of circumstances may be distinguished.
(a) The first case is where the work was carried out under a previous tenancy of the premises by a
previous tenant. It is plain that in such a case the disregard does not apply and account must be taken of
the value of the work on a rent review under the current tenancy.
(b) The second case is where the tenant under the current tenancy carried out the work under a
previous tenancy of the premises. If the rent review clause directs that there be disregarded any
improvement carried out by the tenant it could be argued that the work is to be disregarded since it was
carried out by the tenant. Such an argument is unsound. There are two reasons why in such a case the
value of the work is to be taken into account. First, the work in question is not an improvement as that
word is to be understood in the context of a provision in the current lease. In the provision an
improvement means an improvement to the premises as demised, not an improvement which itself
created the premises as demised1. Second, it may be that the context requires some qualification to be
placed on the word 'tenant', the obvious qualification being that it means the tenant in his capacity as the
tenant under the current lease2. A similar qualification had been applied in a similar context by the
House of Lords when considering the original provisions of the Landlord and Tenant Act 19543. It
follows that if a tenant taking a new lease wishes that the effect on value of improvements which he has
carried out under a previous lease should be disregarded on rent reviews under the new lease he should
insist on the inclusion of a clear express provision to this effect. The Landlord and Tenant Act 1954 was
amended by the Law of Property Act 1969 so as to provide for such a result when the rent is determined
for new leases granted under the Act, but subject to substantial qualifications.
(c) The third case is where the tenant carries out the work not as tenant under a previous tenancy but in
contemplation of the grant of the current tenancy and before that tenancy is actually granted. If the strict
logic of the above qualification, namely that the tenant means the tenant in his capacity as tenant under
the existing lease, is followed the work effected in the circumstances here postulated would not be
disregarded on rent reviews under the current tenancy since when the tenant carried out the work he was
a prospective, not an actual, tenant4. At this point strict logic and consistency give way to a consideration
Page 754
of what the parties intended, and work carried out in the above circumstances will be disregarded5. The
criterion appears to be whether the carrying out of the improvements was referable to the current
tenancy, in which case their value is to be disregarded, or was referable to some prior interest of the
tenant, in which case the opposite conclusion will hold good6.
It will be noted that a limitation of the disregard to improvements carried out under or at least referable to the current
tenancy is more restrictive than the provisions now contained in the Landlord and Tenant Act 19547.
HR A[3791]
1 In Brett v Brett Essex Golf Club Ltd [1986] 1 EGLR 154 the tenants had erected a golf clubhouse on land demised to them in 1973. That
lease was surrendered and a new lease granted to them in 1978. The second lease required that under rent reviews there should be
disregarded 'any effect on rent of any improvement carried out by the tenant or a predecessor in title of his otherwise than in pursuance of an
obligation to his immediate landlord'. The Court of Appeal held that in the context of the above provision in the second lease the clubhouse
was not an improvement and so was not to be disregarded. In Panther Shop Investments Ltd v Keith Pople Ltd [1987] 1 EGLR 131 the
tenants had during an earlier lease constructed a back extension and a separate storage building on the demised premises. The required
disregard was of any improvement carried out by the lessees. Again, it was held that the works had to be taken into account on the ground
that an improvement meant an alteration to the existing premises and not some previous works which were a part of the premises as demised.
In Scottish & Newcastle Breweries plc v Sir Richard Sutton's Settled Estates [1985] 2 EGLR 130 at 137 Judge Baker QC described an
improvement as an alteration or addition to a building which the landlord has provided, so that what is contemplated is that the landlord
provides a building and the tenant then adds something to it or improves it in some way.
2 Brett v Brett Essex Golf Club Ltd [1986] 1 EGLR 154 at 158, per Slade LJ.
3 East Coast Amusement Co Ltd v British Transport Board [1965] AC 58, sub nom Re Wonderland, Cleethorpes, East Coast Amusement
Co Ltd v British Railways Board [1963] 2 All ER 775.
4 If the tenant held an enforceable agreement for a lease at the time he carried out the works he might claim that he came within the
disregard provision as a tenant in equity.
5 Hambros Bank Executor and Trustee Co Ltd v Superdrug Stores Ltd [1985] 1 EGLR 99; Scottish & Newcastle Breweries plc v Sir
Richard Sutton's Settled Estates [1985] 2 EGLR 130.
6 Scottish & Newcastle Breweries plc v Sir Richard Sutton's Settled Estates [1985] 2 EGLR 130.
HR A[3792]-[3800]
A provision for the disregard of improvements will often refer to the works having to be carried out by the tenant for the
disregard to apply. The important point is not so much who has carried out the works but who has paid for them.
Therefore, if the tenant has borne the cost of the works it probably does not prevent them being disregarded that the
landlord has carried them out1.
HR A[3801]
Page 755
HR A[3802]
It is customary to provide that improvements shall be disregarded except when carried out pursuant to an obligation to
the landlord. Such a provision mirrors that in s 34 of the Landlord and Tenant Act 1954. An improvement may be
carried out by the tenant pursuant to a statutory obligation as well as pursuant to an obligation to the landlord.
Covenants in leases often require that the tenant is to comply with statutory obligations. In such a case the improvement
is not to be disregarded since, notwithstanding the effect of statute, it is still carried out pursuant to an obligation to the
landlord1. The obligation owed to the landlord does not have to be one contained in the lease. Improvements are often
permitted by a licence granted by the landlord for this purpose. Such licences often contain provisions that the tenant
shall carry out the permitted improvements in a certain way, for example to a proper standard, in accordance with
specified plans or within a specified time. Such ancillary obligations do not prevent the operation of the disregard. The
obligations in the licence are subsidiary to the main purpose of the licence which is to grant permission for the works2.
Even a term in a licence that the provisions of the lease shall apply to the altered premises as if the premises in their
altered state had originally been comprised in the lease does not prevent the application of the disregard3. The licence
may expressly provide that the works are deemed to be carried out pursuant to an obligation to the landlord. The only
way to give effect to such a provision, where the lease provides that improvements are to be disregarded unless carried
out pursuant to an obligation to the landlord, is to read it as meaning that the disregard is not to apply with the result that
the valuation on a subsequent rent review is to take into account the improvements in question4. If a licence to carry out
an improvement requires that the tenant shall remove the improvement at the end of the term that obligation in the
licence will not normally be a term of the hypothetical lease5.
HR A[3803]
1 Forte & Co Ltd v General Accident Life Assurance Ltd (1986) 54 P & CR 9, [1986] 2 EGLR 115.
2 Godbold v Martin The Newsagents Ltd [1983] 2 EGLR 128; Historic Houses Hotels Ltd v Cadogan Estates [1993] 2 EGLR 151;
Daejan Properties Ltd v Holmes [1996] EGCS 185. Cf Ivory Gate v Capital City Leisure Ltd [1993] EGCS 76. A licence of this nature will
be construed as obliging the tenant to carry out the improvement to a proper standard if he avails himself of the consent to carry it out and
not as obliging him to carry out the improvement.
3 Historic Houses Hotels Ltd v Cadogan Estates [1993] 2 EGLR 151.
4 Daejan Properties Ltd v Holmes [1996] EGCS 185.
5 Pleasurama Properties Ltd v Leisure Investments (West End) Ltd [1986] 1 EGLR 145.
HR A[3804]
A further component often encountered in improvement disregard provisions is that the improvement is only to be
disregarded if carried out with the consent of the landlord where that consent is required under the terms of the lease. A
requirement of consent may exist under many leases although the covenant in question may refer to alterations and
other works without specific reference to improvements. If the tenant omits to apply for consent he loses the right to
have the effect on value of the improvements disregarded on subsequent rent reviews1. At least this will be so unless
the tenant can show that the landlord is estopped from relying on the absence of consent, for instance where the landlord
Page 756
has indicated by his conduct that no consent is necessary. If the consent of the landlord cannot be unreasonably refused
and the landlord has refused consent without reasonable grounds a tenant is entitled to proceed with the works without
being in breach of covenant. In such a case the landlord should not be able to assert an absence of consent for the
purposes of later rent reviews2. However, the tenant must still have applied for consent.
HR A[3805]
1 Hamish Cathie Travel England Ltd v Insight International Tours Ltd [1986] 1 EGLR 244.
2 Cf Hamish Cathie Travel England Ltd v Insight International Tours Ltd [1986] 1 EGLR 244.
HR A[3806]
A direction to disregard improvements relates to improvements which have been carried out prior to the rent review
date. It has nothing to do with the possibility that under the hypothetical lease future improvements may be carried out.
That possibility will turn on the terms of the hypothetical lease and the physical potential for alterations to the premises.
In principle if the opportunity exists under the hypothetical lease to carry out improvements and that opportunity would
have a bearing on the rent which the willing lessee would pay that opportunity should be taken into account in
determining that rent. Unfortunately, the Court of Appeal in one decision have confused the question of a stipulated
disregard of past improvements with the rental effect of the opportunity to carry out future improvements during the
hypothetical lease1. The reasoning was that because the effect on value of past improvements had to be disregarded
therefore the effect on value of the prospect of carrying out improvements in the future also had to be disregarded. It is
not easy to follow this reasoning or the principle on which it was based. Each decision is a decision on the particular
contractual wording before the court and there is now a strong indication that this decision is unlikely to affect the
construction of other similar provisions in leases2. The correct principle is that if a willing lessee would pay more rent
based on the opportunity to carry out improvements during the lease this potential is a part of the true value of the
premises and should be reflected, along with any other relevant potential, in the level of the reviewed rent.
HR A[3807]
1 Iceland Frozen Foods plc v Starlight Investments Ltd [1992] 1 EGLR 126.
2 Lewisham Investment Partnership v Morgan [1997] 2 EGLR 150. In Webber v Halifax Building Society [1985] 1 EGLR 58 it was held
that account could be taken in a valuation of property of the prospect that the property might be amalgamated with an adjoining property,
which is itself a form of improvement.
(d) Ground rents
HR A[3808]
Where premises are let as a site with the tenant to erect any buildings on the site at his own cost it is normally to be
expected that rent reviews will be specified as being to the rental value of the site at the date of the review ignoring the
Page 757
value of the buildings which the tenant has provided. In a sense a consideration of this question is a stark illustration of
the presumption of reality and the need for an expressly required disregard of improvements if improvements are not to
be included in the value. The development of a clear site by the erection of buildings on it is an example of the tenant
carrying out major improvements to that which was demised to him. If the lease is silent about disregarding
improvements the rent review valuations will have to proceed on the footing that the value of the buildings erected by
the tenant is to be taken into account1. Faced with the harshness of this conclusion a court may be able to find other
indications in the lease which are sufficient to rebut the presumption of reality, for instance a distinction drawn in other
clauses between the site or the ground and the buildings to be erected on it so that the rent review clause can be
construed as requiring a valuation of the former component only2. Even where there is an express disregard of
improvements that provision is not necessarily decisive of the matter. The lease may well require the tenant to develop
the site and in that event the improvements comprised in the erection of buildings may be said to have been carried out
pursuant to an obligation to the landlord, so that under the usual form of disregard provision they may still have to be
taken into account3. It is therefore best to state in terms that the open market rental value on review shall be that of the
site alone.
HR A[3809]
1 Laura Investments Co Ltd v Havering London Borough Council [1992] 1 EGLR 155, applying Ponsford v HMS Aerosols Ltd [1979] AC
63, [1978] 2 All ER 837 and Goh Eng Wah v Yap Phooi Yin [1988] 2 EGLR 148. See also Ravenseft Properties Ltd v Park [1988] 2 EGLR
164.
2 See Ipswich Town Football Club Co Ltd v Ipswich Borough Council [1988] 2 EGLR 146. See also Braid v Walsall Metropolitan
Borough Council [1998] EGCS 41 in which a reference to 'the land' in the rent review clause led to the conclusion that the reviewed rent was
to be of the land only and not also of the buildings erected by the original tenant.
HR A[3810]-[3820]
An intention that the tenant shall pay rent after rent reviews based on the value of the site alone is not necessarily put
into effect by a direction that the valuation shall be that of a notionally cleared site. There are possible difficulties in
such valuations such as a lack of comparable transactions from which to derive the site rental value1. It is therefore
sometimes provided that the rent attributable to the site is arrived at by some other means such as a specified proportion
of the full rental value of the site plus the buildings on it2, or a specified proportion of the income derived from the
premises at the review date. A further possibility is to specify the rent as a stated proportion of the open market value at
each review date of the freehold with vacant possession. The Incorporated Society of Valuers and Auctioneers have
published a model form of rent review with such a provision3.
HR A[3821]
1 Where comparable transactions involving the letting or sale of clear sites are not available the valuation is likely to have to proceed by
what is called the residual method. What this means is that a value is found of the land with the buildings on it, and the cost of constructing
the buildings is deducted so as to arrive at the site value as a residue. The residual method of valuation is sometimes considered to be
particularly unreliable since it depends on ascertaining a variety of components, such as building costs and the period of construction, which
cannot be determined with precision. See also para HR A[4464].
Page 758
2 See eg Brown (Cyril) v Gloucester City Council [1998] 1 EGLR 95.
(e) Fitting out
HR A[3822]
When commercial premises are newly let the tenant generally has to fit them out in some way before he can commence
the operation of his business in the premises. A shop needs to be fitted out with shelves, a shop counter, a shop front etc.
An office property will need fitting out so as to accord with the needs of the user1. A tenant will therefore normally
incur two associated burdens, first the burden of a period needed for fitting out before he can put the premises let to
productive or beneficial use and, secondly, the capital cost of the fitting out work.
HR A[3823]
1 The cost and period of fitting out of different premises will vary enormously depending on the size of the premises and the type of use to
be carried on. Two extremes may be the simplicity of a standard fitting out of a small shop, which could be done in weeks, and a complex
fitting out of a large office building for use in the financial services sector, which could take six months or more.
HR A[3824]
A consideration of the purpose of rent reviews suggests that a willing lessee should be taken not to have to bear the first
of the above burdens and that the rent he pays should reflect that situation1. The actual tenant does not incur the time
and burden of fitting out the premises at each rent review since the fitting out will normally have been done by him or
his predecessor in title at the beginning of the lease. Accordingly, there is no reason why it should be assumed that the
willing lessee has to accept a period of non productive use while fitting out takes place2. However, the willing lessee
should be assumed to have the burden of the capital cost of fitting out since that cost will in most cases have been
incurred by him or his predecessor in title at the time of the initial fitting out and the effect on value of the work should
be disregarded on the basis that it is a tenant's improvement. The ideal solution would therefore be a rent review clause
which stipulated in clear and express terms that the willing lessee was to be assumed to bear the second but not the first
burden associated with fitting out3. What this entails is that: (a) there should be a disregard of the effect on value of
fitting out work done by the actual tenant; and (b) the effect on value of a period needed to fit out should be eliminated.
HR A[3825]
1 The whole subject of fitting out, rent free periods associated with a time for fitting out, and the use of comparables in this context is
considered further at paras HR A[3928]ff.
2 In the absence of an express provision a willing lessee taking a lease with vacant possession will bear this burden, and so is likely to
reduce the rent which he would otherwise pay. This reduction is sometimes called the '99 Bishopsgate effect' after the decision of the
arbitrator, upheld in the Court of Appeal, in 99 Bishopsgate Ltd v Prudential Assurance Co Ltd [1985] 1 EGLR 72, in which such a
Page 759
reduction was made.
3 Such a solution will not always be appropriate. It could be that the landlord has carried out a part of the fitting out works at the
beginning of the lease, in which case their value should not be left out of account on a review. The rent review may proceed on the basis of a
hypothetical letting subject to existing subtenancies and not with vacant possession (see paras HR A[3842]ff) in which case questions
relating to fitting out do not arise in the same way.
HR A[3826]
The disregard of the effect on rent of the value of improvements is usually brought about by way of the normal
disregard of tenant's improvements, allied to the principle that tenant's fixtures are taken to have been removed by the
review date. Fitting out works will usually comprise a combination of improvements to the premises, the annexation of
fixtures and the bringing in of chattels (the last element also, of course, not being valued on a rent review). An
elimination of the effect on value of the period needed to fit out has proved to be not so easy to achieve1.
HR A[3827]
1 In actual leases a tenant who has to fit out premises is often given an initial period free of rent in which to do so, the length of the period
being based on an estimate of how long it will take to fit out the premises. Attempts to eliminate the effect of a period needed to fit out may
centre on provisions which seek to eliminate the effect of no such rent free period being given in the hypothetical lease. This whole subject is
considered in paras HR A[3944]ff. For one decision in which the need for a time to fit out and the consequent reduction in rent on account
of this (the '99 Bishopsgate' effect) were held to have been successfully eliminated see Scottish Amicable Life Assurance Society v Middleton
Potts & Co [1995] 1 EGLR 97, explained more fully in para HR A[3962], n 4.
HR A[3828]
Attempts are sometimes made in rent review clauses to deal with the questions explained above by the inclusion of a
provision stating that the premises are assumed to be fit for immediate use and occupation at the review date, or some
similar words. The tendency has been to construe this as meaning no more than that the premises are in good repair, free
of defects and do not need any substantial physical alterations to render them ready for use, and as not meaning that the
premises are fully fitted out1. Even an express direction that the premises are to be taken to be fully fitted out and
equipped may be construed so as to result in the willing lessee not taking premises which are fully fitted out2. There are
certain difficulties inherent in assuming that the premises are fully fitted out at the review date. In the first place such as
an assumption may be in direct conflict with other provisions in the rent review clause as a whole, particularly the
normal provision that the effect on value of improvements carried out by the tenant is to be disregarded. It will also
conflict with the principle that the tenant is taken to have removed any tenant's fixtures before the review date. The
definition of the demised premises may conflict with an assumption that the premises are fitted out3. Secondly, an
assumption that the premises are fitted out goes too far. It makes the point that the willing lessee should not be able to
argue for a reduction in rent due to a period being needed to fit out the premises; but it goes too far in that its effect is
that the willing lessee would pay a rent which would include the value of the fitting out works with the result that the
actual lessee pays a rent on review for work he has in most cases himself carried out. These difficulties have no doubt
played a part in the reluctance of the courts to hold that rent reviews are to be conducted on the footing that the premises
are fully fitted out even though the language of the rent review provisions seems on the face of it to require just that
conclusion.
HR A[3829]
Page 760
1 In Orchid Lodge (UK) Ltd v Extel Computing Ltd [1991] 2 EGLR 116 the tenant was given a licence to use the premises for a specified
type of office use. The licence to assign and to carry out this use contained a provision that rent reviews would be conducted on the basis of
the new use authorised 'the Assignee hereby acknowledging that the premises are fit for use and occupation therefor'. It was held by the
Court of Appeal that this did not require it to be assumed that the premises were fully fitted out for the authorised use. In Iceland Frozen
Foods plc v Starlight Investments Ltd [1992] 1 EGLR 126 the review clause stated that the reviewed rent should be 'the rent at which the
premises might reasonably be expected to be let as a whole or in parts upon the terms of the lease, assuming that the premises remain in
existence and are ready for immediate use and occupation'. The Court of Appeal held that the effect of the words was not that the premises
were fully fitted out for immediate use but merely that if any damage occurred their assumed continued existence was not just as a gutted
shell. In other words the reference to readiness for use and occupation was no more than a gloss on the previous assumption of the premises
remaining in existence. In Pontsarn Investments Ltd v Kansallis-Osake-Pankki [1992] 1 EGLR 148 the rent review clause contained a
required assumption that the premises were 'vacant but fit for immediate occupation and use'. It was held that this did not require an
assumption that the premises were fitted out.
2 In London & Leeds Estates Ltd v Paribas Ltd [1993] 2 EGLR 149 one of the required assumptions was 'that the demised premises are let
for immediate occupation and use and in a state of good repair and condition and that all fitting out and other tenant's works required by such
willing tenant have already been completed'. The Court of Appeal held that there was no assumption that the premises were fitted out at the
review date. In Ocean Accident & Guarantee Corpn v Next plc [1996] 2 EGLR 84 there was an assumption that the premises could be used
for certain purposes followed by an assumption 'that the Demised Premises have been fully fitted out and equipped so as to be ready for
immediate use and occupation by such willing tenant for such a use'. Even these words did not lead to the conclusion that the premises were
to be taken as fully fitted out at the review date. The court was able to reach its decision by reference to other provisions in the lease such as
the right given to the tenant to remove tenant's fixtures and the definition of the demised premises which did not include tenant's fixtures.
3 These various conflicts are illustrated in the decisions discussed in nn 1 and 2.
HR A[3830]-[3840]
A further difficulty is to know exactly what is entailed in fitting out. There are various standards of fitting out and there
may be dispute about just what standard is assumed to exist. The actual fitting out by the actual lessee may be a guide.
Furthermore, the ambit of what is 'fitting out' is nowhere precisely defined. Premises may, of course, be let in any state,
and three descriptions are sometimes used. (a) The premises may be fully fitted out. This means that all the willing
lessee has to do to start business use is to import personal chattels such as books and computers. Even here a question
may arise whether chattels such as desks and chairs are a part of the fitting out. Offices are sometimes let, usually on
short leases, as fully serviced, which may include chattels such as desks. (b) The premises may be let in a 'developer's
finish', which means that no fitting out has been done. This is the usual position as regards new lettings. (c) Premises are
sometimes let in a 'shell finish', which means that some parts of the finishing work to get them even to a developer's
finish has to be done by the tenant.
HR A[3841]
In summary, the position as regards fitting out is: (a) any fitting out carried out by the tenant or his predecessors will
normally fall to be disregarded by reason both of the usual requirement that the effect on value of tenant's improvements
is to be disregarded and of the rule that tenant's fixtures are to be taken to have been removed by the review date; and
(b) the courts will only construe a provision as having the effect that the premises are to be valued as fitted out if there is
a clear and unequivocal direction to that effect. In consequence the usual assumption on rent reviews is that the
premises are not fitted out at the date of the hypothetical letting. The hypothetical willing lessee will in these
circumstances have the burden of paying for any fitting out needed and of not being able to use the premises until the
fitting out work has been completed. The rent he will pay will take into account these burdens.
Page 761
lease/Vacant possession
Vacant possession
HR A[3842]
If at the rent review date the tenant holds the premises not subject to any subtenancy or the rights of any other third
party in occupation then the hypothetical lease will also be taken to be granted with vacant possession. On the other
hand, if the actual lease is at that date subject to one or more subtenancies the question arises of whether the
hypothetical lease is taken to be granted subject to such subtenancies or with vacant possession. The answer to the
question may have a substantial effect on the rental value depending on the terms of any subtenancy1. A well-drawn
rent review clause will provide its own answer, usually in the form of a reference to an assumed letting with vacant
possession. Unfortunately, in the absence of an express provision no clear guidance emerges from the decided cases on
what is the correct answer to the question. It is useful in this context to distinguish between three matters. The first is the
existence of the actual tenancy under which the rent review takes place. Obviously, this tenancy has to be assumed not
to exist in order that the assumption can be made of a hypothetical letting of the premises. The second matter is the
occupation of the previous actual tenant under the actual tenancy. There is usually a specific direction in the rent review
clause that this occupation is to be disregarded, and this matter is considered separately later2. The third matter is
whether the hypothetical lease is taken to be granted with vacant possession or subject to any actual subtenancies which
exist at the review date. The present discussion is concerned only with this third question3.
HR A[3843]
1 The effect of taking into account a subtenancy may be to increase or decrease the rental value depending on the terms of the subtenancy.
For example, where rents have fallen and the subtenancy was granted at an earlier time when rents were higher the subtenant may be paying
a rent in excess of the market rent at the review date. Providing the subtenant is of good financial standing this should result in a higher rent
on the rent review than would be the case if a new letting with vacant possession had to be assumed. The opposite would be the case if the
existing subtenancy was at a rent at a level below that prevailing at the review date or contained some other disadvantage such as a long
period before the next rent review under it was due.
2 See para HR A[4007]. This disregard has nothing to do with the question of whether the hypothetical letting is with vacant possession.
3 In Evans (FR) (Leeds) Ltd v English Electric Co Ltd [1978] 1 EGLR 93 it was said that it was implicit in the concept of vacant
possession that the actual tenants are to be deemed to have moved out or never to have occupied the premises. This observation seems to
have been directed towards the first of the three matters referred to in the text. The case itself did not concern subtenancies. As to the
relationship between a required assumption of vacant possession and the use of a particular type of comparable in deciding the open market
rent of restaurant premises see My Kinda Town Ltd v Castlebrook Properties Ltd (1986) 54 P & CR 9, [1986] 1 EGLR 121.
HR A[3844]
There is a substantial argument that in the above situation, ie no express provision regarding vacant possession, the
hypothetical lease will be taken to be granted subject to any subtenancies which actually exist at the review date. Such
an answer is consistent with the presumption of reality in that in reality the subtenancies do exist. It is also consistent
with the situation under Pt II of the Landlord and Tenant Act 1954 where, in the absence of any provision which settles
Page 762
the question in the Act itself, it has been held that the rent for a new tenancy is to be fixed on the footing that any
existing subtenancy of a part of the premises is taken into account1. There would not normally be any injustice in this
situation from the point of view of the parties. The tenant will have granted any subtenancy or have initially taken the
lease subject to the subtenancy, so that his rent on rent review should properly take a subtenancy into account. In nearly
all cases there will be at least a qualified restriction on subletting in the lease, ie that it needs the consent of the landlord
which is not to be unreasonably withheld. Therefore, a landlord who believes that a proposed subtenancy may adversely
affect the rent at subsequent rent reviews can either refuse consent to it or insist on a term in the licence to sublet that
the subtenancy shall be disregarded on rent reviews. A landlord who acts in this way is likely to be held to be acting
reasonably2. Some of the actual decisions are consistent with the above view in that the hypothetical letting was held to
be subject to subsisting subtenancies3.
HR A[3845]
1 Oscroft v Benabo [1967] 2 All ER 548, [1967]1 WLR 1087, CA. Section 34 of the Landlord and Tenant Act 1954 does not state whether
the assumed letting for valuation purposes is to be with vacant possession. The position under the Act is somewhat complicated in that if the
whole of the demised premises is sublet it is probable that the tenancy would not come within Pt II of the Act at all since the tenant could not
occupy any part of it for the purposes of a business carried on by him: see LTA 1954, s 23(1); and see HR B[433].
2 See the principles laid down in International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513, [1986] 1 All
ER 321, CA. The subject of consent to subletting is considered in Chapter 5. The general proposition that a landlord can reasonably refuse
consent to a subletting where the transaction would adversely affect him on later rent reviews was accepted by Hoffmann J in Laura
Investment Co Ltd v Havering London Borough Council (No 2) [1993] 1 EGLR 124. However, a landlord is not entitled to refuse consent to
an underletting on the ground that the rent proposed under it may form a comparable which will detrimentally affect the future rent of other
properties which he owns: Norwich Union Life Insurance Society v Shopmoor Ltd [1998] 3 All ER 32.
3 Laura Investment Co Ltd v Havering London Borough Council (No 2) [1993] 1 EGLR 124; Scottish & Newcastle Breweries Ltd v Sir
Richard Sutton's Settled Estates [1985] 2 EGLR 130; Forte & Co Ltd v General Accident Life Assurance Ltd [1986] 2 EGLR 115.
HR A[3846]
On the other hand, there are indications in the cases that a different approach may be correct. In one case the court
accepted the submission that vacant possession is likely to be the intention of the parties unless the contrary is
expressed1. In another case it was said that the ascertainment of an open market rent of premises which were let with
vacant possession would ordinarily involve a hypothetical lease granted with vacant possession2. In a third case it was
said not to matter a great deal whether one started with the presumption of reality or a presumption that a hypothetical
letting with vacant possession was intended3. Faced with such a diversity of judicial approach the best guide to whether
vacant possession is to be assumed may be the terms of the lease and any relevant surrounding circumstances. Most
cases have involved an examination of these matters. The following factors are among those which may be most
relevant. (a) The fact that the lease was granted subject to a subtenancy for a term which would continue beyond the
review date may be an indication that the hypothetical letting for the purposes of the review is to be subject to that
subtenancy4. (b) The fact that at the date of the grant of the lease sublettings were clearly contemplated may be an
indication to the same effect5. (c) A provision in the lease which governs the terms of sublettings may be an indication
to the same effect. For instance, in one case the tenant was permitted to sublet but only at the best rent obtainable
without a premium and on terms that the subtenancies should contain rent review provisions similar to those contained
in the head lease. This led the court to hold that the hypothetical letting was to be subject to subsisting tenancies6. (d) A
reference to the means by which the reviewed rent is to be determined may be decisive of the question. Where the rent
was to be determined as a fair yearly rent 'having regard to rental values current as at such day for property let without a
premium with vacant possession' it was clear that the hypothetical letting was to be with vacant possession7. (e) The
Page 763
physical nature of the premises let may suggest that the hypothetical letting is to be subject to subsisting subtenancies.
An illustration of this last matter would be a letting of a shopping parade as a whole where it was clearly expected that
the tenant would sublet each of the shops and receive an income from them. The only principle which at present
emerges from the decided case is that if the rent review clause is silent on the point there is no presumption that the
hypothetical lease is or is not to be with vacant possession and that the answer in each case depends on the indications
one way or the other to be drawn from the provisions of the lease and the general circumstances of the letting.
HR A[3847]
1 Scottish & Newcastle Breweries plc v Sir Richard Sutton's Settled Estates [1985] 2 EGLR 130 at 136, per Judge Paul Baker QC. As
noted in para HR A[3844], the actual decision in this case was that the hypothetical letting was to be subject to any subsisting subtenancy.
2 Forte & Co Ltd v General Accident Life Assurance Ltd [1986] 2 EGLR 115 at 116, per Peter Gibson J. In this case the actual decision
was also that the hypothetical letting was granted subject to a subsisting subtenancy. In Hill Samuel Life Assurance Ltd v Preston Borough
Council [1990] 2 EGLR 127 at 128-129 the assumption of vacant possession was said by Scott J to be no more than a possible implication
which may or may not be consistent with the rent review clause as a whole.
3 Laura Investment Co Ltd v Havering London Borough Council (No 2) [1993] 1 EGLR 124 at 125, per Hoffmann J.
4 This reasoning was applied by Peter Gibson J in Forte & Co Ltd v General Accident Life Assurance Ltd [1986] 2 EGLR 115 at 116.
However, in Avon County Council v Alliance Property Co Ltd [1981] 1 EGLR 110 Judge Mervyn Davies QC held that there was an
assumption of vacant possession even though the premises had been sublet at the date of the grant of the lease.
5 Laura Investments Co Ltd v Havering London Borough Council (No 2) [1993] 1 EGLR 124. In this case the tenants covenanted to sublet
the premises in plots as speedily as possible.
6 Scottish & Newcastle Breweries plc v Sir Richard Sutton's Settled Estates [1985] 2 EGLR 130, per Judge Paul Baker QC.
7 Bishopsgate (99) Ltd v Prudential Assurance Co Ltd [1985] 1 EGLR 72, CA.
HR A[3848]
If the lease at the review date is subject to a subtenancy which has been granted in breach of covenant it is probable that
if the existence of this subtenancy would reduce the rent it is in any event to be disregarded on the principle that the
tenant cannot benefit from his own wrongful act. A similar rule, as explained above, means that a tenant who has failed
to repair the property in accordance with his covenants cannot benefit from that fact1.
HR A[3849]

Page 764
lease/Other terms
Other terms
(a) General
HR A[3850]-[3860]
The general principle is that other terms of the hypothetical lease shall so far as possible follow those of the actual lease.
The principle accords with the purpose of rent reviews which is to update the rent payable to the value which would be
obtained by a letting at the valuation date on the terms under which the tenant holds1. It is also an application of the
presumption of reality2. Most leases contain a plethora of detailed provisions and in general there is no difficulty in
accommodating these within the hypothetical lease. Many of the provisions are of a fairly standard nature and in
themselves are not likely to affect the rent. However, provisions which are out of the ordinary may have a bearing on
the rent which would be agreed between the willing lessor and the willing lessee. A particularly onerous form of user
restriction or of restriction on alienation may depress the rent especially if the hypothetical lease is for a substantial
term. On the other hand, some provision beneficial to the tenant, such as a provision for rent reviews but only at long
intervals, may increase the rent3. A subject of substantial topical concern following the destruction of the World Trade
Centre in New York on 11 September 2001 is the provisions in commercial leases of large buildings covering insurance
against damage by terrorist attacks. A concern of any tenant may be that he could be left with the liability to rebuild
destroyed or damaged buildings in circumstances where no adequate insurance against terrorist attack was available. It
will therefore be important to examine the provisions in the actual lease, which are likely to be reproduced in the
hypothetical lease, in order to see how these matters are dealt with. The provisions as to insurance, repairs and
determination of the lease in given circumstances are likely to be of the highest significance. The relevance of the point,
of course, is that a willing lessee faced with a risk of the nature just mentioned may reflect that risk in a reduced rent. It
must be borne in mind that in all cases the provision in question is to be compared to that which is usual in
contemporary leases and that found in leases of comparable premises since any adjustment to the rent to compensate for
the provisions will be an adjustment to the rent which would be payable if the provision was in the usual form4. If the
actual lease is old and its provisions are generally very different from those found in modern leases this itself may
require an adjustment to the rent which would be agreed under the hypothetical lease5.
HR A[3861]
1 See paras HR A[3851], [3628].
4 For example, if leases of shops in the area of and otherwise comparable to the demised premises show a particular rental level where the
user clause permits use for any retail purposes there may need to be a reduction if the hypothetical lease contains a clause restricting the use
to one particular type of retail purpose. The task of the valuer would then be (a) to determine the rental level on the basis of a normal retail
user clause and (b) to determine what reduction (if any) is appropriate to reflect the restrictive nature of the user clause in the hypothetical
lease.
Page 765
5 A similar principle applies to the terms of new leases ordered to be granted under Pt II of the Landlord and Tenant Act 1954, although in
that case s 35 of the Act gives the court a discretion to alter the terms of the previous lease: see O'May v City of London Real Property Co
[1983] 2 AC 726, [1982] 1 All ER 660. In that decision it was agreed that the insertion of a modern form of service charge provision under
which the tenant of a part of a building would contribute towards the costs of the landlords in carrying out repairs to the building as a whole
would have reduced the rent by about 5%.
HR A[3862]
There are a few instances in which it is obvious that there must be a departure from the terms of the actual lease. The
most obvious is that the actual lease contains an obligation to pay a specified rent and clearly the hypothetical lease
cannot just reproduce this figure since the very purpose of a rent review and a hypothetical lease is to arrive at an
up-to-date rent. Even so, the procedural provisions as to payment of rent, for example the dates for payment, whether
rent is payable in advance or in arrear, and any provision for the payment of interest on unpaid rent, should be
reproduced in the hypothetical lease. Provisions such as these are important and may have a bearing on the rent which a
willing lessee will pay. As an example, since in most commercial leases rent is payable quarterly in advance if the rent
in the actual lease is payable quarterly in arrear and this provision goes into the hypothetical lease it is possible that this
is a benefit to the willing lessee for which he will pay an increased rent1. It is equally obvious that the parties to the
hypothetical lease are notional entities and are not the actual parties to the lease and do not necessarily share the
characteristics of those actual parties2. The duration of the hypothetical lease may be different from that of the actual
lease. In many instances the duration of the hypothetical lease is the unexpired residue of the actual lease at each rent
review and not the full original term3. The rent review clause may itself provide for some hypothesis which differs from
the terms of the actual lease such as a different form of user clause4.
HR A[3863]
1 It is, of course, for a valuer to determine whether an increased rent would be paid by a willing lessee for the benefit mentioned and, if so,
what the increase would be. It is possible to ascertain the increase by a broad approach (eg x%) or by a more elaborate mathematical
calculation which seeks to quantify the monetary benefit to the tenant of having the use of the rental money for the additional periods in the
year.
HR A[3864]
A problem could arise where the actual lease provides that the tenant on each rent review is to pay not the full open
market rent but a proportion of it. The purpose of such a provision would be defeated if exactly the same provisions
were carried into the hypothetical lease. The open market rent as determined on a rent review would then itself reflect
the reduced obligation throughout the hypothetical lease and would be a figure significantly higher than the rent
determined on the ordinary basis of the tenant paying a full rent throughout the lease1. This situation is avoided if it is
assumed that throughout the hypothetical lease, that is initially and on each rent review during it, the willing lessee is
required to pay a full ordinary rent. The rent on each rent review will then be determined on this basis and under the
actual lease the tenant will pay the specified proportion of this rent so determined. In this way effect is given to the
obvious intention of the parties. It is an instance of a provision of the actual lease not being carried into the hypothetical
Page 766
lease2. The same principle applies if the lease contains a requirement to pay a further rent in addition to the open market
rent. This requirement is also excluded from the hypothetical lease3.
HR A[3865]
1 Suppose that the lessee was to pay two-thirds of the open market rent on each review, and that at the first review the open market rent on
an ordinary lease was £100,000 per year. The plain intention of the parties is that following this review the tenant should pay £66,666 per
year. If the provision relating to the two-thirds payment is incorporated into the hypothetical lease the willing lessee would agree a rent of
£150,000 per year on the basis that he only had to pay two-thirds of it which is the ordinary market rent of £100,000 per year. However, the
actual lessee would then pay two-thirds of £150,000, or £100,000, per year. Thus, he would end up paying a full rent which is contrary to the
intention behind the lease. The difficulty is avoided if the two-thirds provision is omitted from the hypothetical lease, since then the rent
payable by the willing lessee would be determined as £100,000 per year and the actual tenant would pay two-thirds of it, or £66,666 per
year. An obligation to pay on each review a rent which is a proportion of the full market rent is not unusual. It is sometimes called a 'geared'
rent. An instance is United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, [1977] 2 All ER 62, a decision in which the
House of Lords laid down the principles which govern whether time is of the essence in relation to rent reviews, discussed in para HR
A[4128]. The rent payable under the review clause in that case was a quarter of the full rental value at each rent review date.
2 In Lister Locks Ltd v TEI Pension Trust Ltd [1982] 2 EGLR 124 the lessee was required under the lease to pay a basic rent with an
additional rent, the latter being attributable to work carried out by the landlord at the request of the lessee to meet his special needs. It was
held that on rent reviews the provision for the additional rent was to be ignored in determining the open market rental value. In Guys 'N'
Dolls Ltd v Sade Brothers Catering Ltd [1984] 1 EGLR 103 the lessee on the first rent review was required to pay £7,500 per year above the
open market rental value at the time. It was held by the Court of Appeal (a) that the hypothetical lease did not include an equivalent
provision to pay the additional £7,500 and (b) that in rent reviews under the hypothetical lease there would be no provision for the payment
by the willing lessee of the additional sum. The latter holding illustrates the complexity of the hypothetical world which has to be assumed to
exist for the purposes of rent reviews. The hypothesis is of a willing lessee taking a hypothetical lease which itself contains rent reviews
requiring the assumption of a hypothetical willing lessee. In Buffalo Enterprises Inc v Golden Wonder Ltd [1991] 1 EGLR 141 the rent
reserved was a basic rent plus an additional rent of 15% of a sum spent on the premises at the beginning of the lease. At rent reviews the
basic rent was to become the open market rental value at the time and the additional rent was to increase in the same proportion as the
increase in the basic rent. It was held that the basic rent was to be determined without reference to the obligation to pay the additional rent. In
Prudential Assurance Co Ltd v 99 Bishopsgate Ltd [1992] 1 EGLR 119 the actual lease provided for rent reviews to 50.6% of the rental
value at the review date. It was held that the rent reviews in the hypothetical lease should be to the full rent.
There appear to be only two decisions which are not fully in accordance with the principle explained. In British Railways Board v Ringbest
Ltd [1996] 2 EGLR 82 rent reviews under the lease were to be to the greater of the previous rent or 84.0253% of the market rent at the
review date. An arbitrator had held that the gearing provision should be inserted into the rent reviews in the hypothetical lease. Leave to
appeal to the High Court under the Arbitration Act 1979 (replaced today by similar provisions under the Arbitration Act 1996) was refused.
This is not a decision on the merits of the point but only on an application for leave to appeal. The other decision is Norwich Union Life
Insurance Society v British Telecommunications plc [1995] EGCS 148. In this case Knox J held that a gearing formula in the actual lease
was to be incorporated into the hypothetical lease. The Judge accepted that there was a degree of illogicality in his conclusion but felt that
any other conclusion would be a re-writing of the rent review provisions. These two decisions cannot stand against the clear thread of
previous decided authority and against what is plainly the logic of the situation.
3 Lister Locks Ltd v TEI Pension Trust Ltd [1982] 2 EGLR 124; Guys 'N' Dolls Ltd v Sade Brothers Catering Ltd [1984] 1 EGLR 103 and
Buffalo Enterprises Inc v Golden Wonder Ltd [1991] 1 EGLR 141 fall into this category.
HR A[3866]
Other adjustments may have to be made where the actual lease contains provisions which are tailored to its term and
cannot fit precisely into the term of the hypothetical lease. In some cases there is no difficulty. If the actual lease
contains a clause entitling the tenant to break the lease at the expiration of the tenth year of the term that same clause
can be carried into a hypothetical lease assumed on a rent review after five years. The break will be exercisable in the
fifth year of the hypothetical term. The actual lease may refer to a specified date, for instance a break clause operative at
Page 767
a certain date which is the end of the tenth year. The proper course will then be to include in the hypothetical lease an
equivalent clause with the specified date being that which is the end of the tenth year of the actual term1. The principle
is that some degree of adaptation may be necessary in order to reproduce in the hypothetical lease provisions which are
as near to the reality and to those in the actual lease as can be achieved. An obligation in the actual lease which has been
performed prior to the review date has no effect on the hypothetical letting to be assumed at the review date2. Where the
rent review clause specifies in precise terms a form of covenant which is to be included in the hypothetical lease effect
must be given to that direction whatever the commercial consequences3.
HR A[3867]
1 R & A Millett (Shops) Ltd v Legal & General Assurance Society Ltd [1985] 1 EGLR 103.
2 Buffalo Enterprises Inc v Golden Wonder Ltd [1991] 1 EGLR 141.
3 In Bellow Properties Ltd v Trinity College Cambridge [2000] EGCS 97 a lease was granted for 85 years with a rent review after 28
years. The lease as granted contained a covenant by the lessee to erect certain buildings in accordance with plans to be approved by the
lessor. In fact, plans had been approved before the grant of the lease. The rent review clause provided that the hypothetical lease was to
contain a covenant by the lessee to erect a building in accordance with plans which had been approved by the lessor. It was held that the
obligation of the hypothetical willing lessee was to build in accordance with the agreed plans even though this amounted to an obligation to
erect an obsolete building and had the effect of reducing the reviewed rent. The decision is an illustration of the principle that where the
language of a contract is wholly clear and can bear only one meaning the court cannot re-write the contract so as to make it more
commercially sensible (see also para HR A[3630]).
HR A[3868]
Provisions of the actual lease may refer by name to the actual lessee, the most obvious case being that the use of the
premises is restricted to use by the named actual lessee. It would be unreasonable and inconsistent with the nature of an
open market rent that the hypothetical lease should contain a restriction referring to the same name. The consequence
would be that only the original lessee would be in the hypothetical market. It would not be possible to envisage a
hypothetical willing lessee taking the lease unless his immediate purpose was to assign or underlet the premises to the
named person. The solution to the problem is that the restriction in the hypothetical lease is to use by a person with no
name actually inserted but a blank left for the insertion of the name of the person who is the highest bidder in the market
and as the willing lessee takes the lease1. Even on this approach the clause in the hypothetical lease may have the effect
of depressing the rent since the willing lessee would not be able to assign or sublet the premises for use by some other
person. However, the expedient of inserting the name of the hypothetical willing lessee in place of a person named in
the actual lease will only be adopted if it is necessary to prevent the purpose of the rent review, the ascertainment of an
up-to-date open market rent, being stultified2. A user restriction where the use is limited to that by one named person
must be distinguished from a restriction which narrowly restricts the use but leaves that restricted use open to be carried
on by any person. In the latter case the covenant is likely to be imported into the hypothetical lease in an unmodified
form3.
HR A[3869]
1 In Law Land Co Ltd v Consumers Association [1980] 2 EGLR 109 the actual tenant under a lease for 15 years was the Consumers
Association. The user clause provided that save with the prior written consent of the landlords the premises should not be used otherwise
Page 768
than as offices of the Consumers Association and its associated organisations. The solution ordered by the Court of Appeal was that a similar
restriction should be taken to exist in the hypothetical lease offered but with a blank for the name of the tenant. See also Sterling Land Office
Developments Ltd v Lloyds Bank plc [1984] 2 EGLR 135 where the same solution was reached in regard to a user clause in the actual lease
which restricted use to that of a branch of Lloyds Bank. The case of a planning permission which restricts the use of the demised premises to
that of a particular named person is discussed in para HR A[3987].
2 In St Martin's Property Ltd v Citycorp Investment Bank Properties Ltd [1998] EGCS 161 a break clause in the lease was exercisable
only by the original tenant or by certain categories of assignees who were associate companies. It was held that in the hypothetical lease the
references to the named persons should remain.
3 In Post Office Counters Ltd v Harlow District Council (1991) 63 P & CR 46, [1991] 2 EGLR 121 a covenant restricting the use to that
of a branch post office was imported into the hypothetical lease.
HR A[3870]-[3880]
Prior to 1996 the principle of law established for centuries was that the original lessee remained liable on the covenants
in the lease even after the lease had been assigned. It is provided by the Landlord and Tenant (Covenants) Act 1995 that
as regards leases granted on or after 1 January 1996 the rule is reversed and after an assignment the original lessee is no
longer liable on the covenants in the lease1. Where the hypothetical letting is on or after 1 January 1996 this new
principle will apply to it with whatever implications for the rent the new principle may have.
HR A[3881]
1 See Chapter 4 for a general explanation of the Landlord and Tenant (Covenants) Act 1995.
HR A[3882]
If the lease was granted on or after 1 January 1996 the original tenant will normally cease to be liable for rent due after
he has assigned the lease. He will, therefore, not be concerned over rent reviews after the assignment1. If the lease was
granted before 1 January 1996 the original tenant will remain liable for the rent throughout the term even after an
assignment by him. His liability will extend to the payment of the reviewed rent after rent reviews2. However, a rent
agreed on a rent review may amount to an obligation not contemplated by the original lease, eg a stepped rent as
opposed to a single level of rent for the whole review period. In that case the original tenant will not be liable on the
new obligation3. As a result of the Landlord and Tenant (Covenants) Act 1995 the original tenant under a lease granted
before 1 January 1996 will not be liable after an assignment to pay rent to the extent that the amount is referable to a
variation in the tenant's covenants under the lease4. A determination of the reviewed rent is not, of course, in itself a
variation of the covenants.
HR A[3883]
2 Centrovincial Estates plc v Bulk Storage Ltd (1983) 46 P & CR 393, [1983] 2 EGLR 45.
Page 769
3 Friends Provident Life Office v British Railways Board [1995] 2 EGLR 55; Beegas Nominees Ltd v BHP Petroleum Ltd (1998) 77P &
CR 14, [1998] 31 EG 96.
(b) Restrictions on use
HR A[3884]
Most leases contain a restriction on the use of the premises and in general this restriction will be reproduced as a term of
the hypothetical lease. Many rent review clauses provide expressly that this shall be the case. If the clause is silent on
the point it will be inferred that the hypothetical lease is to contain the same user restriction as the actual lease. Of
course, the rent review clause may state that the user restriction under the hypothetical lease is to differ from that under
the actual lease, and, even if not expressly stated, this may be implied from some other provision of the clause, for
example, a provision that the premises were assumed to be let for retail purposes led to the user clause in the
hypothetical lease being one which permitted retail user generally rather than the narrow restriction to a particular type
of retail user as contained in the actual lease1.
HR A[3885]
1 Postel Properties Ltd v Greenwell (1992) 65 P & CR 239, [1992] 2 EGLR 130. The direction as to how the premises are to be valued
may dictate a wider user clause in the hypothetical lease than in the actual lease. In Sheerness Steel Co plc v Medway Ports Authority [1992]
1 EGLR 133 the user clause in the actual lease restricted the use to steelmaking and ancillary operations save with the consent of the
landlord. The open market rent was to be ascertained having regard to properties let for industrial purposes. It was held that the user clause in
the hypothetical lease should be one which restricted use to industrial purposes save with the consent of the landlord. Of course, the
inference in a proper case could be that the user restriction in the hypothetical lease was narrower than that in the actual lease.
HR A[3886]
User clauses take a variety of forms. Typically, they provide for a negative restriction such as that the demised premises
shall not be used save for certain specified purposes. Three forms of restriction are encountered: (a) There may be an
absolute restriction, such as that the premises are not to be used save for retail purposes. (b) There may be a qualified
restriction, such as that the premises are not to be used save for retail purposes without the consent of the landlord. (c)
There may be a further qualification, such as that the premises are not to be used save for retail purposes without the
consent of the landlord which consent is not to be unreasonably withheld. The second category is in its effect the same
as the first since in general there will be no implied term that consent is not to be unreasonably withheld. Therefore, the
landlord may refuse consent for arbitrary reasons or for no reason. It is provided by statute that a covenant against
altering the use of premises without consent is deemed to be subject to a proviso that, provided no structural alteration is
involved, no premium is payable for the consent. The landlord may require payment of a reasonable sum in respect of
any damage to his premises or to neighbouring premises of his which would be caused by the altered use and in respect
of his legal and other costs in connection with the consent1. The deemed proviso is of limited value since it only
prevents the landlord from demanding a sum of money for his consent; it does not stop him refusing consent arbitrarily
if he so wishes providing he does not demand a sum of money.
Page 770
HR A[3887]
HR A[3888]
The user covenant to be imported into the hypothetical lease may be positive in character, that is an obligation
positively to carry on a particular use rather than an obligation not to carry out certain uses. In its nature such a covenant
also has a restrictive element since the carrying out of any use other than the use positively enjoined will necessarily be
a breach of covenant. Positive covenants are usually found in relation to shop premises or other property open to the
public where non-use of the premises may affect the saleability of the landlord's reversion or may adversely affect other
premises of his. It may not be easy for a landlord to enforce a positive covenant. He may not wish to forfeit the lease; he
may have difficulty in proving any substantial damages (though in some cases, such as where a reduced sale price for
the reversion has been caused by the premises being closed for trading, substantial damages may be shown1); and an
order for specific performance to force the premises to be kept open will rarely be appropriate2.
HR A[3889]
1 Costain Property Developments Ltd v Finlay & Co Ltd [1989] 1 EGLR 237.
2 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, [1997] 3 All ER 297.
HR A[3890]-[3900]
The relevance to rent reviews of user covenants in the hypothetical lease is that the open market rent may be affected by
the covenant. In principle it is a matter of common sense that a willing lessee may be willing to pay less rent if he is
burdened with a highly restrictive covenant as to use. Not only will it restrict what he can lawfully do with the premises
but it may limit his ability to assign or sublet the premises since it will reduce the number of people who would be
interested in acquiring them. The amount by which the rent is reduced is a matter of valuation, and it must always be
remembered that any reduction only makes sense if it is by comparison with the rents of other premises where there is
no similarly narrow restriction1. Certain factors may be particularly relevant to the matter of a reduction: (a) Obviously,
the tighter the restriction the more likely there is to be a reduced rent. (b) An absolute covenant, ie one where the
landlord can refuse consent to a change of use arbitrarily, is likely to reduce the rent more than a covenant where the
consent of the landlord to a change of use cannot be unreasonably withheld2. (c) A positive covenant to keep open
premises for a certain use may be seen as particularly onerous3. (d) The longer the term of the hypothetical lease the
more onerous a restriction may be perceived to be since there will be a greater chance of altered circumstances in the
future necessitating a change of use.
HR A[3901]
1 In Plinth Property Investments Ltd v Mott, Hay & Anderson [1978] 38 P & CR 361, [1979] 1 EGLR 17 the rent was reduced from
Page 771
£130,000 per year to £89,000 per year on account of an absolute covenant which restricted the use to the lessee's business of consulting civil
engineers. In such cases the restriction normally applies to the lessee for the time being not just to the original lessee, so that an assignee who
has the same business can use the premises for his business.
HR A[3902]
Other factors which may affect the impact on rent of a restrictive user covenant are the question of the possibility of the
landlord relaxing the covenant, the question of consent to a different user having been given prior to the review date and
the question of the need for a consent to a particular use under some public law provision. These matters are discussed
later since they may be relevant to other covenants in the hypothetical lease as well as to a user covenant1. The question
of the use being limited to that of a named person has already been considered2.
HR A[3903]
(c) Restrictions on alienation
HR A[3904]
Most leases contain restrictions on alienation, that is on assigning or subletting the lease. The restrictions may apply to
the premises as a whole or also to alienation of a part of the premises. Alienation of a part is often more strictly
controlled than alienation of the whole. In addition there is often a restriction on parting with possession and on
allowing others to occupy the premises as licensees. Such restrictions should in principle form a part of the hypothetical
lease.
HR A[3905]
In some cases there is no restriction on alienation, something most likely in the case of long leases at low rents. Where
there is a restriction it may be (a) absolute, (b) qualified in the sense that the consent of the landlord is needed, or (c)
further qualified in the sense that the consent of the landlord is needed and that consent cannot be unreasonably
withheld. Statute provides that in general in covenants within the second category there is a deemed proviso that
consent cannot be unreasonably withheld. The deemed proviso applies to any covenant against assigning, underletting,
charging or parting with possession of the demised premises or any part of them. In the case of leases for more than 50
years made in consideration of the improvement of buildings (where the landlord is not a public authority) there is a
further deemed proviso that no consent is required if the transaction is effected more than seven years before the end of
the term. A landlord may require his reasonable legal and other expenses incurred in connection with his consent1. In
Page 772
some cases the tenant is required to offer to surrender the lease before he is able to assign or sublet it2.
HR A[3906]
1 Landlord and Tenant Act 1927, s 19(1). The whole subject of the reasonableness of refusing consent has attracted some volume of
authority and is considered in Chapter 5. Under the Landlord and Tenant Act 1988, a landlord who unreasonably refuses consent may be
liable in damages to the tenant.
2 Where the lease is subject to Pt II of the Landlord and Tenant Act 1954 there may be difficulties in enforcing such an obligation because
of LTA 1954, s 38(1): see HR B[60].
HR A[3907]
The relevance of restrictions on alienation in the hypothetical lease is again that a tight restriction may reduce the rent
obtainable, especially in the case of a long term. A restriction on alienation and a restriction on user may interrelate in
that if the user covenant is very restrictive it may in practice limit the class of persons who would be willing to take an
assignment or sublease. The valuation effect is a matter for a valuer.
HR A[3908]
The landlord under an actual lease may be concerned at the level of rent to be specified in a subletting since it may
affect his position at future rent reviews under the headlease. He will be particularly concerned at a low rent under a
sublease since this may establish the rental value of the premises at the time. He may therefore refuse consent to a
subletting at a low rent unless it is specified at the time that this is for some reason below the open market rental level.
Sometimes the alienation clause expressly prohibits subletting except at a full market rent or even at a rent lower than
that in the headlease. A restriction of the latter type may itself be seen as an onerous provision since it may in practice
make subletting difficult to achieve or require the tenant to pay a reverse premium to the subtenant to achieve a
subletting at the specified rent. This could be the case where rental levels have fallen since the grant of the headlease.
The onerous nature of such a restriction may be reflected in the rent under the hypothetical lease. If the rent review is to
be conducted on the basis that the hypothetical lease is subject to any actual subleases existing at the review date this
may also be a good reason for the landlord refusing to permit certain sublettings1.
HR A[3909]
(d) Restrictions on alterations
HR A[3910]-[3920]
As with other covenants restrictions in the actual lease on carrying out alterations to the demised premises will be
Page 773
carried into the hypothetical lease. The principle must give way to an express direction to the contrary or to an
indication in the rent review clause as a whole that the restriction in the hypothetical lease is to be in a different form to
that in the actual lease. An instance has been cited, in connection with user restrictions, where a restriction to use for
steel making and ancillary purposes was changed in the hypothetical lease to a restriction to use for industrial purposes.
In the same case the restriction in the actual lease against alterations save in connection with the use of the premises for
steel making was changed in the hypothetical lease into a restriction against alterations save for converting the premises
to an industrial use1.
HR A[3921]
1 Sheerness Steel Co plc v Medway Ports Authority [1992] 1 EGLR 133. See para HR A[3885], n 1.
HR A[3922]
As with restrictions on use and on alienation covenants against carrying out alterations to the demised premises
commonly take three forms. They may be absolute. They may restrict alterations without the consent of the landlord.
They may restrict alterations without the consent of the landlord with a proviso that consent is not to be unreasonably
withheld. The carrying out of some types of alterations may amount to waste and so may be unlawful even in the
absence of an express restriction. There are two statutory provisions which mitigate the effect of covenants against
alterations. (a) A covenant against making improvements without consent is deemed to be subject to a proviso that
consent is not to be unreasonably withheld. In other words covenants of the second form are converted into covenants of
the third form1. Absolute covenants are unaffected. What is an improvement is something to be judged from the point
of view of the tenant2. (b) Even when the covenant is absolute there is a procedure under Pt I of the Landlord and
Tenant Act 1927, whereby the tenant can obtain a certificate from the court that the improvement is a proper
improvement, something which then entitles him to carry out the works notwithstanding any covenant to the contrary3.
The provisions apply only when the premises are used for the carrying out of a trade or business4. The landlord is
entitled himself to carry out the improvements in return for an increased rent5. The degree of comfort which these
provisions would give to a willing lessee faced with an absolute covenant against alterations and the effect on rent are
matters of valuation. It should be noted that the provisions of Pt I of the Landlord and Tenant Act 1927 are unfamiliar to
many people and are not often implemented possibly in part due to their complexity6.
HR A[3923]
2 F W Woolworth & Co Ltd v Lambert [1937] Ch 37, CA. See para HR A[3770].
3 See Landlord and Tenant Act 1927, s 3(4). See generally HR B[27]ff.
4 LTA 1927, s 17(1).
5 LTA 1927, s 3(1).

Page 774
6 See the observations of Neuberger J in Daejan Properties Ltd v Holmes [1996] EGCS 185.
HR A[3924]
The nature of a restriction on alterations will be important to a willing lessee where he would anticipate carrying out
works to the demised premises at an early date. It has been explained earlier that, although the matter is not entirely free
from doubt, the better view is that if a willing lessee would pay a higher rent based on the opportunity to carry out
improvements this potential is a part of the value of the premises and should be reflected in the level of the reviewed
rent1. A willing lessee contemplating the carrying out of improvements would also be concerned as to whether on rent
reviews under the hypothetical lease the effect on rent of his improvements would be disregarded. There would be a
disregard of improvements only if the rent review clause in the actual lease required that improvements be disregarded2.
HR A[3925]
1 Iceland Frozen Foods plc v Starlight Investments Ltd [1992] 1 EGLR 126; Lewisham Investment Partnership v Morgan [1997] 2 EGLR
150. See para HR A[3806].
2 The question of the disregard of the effect of improvements in rent reviews is examined at paras HR A[3764]ff.
(e) Rent reviews
HR A[3926]
It has been explained earlier, when dealing with the question of the construction of rent review provisions in accordance
with their commercial purpose, that an important question is whether the hypothetical lease shall contain its own rent
review provisions1. The rent which a willing lessee will pay may obviously be influenced by whether or not the term
which he takes is to be subject to rent reviews. It will normally be fair and in accordance with the commercial purpose
of rent review provisions that the hypothetical lease shall contain provisions for review of the rent which are as close as
possible to those in the actual lease. As explained earlier the principle is (a) clear and unambiguous words which require
that rent review provisions are not to be included in the hypothetical lease must be given effect and, (b) subject to this it
is proper to construe the words of the lease so as to require future rent reviews to be taken into account as a part of the
hypothetical lease2. The rent review provisions so incorporated in the hypothetical lease should so far as possible follow
those in the actual lease as regards the periods between reviews, the formula used to ascertain the market rent, the
machinery of review and all other matters3.
HR A[3927]
1 See para HR A[3642], for a fuller explanation of the matter.
2 British Gas Corpn v Universities Superannuation Scheme Ltd [1986] 1 All ER 978, [1986] 1 WLR 398, approved by the Court of
Appeal in Equity & Law Life Assurance plc v Bodfield Ltd [1987] 1 EGLR 124. It may be useful to tabulate the main decisions which have
gone one way or the other on the question of whether the hypothetical lease should contain rent reviews although it should be emphasised
Page 775
that in any future case which arises it is the application of the principles explained in the text which is important not the exact words
considered in other decisions on other review clauses. The main decisions in which it has been held that the hypothetical lease is subject to
rent reviews are as follows. Datastream International Ltd v Oakeep Ltd [1986] 1 All ER 966, [1986] 1 WLR 404n: the decision of Warner J
in this case is notable as the first to suggest that there may be a presumption in favour of including rent review provisions in the hypothetical
lease. MFI Properties Ltd v BICC Group Pension Trust Ltd [1986] 1 All ER 974, [1986] 1 EGLR 115: this was a further early decision, in
which the conclusion that the hypothetical lease was to contain rent review provisions as in the actual lease was founded on the presumption
of reality. British Gas Corpn v Universities Superannuation Scheme Ltd Ltd [1986] 1 All ER 978, [1986] 1 WLR 398: as explained in the
text, this was the decision of Sir Nicholas Browne-Wilkinson V-C which established the current law on the subject. Amax International Ltd v
Custodian Holdings Ltd [1986] 2 EGLR 111: this decision followed shortly after the above decision of the Vice-Chancellor and applied its
principles. British Home Stores plc v Ranbrook Properties Ltd [1988] 1 EGLR 121: this decision also relied on and applied the principles
established by the Vice-Chancellor. Prudential Assurance Co Ltd v 99 Bishopsgate Ltd [1992] 1 EGLR 119: in this case the hypothetical
lease was held to contain rent review provisions. The decision is of interest in that the provisions in the rent review clause in the actual lease
that the rent was on each review to be 50.6% of the then rental value did not prevent the inclusion of rent review provisions in the
hypothetical lease. The rent reviews in the hypothetical lease were to be to a full rental value in accordance with the principles noted in para
HR A[3864], and established by the Court of Appeal in Guys 'N' Dolls Ltd v Sade Brothers Catering Ltd [1984] 1 EGLR 103. In these
respects the decision is to be compared to that of the Court of Appeal in Equity & Law Life Assurance plc v Bodfield Ltd [1987] 1 EGLR 124
where the existence in the rent review clause in the actual lease of a gearing or 'proportion' provision was one of the matters which led the
Court of Appeal to conclude that the hypothetical lease should not contain rent review provisions.
The main decisions in which it has been held that the hypothetical lease is not subject to rent reviews are as follows. Pugh v Smiths
Industries Ltd [1982] 2 EGLR 120: in this case the hypothetical lease was stated in the review clause to be on the terms of the actual lease
'but excluding therefrom the provisions of this clause'. The decision that the hypothetical lease was not to contain provisions for rent review
is consistent with the principles later established by the Vice-Chancellor since the clause in the actual lease could have no other meaning
save that this was to be the case. Safeway Food Stores Ltd v Banderway Ltd [1983] 2 EGLR 116: in this case the rent review clause provided
that the hypothetical lease should be 'on the same terms and conditions as are in these presents contained (save for this proviso)'. As in the
previous case the decision that the hypothetical lease should not contain provisions for rent review is consistent with the later principles
established by the Vice-Chancellor since the words in brackets cited above could have no meaning except that the rent review provisions
were to be excluded. This was so even though the term of the hypothetical lease was 69 years. National Westminster Bank plc v Arthur
Young Mclelland Moores & Co (a firm) [1985] 2 All ER 817, [1985] 1 WLR 1123: this was the decision of Walton J which attracted
substantial criticism. It must now be regarded as out of keeping with modern authority and incorrectly decided. It was said in the House of
Lords in Arnold v National Westminster Bank plc [1991] 2 AC 93, [1991] 3 All ER 41 that there were powerful grounds for the view that the
approach to construction adopted in this case was wholly incorrect in law. Equity & Law Life Assurance plc v Bodfield Ltd [1987] 1 EGLR
124: this decision of the Court of Appeal approved the general principles of construction advanced by the Vice-Chancellor. Even so, the
actual decision was that the hypothetical lease did not contain provisions for rent review. The main reason for the decision appears to be that
the rent on reviews was to be 85% of the rental value at the time and this suggested that the hypothetical lease was not to incorporate rent
reviews. It is not easy to derive the logic behind this reasoning. It would have been easy to decide that the rent reviews in the hypothetical
lease were to be to the full rental value, a process which has been adopted in other cases such as Prudential Assurance Co Ltd v 99
Bishopsgate [1992] 1 EGLR 119 and Guys 'N' Dolls Ltd v Sade Brothers Catering Ltd [1984] 1 EGLR 103. This decision should not be
regarded as establishing any overall principle that where the actual lease has 'geared' rent reviews the hypothetical lease is not to contain rent
reviews.
3 Where the rent reviews in the actual lease contain some sort of 'gearing' provision, eg they are to a proportion only of the full rental
value, it is likely that the rent reviews in the hypothetical lease will be to the full rental value. This principle is discussed in para HR A[3864]
and is explored in some of the decisions summarised in n 2.
Page 776
lease/Rent free periods and other inducements
Rent free periods and other inducements
(a) General
HR A[3928]
A tenant who takes a new lease of commercial premises will usually have to fit out the premises in some way to make
them suitable for his occupation. Shop premises need fitting out with such items as shelves, counters and shop fronts.
Office premises may need partitioning, storage space, reception areas and similar work. It is frequent practice that a
tenant is given an initial period free of rent in which to fit out. The length of the period may be based on a realistic
estimate of how long it would take to fit out the premises1.
HR A[3929]
1 In some cases no fitting out will be needed prior to beneficial occupation and use. This is usually the case with residential premises. If
the hypothetical lease is taken to be granted subject to subtenancies with subtenants in occupation (see paras HR A[3842]ff) obviously no
period of fitting out will be needed. Where fitting out is needed its extent, and the time it will take, varies enormously from a simple fitting
out of a single shop to the fitting out of a large office building for use by an occupier in the financial services sector where equipment such
as stand-by generators or an uninterruptible power supply system may be needed for efficient use of the premises. An estimate of how long
fitting out will take may be obtainable from specialist fitting out contractors.
HR A[3930]-[3940]
On occasions tenants are given a form of financial inducement to take a lease. The inducement may take the form of an
initial period allowed to them free of rent. If this is done there may be a rent free period which is composed of: (a) a
period appropriate for fitting out; and (b) a further period which is an inducement to take the lease. In a sense both
components are a form of inducement to the tenant to take the lease, and the second component is something described
as a 'pure' inducement. It is unrelated to any estimated period for fitting out. Inducements of other sorts may, of course,
be granted to the tenant, the most obvious being a reverse premium or capital sum paid to him in return for his agreeing
to take the lease1. Whether an inducement is given, and, if it is, the amount of it are likely to depend to a large extent on
the strength of the letting market for the type of property in question at the date of the grant of the lease. If there is an
excess of demand over supply, a landlord's market, then inducements will be non-existent or small. If there is an excess
of supply over demand, a tenant's market, then substantial inducements may be offered by landlords anxious to dispose
of their property on lease. The general economic recession and property slump of the early 1990s saw large inducements
of various sorts offered to tenants to persuade them to take leases. Apart from the state of the market there may be other
factors which induce a landlord to grant inducements. It is obvious that the larger the inducement the higher the rent the
tenant will be willing to pay. The rent payable after the receipt of an inducement is often termed the 'headline' rent2.
Some landlords may be anxious to keep the level of their headline rent as high as possible and thus will be willing to
offer substantial inducements to achieve their aim3.
Page 777
HR A[3941]
1 Other forms of inducement are a reduced rent for a period, either instead of or following a rent free period, a capital contribution to the
costs of fitting out, or the taking by the landlord of an assignment or surrender of a lease of other premises. Of course, an inducement may in
principle be of any kind. The distinction between a rent free period given to cover a period of fitting out and a rent free period given as a
pure inducement was central to the decision in the Court of appeal in Scottish Amicable Life Assurance Society v Middleton Potts & Co
[1995] 1 EGLR 97 (discussed more fully in para HR A[3962], n 4). The language of the rent review clause in that case was held to be such
as to require the determination of a rent which would be agreed after the end of the first type of rent free period not after the end of a pure
inducement rent free period. See also Co-operative Wholesale Society Ltd v Westminster Bank plc [1995] 1 EGLR 97, decided at the same
time by the Court of Appeal.
2 A headline rent may be defined as the rent which a tenant agrees to pay after taking account of an inducement given to him to take the
lease other than a rent free period allowed for the reasonably estimated period it would take to fit out the premises.
3 A landlord who owns a number of tenanted properties in an area such as a shopping mall may be concerned to keep up the ostensible
level of rents. To achieve this he may be willing to offer a substantial inducement in return for a high headline rent. His reasoning may be
that the high rent will assist him in rent reviews or new lettings of other properties. It may also assist in maintaining the capital value of his
reversion. In reality, of course, those negotiating the rent review or new lettings of other property will make themselves aware of the
inducement and will either take it into account in negotiating the rent review (the need for adjustments in such cases is discussed in para HR
A[3963]) or require a similar inducement to take a new lease at the same rent.
HR A[3942]
The question to be considered is the effect of these market practices on rent reviews. The subject is of some complexity
and has caused considerable practical difficulty and debate. It is convenient to take first the matter of fitting out and rent
free periods allowed for fitting out, before coming to the matter of inducements generally. Much of the confusion stems
from a failure by draftsmen of rent review clauses and others to distinguish clearly between (a) the actual lease which
contains the rent review clause, (b) the hypothetical lease which generally has to be envisaged in order to operate the
rent review, and (c) rent agreed or otherwise determined for comparable premises. Inducements and rent free periods are
irrelevant as far as the actual lease is concerned. The actual lessee at the date of the rent review will simply be
continuing to exercise his right to enjoy the term without any question of inducement or rent free period. The critical
question is what is to be assumed as regards the hypothetical lease, in particular whether the rent under it is to be that
which would be agreed without any inducement or is a headline rent in the sense explained above, that is a rent which
would be paid after receipt of an inducement. When it comes to comparable premises the problem will generally be first
to ascertain what inducement, if any, was given or taken into account in determining the rent for those premises and
then to make any necessary adjustment to bring that rent into line with the circumstances of the hypothetical lease.
These points are explored in paras HR A[3944]ff1.
HR A[3943]
1 An illustration of the confusion is Prudential Nominees Ltd v Greenham Trading Ltd [1995] 1 EGLR 97, in which the rent review clause
directed an assumption that 'no reduction or allowance is to be made on account of any rent free period or other concession which in a new
letting might be granted to an incoming tenant'. The issue was whether these words required that the rent under the hypothetical lease was to
be (a) that which would be paid after the grant of a rent free period or other inducement or (b) that which would be paid ignoring any such
rent free period or other inducement. As explained later (see para HR A[3962]) it was held by the Court of Appeal that the latter
construction was correct. A part of the reasoning of the Court was that to take into account an inducement could only increase not reduce the
rent, so that the words used, with the reference to a reduction or allowance, seemed to have little meaning. Clearly, this reasoning is correct.
The question remains what the draftsman intended. One may speculate that his underlying reasoning was (1) in actual lettings inducements
Page 778
are often granted leading to an increased rent, (2) there is no inducement to be considered under the hypothetical lease, (3) accordingly the
hypothetical willing lessee would pay only the lower rent obtainable without an inducement, and (4) this lower rent is not desired on the
review, so that the words were included in the rent review clause to avoid this chain of reasoning and to prescribe the higher rent appropriate
after the giving of an inducement. If this speculation is correct the case is an example of a failure to achieve an intended result and to a
failure to distinguish clearly between the circumstances of actual and hypothetical leases, or at least a failure to express clearly that
distinction.
(b) Fitting out
HR A[3944]
In relation to rent-free periods for fitting out the central question is what assumptions are to be made as regards the
hypothetical lease. The assumptions should in principle reflect as closely as possible the position of the actual lessee.
There are three points to consider:
(a) The actual lessee enjoys no rent-free period in respect of the time between the current and the next
rent review (or the end of the lease). Accordingly, the hypothetical lease should not be one which
contains a rent-free period. In general, this is achieved by the normal form of rent review clause which
does not refer to rent-free periods. On occasions there is a reference to the rent payable by the willing
lessee being that which would be paid after the end of a rent-free period. Provisions of this nature are
considered below in connection with the general question of inducements1. Even provisions of this
nature do not strictly mean that the hypothetical lease contains a period free of rent, rather that the rent
payable under it is that which would be payable if it did contain such a period.
(b) The actual lessee does not have the burden of a period without productive or beneficial occupation
following the review date while the premises are fitted out. This is because in cases needing fitting out
that process will normally have been carried out at the beginning of the lease by him or by his
predecessor in title. It follows that in all fairness the rent under the hypothetical lease should not take into
account such a burden. This purpose is achieved if the rent review clause contains express words which
bring it about. Very many rent review clauses do not contain such a direction. Also, provisions which
direct that the premises are assumed to be fully fitted out at the review date have other difficulties, such
as that they mean the tenant pays a rent for fitting out improvements and fixtures which he has himself
installed, and so are generally construed by the courts so as not to have their apparent effect2. In the
absence of such a direction it seems necessary to assume that the willing lessee will be taking a lease of
premises with the burden of a period needed to fit them out, so that a reduction in the reviewed rent may
be achieved to reflect this factor3. In some cases rent review clauses expressly provide that the rent to be
determined as the reviewed rent shall be that which would be payable at the end of a rent-free period
appropriate to or attributable to the fitting out of the premises. In all cases it is necessary to look carefully
at the precise words used. Sometimes the provision in question refers to a rent-free period such as would
be negotiated in the open market for the purposes of fitting out. The purpose of such a provision appears
to be that the parties to the hypothetical lease should form a reasonable estimate of how long it would
take to fit out the premises and then allow a rent-free period corresponding to that time. In some cases, in
order to arrive at a reasonable estimate, they will need the advice of experts such as quantity surveyors or
fitting out contractors. On the other hand, it appears that in the real market where rent-free periods are
negotiated a composite period is often allowed without any precise thought being given to that part of it
which is attributable to the time needed to fit out the premises, and some rule of thumb period is applied
to the fitting out element. How these possibilities which occur in the actual letting world are to be
applied to the hypothetical world prescribed for the operation of rent reviews depends on the exact
language used in the rent review provision.
Page 779
(c) The actual lessee does not have the burden of the capital cost of fitting out. Again, this is because
any necessary fitting out is likely to have been done in the past. However, the work involved in fitting
out will usually be a mixture of tenant's improvements, tenant's fixtures and chattels. The normal rule is
that the valuation effect of such work is to be disregarded4. Therefore, the rent review should at this
point proceed on a different hypothesis from the reality, namely on the hypothesis that the willing lessee
will bear the capital cost of fitting out. If the rent review clause contains nothing on the point except the
usual disregard of the tenant's improvements the position under the hypothetical lease will be as just
stated. There is a possible logical difficulty in that the rent review provisions may contain a direction that
the premises are assumed to be fitted out (ie a direction of the nature mentioned in (b) above). Such a
direction introduces a potential conflict in that the premises are assumed to be fitted out yet the usual
disregard provision requires that the effect of the fitting out works is to be ignored. The practical
solution, and one which has certainly been favoured by valuers practising in the field, is that (i) the fitted
out assumption results in the willing lessee being assumed not to require any period in which to fit out
and (ii) the disregard provision means that the willing lessee is assumed to have to bear the capital cost
of any fitting out. Such a resolution of the conflict, while perhaps not logically impeccable, has the result
that it accords with principle and fairness. Of course, the ideal solution is that the rent review clause
should spell out in precise terms the propositions as just stated. Such a provision is rarely found, in part
no doubt because at the time of the grant of older leases the conceptual problems here discussed were not
fully appreciated5.
HR A[3945]
1 See para HR A[3961]. Often, such a provision will not distinguish between a rent free period granted to cover a period of fitting out and
a rent free period granted as a pure inducement to take the lease. An approach favoured by the courts is to construe provisions relating to rent
free periods as having the effect of an assumption that the willing lessee will not need a period in which to fit out the premises. In
Co-operative Wholesale Society Ltd v Westminster Bank plc [1995] 1 EGLR 97 the rent review clause required is to be supposed 'that any
rent-free period or concessionary rent or any other inducement whether of a capital or revenue nature which may be offered in the case of a
new letting in the open market at the relevant date of review shall have expired or been given immediately before the relevant date of
review'. The Court of Appeal held that the effect was that the willing lessee must be taken to have been allowed to move into the premises
and carry out any fitting out work before the date of the hypothetical letting. In those assumed circumstances he would not have required a
period in which to fit out.
2 The effect of such provisions is considered in detail in para HR A[3828].
3 The courts will generally seek to interpret a provision so as to have the effect mentioned as fair in the text if that is possible. An example
is Co-operative Wholesale Society Ltd v Westminster Bank plc [1995] 1 EGLR 97. In St Martin's Property Ltd v Citicorp Investment Bank
Properties Ltd [1998] EGCS 161 there was a provision that the willing lessee would not seek a rent free period nor any reduction in rent and
that any such rent free period or reduction should be ignored when considering the rents of comparable premises. It was agreed that this
required the assessment of a rent which would be payable at the end of a period of fitting out. The proposition that with a hypothetical lease
with vacant possession the willing lessee will have to fit out the premises and may require a reduction in the rent in lieu of the rent free
period which would normally be allowed for that process is said to derive from the decision of the Court of Appeal, commenting on the
award of the arbitrator, in 99 Bishopsgate Ltd v Prudential Assurance Co Ltd [1985] 1 EGLR 72. In that case, which concerned a large office
building in the City of London, the arbitrator reduced the rent from £6,700,000 per year to £6,065,000 per year to take account of the time
needed to fit out the property and find subtenants. The reduction needed on this account is sometimes called 'the 99 Bishopsgate effect'. The
distinction between a rent-free period given as a benefit, or contribution to 'start-up costs' and a rent-free period given as a more general
inducement to take a lease was expressed with clarity by Simon Brown LJ in the four cases decided at [1995] 1 EGLR 97.
4 The principles which underlie this rule are considered in detail in paras HR A[3746] to [3806]. In summary, the position is that
improvements are generally disregarded because of an express direction to that effect in the rent review clause, tenant's fixtures are
disregarded because of the principle that the actual lessee is taken to have removed tenant's fixtures prior to the review date, and chattels are
not a part of the demised premises and so do not figure in the rent review valuation.
Page 780
5 An example of the problems which are caused by a failure of the draftsman of a rent review clause to specify exactly what is and is not
to be assumed is the decision in London & Leeds Estates Ltd v Paribas Ltd [1993] 2 EGLR 149. The rent review clause contained two
provisions, one which created an assumption 'that the demised premises are fit for immediate occupation and use and in a state of good
repair and condition and that all fitting out and other tenant's works required by such willing tenant have actually been completed' and the
other which required a disregard of tenant's improvements. When the case was heard at first instance both parties accepted that the meaning
of the clause was that all fitting out works were assumed to have been carried out by the date of the hypothetical letting (and, indeed, this is
exactly what the language of the rent review clause appears to say). The conflict between them was whether, as the tenants contended, it had
to be assumed that the works had been carried out at the expense of the hypothetical willing lessee (so that their value would not be reflected
in the reviewed rent) or, as the landlords contended, no such assumption should be made (so that the willing lessee would have the works
ready for him and would agree a reviewed rent which would take into account the value of the works). It was held at first instance that the
landlords' contention was correct (see [1993] 1 EGLR 121). The Court of Appeal rejected the view of the judge and the contentions of both
parties. They held that all that the second part of the first above provision meant in its context was that the hypothetical willing lessee was to
be assumed to require the same fitting out work as that already carried out by the actual lessee. The effect on value of such fitting out work
was to be disregarded by reason of the second above provision. It may well be that this result achieved broad justice between the parties on
the point at issue but it is not easy to follow the reasoning of the Court of Appeal which appears to pay scant regard to the words actually
used in the rent review clause.
HR A[3946]
In principle, therefore, as regards fitting out of commercial premises and a rent free period for fitting out the approach
should be: (a) that the hypothetical lease should contain no reference to rent free periods; (b) that it should be assumed
that the willing lessee will not have the burden of a period needed to fit out the premises; and (c) that it should be
assumed that the willing lessee will have the burden of the capital cost of fitting out. In practice, the language of the rent
review clause must be scrutinised carefully to see whether it is consistent with this approach. Of course, if the language
contains a clearly different provision that must be applied. It will often be necessary to put together a number of the
provisions of a rent review clause to see whether the overall approach mentioned has been achieved. Unfortunately, in
many cases the conclusion is that the result is in some ways different.
HR A[3947]
The provisions of and the assumptions surrounding the hypothetical lease have to be worked out before the rental
valuation can take place. The problems which arise in practice may centre around the valuation process. Accordingly,
although valuation is discussed in general terms later, it is convenient at this point to refer to certain valuation
consequences of the explanation just given. A valuation in regard to the hypothetical lease will normally proceed by
way of comparables. The task of the valuer will therefore be to adjust the rent derived from comparable transactions to
the assumed circumstances of the hypothetical lease. Any adjustments may be considered in accordance with the three
matters discussed in the last paragraph. The comparables may be an open market letting or a rent review.
(a) If the comparable is an open market letting of premises and a rent free period has been allowed to
cover an estimated period for fitting out it will be necessary to adjust the rent of the comparable by
asking what that rent would have been if no rent free period had been allowed. The method of adjustment
is, of course, for a valuer.
(b) In the case of a letting of comparable premises the tenant will normally have borne the burden of a
period during which the premises would be occupied for fitting out purposes rather than the purposes of
carrying on the business. Since there is no equivalent burden for the hypothetical willing lessee there
should be an adjustment to eliminate this difference. Obviously, the adjustments needed on this score and
for the purposes of sub-paragraph (a) may largely cancel each other out.
(c) An actual lessee of comparable premises will normally have had the burden of paying for the
fitting out. Since the hypothetical willing lessee will usually have this same burden an adjustment of the
rent derived from the comparable will not normally be needed to eliminate any difference.
Page 781
The above valuation considerations proceed on the basis that the provisions and circumstances of the hypothetical lease
are those which have been suggested as most fair. If the provisions and circumstances are different by reason of the
presence or absence of express provisions of the rent review clause then obviously the matter of any adjustment of rents
derived from comparable transactions will also need to be considered differently. In particular many rent review clauses
do not direct or require the adjustment referred to in (b) above. The root principle remains that where the terms of an
actual transaction in comparable premises are different to those of the hypothetical lease an adjustment of the rent
derived from the actual transaction may be needed to arrive at a rent appropriate to the circumstances of the hypothetical
lease.
HR A[3948]
If the comparable transaction is itself the result of a rent review, whether an agreed settlement or a decision by an
arbitrator or an expert, there may still be a need for an adjustment to bring the rent determined into line to that of the
lease which is being valued. In this instance any adjustment needed will be to reflect any difference between the
provisions and circumstances of the hypothetical lease for the comparable premises and those of the hypothetical lease
for the premises being valued. For instance, the hypothetical lease of the comparable premises may be let on the footing
that these premises have been fully fitted out while the hypothetical lease of the premises being valued may not be on
that assumption. In practice, it may be difficult to know as regards the determination of the rent on the comparable
premises what effect, if any, was played by such a factor, especially when the rent determined is simply a settlement at a
figure. The parties and their advisers may never have explored the niceties of principle and valuation discussed in the
preceding paragraphs.
(c) Pure inducements
HR A[3949]
As explained above, an inducement given to a tenant to take a lease may take any form although the two most frequent
forms are a rent free period and a monetary sum or reverse premium. The actual lessee receives no such inducement at
the date of the rent review. Consequently, the rent under the hypothetical lease should be determined on the basis of that
which is appropriate for a letting with no rent free period or other inducement. Obviously, this is likely to be a lower
level of rent than would be paid if an inducement had been given to the tenant1. The higher rent which would be
payable if an inducement is taken into account is sometimes called a 'headline' rent2.
HR A[3950]-[3960]
1 The very large monetary difference that can be made is illustrated by the case of Broadgate Square plc v Lehman Brothers Ltd [1995] 1
EGLR 97 in which the arbitrator had found that in the market conditions prevailing at the review date a 30-month rent-free period would
have been granted to induce a willing lessee to take the lease and that this increased the rent from about £9 1/4m per year to about £12 1/4m
per year. This decision is further discussed in para HR A[3962], n 4.
2 It is explained in para HR A[3930], that a rent payable after the effect of an inducement (other than a rent free period for fitting out) has
been taken into account is often called a 'headline' rent. A definition of a headline rent is given in para HR A[3941], n 2. An example of a
headline rent is given in para HR A[3645], n 1.
Page 782
HR A[3961]
Rent review clauses are often silent on the above point. If so they will be applied in the way just mentioned, that is not
taking into account any inducements. However, not infrequently the clause contains language which could be thought to
point to the determination of a headline rent1. This is something which on the face of it is unfair to the tenant and cuts
across the general purposes attributed to rent reviews. Consequently, the courts have worked out the principle that the
language of a rent review clause is to be construed so as not to require a headline rent to be determined unless the
language is so clearly and unequivocally a direction to determine a headline rent that it cannot be given any other
meaning2. In reaching this principle reliance has been placed on the presumption of reality which is a guiding rule in
the construction of rent review clauses. The presumption of reality, and its application to the present question of
inducements and headline rents, has been considered in general terms earlier3. The courts have exercised some
ingenuity in interpreting the words of rent review clauses so as to avoid a headline rent4.
HR A[3962]
1 See para HR A[3941], n 2 for the meaning of a headline rent.
2 The Court of Appeal in 1995 heard together four cases in which the question of incentives and headline rents in connection with rent
reviews was considered generally. The decisions were Co-operative Wholesale Society Ltd v Westminster Bank plc; Scottish Amicable Life
Assurance Society v Middleton Potts & Co; Broadgate Square plc v Lehman Brothers; Prudential Nominees Ltd v Greenham Trading Ltd
[1995] 1 EGLR 97. As well as deciding the four rent review cases before the Court the judgments, in particular that of Hoffmann LJ, contain
an extensive review of the principles which govern the question and explain the principle set out in the text of this paragraph.
4 This can be seen from three of the following four cases. In Co-operative Wholesale Society Ltd v National Westminster Bank plc [1995]
1 EGLR 97 the rent review clause required the supposition 'that any rent-free period or concessionary rent or any other inducement whether
of a capital or revenue nature which may be offered in the case of a new letting in the open market at the relevant date of review shall have
expired or been given immediately before the relevant date of review'. This was interpreted to mean that the willing lessee had been allowed
into possession to carry out any necessary fitting out work before the date on which the hypothetical lease was granted. Accordingly, its only
effect was to remove any argument that there might otherwise be that the willing lessee would negotiate a reduced rent on account of a
period during which he would have to fit out the premises but not receive any rent free period. The question of rent free periods for fitting
out and the impact of this decision is considered in para HR A[3944]. In Scottish Amicable Life Assurance Society v Middleton Potts & Co
[1995] 1 EGLR 97 the rent to be agreed or determined was 'the best yearly open market rent (at the rate payable following the expiry of any
rent-free periods or periods at concessionary rents which might be granted on a new letting of the Demised Premises or of comparable
premises in the open market on the relevant Review Date) at which the Demised Premises might reasonably be expected to be let in the open
market on the Relevant Review Date without a fine or premium or value in the nature of a fine or premium...' It was held that what was
intended was that a rent should be determined as that which would be agreed after the end of a rent free period given to cover a reasonable
period for fitting out and not at the end of some further rent free period given as an inducement. The use of the expression 'new letting' and
the specific exclusion of a premium, which it was said could include a reverse premium, led the court to this conclusion. This decision is
perhaps a good illustration of the determination of the courts to avoid the conclusion that a headline rent is required under a rent review
clause unless the language used leaves no escape from that conclusion. In Broadgate Square plc v Lehman Brothers Ltd [1995] 1 EGLR 97
the reviewed rent was to be 'the best yearly rent which would reasonably be expected to be payable in respect of the premises after the expiry
of a rent-free period of such length as would be negotiated in the open market upon a letting of the Premises as a whole by a willing lessor to
a willing lessee...' It was held that the language pointed unequivocally to a headline rent being specified. This is the only one of the four
cases heard together in which the Court of Appeal were willing to come to this conclusion. The arbitrator had decided that in the open
market at the review date a rent free period of 30 months would have been negotiated as an inducement to secure the letting. In Prudential
Nominees Ltd v Greenham Trading Ltd [1995] 1 EGLR 97 there was an assumption to be made that 'no reduction or allowance is to be made
on account of any rent free period or other rent concession which in a new letting might be granted to an incoming tenant'. It was held that
this did not lead to a headline rent having to be determined. A headline rent logically means an increase on the rent above that which it
would otherwise be on account of a rent free period. The reference to a reduction in the rent could not therefore have the effect of prescribing
a headline rent. One is perhaps left wondering what it is the draftsman did have in mind when he used the language which he did. There is
Page 783
further comment on this decision in para HR A[3943], n 1. Since the decisions of the Court of Appeal and the general guidance given in
them the question of a headline rent arose again in St Martin's Property Ltd v Citicorp Investment Bank Properties Ltd [1998] EGCS 161.
The provision there under consideration was the assumption 'that the said willing tenant or tenants do not seek a rent free period nor any
reduction in rent to allow them the equivalent of a rent free period and in considering any comparable rents the existence of any rent free
period or any reduction in rent calculated to allow for any rent free period shall be ignored'. It was held that the ambiguity inherent in this
provision was such as to justify the conclusion that a headline rent was not intended. Once again it is possible to ask what the draftsman
could have intended by the admittedly somewhat clumsy language except that the rent should be a headline rent. See also the earlier case of
City Offices plc v Bryanston Insurance Co Ltd [1993] 1 EGLR 126 in which successive provisions in a rent review clause were held to be
self-cancelling.
HR A[3963]
As with rent free periods for fitting out once the correct construction and approach have been decided the parties may be
left with valuation problems. The problems relate mainly to the way in which comparable transactions are to be used as
an aid to valuation where the rent to be determined is not a headline rent. Where the comparable transaction is an open
market letting and there has been an inducement to the tenant, for instance by way of a substantial rent free period, it is
necessary in order to use the comparable to ask what the rent would have been if there had been no such rent free
period. This may not be an easy valuation exercise. There can be even greater complications where the comparable
transaction includes a rent free period given in part to cover a period necessary for fitting out and in part as a pure
inducement to take the lease. Since the circumstances of the hypothetical lease of the premises being valued may be
different in regard to these two elements of a rent free period it may be necessary to assess how much of the rent free
period contained in the lease of the comparable premises is attributable to each of the two factors so that an adjustment
can be made to eliminate the effect of one part only of the total rent free period. Despite the potential complication the
overall approach should always be the same. First, there has to be determined the exact terms of and assumed
circumstances surrounding the hypothetical lease. Then an adjustment may be necessary to compensate for the fact that
the actual terms and circumstances of the lease of the comparable premises were different. It is pointed out later in
connection with valuation and onerous provisions in the hypothetical lease that there is a valuation argument which may
in some cases temper the apparent injustice to the tenant of having to pay a headline rent on each rent review1.
HR A[3964]
HR A[3965]
A comparable transaction which is itself a rent review determination may also need adjustment. If the review in
question was on the same basis as that of the premises being valued (ie both are, or are not, to headline rents) then, of
course, no adjustment is necessary on account of inducements1. In both cases any inducements have been or should
have been either ignored or taken into account. However, if the rent review of the comparable premises has been a
review to a headline rent but the review of the premises being valued is not on this basis an adjustment will normally be
needed so as to bring the rent determined for the comparable onto all fours with the hypothesis which is correct for the
premises being valued.
HR A[3966]
Page 784
1 Even if inducements are to be taken into account in both cases the inducements assumed for the two hypothetical leases may not be the
same. In one case a rent free period may be assumed and in the other a reverse premium may be assumed. In such cases an adjustment to the
rent determined in the rent review of the comparable premises may still be necessary.
Page 785
lease/Consents under the lease
Consents under the lease
HR A[3967]
Many of the restrictive provisions which are terms of the hypothetical lease, for instance restrictions on use, alterations
and alienation, may be framed in absolute terms or may be qualified with a provision that what is restricted may be
carried out with consent. The qualification often adds that consent is not to be unreasonably withheld, and such a
proviso is sometimes deemed to exist by virtue of statute1. Where there is a qualified covenant the willing lessee has the
comfort of knowing that if he wishes to carry out the restricted act he can only be prevented if the landlord has
reasonable grounds for a refusal of consent. The willing lessee will accordingly negotiate a rent on the basis of this
limited and qualified restriction. He may reason that he will be able to obtain consent for some change of use or other
matter for which consent is needed since the lessor will not have any ground to refuse the required consent. His ultimate
recourse would be to seek a declaration that consent had been unreasonably refused.
HR A[3968]
1 See para HR A[3886] (user), para HR A[3905] (alienation) and para HR A[3922] (alterations). A relevant point to consider may be
whether statutory provisions will affect the capacity of the landlord to refuse his consent to some proposal, eg s 24 of the Disability
Discrimination Act 1995 which prohibits discrimination against a disabled person by a person managing premises: see Williams v Rothwell
Court (Swansea) Limited [2007] 09 EG 204.
HR A[3969]
Where the restriction is absolute the willing lessee will not have this comfort. Even so, general principle suggests that
where a lessee would believe that he might persuade or induce a landlord to give consent this prospect should be
something to be borne in mind in the hypothetical negotiations. In fact the Court of Appeal have held that it must be
assumed that absolute restrictions will be strictly enforced and not relaxed1. Since the hypothetical world is meant so
far as possible to reflect what happens in the real world it is difficult to see why the possibility of a relaxation of an
absolute covenant should be ignored if that possibility is something which would affect the mind of a lessee2. A reason
given by the Court of Appeal for the decision is the difficulty in estimating what consideration a landlord would want
for relaxing the restriction. However, difficulties of this nature abound in property valuation. For instance, valuers often
have to determine when valuing property what sum a person who owns a strip of land over which access is necessary to
develop the property would demand for allowing the access3. Although the decision relates to absolute covenants
against a change of use and alteration of a part of the premises the principle applies to any restrictive covenant of an
absolute nature.
HR A[3970]-[3980]
Page 786
1 Plinth Property Investments Ltd v Mott, Hay & Anderson (1978) 38 P & CR 361, [1979] 1 EGLR 17
2 The fact that the possibility of a relaxation may affect the rent is illustrated by the alternative awards of the arbitrator in Plinth Property
Investments Ltd v Mott, Hay & Anderson (1978) 38 P & CR 361, [1979] 1 EGLR 17 one alternative taking that possibility into account and
the other not doing so. The Court of Appeal of New South Wales appear to have taken a somewhat different view of the question: see Burns
Philp Hardware Ltd v Howard Chia Pty Ltd (1987) 8 NSWLR 642.
3 See eg Stokes v Cambridge Corpn (1961) 13 P & CR 77.
HR A[3981]
A consent which has been granted by the actual landlord prior to the review date will be taken into account in
determining the reviewed rent. The consent will be taken to enure for the benefit of the willing lessee. They may be
because there is an express provision to that effect, or it may be as a result of an implied term to that effect, or the
consent in question may be seen as a variation of the terms of the actual lease1. The terms of a deed entered into during
the term of the lease and affecting the rights of the parties under it will be taken into account on a rent review, for
example an option which entitles the landlords to call for a surrender of a part of the demised premises2. Landlords
have made attempts to issue a consent, unilaterally and unasked for by the tenant, prior to a review date in order to
argue that the lifting of a restriction will increase the rent payable on the review. Such attempts have been unsuccessful,
it being held in one case that there was an implied term that before a consent was effective for present purposes it had to
be one given as a result of a request by the tenant3.
HR A[3982]
1 Lynnthorpe Enterprises Ltd v Sidney Smith (Chelsea) Ltd [1990] 2 EGLR 131. Cf SI Pension Trustees Ltd v Ministerio de Marina de la
Republica Peruano [1988] 1 EGLR 119.
2 Commercial Union Life Assurance Co v Woolworths plc [1996] 1 EGLR 237.
3 C & A Pension Trustees Ltd v British Vita Investments Ltd [1984] 2 EGLR 75. See also the decision of the Court of Appeal of New
South Wales in Burns Philp Hardware Ltd v Howard Chia Pty Ltd (1987) 8 NSWLR 642.
Page 787
lease/Consents under public law
Consents under public law
HR A[3983]
There are many restrictions under public law which govern the use of and the carrying out of works on property. The
most obvious is the need for planning permission under the Town and Country Planning Act 1990 for the carrying out
of development, which is defined as the carrying out of operations on land or the making of a material change in the use
of the land1. Other consents which may be needed include a Justices' licence to sell alcoholic drinks and the consent of
the Gaming Board and a Justices' licence before premises can be used as a casino. The question is how this affects the
hypothetical lease.
HR A[3984]
1 See Town and Country Planning Act 1990, s 55 for a full definition of development. Changes of use which come within the same class
in the Town and Country Planning (Use Classes) Order 1987 do not require planning permission. Also planning permission is granted
automatically, and without the need for an application, for certain forms of development by the Town and Country Planning (General
Permitted Development) Order 1995.
HR A[3985]
A frequently found provision in leases is that the tenant will comply in all respects with the planning legislation. That
provision will be incorporated into the hypothetical lease. It should, therefore, be assumed in such cases that the willing
lessee will not be able to carry out any use or operations in breach of planning control. The valuer should exclude from
his mind any possibility that there will be some future use of the premises which is in breach of planning control1. The
same principle probably applies even in the absence of an express provision in the actual and the hypothetical leases
which prohibits conduct in breach of planning control. A breach by the willing lessee would then not be a contravention
of the covenants in the hypothetical lease but could be prevented by the local planning authority. It seems correct that
the prospect of unlawful acts should not be taken into account in the valuation2. Under current planning legislation no
enforcement action may be taken against a change of use carried out in breach of planning control where the use
commenced more than ten years ago. Such uses, although initially unlawful, become lawful after ten years3. Clearly,
where a use has become lawful due to the passage of time its continued use under the hypothetical lease can be taken
into account4.
HR A[3986]
1 Compton Group Ltd v Estates Gazette Ltd [1977] 2 EGLR 73.
2 There is a possible analogy with the rule that a tenant cannot benefit from his own wrong in failing to keep the property in repair as
Page 788
required by the terms of the lease: see para HR A[3762].
3 See Town and Country Planning Act 1990, ss 171B(3), 191(2), as amended by the Planning and Compensation Act 1991.
4 Less clear is the question of whether a use can be taken into account where at the valuation date it has been carried on for a substantial
period without enforcement action but the full ten years has not elapsed. A possible distinction is between (a) uses which have been carried
out prior to the review date without planning permission but for less than ten years (the continuation of which can be taken into account but
also taking into account in the valuation the risk of enforcement action against the use) and (b) uses which have never been carried on before
the valuation date. See 6th Centre Ltd v Guildville Ltd [1989] 1 EGLR 260. The most satisfactory overall approach is probably to look at the
actual circumstances of user and planning controls and to ask how a hypothetical willing lessee would view this situation in agreeing to pay
a rent.
HR A[3987]
Obviously the willing lessee and anyone else who would be in the hypothetical market would take into account the
existence of any actual planning permission which enured to the benefit of the premises. The legislation provides that
unless otherwise expressed a planning permission enures for the benefit of the land and may be taken advantage of by
anybody1. However, a permission may, exceptionally, contain a condition which limits its benefit to a named person or
persons or to a category of persons. Such conditions, though lawful in principle, need some special justification since
the objective of planning control is to regulate the use of land not the persons who may carry out that use. A personal
condition may be imposed where a particular person has a special need to carry on a use which would not be generally
permitted on the land in question. An example of a condition which limits use to persons in a particular category is one
which requires that only persons employed in agriculture shall occupy a particular house. Clearly, the existence of a
personal condition may affect the rental value of the premises. If it is of the first type, so that only a named person
(usually, of course, the tenant under the actual lease) can use the premises, it would follow that the actual tenant (or
other named person) would be the only actual person likely to take a lease. The willing lessee will still be a hypothetical
person, and the principle is that in such a case he will have to outbid any offer the actual tenant would make in order to
secure the lease2. If the condition is of the second type, so that only persons of a certain category can use the premises,
the range of persons who would be interested in taking the hypothetical lease is narrowed and the willing lessee will be
assumed to have the characteristics of such a person. In valuation terms this last situation is comparable to that where a
term of the lease restricts the user3. For instance, both a planning permission and the terms of the lease may restrict the
user to that of professional offices. As is explained below, account can be taken of a prospect that the local planning
authority will be willing to remove or amend the restriction contained in the condition4. Account may be taken of the
existence of an actual planning permission even though it has been implemented by the tenant and the resultant
development is to be disregarded because it is a tenant's improvement5. What could be relevant in such a case was the
value effect of the prospect of implementing the permission. However, planning permissions are subject to time limits
for the commencement of the development and it must be established whether the permission has expired6.
HR A[3988]
1 See Town and Country Planning Act 1990, s 75(1).
2 It is arguable that in such a case the hypothesis of an open market letting requires that it is assumed that the planning permission is for
the personal benefit of the willing lessee who takes the hypothetical lease. An hypothesis of this nature was required in the case of a
restriction in the lease to use by a specific named person: see Law Land Co Ltd v Consumers Association Ltd [1980] 2 EGLR 109, discussed
in para HR A[3868].

Page 789
5 Railstore Ltd v Playdale Ltd [1988] 2 EGLR 153.
6 Town and Country Planning Act 1990, s 91ff.
HR A[3989]
Equally, obviously the willing lessee will be able to take the benefit of any planning permission which it is expressly
directed to be assumed to exist1. What is less clear is when a planning permission will be assumed to exist because the
provisions of the rent review clause impliedly require such an assumption. If the valuation is expressed to be on the
basis that the premises are let for a specified purpose it is likely to be assumed that there is in existence at the valuation
date planning permission to use the premises for that purpose2. A provision that the premises are available for letting
for a specified use probably carries the same implication of an assumed planning permission for that use3. Such a
planning permission would be subject to any normal conditions which would attach to a permission of the type
contemplated. On the other hand, where the terms of the hypothetical lease permit use for a number of purposes it is not
necessarily to be assumed that a planning permission or other consent is held by the willing lessee for all of those uses4.
In particular it cannot be assumed that the willing lessee would, during any period of negotiation prior to the grant to
him of the hypothetical lease, have taken steps to obtain any consent needed under public law. It is not correct to
assume, in the absence of some special provision in the rent review clause, that the willing lessee has at some time prior
to the valuation date entered into a conditional contract, that is a contract conditional upon the coming into existence of
a necessary consent such as a gaming licence granted by Justices5. Clearly, fine distinctions of language are involved in
this area of construction.
HR A[3990]-[4000]
1 In Worcester City Council v A S Clarke (Worcester) Ltd (1995) 69 P & CR 562, [1994] EGCS 31 it was stated that the premises should
be valued 'with planning permission for development permitted under this lease'. It was held that the willing lessee should be assumed to
have the benefit of planning permission for operations and changes of use permitted by the hypothetical lease.
2 See Bovis Group Pension Fund Ltd v Flooring (GC) & Furnishings Ltd [1984] 1 EGLR 123 in which the rent to be determined was that
in which the demised premises might reasonably be expected to be let for office purposes and it was held in the Court of Appeal that a
planning permission had to be assumed for office use even though none existed at the valuation date. In Wolff v Enfield London Borough
Council [1987] 1 EGLR 119 the rent to be determined was that obtainable on a letting for any purpose within Class III of the Town and
Country Planning (Use Classes) Order 1972 (light industrial purposes). It was held in the Court of Appeal that a planning permission for this
use must be assumed.
3 Trusthouse Forte Albany Hotels Ltd v Daejan Investments Ltd [1980] 2 EGLR 123. However, there is no assumption that any works
needed to adapt the premises for the specified use have been carried out: see para HR A[3728].
4 The user clause in Daejan Investments Ltd v Cornwall Coast Country Club [1985] 1 EGLR 77 permitted use of the premises for a
variety of purposes including offices, restaurant use and use as a casino. It was held that there was no assumption that the willing lessee held
the consent of the Gaming Board and the licence of the Justices which were necessary for a lawful casino use. See also Parkside Clubs
(Nottingham) Ltd v Armgrade Ltd [1995] 2 EGLR 96 which related to an express provision that necessary licences had been given but to the
actual tenant not the hypothetical willing lessee: see para HR A[3688].
5 Daejan Investments Ltd v Cornwall Coast Country Club [1985] 1 EGLR 77.
Page 790
HR A[4001]
A willing lessee who takes a lease with no actual or assumed planning permission for a particular use may still hope to
obtain the permission needed to institute that use. If this consideration would have an effect on the rent which he would
pay it must be taken into account in determining that rent. The concept involved is the familiar valuation concept of
hope value, that is the component of the value of land which is attributable to the hope, though not the certainty, that
permission will be obtained for some development of the land1. The amount of the hope value will depend primarily on
how strong is the hope or expectation of getting the necessary permission. In the case of a lease it may also be relevant
to consider whether the projected new use can be carried out under the terms of the lease. The fact that the rent review
clause expressly requires that regard is had to any existing planning permission does not prevent the hope that a further
permission will be obtained being taken into account2. A willing lessee may also reason that there is a hope of securing
the removal or amendment of a restriction in an existing planning permission.
HR A[4002]
1 See 6th Centre Ltd v Guildville Ltd [1988] NPC 33, [1989] 1 EGLR 260. If it is desired to exclude hope value from the valuation of land
an express provision to that effect will be needed. An example of a definition which did exclude hope value was the Development Land Tax
Act 1976, s 7(2)(b) (now repealed).
2 Rushmoor Borough Council v Goacher (1985) 52 P & CR 255, [1985] 2 EGLR 140.
HR A[4003]
The principles relating to consents under public law have been examined mainly in the context of the need for planning
permission. The same principles govern the need for other consents1. The principles may be summarised as being: (a)
account should be taken of any permission or consent in existence at the valuation date (although conditions attached to
the permission or consent may reduce its valuation benefit); (b) account should be taken of any other permission or
consent expressly stated to be assumed to exist; (c) in some cases it is to be implied that an assumed permission or
consent exists, and of course account must be taken of this; (d) account can be taken of any effect on rental value of the
hope which a willing lessee would entertain of obtaining a permission or consent needed for any use; and (e) it must be
assumed that the premises will not during the hypothetical lease be put to any use which would be unlawful because a
necessary public law consent was not in existence.
HR A[4004]
1 Eg compliance with a requirement for fire precautions work: Exclusive Properties v Cribgate Ltd [1986] 2 EGLR 123.
Page 791
lease/Matters to be disregarded
Matters to be disregarded
HR A[4005]
In broad principle all facts and circumstances which exist at the valuation date and which could have a bearing on the
rent which would be agreed for the hypothetical lease should be taken into account. This is an aspect of the presumption
of reality. In practice, most rent review clauses provide that certain matters, or the effect on rent of certain matters, are
to be disregarded. The most commonly found matters to be disregarded (or 'disregards') are (a) tenant's improvements,
(b) previous occupation of the premises by the tenant, and (c) goodwill built up by the tenant. These matters correspond
to the matters directed to be disregarded in the determination of the rent for a new tenancy of business premises under
Pt II of the Landlord and Tenant Act 19541. The important question of the disregard of tenant's improvements relates to
the physical condition of the premises to be valued and has already been considered2. It is possible that in some
circumstances a disregard can be implied3.
HR A[4006]
1 See LTA 1954, s 34, printed at HR B[553].
(a) Occupation of the tenant
HR A[4007]
Rent review clauses often provide that there shall be disregarded any effect on value or rent of the fact that the tenant or
his predecessors in title has been in occupation of the demised premises. The actual tenant can usually be regarded as a
potential bidder in the market for the hypothetical lease1. Since the actual tenant has usually been in occupation of the
premises up to the date of the rent review it could be argued that he would often outbid anyone else interested in taking
a lease of the premises by reason of a desire or need to continue in occupation or resume occupation of the premises. It
seems normally to be unfair that such an element of overbid or additional value should accrue to the landlord on each
rent review. The element is eliminated by the disregard provision mentioned.
HR A[4008]
Page 792
HR A[4009]
The phraseology of the disregard may refer to disregarding occupation by predecessors in title of the tenant and by
subtenants as well as by the tenant1. The former addition may make little difference since a predecessor in title of the
tenant at the time of the rent review will have parted with any interest in or right to occupy the demised premises
sometime in the past and is unlikely to have the interest or need to take a lease of the premises which would lead to an
overbid. The second addition may be more significant. It is quite possible that a subtenant in occupation would have a
special interest in taking a new headlease. Such a person may be a form of special purchaser2. If the language of the
disregard does not extend to subtenants any overbid which a subtenant will make should not be disregarded and could in
an appropriate case inflate the rent3.
HR A[4010]-[4020]
1 LTA 1954, s 34(1)(a) does refer to predecessors in title of the tenant. It does not refer to subtenants.
2 See para HR A[3702], for a consideration of the position of a special purchaser.
3 See Daejan Investments Ltd v Cornwall Coast Country Club (1984) 50 P & CR 157, [1985] 1 EGLR 77.
HR A[4021]
The disregard of occupation by the tenant should not be pushed to lengths which go beyond its purpose as explained.
The occupation by the tenant is not to be ignored for all purposes1. For instance, the way in which the tenant has
occupied and used the premises may demonstrate the inherent suitability of the premises for a particular purpose and
there is no reason to ignore a factor such as this. The past occupation by the tenant has got nothing to do with the
question of whether the hypothetical letting is to be with vacant possession2. Whether or not the hypothetical letting is
with vacant possession, ie is or is not subject to any existing subtenancies, it must be assumed that the actual lease under
which the rent review is taking place is not in existence so that the actual tenant cannot be in occupation under it. The
disregard is directed not to this question but to the matter of whether the actual tenant has been in occupation in the past.
The disregards of occupation and of goodwill (which is considered next) are closely related and it seems that a required
disregard of the tenant's occupation will necessarily involve a disregard of goodwill built up by him during his period of
occupation3.
HR A[4022]
1 Cornwall Coast Country Club v Cardgrange Ltd [1987] 1 EGLR 146.
2 Scottish & Newcastle Breweries plc v Sir Richard Sutton's Settled Estates [1985] 2 EGLR 130. The question of whether the hypothetical
letting is with vacant possession is considered in paras HR A[3842]ff.
3 Prudential Assurance Co Ltd v Grand Metropolitan Estates Ltd [1993] 2 EGLR 153. If this decision is correct then a separate provision
Page 793
requiring goodwill to be disregarded is largely otiose.
(b) Goodwill
HR A[4023]
The carrying on of a business at the premises by the tenant may have created an element of goodwill in the sense that
the business has acquired a name and reputation which creates for it an expectation of future business. The expectation
may be that former customers will return and that new customers, knowing of the reputation, will be found. There may
also be other matters, such as contacts with suppliers of services to the business, built up through years of business
which can be regarded as a part of the goodwill of the business. There are a number of judicial explanations of the
concept of goodwill1. A willing lessee taking a lease to carry on such a business would be likely to benefit from this
goodwill. Since it has been built up by the tenant it is usually considered fair that the rent determined at each rent
review should not include any element attributable to the goodwill1. A disregard of the effect on value of any goodwill
attached to the premises by reason of the business carried on there by the tenant is therefore usually found in rent review
clauses. The disregard follows that provided for under Pt II of the Landlord and Tenant Act 19542. Goodwill
established through the carrying on of a business at the premises must be distinguished from the inherent attractiveness
of the premises for business use or for some form of business use, for instance the attractiveness of premises near a busy
railway station for the sale of newspapers and confectionary to travellers. Any rental value attributable to this last type
of characteristic should be included in the open market rent determined at each rent review. It has nothing to do with the
carrying on of a business by the actual tenant.
HR A[4024]
1 In IRC v Muller & Co's Margarine Ltd [1901] AC 217 at 223 Lord Macnaghten described goodwill as 'the benefit and advantage of a
good name, reputation and connection of a business. It is the attractive force that brings in custom'. In Bacchus Marsh Concentrated Mild Co
Ltd v Joseph Nathan & Co Ltd (1919) 26 CLR 410 at 438 Isaacs J said 'I summarise by saying, the goodwill of business is the advantage,
whatever it may be, which a person gets by continuing to carry on a business which has been carried on for some time previously. That
seems to me to be the meaning of "goodwill".' The last citation goes to the essence of the matter for present purposes. The landlord on a rent
review should not normally get the value of the goodwill built up by the tenant from his carrying on the business. It is for this reason that
goodwill is often directed to be disregarded in the valuation process.
2 See LTA 1954, s 34(1)(b).
HR A[4025]
The precise terms of the disregard must be applied. A well drawn provision will exclude goodwill attributable to the
business carried on by any predecessor of the tenant in the business and by any subtenant. A disregard of the effect of
occupation by the tenant will necessarily include a disregard of goodwill since the establishment of goodwill is
dependent on business occupation1.
HR A[4026]
Page 794
1 See Prudential Assurance Co Ltd v Grand Metropolitan Estate Ltd [1993] 2 EGLR 153 and see para HR A[4021].
HR A[4027]
The rent of some premises such as hotels, restaurants and premises used in the entertainment field is often determined
by way of an assessment of the level of profits which might be made from the premises. This will involve an assessment
of future income and future profits. A disregard of goodwill is likely to mean that the income and profits in the early
years of a business carried on by the willing lessee will be likely to be less than they would have been if the goodwill
built up by the actual tenant could be taken into account. A disregard of goodwill may have an effect whatever the mode
of valuation but the profits mode most overtly and vividly illustrates the effect.
Page 795
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/D Machinery of
review
D
Page 796
review/General
General
HR A[4028]
Just as there are many variations of formulae for determining the amount of the reviewed rent, with associated
complexities of valuation assumptions and disregards, so there are many variations in the procedural machinery for
carrying out rent reviews. It has already been mentioned that the current tendency of the courts is to find a way of
preserving the review even when its procedure and machinery are uncertain1. Also, where the machinery as prescribed
by the parties has broken down the court may substitute its own machinery, including a determination of the reviewed
rent by the court, to enable the review to proceed2.
HR A[4029]
2 Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444, [1982] 3 All ER 1; Royal Bank of Scotland plc v Jennings (1996) 75 P & CR
458, [1997] 1 EGLR 101. See para HR A[3607].
HR A[4030]-[4040]
The main questions relating to the machinery of review which are considered in the following paragraphs are the
following:
(a) the review date;

(b) initiating the review. The review is either automatic or requires the service of a notice by one of the
parties to initiate it;
(c) time limits applicable to various steps in the machinery. A cardinal question is whether time is of
the essence;
(d) the question of whether the review is upwards and downwards or upwards only;
(e) the mechanism for determining the amount of the reviewed rent in default of agreement. It is
usually provided that in such a case the determination will be be an arbitrator or an expert;
(f) the date from which the reviewed rent becomes payable;
(g) recording the rent review.
Page 797
review/The review date
The review date
HR A[4041]
An initial question to be determined is the date of the review. This is the date from which the reviewed rent is to become
payable (assuming that a rent review in fact takes place) in substitution for the rent previously payable. It is necessary to
distinguish between (a) the review date in the sense just mentioned, (b) the date by reference to which, or 'as at' which,
the rental valuation takes place; and (c) the date at which the reviewed rent is actually determined by agreement or by
arbitration or other process. In most instances the first two dates are the same, although this is not inevitable1.
HR A[4042]
1 See also para HR A[3708]. The above explanation of the three relevant dates was referred to by the Court of Appeal in Riverside
Housing Association v White [2006] 14 EG 176 at paragraph 41 in which it was held that the presumption that time is not of the essence in
rent review clauses had no application to the date on which the rent review was to have effect. This point is discussed more fully in HR
A[4123.1].
HR A[4042.1]
It is essential that the lease should state what is the review date or dates during its term. A failure to do so, either
expressly or by implication, will mean that any provision for rent review is too uncertain to be enforced. It is possible
that the lease, instead of providing for a series of unalterable fixed dates for reviews during its term, provides that after a
certain period there can be an alteration of the timing or periodicity of the reviews, with the alteration to be decided by
agreement or by third party determination. Such a provision (a 'review of reviews') is obviously more appropriate in a
long lease and the usual criterion for changing the dates of reviews is changing market practice as the term of the lease
passes.
HR A[4042.2]
The usual provision is that the review date is fixed as at a specified anniversary of the commencement of the term or as
at a series of such anniversaries. For instance, in a 25-year term it would be common to find rent reviews fixed at the
end of the fifth, tenth and fifteenth years of the term. Less commonly reviews are provided for at irregular intervals or
by reference to specified dates which are not necessarily anniversaries of the commencement of the term. A further
possible provision is that a review takes place automatically, or at the election of a party, after the occurrence of some
event1. A provision that a rent review is to take place on a specified date cannot be construed as meaning that the
review is to take place not earlier than that date2.
HR A[4042.3]
Page 798
1 In Inntrepreneur Pub Co (CPC) Ltd v Price [1998] EGCS 167 the event was the release by the landlords of certain tie provisions in the
lease of a public house.
2 Riverside Housing Association v White [2006] 14 EG 176. Therefore, when a rent review was due on the first Monday in June in each
year a notice purporting that the rent should be altered from 1 April in the following year was invalid. The presumption that time is generally
not of the essence in rent review clauses has no application to the specification of the rent review date. See HR A[4123.1].
HR A[4043]
A point of construction may arise where the lease is executed at one date but the duration of the term is computed from
an earlier date. For instance, a lease may be granted on 1 June 1998 to run for ten years from 1 April 1998. The law in
such a case is that the lease takes effect only from its date of grant or execution but the calculation of the term will be as
stated by the parties, so that the term of ten years will end on 1 April 2008 not 1 June 20081. The point of construction
may arise when a rent review is stated to take place at the end of the fifth year of the term or by the use of some similar
expression referring to the term. The question is whether the term is to be measured from the date of the grant of the
lease or from the earlier date by reference to which the length of the term is calculated. It is a matter of construction of
the language to decide which is correct. In some cases, the reference to the term will mean the term as directed to be
calculated in the lease2. On this basis, in the above example a rent review specified at the end of the fifth year of the
term would mean a review on 1 April 2003, not 1 June 2003. In other cases, a consideration of the likely intention of the
parties will result in the rent review being computed from the date on which the lease was executed3.
HR A[4044]
1 Bradshaw v Pawley [1979] 3 All ER 273, [1980] 1 WLR 10. It follows that in such a case the actual length of the lease, in the sense of a
subsisting relationship between the landlord and the tenant, is less than ten years. In the example given in the text it is nine years and ten
months.
2 See Beaumont Property Trust v Tai [1983] 1 EGLR 122 in which this conclusion was reached.
3 Bisichi Mining Ltd v Bass Holdings Ltd [2002] 18 EG 159.

Page 799
review/Initiating the review
Initiating the review
(a) Option to initiate the review
HR A[4045]
The machinery of review takes one of two main forms. The review may be automatic in the sense that it occurs without
either party having to take a formal step to initiate it such as the service of a notice. Alternatively the review may only
operate if one or other of the parties takes a formal step to require that it should occur. In the former case it will in
practice still be necessary for some action to be taken to set the review in motion, if only a letter from one party to the
other calling for an attempt to settle the amount of the rent. Either party will be entitled to insist on the review, and
generally there will be no question of the right to the review being lost by the passage of time. In the second case there
can be no rent review unless a notice is served or other requisite step taken by a party entitled to do so. The mechanism
may be such that either party can take the step or that only one party can do so. The precise provision may depend on
whether the review is upwards only or upwards and downwards. If it is upwards only then usually only the landlord is
given the right to initiate it since only he will have any reason to do so. If the review is upwards or downwards then
usually both parties are given the right to initiate it, although in such cases a right given to the landlord alone is not
unknown (the effect of this being, of course, that if rental values have fallen the tenant has no way in which to obtain a
revision of his rent to the lower prevailing level). A notice which has to be given if there is to be a rent review is often
called a 'trigger notice'. There are normally time limits specified for the giving of trigger notices and a question which
frequently arises is whether a failure to give a notice within the time specified means that the right to the review is lost.
The question is usually described as being one of whether time is of the essence, and is considered further below1.
HR A[4046]
HR A[4047]
It is unlikely that the necessity for a trigger notice before the rent review can take place will be implied if it is not
expressed. It follows that a party may have to decide whether to act in some way, such as serving a notice to end the
lease or assigning the lease, without knowing for certain whether a rent review will take place1.
HR A[4048]
1 In Edwin Woodhouse Trustee Co Ltd v Sheffield Brick Co plc [1984] 1 EGLR 130 a rent review was due to take place at 25 December
1982 whereas the tenant was required to serve notice, if he wished to exercise a right to determine the lease under a break clause, by 24 June
1982. It was held that it could not be implied that the initiation of the review depended upon a trigger notice being served.
Page 800
HR A[4049]
It is important in the present context to distinguish between two different situations. The first situation is where there
has to be an initiating or trigger notice so that in the absence of such a notice there will not be a rent review. In this
situation where only one party can serve the notice he has in effect an option to decide whether there will be a rent
review at all. The election is for him and his decision cannot be queried1. The second situation is where there is an
automatic review without the necessity for an initiating notice but some aspect of the machinery or working out of the
review requires some notice or step by one or other party. An instance would be an automatic review but a provision
whereby in the absence of agreement only one party can apply for the appointment of an expert to determine the rent. In
this situation if the machinery breaks down because the party fails to take the required procedural step the court will
repair the machinery either by ordering him to take the step or by itself determining the reviewed rent2. While these are
the two principal types of situation to be considered it is possible that a party may have an obligation to serve an initial
notice, with the result that if he fails to do so the court will remedy the deficiency3. It is possible to envisage a further
type of case in which the review is initiated by a notice but a party refuses to take some essential further procedural step
such as appointing an expert. In this type of case the court will also repair the machinery so as to ensure that the review
takes place.
HR A[4050]-[4059]
1 Examples of the first situation are Melanesian Mission Trust Board v Australian Mutual Provident Society [1997] 2 EGLR 128;
Standard Life Assurance v Unipath Ltd (1997) 75 P & CR 473, [1997] 2 EGLR 121; Royal Insurance Property Services Ltd v Cliffway
[1996] EGCS 189; and Sunflower Services Ltd v Unisys New Zealand Ltd (1997) 74 P & CR 112.
2 Royal Bank of Scotland plc v Jennings (1996) 75 P & CR 458 [1997] 1 EGLR 101. In this case there was held to be an automatic review
so that the appointment of an expert to determine the rent upon a failure to agree was a matter of machinery and the court could step in to
repair a breakdown of that machinery.
3 See Addin v Secretary of State for the Environment [1997] 1 EGLR 99, in which an upwards and downwards rent review clause
provided that the reviewed rent should be that specified in a notice served by the landlords or, if that or some other rent was not agreed, as
determined by a third party. It was held that the rent review was automatic and that the landlord did not have an option over whether to serve
a notice. These cases are considered in para HR A[3608], n 3.
HR A[4060]
It is common to find as part of the specified machinery that once the landlord has served a notice triggering the review
the tenant is required to serve some form of notice in response or counter-notice. Where the landlord's notice has to
specify his proposal for the amount of the reviewed rent it may be required that the tenant gives a counter-notice stating
whether he accepts the landlord's proposal, this requirement being normally combined with a provision that if the tenant
does not give such a counter-notice within a specified time he shall be deemed to have accepted the landlord's
proposal1. A further possibility is that the tenant may be required by his counter-notice to elect whether he desires that
the rent be determined by a third party. It will be important to ascertain whether time is of the essence in regard to the
service of a counter-notice.
HR A[4061]
Page 801
1 However, the inclusion of the deemed acceptance of the landlord's proposal if the tenant does not serve a counter-notice is not
inevitable: see para HR A[4069].
(b) Form of notice
HR A[4062]
It is normally stated in the lease that a notice or a counter-notice must be in writing. Section 196(1) of the Law of
Property Act 1925, which provides that notices served under the Act shall be in writing, also applies to notices served
under rent review clauses in leases unless a contrary intention appears1. In that case an oral notice or counter-notice will
be of no effect2. There could be a case in which the recipient of an oral notice expressly agreed that it should be
regarded as valid or acted so as to estop himself from asserting its invalidity. Presumably in the very unusual case where
there is no requirement that the notice is in writing an oral notice will suffice.
HR A[4063]
1 LPA 1925, s 196(5) extends s 196 to notices required to be served by any instrument affecting property entered into after the
commencement of the Act unless a contrary intention appears. Section 196 is considered further in para HR A[4101].
2 Museprime Properties Ltd v Adhill Properties Ltd [1990] 2 EGLR 196 (oral counter-notice by tenant held to be ineffective). In
Chichester Cathedral v Lennards Ltd (1977) 35 P & CR 309 a notice to initiate the rent review had to be in writing and was required to state
the suggested reviewed rent. The main issue before the Court of Appeal was whether a failure to include a suggested rent invalidated the
notice. It was said, obiter, by Lord Russell that the requirement of writing was essential to the validity of the notice.
HR A[4064]
It may be required that a notice, as well as being in writing, contains other specified material. In general, a failure to
comply with such a requirement is unlikely to render the notice invalid. The legal terminology used to express this
conclusion is to say that the requirement is not of the essence or that it is directory and not mandatory1. In one case it
was required that a landlord's trigger notice initiating the review should state a figure for the revised rent to be based on
a method which would be adopted by an arbitrator, should inform the tenants of their right to serve a counter-notice and
should inform the tenants of the consequences which would follow if they failed to serve a counter-notice. It was held
that a notice which did not observe these requirements would nonetheless be valid2. Notices under rent review clauses
differ in this way from most notices which have to be served under landlord and tenant legislation where there is usually
a prescribed form and a failure to include material such as that informing the other party of his rights is likely to mean
that the notice is not in the prescribed form or a form substantially to the like effect and is for that reason invalid3. The
matter of a requirement that a landlord's notice shall specify a figure proposed for the reviewed rent is considered
separately below4.
HR A[4065]
1 The distinction between mandatory and directory requirements is borrowed from public and administrative law: see eg Wade and
Forsyth Administrative Law (6th edn, 1998) p 253.
Page 802
2 Taylor Woodrow Property Co Ltd v Lonrho Textiles Ltd [1985] 2 EGLR 120. The landlord's notice in this case did comply with the
three requirements. The relevance of the holding was that the landlord asserted that time was of the essence in regard to a tenant's
counter-notice and advanced the proposition that the requirements of a landlord's notice were of the essence in support of his assertion. It
was in this context that it was held that the requirements of the landlord's notice were not of the essence.
3 See eg the forms prescribed for notices served under Pt II of the Landlord and Tenant Act 1954.
HR A[4066]
A notice may contain some factual error such as a misdescription of the parties or of the demised premises or of the date
of the rent review. The general law on the validity of notices served between landlord and tenant is that an error will
only invalidate a notice if it would leave a reasonably minded recipient in reasonable doubt as to what was intended1. In
accordance with this principle most errors of the obvious nature just mentioned will not invalidate the notice. For
example, where the review date was the 23 May and the landlord's notice initiating the review referred in error to 25
May it was held that since no reasonable recipient of the notice could have been misled the error did not invalidate the
notice2. In another case the landlord's notice was required to specify the level proposed for the reviewed rent. The
notice served did so but by a typographical error specified different sums in the words and the figures. The notice was
held to be valid on the reasoning that the tenant would assume that the amount stated in words was the correct figure3.
A notice given by a tenant to operate a break clause was held valid when the tenant had inserted the wrong termination
date because he had mistakenly treated the date of the lease as the date from which the length of the term was measured;
a reasonable recipient would not have been misled by the mistake4. There could be cases where a reasonable recipient
might be left in real doubt on what was intended. An instance might be where a landlord was entitled to a rent review
under two separate leases held by the same tenant and his notice did not state clearly to which of the premises it related.
HR A[4067]
1 Mannai Investment Co Ltd v Eagle Star Insurance Co Ltd [1997] AC 749, [1997] 3 All ER 352.
2 Fox & Widley v Guram [1998] 1 EGLR 91.
3 Durham City Estates v Felicetti [1990] 1 EGLR 143. A previous notice had stated the same sum as expressed in the words of the second
notice but had contained its own error as to the date of the review. It was said in the Court of Appeal that in construing the second notice the
impact of the former notice in the mind of the tenant should not be considered.
4 Garston v Scottish Widows Fund and Life Assurance Society [1998] EGCS 101.
HR A[4067.1]
The draftsmen of notices and counter-notices, particularly if they are not lawyers, sometimes include phrases such as
'subject to contract' or 'without prejudice' without any clear understanding of the legal impact of the words used. The
question arises whether the inclusion of such phrases renders the notice invalid. The test should be whether the use of
inappropriate, and sometimes in its context virtually meaningless, legal phraseology could lead a reasonable recipient to
doubt the purpose of the notice. This was a test applied in one case in which it was held that a tenant's counter-notice,
objecting to the rent specified in a landlord's notice, which was headed 'subject to contract' was still a valid
Page 803
counter-notice1. In another case a landlord through his agent sent what would have been indisputably a good trigger
notice save that it was headed with the words 'subject to contract' and 'without prejudice'. It was held that in this context
the words 'subject to contract' did not make sense and that the notice was a valid notice despite the words with which it
had been headed2. The authorities are somewhat complicated in that in an earlier case the Court of Appeal had held that
a landlord's trigger notice which had at the bottom the words 'subject to contract' was not a valid notice on the ground
that a reasonably minded tenant would have regarded it as an invitation to negotiate rather than a trigger notice served
pursuant to the rent review clause3. In further cases a landlord's trigger notice was held to be invalid when it was
marked 'without prejudice'4 and a tenant's counter-notice was held to be invalid when it was headed 'without prejudice
and subject to contract'5. It is apparent from the decided cases that no simple and automatic answer can be given to the
question of whether a document is prevented from being a valid notice by the inclusion of the type of phrase under
discussion. Much may depend on the language of the document as a whole and its timing in relation to the rent review6.
The normal effect of heading a document 'without prejudice' is that it becomes privileged and cannot be introduced in
evidence in subsequent legal proceedings7. It is usually a means of trying to compromise a dispute without the attempt
subsequently being used to the disadvantage of the person seeking the compromise. It seems probable that the heading
of a notice 'without prejudice' in the context of initiating a rent review does not prevent the server of the notice referring
to it in subsequent proceedings8. If the words did have that effect then it would necessarily follow that the document in
question could not be established by court proceedings as a valid notice. The normal effect of marking a document
'subject to contract' is that it prevents a binding contract coming into existence until some more formal document is
executed by the parties.
HR A[4068]
1 British Rail Pension Trustee Co Ltd v Cardshops Ltd [1987] 1 EGLR 127.
2 Royal Life Insurance v Phillips (1990) 61 P & CR 182, [1990] 2 EGLR 135.
3 Shirlcar Properties Ltd v Heinitz [1983] 2 EGLR 120.
4 Norwich Union Life Insurance Society v Tony Waller Ltd [1984] 1 EGLR 126.
5 Sheridan v Blaircourt Investments Ltd [1984] 1 EGLR 139.
6 Eg in Sheridan v Blaircourt Investments Ltd [1984] 1 EGLR 139 the letter marked 'without prejudice' was one of a series of documents
which together were alleged to constitute a sufficient counter-notice.
7 For an example of this rule applied in the context of rent reviews see Norwich Union Life Insurance Society v Sketchley plc [1986] 2
EGLR 126.
8 Norwich Union Life Insurance Society v Tony Waller Ltd [1984] 1 EGLR 126; but cf South Shropshire District Council v Amos [1987] 1
All ER 340, [1986] 1 WLR 1271.
HR A[4069]
Whether a document is efficacious as a trigger notice or a counter-notice may, of course, depend on factors other than
that it contains some inappropriate words or heading. It must in general terms be such that it fulfils its contractual
function. The key test is that for the notice to be efficacious it must leave a reasonably minded recipient in no
Page 804
reasonable doubt as to its intended function under the agreed rent review machinery. This is the test adumbrated by the
House of Lords to decide the validity of a notice which contains some factual error1. It should apply to the more general
question of the efficaciousness of the overall terms of a notice to achieve a contractual purpose, and a test of this nature
has been applied2. The issue most commonly arises in connection with counter-notices since of their nature they require
the tenant to make something clear, such as that he objects to a rental figure suggested in the landlord's initial notice or
that he elects that the amount of the rent shall be determined by an independent third party. A typical requirement of a
counter-notice is that it shall contain an election by the tenant that the rent shall be determined by a third party. There
have been a number of decisions in which a general indication by a tenant that he does not accept the figure put forward
by the landlord in the initial notice has been held not to amount to such an election and thus not to be a valid
counter-notice3. More recent cases suggest that the courts are more ready to hold that a counter-notice is efficacious
even though it does not in terms refer to an election for third party determination4. A comparison of the language used
in the letters under review in the cases, as summarised in the notes to this paragraph, demonstrates that it is difficult to
prognosticate on which side of the line a document will fall. A combination of the test of the reasonable recipient and of
the common sense consideration that a letter objecting to the landlord's proposals is likely to be intended to operate as a
counter-notice suggests that in general, provided the tenant makes it clear that he does not accept the landlord's
proposal, his response will today be likely to be held to be a good counter-notice5. Certainly a letter is unlikely to be
rejected just because it does not contain some particular words such as 'election' or 'counter-notice'. The issue is, of
course, at its most crucial where time is of the essence for the giving of a counter-notice. If time is not of the essence
there is usually nothing to prevent a tenant giving a further and clearer counter-notice if it is alleged that a previous
document is not valid. Rent reviews take many forms and it is possible to have a requirement for a counter-notice to be
served by a tenant but without a provision that in the event of his failure to do so the landlord's proposal shall become
the reviewed rent6.
HR A[4069.1]
1 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, [1997] 3 All ER 352. See para HR A[4066].
2 Nunes v Davies Laing & Dick Ltd (1985) 51 P & CR 310, [1986] 1 EGLR 106, per Sir Nicholas Browne-Wilkinson V-C; Norwich
Union Life Insurance Society v Sketchley plc [1986] 2 EGLR 126. It appears that the conduct of the actual recipient of a notice, the effect of
which in dispute, is not admissible evidence of how a reasonably minded recipient would act: see the majority judgment of the Court of
Appeal in Lancecrest Ltd v Asiwaju [2005] EWCA Civ 117, [2005] 1 EGLR 40 (Clarke LJ dissenting).
3 In Bellinger v South London Stationers Ltd [1979] 2 EGLR 88 the letter alleged to be a counter-notice with the appropriate election
stated 'We formally acknowledge receipt of your notice of rent review for the above property, and we would hardly need to add that we do
not accept your reviewed figure.' This was held not to be an efficacious counter-notice. In Edlingham Ltd v MFI Furniture Centres Ltd
[1981] 2 EGLR 97 the letter in response contained the sentence, 'Will you please accept this letter as counter-notice to the effect that we
consider that the rent of £50,000 is excessive and will appreciate it if you will kindly forward to us comparables on which you have based
this figure.' Again, the document was held not to be an efficacious counter-notice notwithstanding the use of the expression 'counter-notice'
in it. See also Oldschool v Johns [1980] 2 EGLR 113; Amalgamated Estates Ltd v Joystretch Manufacturing Ltd [1981] 1 EGLR 96;
Darlington Borough Council v Waring & Gillow (Holdings) Ltd [1988] 2 EGLR 159.
4 In Nunes v Davies Laing & Dick Ltd [1986] 1 EGLR 106 the words which were held to be efficacious were 'I am instructed by the
tenants to give you hereby formal notice that the open market rental is £12,000 per annum and call on you under the terms of the above lease
to agree this. Please confirm that this is accepted as due notice.' See also Glofield Properties Ltd v Morley [1988] 1 EGLR 113 where the
operative section of the letter said only 'Please accept this letter as formal objection and counter-notice'; and see Prudential Property
Services Ltd v Capital Land Holdings Ltd [1993] 1 EGLR 128 where the operative sentence was 'My client is not agreeable to settlement of
rent proposal on this basis and in accordance with clause 2 of the lease please acknowledge this letter on the landlord's behalf as formal
notice of our disagreement to your rent proposal.' In both cases there was held to be a valid counter-notice.
5 In Lancecrest Ltd v Asiwaju [2005] 1 EGLR 40, the landlord served a trigger notice specifying the reviewed rent at £30,000 per year.
Page 805
The tenant was required to serve a counter-notice (as to which time was made of the essence) informing the landlord that the tenant did not
accept the amount proposed by the landlord. A letter sent by the tenant simply stated that the landlord's notice was invalid because it did not
comply with a time limit (as to which time was not of the essence). The majority of the Court of Appeal held that this was a sufficient
counter-notice. There is a powerful dissenting judgment by Brooke LJ.
6 See eg Cheapside Land Development Co Ltd v Messels Service Co [1978] AC 904, [1977] 2 All ER 62. See para HR A[4061].
HR A[4070]-[4080]
It is apparent from the above discussion that when it comes to assessing whether a particular requirement is mandatory
or directory and when it comes to deciding whether a particular document is a valid notice or counter-notice, fine
distinctions have to be drawn between the decided cases. Decided cases can offer valuable guidance on the principles to
be applied and the test to be used to decide questions such as those just mentioned. However, every case rests on the
exact language used in a lease or in another document and the exact context of the use of that language. There is no
doctrine of strict precedent in the sense that similar language must always lead to the same result or even that the same
language necessarily produces the same result in a different context. There are a number of judicial warnings in relation
to rent reviews against the dangers of trying to apply one authority in relation to one clause in a rent review to another
clause of a similar nature in a different rent review, and this warning must apply with even greater cogency to an
attempt to apply a decision on the wording of one letter to similar wording in another letter1. The correct course is first
to elucidate from authority the correct approach applicable to the question in issue then to apply that approach to the
particular words used in the particular context where the current dispute arises. Previous decisions on similar or even
the same words offer only limited guidance.
HR A[4081]
1 See eg Patel v Earlspring Properties Ltd [1991] 2 EGLR 131 at 132, where Woolf LJ said: 'However, if I may say so, to try to apply one
authority given in relation to a different rent review clause in different circumstances to another situation is always a dangerous course to
adopt, and in the normal event it is more appropriate for issues of this sort to be determined by looking at the facts of the particular case and
applying those facts to the particular rent review clause which is under consideration.' See also the remarks of Judge Colyer QC, sitting as a
judge of the High Court, in Prudential Property Services Ltd v Capital Land Holdings Ltd [1993] 1 EGLR 128.
(c) Notice specifying a rent
HR A[4082]
One particular feature of a landlord's trigger notice which is often required by the terms of the rent review clause is that
the notice shall specify a level of rent proposed by the landlord as the reviewed rent. Two questions arise in connection
with such a requirement, (a) what is the position if the notice does not specify a rent and (b) does the rent specified in
the notice have to be at a reasonable level.
HR A[4083]
The answer to the first question depends on whether the requirement that the notice shall specify a rent stands by itself,
so that the failure to specify a rent has no further consequences, or the requirement is an essential part of the further rent
Page 806
review machinery, so that the failure to specify a rent means that the machinery as a whole cannot operate. If the first
alternative is correct the omission of a specified rent will not invalidate the notice1. The requirement is, in terms of a
distinction mentioned above, likely to be regarded as not of the essence or as directory not mandatory2. It is possible,
though less usual, that a tenant's counter-notice is required to specify the level of rent which the tenant proposes or is
willing to pay. Again, where a failure in the counter-notice to comply with this requirement has no further major
consequences for the machinery of the review the failure is not likely to invalidate what is otherwise a good
counter-notice3. The matter is always one of the construction of the contractual language and it seems that in a case of
sufficiently clear language a requirement that a rent be specified could be considered to be mandatory even though it is
not part of the continuing machinery of the review4. On the other hand, where the specification of a rent in a trigger
notice has further stipulated procedural consequences under the rent review clause it seems inevitable that a failure to
specify the rent will result in the notice being invalid. If it were otherwise the agreed rent review machinery could not
operate. This is the most usual type of situation in that the landlord in his trigger notice is required to specify a rent and
there is a consequential provision that if the tenant does not serve a counter-notice objecting or requiring determination
of the rent by a third party the rent so specified by the landlord becomes the reviewed rent. This machinery is dependent
for its operation on the initial specification of a rent by the landlord.
HR A[4084]
1 Dean and Chapter of Chichester Cathedral v Lennards Ltd [1977] 2 EGLR 78.
3 Patel v Earlspring Properties Ltd [1991] 2 EGLR 131.
4 See Commission for the New Towns v R Levy & Co Ltd [1990] 2 EGLR 121.
HR A[4084.1]
The answer to the second question depends on the precise language of the clause in the lease which requires that a rent
shall be specified in a notice. If that is all that is stated then the person giving the notice is free to specify any rent he
wishes and there is no requirement that the amount specified is a reasonable sum or is the honest opinion of the person
giving the notice on the correct open market rent of the premises1. Landlords sometimes regard the figure stated in
notices as akin to an opening suggestion or bid in negotiations. There is one caveat to the above principle. A person
serving a notice should be careful that he does not state that the specified rent is his opinion of the open market rent
unless that is his genuine opinion. If he specifies a rent as his opinion of the open market rental value when he has no
such genuine opinion or ground on which to base such an opinion he may find the validity of the notice attacked on the
basis that it contains a false or even fraudulent representation2. The rent review clause may itself require that the rental
figure specified in the notice is the opinion of the person serving the notice as to the open market rental value. In that
case the figure specified in the notice must be that which is the genuine opinion of the server as to the rental value. It
must not be just a negotiating figure. The opinion may be later shown to be incorrect, and of course that in itself will not
invalidate the notice, but if the figure specified is not the genuine opinion of the server of the notice there is a high risk
that the notice will be held to be invalid. It is inherent in the formulation of an opinion on a rental value that it is done
on some informed and rational basis, for instance a consideration of rents of comparable properties or the taking of
competent professional advice, so that the figure specified should not be an uninformed or over-optimistic guess.
Page 807
HR A[4085]
1 Davstone Holdings Ltd v Al-Rifai (1976) 32 P & CR 18; Amalgamated Estates Ltd v Joystretch Manufacturing Ltd [1981] 1 EGLR 96;
Fox & Widley v Guram [1998] 1 EGLR 91. In Lancecrest Ltd v Asiwaju [2005] EWCA Civ 117, [2005] 1 EGLR 40, Neuberger LJ said at
paragraph 24 that in the light of the wording of the rent review clause in the case before him, he was prepared to accept that it might well be
right that the landlord could specify a rent that was substantially in excess even of its honest view of the market rent. The rent review clause
before the court stated that in order to exercise the option to review the basic rent the landlord should give notice before the review date
stating 'what annual amount the landlords propose as the basic rent from the review date'.
2 This point was left over by Goulding J in Davstone Holdings Ltd v Al-Rifai (1976) 32 P & CR 18.
(d) Service of notices
HR A[4086]
The law on the service of documents is complex and is a field strewn with decisions not always easy to reconcile. There
are no special rules governing the service of notices under rent review clauses but it may be useful here to summarise
the main principles involved. General principles of law apply to the service of rent review notices, for example the rule
that on the death of a party a notice should be served on his executors if he died testate or on the Public Trustee if he
died intestate1.
HR A[4087]
1 See Law of Property (Miscellaneous Provisions) Act 1994, s 14.
HR A[4088]
The starting point regarding service of a notice is that in the absence of some special provision a person only serves a
notice if he causes it to be received by the intended recipient1. Providing the notice is actually so received it is usually
irrelevant what mode of service is employed. The notice may be delivered personally or sent through the post or left at
premises where it is received by the person to be served. It does not matter whether the rent review clause refers to the
notice being given or served or sent, all these words having the same connotation.
HR A[4089]
1 Sun Alliance and London Assurance Co Ltd v Hayman [1975] 1 All ER 248 at 253, per Lord Salmon; Holwell Securities v Hughes
[1973] 2 All ER 476, [1974] 1 WLR 155.
HR A[4090]-[4100]
Page 808
There are statutory provisions which have a bearing on the service of notices, and the lease may itself contain provisions
on the subject. Three statutory provisions need mention.
HR A[4101]
Section 196 of the Law of Property Act 1925 contains a number of provisions relevant to the service of notices. The
section is stated in the introductory words to its substantive provisions to apply to any notice required or authorised by
the Act to be served. Section 196(5) provides that the provisions of the section shall extend to notices required to be
served by any instrument affecting property entered into after the commencement of the Act unless a contrary intention
appears. A rent review clause in a lease is plainly an instrument affecting property. The only possible query as to the
application of s 196(5) is whether notices are 'required' to be served under rent review clauses. It can be noted that s
196(5) refers to notices 'required' to be served under an instrument whereas s 196(1)-(4) all refer to notices 'required or
authorised' to be served by the Act. Although there is no authority on the point it seems correct that all notices to be
served under rent review clauses are required to be served by the lease. In its context the word 'required' must mean
required if a certain result (such as the initiation of the rent review) is to occur rather than required in the sense of a
contractual obligation to serve the notice. This conclusion is strengthened by the consideration that there seems no
relevant purpose in applying s 196 to notices which have to be served under a duty (something which infrequently
occurs in contractual documents) as opposed to notices which may be served at the option of a party. It is otherwise in
the case of a periodic tenancy which makes no provision at all for the service of a notice to quit. In such cases the
requirement of a notice to quit arises not from the terms of the lease but from the general common law1. In some cases
the parties expressly provide in the lease that the service provisions in LPA 1925, s 196 are to apply to the service of
documents under the lease. On the assumption that LPA 1925, s 196 does apply to notices served under rent review
clauses it contains four provisions:
(a) any notice has to be in writing2;

(b) a notice is sufficiently served on a lessee although only addressed to the lessee by that designation,
without his name, or generally to the persons interested without any name, and notwithstanding that any
person to be affected by the notice is absent, under disability, unborn, or unascertained3;
(c) a notice is sufficiently served: (i) if it is left at the last known place of abode or business in the
United Kingdom of the lessor or lessee; (ii) if, in the case of service on a lessee, it is affixed or left for
him on the land or any house or building comprised in the lease; and (iii) in the case of a mining lease, if
it is left for the lessee at the office or counting house of the mine4;
(d) a notice is sufficiently served on a lessor or lessee if it is sent by post in a registered letter, or using
the recorded delivery service, at the place of abode or business, or office or counting house, referred to
above, providing the letter is not returned through the post office undelivered5. If the registered post or
recorded delivery service is used service is deemed to have been made at the time at which the registered
or recorded delivery letter would in the ordinary course be delivered6.
HR A[4102]
1 Wandsworth London Borough Council v Attwell [1996] 1 EGLR 57.
2 LPA 1925, s 196(1). The need for a written notice is considered in para HR A[4062].
3 LPA 1925, s 196(2).

Page 809
4 LPA 1925, s 196(3). Under this provision service is effective if the notice is left at the last known place of business or abode of the
lessee even if the lessee does not actually receive it: Kinch v Bullard [1997] 1 WLR 423, [1998] 47 EG 140.
5 LPA 1925, s 196(4). The option of using the recorded delivery service was introduced by the Recorded Delivery Service Act 1962.
6 LPA 1925, s 196(4). See also Recorded Delivery Service Act 1962, s 1(1).
HR A[4102.1]
These provisions are of substantial practical use to those serving notices. It is possible to be certain that good service is
effected if the notice is sent by registered or recorded delivery post to the last known place of abode or business of the
intended recipient and it is not returned undelivered. The procedures operated by the Post Office are such that where the
registered or recorded delivery service is used proof of posting and proof of delivery can be obtained. There is no
advantage in using the registered as opposed to the recorded delivery service unless material of monetary value is sent.
HR A[4102.2]
It should be noted that section 196(4) of the Law of Property Act 1925 has two aspects. In the first place it deems there
to have been service of the document in question if it is sent by registered letter or recorded delivery post and is not
returned through the post office undelivered. This is so whether the letter is actually delivered or not. Secondly, the
sub-section deems that a letter sent by one of these methods and not returned through the post office undelivered was
served at the time at which it would in the ordinary course of post be served. This is so even if the letter was not actually
delivered or was delivered but at some later time. The provisions therefore create what may be a statutory fiction of
service which is contrary to the reality1.
HR A[4102.3]
1 This is the effect of the decision of Patten J in W X Investments Ltd v Begg [2002] 1 WLR 2849. In that case a tenant's counter-notice
had to be served by 6 October 1997, time being of the essence. The notice was dispatched by the tenant's agents by first-class recorded
delivery post on 24 September 1997. Attempts were made by the post office to deliver the letter on 25 September and 30 September but
failed since the office of the landlord's surveyor, to which the letter was addressed, was closed on both occasions. The letter was eventually
received by that surveyor on 10 October. It was held that in the ordinary course of post the letter would have been delivered on 25 September
and that, since the letter was posted and had not been returned undelivered, it was deemed to have been served on that date. This decision is
to be contrasted with the earlier decision of Scott J in Stephenson & Son v Orca Properties Ltd [1989] 2 EGLR 129. In that case the postman
attempted to deliver the recorded delivery letter containing a rent review notice on a Friday but was unable to do so since there was nobody
at the premises to receive it. He did deliver the letter on the following Monday when somebody did receive it and sign the receipt for it. It
was held that service was effected on the Monday. The significance of the point was that the Sunday was the last day for service and this
also was a case in which time was of the essence. In so far as the Orca Properties case decided that there was no deemed delivery on a
particular day when actual delivery took place on a later day the decision was not followed by Patten J in W X Investments Ltd v Begg. Note,
however, that where the provisions of s 23 of the Landlord and Tenant Act 1927 are applied to the service of notices under the lease (see
para HR A[4106]) and the recorded delivery service is used as permitted by that section, service is deemed to have occurred on the date of
the posting of the notice, not on the date of its receipt: Beanby Estates Ltd v Egg Stores (Stamford Hill) Ltd [2003] 12 EG 190 (CS).
HR A[4103]
Under the Companies Act 1985, s 725(1), service on a company may be effected by sending the document to be served
by post to the registered office of the company. This is also a very useful provision. The address of the registered office
Page 810
can be obtained by a company search. Again, it is prudent to use the facilities of the recorded delivery service.
HR A[4104]
By virtue of the Interpretation Act 1978, s 7, where an Act authorises the service of a document by post a letter sent by
the ordinary post is deemed to be delivered, and to be delivered at the time at which in the ordinary course of post it
would be delivered, unless the contrary is proved1. The effect of this provision is that there is a rebuttable presumption
of fact that a letter, once posted, is delivered. The presumption can be rebutted by evidence that the letter was not in fact
delivered. There is a risk in relying on this provision since it is always open to the intended recipient of a notice to show
that he did not in fact receive the notice even though it was posted to him2.
HR A[4105]
1 This provision will usually apply to notices served under rent review clauses since LPA 1925, s 196 will authorise service of documents
by post.
2 Chiswell v Griffon Land and Estates Ltd [1975] 2 All ER 665, [1975] 1 WLR 1181.
HR A[4106]
Leases sometimes contain their own provisions regarding service of documents. The provisions may relate to service in
the sense of the mode of transfer of the document (for example, the use of registered or recorded delivery post) or in the
sense of the location or address to which service is to be directed. Often, these do no more than apply certain statutory
provisions, for example s 196 of the Law of Property Act 1925 which, as just explained, is applied in any event to
notices under leases unless a contrary indication appears. Another statutory provision on service sometimes applied is s
23 of the Landlord and Tenant Act 1927. This contains provisions similar to, but not the same as, those in s 196 of the
Law of Property Act 1925. As enacted it applied to notices to be served under the Landlord and Tenant Act 1927, but it
has been applied to notices under other statutes dealing with the law of landlord and tenant including the Landlord and
Tenant Act 1954 and the Landlord and Tenant (Covenants) Act 19951. Where the lease provides for a particular method
of service it may have to be decided whether the method so described is mandatory, in the sense that only service by
that method is valid, or permissive in the sense that service is still valid if effected by some other method which would
be good service apart from the provision. Which conclusion is correct is a matter of interpreting the exact language of
the provision. A provision that notices shall be served in a certain way is potentially more likely to be held to be
mandatory than is a provision that notices may be served in a certain way. In general, such provisions are intended to
make service easier not more difficult and it is likely that the provision will usually be interpreted as permissive. In the
statutory context provisions as to service have been construed as permitting the method of service specified but not
shutting out other possible methods2.
HR A[4107]
1 See Landlord and Tenant Act 1954, s 66 and Landlord and Tenant (Covenants) Act 1995, s 27(5). Section 23 of the Landlord and
Tenant Act 1927 is printed at HR B[431]. Where service is effected by recorded delivery post in reliance on the provisions of s 23 of the
Landlord and Tenant Act 1927 as applied to the lease, the date of service will be the date of the posting of the notice and not the date of its
Page 811
receipt: Beanby Estates Ltd v Egg Stores (Stamford Hill) Ltd [2003] 21 EG 190 (CS).
2 See Stylo Shoes Ltd v Prices Tailors Ltd [1960] Ch 396, [1959] 3 All ER 901.
HR A[4108]
A notice under a rent review clause may be served by the agent of a party. The ordinary principles of the law of agency
apply so that the service is valid if the agent has authority to effect service. Authority may be express, implied, or
ostensible (ie the principal has acted in such a way as to lead people to believe that he has conferred authority on the
agent)1. Where a firm of surveyors or other professional firm has acted for a party for a substantial period in relation to
property matters it will readily be concluded that the firm has implied authority to serve a notice under a rent review
clause on behalf of that party even if express authority cannot be shown2. A notice may also be served on an agent of a
party provided that agent has actual, implied or ostensible authority to accept service. Anyone serving a notice on an
agent would be well advised to ensure that the agent has the requisite authority before relying on what has been done as
valid service.
HR A[4109]
1 For agency generally, see 1 Halsbury's Laws.
2 Fox & Widley v Guram [1998] 1 EGLR 91. However, a company in the same group of companies as the landlord or the tenant may not
be held to have implied authority to serve a notice on behalf of the tenant: Lemmerbell Ltd v Britannia LAS Direct Ltd [1998] 48 EG 188,
[1998] EGCS 138.
Page 812
review/Time limits
Time limits
(a) General
HR A[4110]-[4120]
It is possible to frame a rent review clause which specifies no dates or time limits except for the rent review date or
dates. Such a clause would be unusual and the majority of leases provide for some timetable using time limits of greater
or lesser complexity. A simple time limit would be that the review has to be initiated by a notice served by the landlord
not later than a period of six months before the review date. More complex provisions may include time limits for the
service of a counter-notice by the tenant, for a period in which the parties are to attempt to agree the rent, for an
application to appoint a third party to determine the rent in default of agreement and for the decision of the third party1.
Of course, before any question arises as to whether time is of the essence, it must be decided what as a matter of
construction the time limits mean2. If a lease provides that a step to initiate a rent review, or some procedural step
essential to the implementation of the review, is to be taken by one of the parties, but no time limit is prescribed for the
taking of the step, a term may be implied that the step is to be taken within a reasonable time. The implication of such a
term may be necessary to give business efficacy to the rent review provisions as a whole3. The lease may provide that a
notice to initiate a rent review has to be served within specified time limits but may then make express provision for the
service of a late notice; it will be a matter of construction of the relevant provisions whether in the case of a late notice
the reviewed rent is payable from the specified rent review date or from some later date4.
HR A[4121]
1 The question of initiating the review and of notices for this and other purposes is considered in paras HR A[4045]ff.
2 See eg London & Manchester Assurance Co Ltd v G A Dunn & Co [1982] 1 EGLR 117. In this case a notice was to be served by the
landlord 'at any time not earlier than 12 months prior to 25 December 1977'. It was agreed that a notice had to be given not earlier than 25
December 1976. The issue was whether a notice could as a matter of construction be given after 25 December 1977. The majority of the
Court of Appeal held that as a matter of construction it could not. Opinions differed as to whether time was of the essence in relation to 25
December 1977. See para HR A[4181]. In Rahman v Kenshire [1981] 2 EGLR 102 a landlord's trigger notice was required to be given not
less than nor more than 12 months before the review date. It was held that as a matter of construction only one day was specified for the
service of the notice. Since time was of the essence because of the relationship between the rent review clause and break clause the result
was that any notice was invalid unless given on the single permitted day. In First Property Growth Partnership LP v Royal & Sun Alliance
Property Services Ltd [2002] 22 EG 140 the lease provided that a notice to initiate a rent review might be given 'at any time not more than
12 months before the expiration of' certain specified years of the term. It was held that a notice had to be given during the 12 months in
question and would be out of time if given after the expiration of the 12 months. See also para HR A[4163]. In First Property Growth
Partnership LP v Royal and Sun Alliance Property Services Ltd [2002] 49 EG 125 (case summaries) it was provided that notice of a rent
review 'may be given at any time not more than 12 months before the expiration of each or any of the following years of the said term that is
to say every fifth year thereof but not at any other time ...'. The relevant fifth year ran from 7 May 1999 to 6 May 2000. The landlords gave
notice initiating the review in April 2001. They contended that the above provision specified the earliest day on which a notice could be
given but did not specify the latest date on which it could be given. The Court of Appeal held that on a proper construction the provision
meant that a notice could not be given earlier than the beginning of the year specified and had to be given within that year. Since time was of
the essence the notice given was invalid.
3 In Barclays Bank plc v Savile Estates Ltd [2002] EWCA Civ 589 [2002] 24 EG 152 the rent review was due on the December quarter
Page 813
day with a provision that, if the amount had not been agreed by the previous September quarter day, the landlord could apply for the
appointment of an expert to determine it. It was held that there was an implied term that in default of agreement by the September quarter
day the landlord, if he wished for a review, was bound to apply within a reasonable time for the appointment of an expert. The existence of
the implied time stipulation meant that the tenant could make time of the essence for the application to appoint an expert by serving an
appropriate notice on the landlord. See para HR A[4183].
4 H Turner & Son Ltd v Confederation Life Insurance Co (UK) Ltd [2002] EWHC 2949 (Ch), [2003] 21 EG 192.
HR A[4122]
A question which frequently arises in regard to time limits and time provisions generally is whether time is of the
essence. What is meant by time being of the essence is that a failure to observe the stipulated time limit results in the
step in question being invalid. If the step is essential to the initiation or continuation of the review the consequence will
be that the review will not take place and the rent will usually remain that which it was prior to the review. The court
has no power in such circumstances itself to provide a substituted machinery for determining a reviewed rent1. This
consequence would occur, for example, where the review has to be initiated by a notice served within a certain time by
the landlord and he fails to serve the notice in time. It could also occur if the rent is to be that agreed or determined by
an expert and there is no application to appoint an expert within a time limit specified for this step; there will then be no
means of determining the rent2. In other cases a failure to observe a time limit where time is of the essence could
simplify and expedite the completion of the rent review. Some review clauses provide that the landlord must specify a
proposed rent and then give the tenant a period in which to serve a counter-notice disputing the landlord's proposal and
calling for determination by a third party, with a provision that if the tenant does not serve a counter-notice the rent as
proposed by the landlord becomes the reviewed rent. The consequence of the tenant not serving a counter-notice within
the prescribed time is that the review becomes concluded at the rent proposed by the landlord3. Other aspects of notices
prescribed by the lease may be of the essence in the above sense as well as time requirements4. Because the time
prescribed for a step is said to be of the essence it does not mean that the party who fails to take the step in time is in
breach of covenant. There is not usually an obligation to take the step; it is merely that if a party fails to take it he may
suffer some disadvantage such as losing the right to that particular rent review5. An alternative phraseology for
describing time limits is to say that when time is of the essence the provision is mandatory and when time is not of the
essence it is directory6.
HR A[4123]
1 Weller v Akehurst [1981] 3 All ER 411, 42 P & CR 320; Samuel Properties (Developments) Ltd v Hayek [1972] 3 All ER 473, [1972] 1
WLR 1296 (this decision was stated to be incorrect by the House of Lords in United Scientific Holdings Ltd v Burnley Borough Council
[1978] AC 904, [1977] 2 All ER 62 as regards the question of time being of the essence, but it remains authority for the point stated). It is
possible that in the absence of an effective rent review the rent will not remain at the level prior to the review but will revert to some earlier
specified level. For example, it could be provided that the rent throughout the term will be the higher of £100,000 per year or that determined
on each rent review. The rent might be determined at £200,000 on the first rent review. If there is no second review because the landlord
fails to serve a notice in time, and time is of the essence, the rent would revert to £100,000 per year until the next review. If the rent review
clause is silent as to what is to happen in the event of the review becoming inoperative because of a failure to observe a time limit where
time is of the essence it is probably to be implied that the rent as it was prior to the review date is to remain payable: see Weller v Akehurst
[1981] 3 All ER 411, 42 P & CR 320. Of course, the parties may provide for a particular rent to become payable if the review machinery
becomes inoperative, or even if the review is not completed by a certain date where time is not of the essence: Panavia Air Cargo Ltd v
Southend on Sea Borough Council (1988) 56 P & CR 365, [1988] 1 EGLR 124.
2 The situation in which a party omits to take a procedural step in good time through error or inadvertence must be distinguished from a
case where a party deliberately refuses to take a procedural step, such as appointing a valuer as required, in order to frustrate the review. In
the latter type of case the court will remedy the breakdown in the machinery either by itself deciding the rent or by ordering the party in
default to take the necessary step. See para HR A[3607].
Page 814
3 The process of notices proposing a rent and counter-notices is considered in paras HR A[4144]ff.
5 In the law of contract generally a term of a contract is sometimes said to be of the essence when it is so important that a breach of it
automatically entitles the other party to the contract to elect to treat the contract as at an end. The present use of the expression 'of the
essence' is quite different from the general contractual usage.
HR A[4123.1]
It is important to be clear that the question of time being of the essence relates to the taking of some step in connection
with the operation of a rent review, for example the service of a notice initiating the review or an application for the
appointment of an expert to determine the reviewed rent in the event of a failure to agree that rent. The concept of time
being of the essence has nothing to do with the rent review date in the sense of the date on which the rent review has
effect or the date from which the reviewed rent will become payable. In one case, a term of a lease granted by a housing
association provided that the rent payable would be increased annually in accordance with a prescribed formula with
effect from the first Monday in June of each year1. The landlords were to give four weeks' notice of the increase. The
landlords gave a notice purporting to increase the rent from 1 April in a particular year, they not having served notice in
relation to the first Monday in June of the previous year. It was held at first instance that the notice was valid since it
was said that time was not of the essence in relation to the June date stated in the lease. The Court of Appeal reversed
this decision holding that the rules relating to time being of the essence had nothing to do with the review date in the
sense of the date on which a reviewed or varied rent had effect, which was a contractual term and so was incapable of
alteration save in accordance with the terms of the lease or by virtue of a separate agreement between the parties. The
relevance of time being of the essence or not being of the essence was to steps required to bring about or operate a rent
review on the date specified for the effect of that review.
HR A[4123.2]
1 Riverside Housing Association v White [2006] 14 EG 176. This decision is currently under appeal to the House of Lords. See also HR
A[4041].
HR A[4124]
A question which might be pertinently asked is why time limits in rent review clauses are not always mandatory. The
parties must have some purpose in agreeing a time limit and one would suppose that the intention is that a person shall
act timeously as required if his action is to have effect. To hold that a time limit is directory only, and so need not be
observed, appears to frustrate rather than further the presumed contractual intention of the parties. Furthermore, it is not
clear what is the effect of a directory time limit. The action limited in time is just as effective if the time limit is not
observed as it is if the time limit is observed. The position is in some ways the same as if there were no time limit. It
must be said that it would be unfair in some instances to hold that time was of the essence since the observance of a
time limit could be dependent wholly or partly on the co-operation of both parties, and one party to whom the review
would work to his disadvantage might not co-operate in observing the time limit. An instance of this may be where the
rent has to be agreed or determined by arbitration within a specified time limit1. It is also the case that if time is not of
the essence in the provision as entered into it is still open to a party to make time of the essence by serving an
Page 815
appropriate notice to that end2. That would not always be a procedure available unless there was an initial time
stipulation in respect of which time could in this way be made of the essence. In any event whatever are the abstract
considerations it is well settled that time limits may be mandatory or directory and general guidance now exists as a
path to the correct conclusion on this subject. The reasoning which has led to the general principle has been heavily
criticised in Australia3.
HR A[4125]
1 This was the provision in one of the leading cases on the subject, United Scientific Holdings Ltd v Burnley Borough Council [1978] AC
904, [1977] 2 All ER 62, explained in para HR A[4128].
3 See HR A[4129], fn 1.
(b) The general rule
HR A[4126]
When the question of time limits in rent review clauses first came before the courts a dichotomy was established
between (a) cases in which the time limit was a part of an option conferred on the landlord to secure a review of the
rent, in which event time was of the essence, and (b) cases in which the time limit related to the machinery of the
review, in which event time was not of the essence1. The analogy drawn was with the well established rule that a person
who has the benefit of an option relating to property, such as an option to renew or to determine a lease, must comply
strictly with any conditions for its exercise including the observance of time limits2.
HR A[4127]
1 An example of the option type of case where time was held to be of the essence is the decision of the Court of Appeal in Samuel
Properties (Developments) Ltd v Hayek [1972] 3 All ER 473, [1972] 1 WLR 1296, which concerned a landlord's trigger notice which had to
be served at least two quarters before the review date. An example of the machinery type of case where time was held not to be of the
essence is the decision of the Court of Appeal in Kenilworth Industrial Sites Ltd v Little & Co [1975] 1 All ER 53, [1975] 1 WLR 143. The
reasoning in these decisions has now been superseded by the decision of the House of Lords in United Scientific Holdings Ltd v Burnley
Borough Council [1978] AC 904, [1977] 2 All ER 62. It was said by the House of Lords that the first decision should be regarded as
overruled whereas the second was correct.
2 See eg Finch v Underwood (1876) 2 Ch D 310; West Country Cleaners (Falmouth) Ltd v Saly [1966] 3 All ER 210, [1966] 1 WLR
1485.
HR A[4128]
The distinction just mentioned has now been rejected as unsound. It is wrong to think of a lease as conferring an option
for a rent review. Rather rent reviews are to be considered as necessary adjuncts to leases granted in modern conditions
Page 816
where inflation has long existed and is likely to continue. The general principle is that in regard to time limit provisions
in rent review clauses time is presumed not to be of the essence unless there is some contra-indication which makes it of
the essence. A sufficient contra-indication may be found in the express words of the lease or in the interrelation of the
rent review clause itself with other clauses in the lease or in the surrounding circumstances. The law in the form just
stated was established in two cases heard together by the House of Lords in 19771. It seems possible that some
contra-indication could be such as to render time of the essence in relation to one rent review due under a lease but not
others2. It has been said that the presumption in favour of time not being of the essence is strong so that the
contra-indication needed to rebut the presumption must be correspondingly strong3. The distinction mentioned therefore
has no utility for the purpose of deciding whether time is of the essence as regards time limits, but it may still be of
some use in other contexts4.
HR A[4129]
1 United Scientific Holdings Ltd v Burnley Borough Council; Cheapside Land Development Co Ltd v Messels Service Co [1978] AC 904,
[1977] 2 All ER 62. The two cases were heard together by the House of Lords and they illustrate by their facts the application of the
principle. In the first case there was a lease for 99 years with rent reviews at ten-year intervals. It was provided that in the year preceding
each rent review date the reviewed rent (which was to be a quarter of the rack rental value) should be agreed or determined by arbitration.
The presumption indicated that time was not of the essence and there was no contra-indication to the contrary. Therefore, the landlords were
able to obtain a rent review even though the reviewed rent was not determined in the year provided. The second case concerned a much more
elaborate provision. The lease was for 21 years with rent reviews at the seventh and fourteenth years. The time provisions were that the
landlord should serve a notice not more than twelve and not less than six months before the review date. His notice was required to specify a
proposed new rent. The tenant then had one month in which to serve a counter-notice in which he could agree to the landlord's proposal or
specify a rent of his own. There were then two months for agreement to be reached. If there was no agreement within this two-month period
the landlord could apply for the appointment of a surveyor as an expert to determine the rent if the parties did not agree on an expert. Again,
it was held that time was not of the essence as regards the various time limits. There was no contra-indication to rebut the presumption. It
may be noted that, in Cheapside Land Development Co Ltd v Messels Service Co, the landlord had in fact given a trigger notice to initiate the
rent review within the time limits specified, so that the validity of that notice was not in issue in the proceedings. Nonetheless, it is clear that
the House of Lords were laying down a general principle or presumption on the question of whether time was of the essence and that the
principle was to apply as much to the service of trigger notices as to other steps in the overrall rent review process: see McDonalds Property
Co Ltd v HSBC Bank plc [2001] 36 EG 181.
The reasoning of Lord Diplock has not found universal favour in the common law world, perhaps least of all in Australia: see G R Mailman
and Associated Pty Ltd v Wormald Australia Pty Ltd (1991) 24 NSWLR 80, per Meagher JA at p 99; and see Meagher Gummer & Lehane
on Equity: Doctrines and Remedies (4th Ed), introduction at page xv where the reasoning of Lord Diplock is described as 'the low
water-mark of modern English jurisprudence'.
See Riverside Housing Association Ltd v White [2005] 50 EG 91 (CS) in which the decision in the United Scientific Holdings case was
distinguished in the context of a rent review under an assured tenancy and a claim for possession under ground 10 of Sch 2 to the Housing
Act 1988.
2 As is explained in paras HR A[4161]ff, one contra-indication which may render time of the essence is an interrelationship between the
timetable for a rent review and that for the exercise of a break clause by the tenant. It is possible that a lease could be subject to a series of
rent reviews only one of which was coincident with a right for the tenant to end the lease. On the assumption that time is of the essence in
relation to the rent review which is so coincident this may in theory have one of two effects. It may render time of the essence in relation to
all the rent reviews or it may render time of the essence in relation to the single rent review which is coincident with the break clause. This
situation arose in the Court of Appeal in Central Estates Ltd v Secretary of State for the Environment (1995) 72 P & CR 482, [1995] EGCS
110 where the lease had four rent reviews but a break clause coincident with only one of them. Morritt LJ thought that time could be of the
essence in relation only to the coincident review (which was the one before the court) but not the others. Sir John May thought that time was
of the essence in relation to all four reviews. Glidewell LJ expressed no view on the question. The observations made were obiter since only
the third review was before the court. The view of Morritt LJ is the closest to the underlying principle since the contra-indication of the
coincident break clause applied only to one review.
3 Phipps-Faire Ltd v Malbern Construction Ltd [1987] 1 EGLR 129, applied in McDonalds Property Co Ltd v HSBC Bank plc [2001] 36
Page 817
EG 181.
4 See Hemingway Realty Ltd v Clothworkers of the City of London [2005] EWHC 299 (Ch), [2005] 2 EGLR 36. An area where the
distinction may be important is that of deciding whether a rent review is mandatory on the parties or is an option operable only by the
landlord: see HR A[3608], fn 4, and HR A[4223].
HR A[4130]-[4140]
A purpose in establishing a general principle or presumption is to avoid future disputes on the subject. The application
of the principle is intended to provide a solution for later cases. To some extent the principle as established must have
had that effect. Even so, it has not stopped a flow of further cases mainly directed to the questions (a) whether the
language used in a rent review clause was an express direction that time should be of the essence and (b) whether the
terms of the remainder of the lease did provide a sufficient contra-indication to rebut the presumption that time is not of
the essence. The correct approach to the question is to presume that time is not of the essence unless it is expressly
made so or there is a sufficient contra-indication. These two matters must therefore be examined.
(c) Express provisions
HR A[4141]
The parties may state that time is or is not to be of the essence for the purposes of the rent review provisions, and effect
will be given to such an express provision1. In reality not all language used in rent review clauses is as plain as this.
Four areas of doubt emerge in relation to express provisions: (a) what words, other than an express direction that time is
to be of the essence, are sufficient to render time of the essence; (b) the effect of 'deeming' provisions; (c) the question
of what part or parts of the review clause are governed by an express provision which makes time of the essence; and
(d) the effect of time being made expressly of the essence for some time limits but not others within the total rent review
clause.
HR A[4142]
1 See Panavia Air Cargo Ltd v Southend on Sea Borough Council [1988] 1 EGLR 124 for a case in which effect was given to an express
provision that time was not to be of the essence even though the parties had provided for what was to happen in substitution for a rent review
if the review was not completed by one year after the review date.
HR A[4142.1]
The problem is that those who frame rent review clauses sometimes use words which emphasise the importance of time
limits but do not employ the technical phrases, such as time being of the essence or being mandatory, which are
understood by lawyers. The question is whether the words of emphasis used are enough to rebut the presumption and
render time of the essence. As so often the decided cases exhibit fine differences and offer little clear guidance. In two
cases a notice by the landlord requiring that the rent be submitted to arbitration or to an expert had to be served within
three months of a previous trigger notice 'but not otherwise'. It seems clear that by using these words the parties
intended that time should be of the essence, and it was so held1. On the other hand, the use of the expression 'in any
event' seems not to be sufficient to make time of the essence. This was the conclusion reached where a reference to an
Page 818
expert was required to be made so soon as practicable after the service of a landlord's trigger notice and in any event not
later than three months after the service of that notice2. The statement that a notice given within a certain time is a
condition precedent to something happening is a clear indication that time is of the essence3. Sometimes the provisions
state what is to happen if some step is not taken within the time specified, such as that a notice initiating the rent review
is to be void and of no effect if an application is not made by the landlord for the appointment of a surveyor within a
specified time. Effect will generally be given to such a provision with the result that time is of the essence in regard to
the step in question4. However, it has been said that such provisions, called 'default' provisions, are not decisive of the
question whether time is of the essence5. Provisions of this nature are akin to the 'deeming' provisions discussed in the
next paragraph. As always in matters of construction of documents, it must be remembered that the same words may
have different meanings in different contexts6. Also, where an expression such as 'in any event' is used it is essential to
decide whether it is a time limit or some other aspect of the review provisions which is qualified by the words7.
HR A[4143]
1 Drebbond Ltd v Horsham District Council [1978] 1 EGLR 96; Norwich Union Life Insurance Society v Sketchley plc [1986] 2 EGLR
126. In First Property Growth Partnership LP v Royal and Sun Alliance Property Services Ltd it was provided that a notice given to initiate
a rent review had to be served within a specified period 'but not at any other time'. It was held that these words made time of the essence. See
note 2 in para HR A[4121] for a further consideration of this case.
2 Touche Ross & Co v Secretary of State for the Environment [1983] 1 EGLR 123. See also Thorn EMI Pension Trust Ltd v Quinton
Hazell plc [1984] 1 EGLR 113; Factory Holdings Group Ltd v Leboff [1987] 1 EGLR 135.
3 Chelsea Building Society v Millett (RA) (Shops) Ltd [1994] 1 EGLR 148. Cf North Hertfordshire District Council v Hitchin Industrial
Estate Ltd [1992] 2 EGLR 121, where a different conclusion was reached. See also Staines Warehousing Co Ltd v Montague Executor &
Trustee Co Ltd [1986] 1 EGLR 101, (1985) 51 P & CR 2121 (where it was common ground that time was of the essence in regard to a
provision of this nature).
4 Lewis v Barnett [1982] 2 EGLR 127. Cf Bickenhall Engineering Co Ltd v Grandmet Restaurants Ltd [1994] EGCS 146, considered in n
7 to this para and in para HR A[4146], n 2. It is possible for the parties to provide for what is to happen if the review is not concluded by a
certain date even though time is expressly stated not to be of the essence, eg for a particular rent to become payable in those circumstances.
This does not make time of the essence contrary to the express provision but the court will generally give effect to the substituted rental
provision specified by the parties should the review not be completed by the specified date: Panavia Air Cargo Ltd v Southend on Sea
Borough Council [1988] 1 EGLR 124.
5 Power Securities (Manchester Ltd) v Prudential Assurance Co Ltd [1987] 1 EGLR 121, per Millett J.
7 In Metrolands Investment Ltd v J H Dewhurst Ltd [1986] 3 All ER 659, 52 P & CR 232 an argument that the words 'but such yearly rent
shall not in any event be less than £1,800' made time of the essence was rejected because they meant that the rent was not to be lower than
the stated figure whatever the decision in the arbitration. See also Bickenhall Engineering Co Ltd v Grandmet Restaurants Ltd [1995] 1
EGLR 110, [1994] EGCS 146, in which a provision as to what should happen in the absence of a tenant's counter-notice was held to mean in
the absence of a counter-notice containing certain particulars not in the absence of a counter-notice served within the specified time limit.
HR A[4144]
As mentioned earlier a common form of provision found in rent review clauses is that the landlord is required to serve a
notice proposing a rent and the tenant is then given a period within which to serve a counter-notice objecting to the rent
proposed and requiring that the rent be determined by a third party1. The requirement of a counter-notice is usually
Page 819
combined with a provision that in the absence of a counter-notice the rent as proposed by the landlord shall be deemed
to be the reviewed rent. A variant of these provisions is that the tenant may be required to specify a rent in a
counter-notice with that rent becoming the reviewed rent unless the landlord takes some step within a specified time
such as applying for the appointment of a surveyor to determine the rent. Other variants may be found, for example a
provision under which either the landlord or the tenant may serve the initial notice specifying the amount of the
reserved rent. In the absence of a counter-notice or other action required within a certain time by the recipient of the
initial notice it may be stated that the rent as initially specified is deemed to be the reviewed rent or that the parties are
deemed to have agreed that rent as the reviewed rent. The obvious meaning of and intention to be derived from such
provisions is that if no counter-notice is served within the time allowed that is the end of the matter. For instance, in the
first variant mentioned the intention is that reviewed rent is to be that proposed by the landlord and no counter-notice
may be served late so as to reverse that which is expressly provided. The result is that, as regards the service of a
counter-notice, or other action required to be taken by the recipient of the initial notice to dispute the rent specified in it,
time is of the essence. Provisions of this general nature are sometimes called 'deeming provisions' since the rent as
initially specified is deemed to become the reviewed rent unless the appropriate timeous action is taken to dispute it.
HR A[4145]
HR A[4146]
The obvious meaning of deeming provisions, namely that time is of the essence for the purposes of any action to be
taken by the recipient of a notice specifying the amount of the reviewed rent, was applied in the earlier cases1. The very
nature and structure of deeming provisions was a contra-indication which rebutted the presumption that time was not of
the essence. Unfortunately the law was thrown into confusion by a later majority decision of the Court of Appeal in
which it was held that time was not of the essence in relation to the service by a tenant of a counter-notice even though
it was provided that in the absence of such a notice within the time specified he was deemed to have agreed to pay the
rent specified in the landlord's notice2. Not surprisingly, subsequent decisions showed no clear pattern3. Courts in other
jurisdictions, including Scotland, Australia and New Zealand, declined to follow the suggestion that time was not of the
essence in relation to deeming provisions4. A coherent approach has now been restored by a recent decision of the
Court of Appeal in which the principle was established that in deeming provisions of the present nature time is of the
essence in relation to counter-notices or other prescribed actions for disputing the rent specified in the initial notice5.
HR A[4147]
1 Henry Smith's Charity Trustees v Awada Trading and Promotion Services Ltd [1984] 1 EGLR 116. This case concerned the variant
mentioned in the text of the tenant proposing a rent in a counter-notice with that rent being deemed to be the reviewed rent unless the
landlord applied within two months for the appointment of a surveyor to determine the rent.
2 Mecca Leisure Ltd v Renown Investments (Holdings) Ltd [1984] 2 EGLR 137. The case is characterised by the strong dissenting
judgment of Browne-Wilkinson LJ.
3 As a result of the recent decision of the Court of Appeal, discussed in this paragraph, it is now unnecessary to consider in any detail the
various conflicting earlier decisions: see Greenhaven Securities Ltd v Compton [1985] 2 EGLR 117; Taylor Woodrow Property Co Ltd v
Lonrho Textiles Ltd [1985] 2 EGLR 120; Phipps-Faire Ltd v Malbern Constrction Ltd [1987] 1 EGLR 129; Mammoth Greeting Cards Ltd v
Page 820
Agra Ltd [1990] 2 EGLR 124; Bickenhall Engineering Company Ltd v Grandmet Restaurants Ltd [1995] 1 EGLR 110; Banks v Kokkinos
[1999] 3 EGLR 133.
4 Visionhire Ltd v Britel Fund Trustees Ltd [1992] 1 EGLR 128 (Scotland); GR Mailman and Associates Pty Ltd v Wormald (Aust) Pty
Ltd (1991) 24 NSWLR 80 (Australia); Mobile Oil New Zealand Ltd v Mandeno [1995] NZLR 114 (New Zealand).
5 Starmark Enterprises Ltd v CPL Distribution Ltd [2001] EWCA Civ 1252, [2001] 32 EG 89 (CS), CA. In this case there was a provision
whereby the landlord could serve a notice on the tenant providing for the reviewed rent to be that specified in his notice. The tenant was
given one month to serve a counter-notice calling on the landlord to negotiate the amount of the rent. It was then provided that if the tenant
failed to serve a counter-notice within the period of one month he should be deemed to have agreed to pay the increased rent specified in the
landlord's notice. The Court of Appeal reviewed the relevant earlier authorities and concluded that in relation to the service of a
counter-notice time was of the essence. Accordingly, a purported counter-notice served by the tenant later than the permitted one month after
receipt of the landlord's notice was invalid. The rent was that specified in the landlord's notice. In effect the previous decision in Mecca
Leisure Ltd v Renown Investments (Holdings) Ltd [1984] 2 EGLR 137 is no longer good law.
HR A[4148]
The present statement of the law on deeming provisions may be regarded as an application of the principle that a
contra-indication which rebuts the presumption that time is of the essence may be found in the express words of the
lease1. Although there is no express statement that time is of the essence using those words the nature of deeming
provisions is such that they are tantamount to an express statement that time is of the essence for the giving of a
counter-notice. No fine distinctions are to be drawn such as between cases where only one party can serve an initial
notice specifying the rent and cases where either party can serve such a notice. Even so, every contractual provision
must be considered in the light of its own exact words and its context and it is not impossible (though perhaps extremely
unlikely) that a deeming provision may be encountered in which time is not of the essence for the service of a
counter-notice. A deeming provision may work harshly in that usually there is no requirement that the rent specified in
the original notice is a genuine or realistic estimate of the rent so that, if the recipient of the notice fails to act so as to
dispute it in good time, he may find that he is bound by a rent which is substantially higher or lower than that which
would be determined as the reviewed rent by a genuine negotiation or a determination by a third party. However, the
possible harshness of the operation of a deeming provision is no reason for re-writing the rent review clause or for
relieving a party of the consequences of his failure to act in good time in accordance with the procedure which he has
agreed2. The recent decision of the Court of Appeal is an interesting authority as regards the doctrine of precedent since
the court refused to follow one of its own recent decisions on the basis that the views of the majority in that decision
were based on fallacious reasoning and were simply wrong3.
HR A[4148.1]
1 As explained in para HR A[4128] a sufficient contra-indication may be found in either the express words of the lease or in the
interrelation of the rent review clause itself with other clauses in the lease or in the surrounding circumstances.
2 In Starmark Enterprises Ltd v CPL Distribution Ltd Peter Gibson LJ said at paragraph 84 that considerations of this nature, including
the fact that deeming provisions may be a trap for the unwary, did not carry much weight in determining whether the parties had chosen that
time should be of the essence despite the presumption to the contrary.
3 The general rule of precedent is, of course, that the Court of Appeal is bound by its own decisions so that a previous decision of the
Court must be followed by a subsequent Court even if it does not agree with it. A further principle is that where two inconsistent decisions of
the Court of Appeal follow each other a subsequent court is bound to follow the more recent decision. There appear to be two bases on
which the Court of Appeal in Starmark Enterprises Ltd v CPL Distribution Ltd declined to follow the reasoning in Mecca Leisure Ltd v
Renown Investments (Holdings) Ltd. The first is that decisions on a particular contract do not in strictness constitute a precedent as regards
other contracts since the construction of each contract depends upon the precise language used and the context within which it appears. The
Page 821
second reason is that the reasoning in the Mecca Leisure case was regarded as plainly incorrect and where the ratio of an earlier decision of
the Court of Appeal is directly applicable to the circumstances of a later case before that same Court but that earlier decision has been
wrongly distinguished in a later decision of the Court in principle it must be open to the Court to apply the ratio of the earlier decision and to
decline to follow the later decision: see per Peter Gibson LJ at paragraph 97. The court in the Starmark case did not suggest that the earlier
decision in the Mecca Leisure case could be distinguished on the basis of small differences in the contractual language used in the two rent
review clauses.
HR A[4149]
If time is expressly made of the essence in relation to one or more time limits in a rent review clause that provision
reinforces the presumption that time is not of the essence in relation to other time limits for other steps1. It should
follow that if time is expressly made not of the essence for a particular time limit or limits time should be regarded as
being of the essence for other time limits. Were it otherwise the provision that time is not of the essence would have no
effect.
HR A[4150]-[4160]
1 Accuba Ltd v Allied Shoe Repairs Ltd [1975] 3 All ER 782, [1975] 1 WLR 1559; Amherst v James Walker Goldsmith & Silversmith Ltd
[1982] 1 EGLR 121; London & Manchester Assurance Co Ltd v G A Dunn & Co [1982] 1 EGLR 117 (see per Slade LJ; Lawton LJ reached
the conclusion that time was of the essence in relation to a landlord's trigger notice even though time was made expressly of the essence in
relation only to a tenant's counter-notice; Oliver LJ preferred a construction of the clause which did not require from him a decision on the
question). The view of Slade LJ in the last case, namely that where time is expressly made of the essence in relation to one form of notice
this reinforces the presumption that time is not of the essence in relation to another form of notice where there is no such express provision,
was preferred by Neuberger LJ in Lancecrest Ltd v Asiwaju [2005] EWCA Civ 117, [2005] 1 EGLR 40.
(d) Contra-indications
HR A[4161]
In his formulation of the principle regarding whether time is of the essence Lord Diplock spoke of contra-indications
which might be found in the interrelationship of the rent review clause and other clauses in the lease or in the
surrounding circumstances1. The main interrelationship which has led to time being of the essence is that between the
rent review clause and a break clause available to the tenant. Apart from this there is little indication that the court will
find a sufficient contra-indication in any other provisions of the lease or in any other surrounding circumstances.
HR A[4162]
1 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 at 930, [1977 2 All ER 62 at 72.
HR A[4163]
The exercise of a tenant's break clause is nearly always made dependent on the service of a notice by the tenant
exercising his right to determine the lease, the notice having to be served a specified period before the date of the
Page 822
determination. It is well established that time is of the essence in relation to such notices. If there are time limits
prescribed for a rent review and there is an obvious temporal relationship between the two this is a sufficient
contra-indication to rebut the presumption that time is not of the essence in relation to the rent review. Time will then be
of the essence in relation to both time limits for both notices. A typical example of what is involved is that the tenant
might have the right to determine the lease at the end of the tenth year of the term by serving a notice at least six months
before the end of the tenth year. The landlord might have the right to a rent review at the end of the tenth year by
serving a trigger notice at least nine months before that date. The obvious intention of the two provisions is that the
tenant shall have at least three months in which to decide whether to serve a break notice with the knowledge that he is
or is not to be subjected to a rent review. It should be noted that in cases such as this the information which the tenant
will have for the purposes of making his decision whether to end the lease is whether there will be a rent review but not
necessarily the rent which he will have to pay following that review. Of course, the latter question is something on
which he may be able to take an informed view1.
HR A[4164]
1 The principle that time can become of the essence because of the relationship between a break clause and the rent review clause was
recognised by the House of Lords in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, [1977] 2 All ER 62. One of
the earlier decisions approved by the House was Richards & Son Ltd v Karaneta (1971) 221 Estates Gazette 25 in which the break clause
and the rent review clause had the relationship mentioned in the text and time was held to be of the essence. A more recent illustration of the
principle is Central Estates Ltd v Secretary of State for the Environment (1985) 72 P & CR 482, [1995] EGCS 110, a decision of the Court
of Appeal that time was of the essence in relation to a rent review trigger notice where that notice had to be served at least a year before the
expiration of the twenty-first year of the term and there was a relationship with the tenant's exercise of a break clause which had to be
effected by a notice served at least six months before the expiration of the twenty-first year. See also Coventry City Council v J Hepworth &
Son Ltd [1983] 1 EGLR 119, and William Hill (Southern) Ltd v Govier & Govier [1984] 1 EGLR 121 in which the event which had to occur
prior to the last date for the exercise of a break clause by a tenant was a reference of the reviewed rent to the determination of a surveyor and
it was held that time was of the essence for this reference. In Rahman v Kenshire Ltd [1981] 2 EGLR 102 a combination of the construction
of the provision for the service of a trigger notice and the relationship with a break clause in the lease meant that there was only one day on
which the trigger notice could be validly served.
HR A[4165]
Some attempts have been made to avoid the conclusion that time is of the essence because of the connection with a
break clause.
(a) It makes no difference that the rent review is upwards and downwards. The tenant still needs an
opportunity to consider whether there is to be a review before he decides whether to exercise the right to
end the lease1.
(b) Nor does it make any difference that the right to break the lease is available to the landlord as well
as to the tenant1.
(c) The fact that there are a number of rent reviews during the lease but only one date on which a break
clause may be exercised does not prevent time being of the essence in relation to the rent review which is
co-incident with the break clause1. It is not entirely clear whether time is made of the essence in relation
to the other rent reviews in the lease in the above situation. There is no good reason why it should be2.
(d) There will be a sufficient interrelation between the break clause and the rent review clause to
render time of the essence in the latter clause when the last day for service of a notice to initiate the rent
review and the last day to exercise the break clause are the same day3. The reasoning which underlies
this rule is not wholly clear since where the tenant may have to decide whether to break the lease on the
very day when he receives a notice requiring a rent review he may have no or no significant time in
Page 823
which to make his decision with knowledge of whether there will be a rent review.
(e) Apart from the matter of the interrelationship of the time limits the rent review and break clause
provisions may be so linguistically tied together as to lead to the conclusion that time is of the essence in
both4.
(f) It may be possible in principle that the interrelationship would render time of the essence for one
part of a rent review clause but not for other parts. For instance, there could be a sequence of time
whereby first the landlord had to serve a trigger notice to initiate the review by one date, then the tenant
had to exercise a break clause by notice given by a later date, and finally a reference to an expert had to
be made by a third and further date. The time for the service of the trigger notice would become of the
essence because the tenant might need to know whether there was to be a rent review before deciding
whether to exercise the right to break the lease. It does not follow that time for a reference to an expert
would be of the essence since this is not related to the exercise of the right to break the lease. It is
possible that one time limit but not another within a rent review clause is made of the essence by an
express provision, and there seems no reason why the same result should not be reached where it is the
interrelationship with another clause in the lease which makes time of the essence5.
HR A[4166]
1 Central Estates Ltd v Secretary of State for the Environment (1995) 72 P & CR 482, [1995] EGCS 110.
3 Al Saloom v Shirley James Travel Service Ltd (1981) 42 P & CR 181, (1981) 259 Estates Gazette 420; Legal & General Assurance
(Pension Management) Ltd v Cheshire County Council [1984] 1 EGLR 102, (1983) 46 P & CR 160; Stephenson & Son v Orca Properties
Ltd [1989] 2 EGLR 129.
4 See Al Saloom v Shirley James Travel Service Ltd (1981) 42 P & CR 181, (1981) 259 Estates Gazette 420 where the two provisions
formed part of one integrated clause.
5 See para HR A[4149] for instances of an express provision making time of the essence for one part of a rent review clause but not for
another part.
HR A[4167]
None the less, it is not enough to make time of the essence in a rent review clause that there is also a break clause in the
lease or even that there is an interrelationship between the timetables in the two clauses. In one case there was a break
clause which had to be exercised by a notice given by the tenant at least three months prior to the end of a specified year
of the term. There was also a rent review clause where the review was to be at the end of the same year of the term and
the only time provision was that if the matter went to arbitration the decision of the arbitrator should be obtained at least
six months before the end of the year. There clearly was a degree of interrelationship between the two time limits. Even
so, it was held that time was not of the essence as regards the decision of the arbitrator since it was something
substantially outside the control of the landlord. Furthermore, the tenant could have taken steps to ensure that he had a
decision on the rent from an arbitrator before the last date on which he could serve a notice under the break clause by
himself initiating an arbitration1. The usual event as to which time is made of the essence by an interrelated break
clause is the service of a trigger notice by the landlord. If the review takes place automatically without any trigger notice
the existence of a break clause which is contemporaneous with the review will not give rise to an implied term that the
landlord must give a notice to initiate the review2.
Page 824
HR A[4168]
1 Metrolands Investments Ltd v J H Dewhurst Ltd [1986] 3 All ER 659.
2 Edwin Woodhouse Trustee Co Ltd v Sheffield Brick Co plc [1984] 1 EGLR 130. See also para HR A[3605].
HR A[4169]
Cases which have come before the courts have concerned interlocking time provisions in rent review clauses and break
clauses. If the interlocking is such as to rebut the presumption that time is not of the essence in the rent review clause it
does not matter whether the right to end the lease within its time limit is exercisable by the landlord as well as by the
tenant1. In such a case the tenant may still need to know whether there is to be a review before deciding to exercise his
right under the mutual break clause. A right to break the lease exercisable only by the landlord could make time of the
essence in a rent review clause, for example, where the review was upwards and downwards and either party could
serve a trigger notice by a specified date to bring about the review. The landlord might then need to know whether the
tenant desired a review in order to try to secure a reduced rent before the landlord made a decision on whether to end the
lease. It is possible that the existence in the lease of some option or right other than a break clause in which time was of
the essence could render time of the essence in a rent review clause if the two timetables were interlocked. An example
would be a tenant's option to acquire the freehold.
HR A[4170]-[4180]
1 Central Estates Ltd v Secretary of State for the Environment (1995) 72 P & CR 482, [1995] EGCS 110.
HR A[4181]
The courts have not readily held that factors other than an interrelated break clause could make time of the essence. The
fact that the lease was granted before the present law with its presumption that time is not of the essence was established
by the House of Lords in 1978 is not a sufficient contra-indication1. Nor is the fact that at the time of the grant of the
lease it was intended to sublet parts of the premises with the subleases to contain rent review provisions tied in with
those in the headlease1. It is not a sufficient contra-indication that only one party has the right to initiate the rent
review2. It is possible, though unlikely, that the rental value may have to be assessed on values which prevail not at the
review date but at the date on which it is actually determined by agreement or by the decision of a third party3. It is
arguable that in such a case time is of the essence since otherwise a party could delay the progress of the review in order
to gain an advantage for himself in a changing market4. The initial question to be decided is whether the valuation is to
proceed by reference to values prevailing at the review date irrespectively of when the valuation is actually made. If the
answer is in the affirmative then the case for suggesting that time is of the essence loses its force5. In one case, it was
provided by the rent review clause that, in the event of dispute, an expert should determine the rent not less than 14 days
before the review date. A landlord's notice to initiate the review had to be given not less than six months before the
review date. The suggestion that the presumption was rebutted and that time was of the essence in regard to the trigger
notice by reason of the stated intention that the expert should make his determination before the review date was
rejected, and the landlord's trigger notice given more than a year after the review date was held to be valid6. This
Page 825
decision again illustrates the strength of the presumption and the need for a compelling reason if it is to be rebutted7.
HR A[4182]
1 Pembroke St George's Ltd v Cromwell Development Ltd [1991] 2 EGLR 129.
2 H West & Son Ltd v Brech [1982] 1 EGLR 113; Pembroke St George's Ltd v Cromwell Development Ltd [1991] 2 EGLR 129.
3 The courts seek to avoid such a result: see Glofield Properties Ltd v Morley (No 2) (1989) 59 P & CR 14, [1989] 2 EGLR 118, and see
the discussion in para HR A[3708].
4 The authorities are not clear on this point. Cf the decision of the Court of Appeal in London and Manchester Assurance Co Ltd v G A
Dunn & Co [1983] 1 EGLR 111 and Touche Ross & Co v Secretary of State for the Environment (1982) 46 P & CR 187, [1983] 1 EGLR
123.
5 This appears to be the explanation of the decision in McDonalds Property Co Ltd v HSBC Bank plc [2001] 36 EG 181.
6 McDonalds Property Co Ltd v HSBC Bank plc [2001] 36 EG 181.
7 See para HR A[4129], fn 3. In Lancecrest Ltd v Asiwaju [2005] EWCA Civ 117, [2005] 1 EGLR 40, a series of further reasons were
advanced by the tenant in support of the proposition that time was of the essence for the service of a notice by the landlord initiating the
review, although there was no express provision to that effect, namely:
(a) the right to a rent review was expressed as an option;

(b) the reviewed rent as specified in the landlord's notice did not have to be the market rent;
(c) the time available for service of a counter-notice by the tenant (as to which time was
expressly made of the essence) was short;
(d) given the right of the tenant to sublet the premises he needed to know the result of any rent
review at an early date; and
(e) if a landlord's notice was given at a late date there was provision for payment of back rent
and, in addition, provision for payment of interest on that back rent.
The Court of Appeal rejected all of these reasons holding that time was not of the essence as regards the
landlord's initial notice.
(e) Making time of the essence
HR A[4183]
If time for the taking of some step is not of the essence, either because that is expressly stated or because of the
application of the presumption, a party can still make time of the essence for the taking of that step by the other party.
The procedure is that once the time limit for carrying out the step has passed the other party can make time of the
essence by serving a notice requiring that the step be taken within a reasonable period of time1. If the step to be taken is
the service of a notice the reasonable time which is given in the notice for it to be carried out may be very short since it
Page 826
is normally very easy for a party to carry out such a step2. A short time may also be given in the notice where the step
to be taken is an application to appoint a third party to determine the rent in default of agreement3. The purpose of the
rule which allows a party to give notice making time of the essence is that it gives him a remedy against delay and
inactivity by the other party. An obvious illustration would be that a tenant, faced with the failure of a landlord to give a
trigger notice within the specified time limit when time is not of the essence, would not know whether he was to be
subjected to a rent review or not. By serving a notice making time of the essence he can bring about certainty. Either the
landlord will serve a trigger notice within the reasonable time allowed to him by the tenant's notice, so that there is a
review, or he will fail to do so, in which case, since time has become of the essence, he will lose the right to a review. A
notice making time of the essence can be served as regards any step which the other party has to take under the rent
review machinery. It could be served, for example, in relation to an application to be made by the landlord for the
appointment of an expert4. The time limit in respect of which time can be made of the essence by an appropriate notice
may be contained in either an express or an implied term. It may be necessary to imply a term for taking some step,
such as an application by one party to appoint an expert to decide the reviewed rent in default of agreement, in order
that the other party can serve a notice making time of the essence in relation to this step. If there is no express or
implied time limit time cannot be made of the essence5. However, if the step is one which the party serving the notice is
himself entitled to take under the review machinery no notice may be served on the other party making time of the
essence. The reason is that where the party serving the notice can himself carry out the step in question the very purpose
of a notice does not exist; it is not necessary to prevent delay, inactivity or uncertainty regarding the procedural step6.
While the law on the service of a notice making time of the essence is clear and well established, it has been pertinently
pointed out that few landlords or tenants reading a rent review clause would appreciate that the law implied provisions
for yet further notices over and above those expressly contemplated by the lease7.
HR A[4184]
1 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, [1977] 2 All ER 62. Lord Simon ([1978] AC 904 at 946)
said that the process involved: (a) that a reasonable time has elapsed since the date specified for the act; and (b) after the passage of this
reasonable time a further reasonable period of time is given by notice for the act to be performed.
2 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 at 934, per Lord Diplock. In Phipps-Faire Ltd v Malbern
Construction Ltd [1987] 1 EGLR 129 it was said that where the step to be taken was an application for the appointment of a valuer to
determine the rent a reasonable period would not exceed 14 days. It has been suggested that where a landlord does not serve a notice
initiating a rent review by the date specified, the tenant can make time of the essence by requiring the landlord to give the appropriate notice,
or of course lose his right to do so, within a month, or possibly even two or three weeks, from the specified date: Lancecrest Ltd v Asiwaju
[2005] EWCA Civ 117, [2005] 1 EGLR 40, per Neuberger LJ at paragraph 20.
3 Barclays Bank plc v Savile Estates Ltd [2002] EWCA Civ 589, [2002] 2 EGLR 16 (20 days held to be ample notice when all that the
landlord had to do was write a letter enclosing a cheque).
4 Barclays Bank plc v Savile Estates Ltd [2002] EWCA Civ 589, [2002] 2 EGLR 16.
5 Barclays Bank plc v Savile Estates Ltd [2002] EWCA Civ 589, [2002] 2 EGLR 16. In this case there was a provision that in default of
agreement by a stated date the rent was to be assessed by a surveyor appointed on the application of the landlord to the President of the
RICS. It was held that there was an implied term that the landlord would make an application to the President within a reasonable time after
the stated date. It was in respect of the implied term and a failure to apply under it that time was made of the essence by notice to the
landlord. By failing to make an application within the 20-day period specified in the notice the landlord lost his right to the rent review.
6 Factory Holdings Group Ltd v Leboff International Ltd [1987] 1 EGLR 135.
7 See Lancecrest Ltd v Asiwaju [2005] EWCA Civ 117, [2005] 1 EGLR 40, per Neuberger LJ at paragraph 18.
Page 827
(f) Unreasonable delay
HR A[4185]
Where time is not of the essence the question arises whether unreasonable delay by a party entitled to a rent review can
rob him of the right to the review. Some early authorities suggested that the right to a review might be lost in these
circumstances1. That is not a correct statement of the law today. Unreasonable delay by a party, even when combined
with hardship to the other party, does not of itself prevent the first party from initiating or continuing with a rent review.
There is no doctrine under which delay constitutes an abandonment of the right to a review2. A party faced with
unreasonable delay by the other party in taking a procedural step can usually make time of the essence by service of an
appropriate notice and so bring the delay to an end3.
HR A[4186]
1 See eg Telegraph Properties (Securities) Ltd v Courtaulds Ltd [1981] 1 EGLR 104.
2 Amherst v James Walker Goldsmith & Silversmith Ltd [1983] Ch 305, [1983] 2 All ER 1067. The landlord was entitled to initiate the
review by giving an assessment on or before 25 December 1974. It was held that, time not being of the essence in relation to this step, he
could give a valid assessment as late as 10 May 1979.
3 See Barclays Bank plc v Savile Estates Ltd [2002] 24 EG 152 and see para HR A[4183].
HR A[4187]
The ordinary principles of estoppel apply to the operation of rent reviews. A clear and unambiguous promise that a
party will not initiate or continue a rent review will, if acted upon by the other party, constitute a promissory or
equitable estoppel so that the party making the promise cannot resile from it1. The mere fact that there is delay in
initiating a review does not in itself constitute a representation or promise that the review will never be activated2.
HR A[4188]
1 For a consideration of promissory estoppel generally, see Cheshire, Fifoot and Furmston Law of Contract (13th edn, 1996) pp 101ff.
The need for a clear and unambiguous promise was stated by the House of Lords in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce
Marketing Co Ltd [1972] AC 741, [1972] 2 All ER 271.
2 James v Heim Gallery (London) Ltd [1980] 2 EGLR 119, (1980) 41 P & CR 269.
HR A[4189]
The law may therefore be summarised as being that a person may lose the right to a rent review by reason of his delay
Page 828
or associated conduct in operating the review machinery: (a) if there is an enforceable agreement that there will not be a
review; (b) if time is of the essence and a time limit is not observed; (c) if time is made of the essence by notice and
there is not compliance with the reasonable time for taking some step afforded by the notice; and (d) if a person makes a
clear and unambiguous promise that there will not be a review and the other party acts on that promise, ie a promissory
or equitable estoppel.
(g) Extension of period for commencing arbitration
HR A[4190]-[4200]
Where a rent review clause contains a time limit for a step to begin arbitral proceedings in respect of which time is of
the essence the court may in certain circumstances extend the time for taking that step under the Arbitration Act 19961.
This jurisdiction is therefore available only where the time limit is of the essence and it has not been complied with. It
applies only to a step to begin an arbitration (or to begin other dispute resolution procedures which must be exercised
before arbitral proceedings can be began). It does not, therefore, apply to steps such as the service of a trigger notice or
of a counter-notice proposing a rent2. It may apply to a failure to serve the type of counter-notice which is itself an
election that there shall be an arbitration3. Nor does it extend to a step to refer a dispute to the determination of an
expert as opposed to an arbitrator. It is possible that the jurisdiction only arises when the rent review clause itself makes
times of the essence in accordance with the principles explained earlier. If time is made of the essence by a notice to that
effect it is not a case where, in accordance with the words of the statute, the arbitration agreement itself provides that the
claim shall be barred unless the claimant takes a step to begin arbitral proceedings within the time fixed. Steps to begin
arbitral proceedings include a reference to an arbitrator, an appointment of an arbitrator and an application to some
person to appoint an arbitrator. The application for an order extending time may be made only after exhausting any
other arbitral process for extending time4. It is unlikely that a rent review clause will itself contain any procedure for
extending time. Notice of the application for an extension of time must be given to the other party5.
HR A[4201]
1 Arbitration Act 1996, s 12(1).
2 Richurst Ltd v Pimenta [1993] 2 All ER 559, [1993] 1 WLR 159, holding that a landlord's trigger notice was not a 'step to commence
arbitration proceedings' within the meaning of s 27 of the Arbitration Act 1950. This was the provision in force prior to the Arbitration Act
1996: see para HR A[4206].
3 Fox & Widley v Guram [1998] 1 EGLR 91; Pittalis v Sherefettin [1986] QB 868, [1986] 2 All ER 227, holding that such a
counter-notice was a 'step to commence arbitration proceedings' within the meaning of the Arbitration Act 1950, s 27.
5 AA 1996, s 12(2).
HR A[4202]
One or other of two conditions has to be fulfilled before the court can make an order extending time1. The first is that
the circumstances are such as were outside the reasonable contemplation of the parties when they agreed the provision
Page 829
as to the time limit, and that it would be just to extend the time. The second is that the conduct of one party makes it
unjust to hold the other party to the strict terms of the provision in question. Most instances of a failure to take a step in
good time to begin arbitration are likely to be due to simple error or inadvertence, and these do not easily fall within
either of the two conditions2. It is not a purpose of the statute to relieve people of the consequences of their own
errors3.
HR A[4203]
2 In Fox & Widley v Guram [1998] 1 EGLR 91 a tenant failed to elect for determination of the rent by an arbitrator within the three
months from the service of the landlord's trigger notice prescribed by the rent review clause where time was made expressly of the essence.
The failure was due to inadvertence. It was also suggested that the rent specified in the trigger notice was unreasonably high. It was held that
neither of these considerations brought the case within either of the two conditions.
3 The position under the previous law in s 27 of the Arbitration Act 1950 was different. See para HR A[4206].
HR A[4204]
Even if one or other of the conditions is fulfilled, the court still has a discretion on whether to grant an extension of
time1. If the discretion is exercised the court may extend the time for taking the step for such period and on such terms
as it thinks fit. The time may be extended before or after it has expired, and a second or further order may be made2.
HR A[4205]
1 The power under s 12(1) of the Arbitration Act 1996 is conferred by the use of the word 'may'.
HR A[4206]
The above provisions of the Arbitration Act 1996 came into force on 1 February 1997. Prior to this there had been a
similar power to extend time under the Arbitration Act 1950 which was exercisable on the wider ground that in the
circumstances of the case undue hardship would be caused if an extension was not granted1.
HR A[4207]
1 Arbitration Act 1950, s 27. The provisions of s 12 of the Arbitration Act 1996 apply to arbitral proceedings commenced on or after 1
February 1997: see s 84(2). See AA 1996, s 14 for the date on which arbitral proceedings are commenced for the purposes of the Act.
Page 830
(h) Computation of time
HR A[4208]
There are no special rules for the computation of time under rent review clauses. In some instances it will be a matter of
construing the words of a time provision to elucidate what is meant1. In other instances general principles governing the
computation of time will be of assistance. For example, a month means a calendar month2. The 'corresponding day'
principle may be of assistance, that is the principle that when a period measured in months runs from the last moment of
a numbered day in one month it ends on the corresponding day of the specified later month3. A further general principle
is that when a period is expressed as running 'from' or 'after' a specified date that date is not included in the computation,
but when the period is expressed as one 'beginning on' or 'commencing on' a specified date that date is included in the
computation4.
HR A[4209]
1 Eg in London & Manchester Assurance Co Ltd v G A Dunn & Co [1983] 1 EGLR 111 a landlord's trigger notice was to be served 'at any
time not earlier than 12 months prior to December 25, 1977'. The Court of Appeal held by a majority that the notice had to be given by 25
December 1977 and not later than that date.
2 Law of Property Act 1925, s 61. This provision applies to all instruments executed after the commencement of the Act.
3 Therefore, if a step such as the giving of a counter-notice has to be taken, say, not more than four months after the giving of a trigger
notice and the trigger notice was given on, say, 30 September the last day for the service of the counter-notice would be 30 January of the
following year: see Dodds v Walker [1981] 2 All ER 609, [1980] 2 EGLR 52.
4 Lester v Garland (1808) 15 Ves 248; Trow v Ind Coope (West Midlands) [1967] 2 QB 899, [1967] 2 All ER 900.
Page 831
review/Upwards and downwards reviews
Upwards and downwards reviews
HR A[4210]-[4220]
There are three broad forms which rent reviews can take:
(a) The review may be upwards only. In this case at each review date the rent can only increase above
the level which prevailed prior to the review. If the rental value of the property has fallen since the grant
of the lease or the previous review the rent will still remain the same. An obvious possible consequence
of such a review is that tenants are obliged to pay rents which exceed prevailing rental values. If they
wish to dispose of the lease during a review period where this is the case they will probably be obliged to
pay a reverse premium to an assignee in order to secure the assignment.
(b) The review may be upwards and downwards. As the name suggests this means that rents may rise
or fall at the review depending on how rental values have moved since the date of the grant of the lease
or the previous review.
(c) The review may be upwards and downwards but with a minimum or floor level below which the
rent cannot fall. The minimum is often the rent at which the lease was originally granted.
HR A[4221]
It has been explained earlier that the majority of reviews are upwards only, and suggestions have been made on why this
should be the prevailing practice1. Other elements of the machinery of the review are likely to reflect the fact that a
review is upwards and downwards. If it is of this type it will generally be appropriate either that the review is automatic
or that the right to give a notice initiating the review is available to the tenant as well as the landlord. A review where
the rent may be reduced will be of little use to a tenant if it is only the landlord who can initiate the review since if the
rental value of the demised premises has clearly fallen the landlord will not take any step to initiate a review which
would necessarily work against his interest2.
HR A[4222]
2 It is obviously important in such cases to ascertain whether the giving of a notice or some other step essential to the review to be taken
by the landlord (a) means that he has a genuine option whether there is to be a rent review, in which case he alone can decide whether to take
the step, or (b) is a part of the machinery of an automatic review, in which case if the landlord refuses to take the step the court may repair
the breakdown in the machinery and so ensure the operation of the review. See para HR A[3607], where this question is considered further.
HR A[4223]
Page 832
There may be a disputed point of construction on the category within which a particular rent review falls. In times of
generally rising rents the question is less likely to arise since there will be no purpose in a tenant asserting that the rent
may decrease. The point became of greater practical importance in the recession of the early and mid-1990s when some
commercial rental values dropped sharply. There seems an inherent sense of fairness in a rent review providing an
opportunity for rents under leases to fall as well as rise if market rents have generally fallen. None the less, there is no
presumption that rent review clauses are to be construed so as to produce such a result1. There is no reason to think that
an arms' length commercial transaction could not result in an upwards and downwards rent review provision subject to
the rent not falling below the floor of that initially payable in the lease2.
HR A[4224]
1 The Melanesian Mission Trust Board v Australian Mutual Provident Society (1996) 74 P & CR 297, [1996] NPC 188; Standard Life
Assurance Co v Unipath Ltd (1997) 75 P & CR 473, [1997] 2 EGLR 121; Hemingway Realty Ltd v Clothworkers of the City of London
[2005] 2 EGLR 36.
2 In New Zealand, a provision under which the rent on a review can never fall below that previously payable is called a 'ratchet clause':
see Norwich Union Life Assurance Society v Attorney General [1995] NPC 86; Australian Mutual Provident Society v National Mutual Life
Association of Australasia [1995] 1 NZLR 581; Board of Trustees of the National Provident Fund v Shortland Securities Ltd [1996] 1 NZLR
45, (CA of New Zealand) [1997] 1 NZLR 1 (Privy Council).
HR A[4225]
In the absence of a presumption one way or the other each case must rest on an examination of the precise language and
structure of the rent review provisions. A reference to the rent being increased at each review may be decisive in favour
of the review being construed as upwards only1. In one case the reviewed rent was on each review to be that previously
payable or such rent as might be determined by an expert. There was also a provision that if the rent was determined
after the review date the tenant should become liable to pay the difference between the rent determined and the previous
rent which he had actually paid since the review date. It was held that the review was upwards only and that the words
'whatever is the higher' had to be inserted into the first provision to make sense of it2.
HR A[4225.1]
1 See Secretary of State for the Environment v Associated Newspapers Holdings Ltd (1995) 72 P & CR 395, [1995] EGCS 166; Standard
Life Assurance v Unipath Ltd [1997] 2 EGLR 121.
2 Great Bear Investments Ltd v Solon Co-operative Housing Services Ltd [1997] EGCS 177.
Page 833
review/Third party determination
Third party determination
(a) General
HR A[4226]
If the parties cannot agree the amount of the reviewed rent the process will falter unless there is some means of
determination in default of agreement. Should the parties provide no machinery for this purpose or should the
machinery break down the court will itself determine the rent1. It is possible to provide that failing agreement some
person shall simply state what is to be the reviewed rent, though this would be unusual in a lease of commercial
property. The usual provision is that the determination in the absence of agreement shall be by an arbitrator or an expert.
Such a person is likely to be experienced in the field of valuation involved in determining an up-to-date rent. Both types
of proceedings have the advantage that they are private.
HR A[4227]
HR A[4228]
A third party determination will, of course, only be necessary in the event of an absence of agreement. Whether there
has been an agreement will be decided on the ordinary principles of the law of contract. It is necessary that there is a
consensus between the parties on all the issues discussed between them. Normally, the only issue will be the amount of
the reviewed rent, but there could be discussion on associated terms and an agreement on the rent may be dependent on
agreement on all the issues. An agreement reached 'subject to contract' is not binding in the absence of a further formal
document executed by the parties1. In principle, unless the lease states otherwise a binding agreement on the rent can be
made orally, but obviously there may be difficulty in proving such an agreement if its existence is later disputed. Where
the agreement is made between surveyors or other representatives of the parties each party should ensure that the agent
of the other party has actual authority (express or implied) to conclude the agreement on behalf of his principal. In
general, a surveyor probably does not have ostensible authority to bind his client2.
HR A[4229]
1 See Henderson Group plc v Superabbey Ltd [1988] 2 EGLR 155
2 Normally, a solicitor does not have ostensible authority to bind his client to a figure reached in negotiations unless it involves the
settlement of litigation: Eccles v Bryant and Pollock [1948] Ch 93, [1947] 2 All ER 865.
Page 834
HR A[4230]-[4240]
Rent review clauses often state that the matter may be referred to a third party in the absence of agreement. Often, a
time is specified for reaching agreement and a reference to a third party cannot be made until that time has elapsed, save
of course by consent. Naturally, there is nothing to stop the parties reaching agreement at any time if they are both
willing, and an agreement even during the course of an arbitration or while the award of the arbitrator is awaited is far
from unknown. A further frequently encountered type of provision is that the parties shall have a time in which they are
to attempt to agree the rent. If there is in fact no agreement within the time specified a reference to a third party for
determination will be valid even though the parties have not made the required attempt or any attempt to reach
agreement1.
HR A[4241]
1 Essoldo (Bingo) Ltd's Underlease, Re, Essoldo v Elcresta Ltd (1971) 23 P & CR 1; Laing Investment Co v G A Dunn [1982] 1 EGLR
129; Patel v Earlspring Properties Ltd [1991] 2 EGLR 131. This rule is associated with the principle that English law does not recognise an
agreement to agree or an enforceable obligation to negotiate: see Courtney & Fairbairn Ltd v Tolaini Bros (Hotels) Ltd [1975] 1 All ER 716,
[1975] 1 WLR 297.
HR A[4242]
There is sometimes discussion on whether it is preferable to provide for the determination in the absence of agreement
to be by an arbitrator or an expert. The two processes are fundamentally different. An arbitrator is a type of judge
appointed by the parties. His duty is fundamentally to decide the issue on the evidence before him not in accordance
with his own knowledge and expertise. His own expertise may assist him in evaluating the evidence but he remains
someone who reaches a decision on the basis of material before him rather than as an investigator of the facts. An expert
on the other hand is at bottom a valuer appointed to provide a valuation of the property. He can and should draw on all
relevant material known to him and should himself carry out all necessary investigations. The only difference between a
valuer providing a third party determination and a valuer who is just instructed by a person to value his property is that
in the former case the valuer has two clients with opposing interests to both of whom he owes an ordinary contractual
duty of care. An arbitrator is subject to the legislation governing arbitration which includes such matters as securing the
attendance of witnesses and which provides a limited opportunity to appeal to the courts on points of law. There is no
legislation governing the position of experts and there is only minimal control over their conduct by the courts.
HR A[4243]
The advantages of arbitration are said to be its greater formality, greater opportunity of testing the case of the other side,
greater transparency as to the whole procedure, a better procedure for getting points of law settled and a greater control
by the court. The advantages of an expert determination are said to be speed, lower costs and less formality. It may be
that determination by an expert is preferable in shorter and simpler disputes but many parties are disappointed at the
lack of opportunity to challenge that which an expert has done. It appears that in recent years there has been a trend
towards expert determinations assuming more and more of the formality and time and expense of arbitrations, with the
exchange of representations and counter-representations1.
Page 835
1 See article by Hazel Williamson QC in Estates Gazette, 5 November 2005, 129. The result of the process is that the advantage of a
speedy and relatively inexpensive determination of the revised rent is partly lost. A remedy may be that in leases of less valuable properties,
the parties should expressly provide in the rent review clause that if an expert is appointed to determine the reviewed rent he should be
required to carry out the whole exercise without assistance or receipt of representations from the parties, just as would an ordinary valuer
instructed by a party to value a property.
HR A[4244]
There may be a dispute on whether the person to be appointed to determine the rent is to act as an arbitrator or an
expert. This is a matter of the construction of the language used. References to disputes and formal procedures to be
adopted may point towards an arbitration being intended. A general provision for arbitration in the lease but no
reference to arbitration in the rent review clause may be an indication that in the latter case determination by an expert is
intended1.
HR A[4244.1]
1 Fordgate Bingley Ltd v Argyll Stores Ltd [1994] 2 EGLR 84.
HR A[4245]
The usual provision found in rent review clauses is that if the parties do not agree on the identity of an arbitrator or an
expert he is to be appointed on the application of one of the parties by the President of the Royal Institution of Chartered
Surveyors(RICS)1. On receipt of an application staff at the RICS check the lease to see that there is a power of
appointment and the appointment is then made. The President and his staff do not attempt to decide disputed questions
arising under the rent review provisions. This practice has been commended by the High Court and if a party wishes to
challenge the legality of an appointment, its proper course will be to raise the matter with the arbitrator or expert who
has been appointed. If the matter cannot be resolved otherwise it can be resolved by legal proceedings between the
parties, including, if necessary, the appointed arbitrator or expert2. For instance, there may be a dispute over whether
the application for an appointment was made within time limits specified in the lease or whether the person appointed
satisfies the criteria set out in the lease for an appointment. The court will decide questions of law or fact of the above
nature3. The appointment may involve some exercise of judgment on the part of the President, such as whether a
particular person who might be appointed is experienced in certain types of valuation in certain locations where there is
a requirement of the lease that the person to be appointed has such experience. In such cases the court will not interfere
unless it can be shown that the President has acted perversely or manifestly unreasonably in reaching his judgment4. It
appears that the President has no duty to make an appointment5. If he does make an appointment he probably enters
into a contract with the party on whose application the appointment is made and he may owe certain duties under that
contract to that party, such as a duty to exercise reasonable care in making the appointment6. It is also possible that the
President in these circumstances will owe a duty of care in tort to both parties7. It is possible that the President, when he
receives an application for an appointment by one party, is bound to notify the other party that an application has been
made but, if so, that is the limit of his duty; there need be no prolonged written interchange or any form of oral
proceedings prior to the appointment8.
HR A[4246]
Page 836
1 It was said in 2004 that the President received about 10,000 applications per year for the appointment of dispute resolvers of which
about 8,000 were concerned with rent reviews. The RICS provide guidance notes on the procedure involved. There is an application form
and the person applying for an appointment has to be pay a fee. The RICS have a dispute resolution service and applications are
administered by a team which in 2004 comprised 16 persons. In practice decisions on appointments are usually taken by a person within this
team on behalf of the President. The President maintains a list or panel of chartered surveyors willing to act as arbitrators or experts in
appropriate cases and the panel indicates the speciality of persons on it, eg 'prime retail'. Of course the President is not bound to appoint a
person from the panel and, if no person on the panel satisfied the criteria for an appointment specified in the lease or no such person was
willing to act, the President would be entitled to go beyond the panel.
2 United Co-operatives Ltd v Sun Alliance & London Assurance Co Ltd [1987] 1 EGLR 126. In the case of an expert the appropriate
procedure would be an action for a declaration. In the case of an arbitrator there may be proceedings under the Arbitration Act 1996: see
paras HR A[4288]-[4298]. Although the President is not a necessary party to such proceedings he may be made a party and may himself
apply to be joined in the proceedings. If a party believes that he would be prejudiced by the appointed person proceeding towards
determination of the rent while a dispute as to the validity of the appointment was being considered by the court, that person could apply to
the court for an order preventing the appointed person from proceeding prior to the determination of the court.
3 United Co-operatives Ltd v Sun Alliance & London Assurance Co Ltd [1987] 1 EGLR 126. An example given of when the court would
intervene would be if the President appointed a solicitor as the arbitrator when the lease stated that a surveyor should be appointed, or vice
versa. When the question is whether an application for an appointment has been validly made, for example within a time limit specified in
the lease, the question may have to be decided by reference to the procedure laid down by the President for the making of applications: see
note 1, and see Staines Warehousing Co v Montague Executor & Trustee Co [1987] 2 EGLR 130.
4 Epoch Properties Ltd v British Home Stores (Jersey) Ltd [2004] 48 EG 134. The power of the court to intervene in such cases is
therefore similar to the power of a court in the field of administrative law to review and, if necessary, quash the decision of a public body
where the degree of perversity or gross unreasonableness needed to justify the intervention of the court - often called 'Wednesbury'
unreasonableness from the decision of the Court of Appeal in Associated Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223.
5 See Epoch Properties Ltd v British Home Stores (Jersey) Ltd [2004] 48 EG 134 at para 56(9). The President enters into no contractual
commitment towards either of the parties to the lease that he will make an appointment. The parties simply rely on the established
mechanism and procedure which means that normally an appointment will be made. If the President for any reason refuses to make an
appointment there is a procedure under the Arbitration Act 1996 whereby the court can appoint an arbitrator: see s 18(2). In the case of an
expert it may be that the court will overcome the deficiency by itself deciding the reviewed rent or establishing some mechanism for doing
so: see Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444, and see para HR A[3607].
6 See Epoch Properties Ltd v British Home Stores (Jersey) Ltd [2004] 48 EG 134 at para 55(5).
7 In United Co-operatives Ltd v Sun Alliance & London Assurance Co Ltd [1987] 1 EGLR 126 Hoffmann J referred to but did not decide
this point.
8 Epoch Properties Ltd v British Home Stores (Jersey) Ltd [2004] 48 EG 134 at para 54, citing Board of Education v Rice [1911] AC 179,
per Lord Loreburn at p 182. Such duties to consult are usually found in public law: see Wade & Forsyth on Administrative Law (9th edition,
2004) Ch 14, discussing the right to a hearing and the audi alteram partem rule.
(b) Arbitration
HR A[4247]
Arbitration is a widely used procedure in commercial disputes of all sorts including those with an international element.
It is governed by special legislation now found mainly in the Arbitration Act 19961. A full treatment of the subject will
be found in specialist textbooks2.
HR A[4248]
Page 837
1 The Arbitration Act 1996 came into force in the main on 1 February 1997. The previous law was contained in the Arbitration Acts 1950
and 1979.
2 See 2 Halsbury's Statutes; Mustill and Boyd Commercial Arbitration (1989) and Russell on Arbitration (1997).
HR A[4249]
Arbitrations are contested on the basis of evidence as are court proceedings. It is therefore the duty of each party to put
his case to the arbitrator by adducing evidence in support of it. That evidence will come from an expert valuer who will
give his opinion of the rental value. Such a valuer has a duty to provide his honest opinion and to draw the attention of
the arbitrator to all material relevant to the formation of his expert opinion1. The arbitration may be conducted by
written representations, in which case only written evidence is submitted. Often, the procedure agreed between the
parties or laid down by the arbitrator is that each party prepares written evidence which is then exchanged, and finally
each party has an opportunity to submit a counter-representation which should be confined to commenting on the
evidence of the other party. The arbitration may be conducted more formally with an oral hearing before the arbitrator.
The experts on each side will then speak to their valuation and may be subject to cross-examination by an advocate on
the other side. It is usual even in the case of oral hearings that written material is exchanged between the parties in
advance of the hearing. An arbitration is therefore an adaptable procedure which can vary between a short exchange of
written submissions and a full blown hearing with numerous witnesses which can last many days2. The preparation of
evidence for use in an arbitration and the obtaining from the arbitrator of full and proper procedural directions
appropriate to the nature and scale of the arbitration are very important questions3.
HR A[4250]-[4258]
1 For a fuller consideration see para HR A[4345], in particular a consideration of a topic of substantial recent importance which is the
extent to which an expert valuer may give evidence in an arbitration where he is not truly independent but has some connection with one of
the parties.
2 A benefit of an oral hearing is that the parties can be sure that they have had an opportunity to comment on all points raised. It was said
by Colman J in Pacol Ltd v Joint Stock Co Rossekhar [1999] 2 All ER (Comm) 778 at p 787 that it is particularly important in arbitrations
which are conducted on documents alone that the arbitrator should be alive to the dangers of introducing into his award matters which have
never been in issue between the parties. In St George's Investment Co v Gemini Consulting Ltd [2005] 01 EG 96 an award was remitted to
the arbitrator because he had based a part of his award on a point which was not addressed by the parties in their written representations to
him so that the point had never been 'in the arena'.
3 A full consideration of the practical aspects of preparing for and conducting a rent review, together with draft directions for rent review
arbitrations with annotations, are found in Hill and Redman's Guide to Rent Review.
HR A[4259]
The arbitrator and the parties to an arbitration have been given wide statutory powers relating to procedural matters
which puts an arbitration in many ways on a like footing to court proceedings. The arbitrator may dismiss a claim in the
case of inordinate and inexcusable delay by the claimant1. If a party fails to attend a hearing an arbitrator may proceed
in his absence2. An arbitrator may make a peremptory order when an earlier order has not been complied with3. The
Page 838
court may make an order requiring a party to comply with a peremptory order4. With the permission of the arbitrator a
party may use the procedures available in court proceedings to compel the attendance of witnesses4. The arbitrator can
order the disclosure of documents, can order a claimant to give security for costs, can appoint experts, legal advisers or
assessors and can make interim and provisional orders5. Most of these powers are exercisable unless the parties agree
otherwise. Aspects of arbitrations into difficult and complicated rent reviews, particularly involving properties of high
value, may be similar to those applied in formal proceedings before courts and tribunals; for example, formal principles
of legal proceedings such as the need to cross-examine a witness may be important5.
HR A[4260]
2 AA 1996, s 41(4).
3 AA 1996, s 41.
4 AA 1996, s 42. See London and Leeds Estates Ltd v Paribas Ltd (No 2) [1995] 1 EGLR 102, [1995] 02 EG 134.
5 AA 1996, ss 34, 37, 38, 43.
6 The principle that the content of evidence should not be impugned unless it has been challenged by cross-examination was emphasised
in a case concerning rent reviews: see Epoch Properties Ltd v British Homes Stores (Jersey) Ltd (2004) 48 EG 134. The principle was said to
be not only a rule of professional practice in the conduct of a case but something essential to fair play and fair dealing with witnesses; see
Browne v Dunn (1893) 6 R 67, per Lord Herschell at pgs 70-71.
HR A[4261]
It sometimes emerges in arbitrations into rent reviews that some issue of principle arises, for example whether the rent
is to be a headline rent, which it is convenient to have decided prior to the determination of detailed questions of
valuation1.The attraction of deciding such questions as preliminary issues is that to do so may in the end save time.
There are three ways in which as a matter of procedure such preliminary issues can be determined.
(a) They may be determined by the arbitrator alone.

(b) They may be determined by the arbitrator with the assistance of a legal adviser or assessor.
(c) The parties may agree that they shall be decided by the courts.
The last course is only possible with the consent of the parties or of the arbitrator2. Arbitrators who are not lawyers
often welcome the introduction of a lawyer to advise them on legal questions and the second of the above three courses
is often that best designed to achieve the desired end3. The award of the arbitrator, whether or not he has been assisted
by a legal assessor, may be the subject of an appeal to the court on a question of law with the leave of the court, but the
fact that an assessor has given advice may be a factor which inclines a court against giving leave4.
HR A[4262]
Page 839
1 See paras HR A[3949]-[3965] for an explanation of headline rents.
2 See para HR A[4282] where this procedure is explained.
3 Section 37(1) of the Arbitration Act 1996 provides that unless the parties otherwise agree the arbitrator may appoint a legal adviser to
report to him. The adviser is often called a legal assessor, and barristers or solicitors who practice in the field of rent reviews are often
appointed. The usual procedure is that the issue or issues of law are formulated and the parties agree a timetable for the making of written
submissions and, possibly, counter-submissions to the legal assessor. The assessor then gives his written advice to the arbitrator. Sometimes
an oral hearing is arranged with the arbitrator and the assessor present. Section 37(1)(b) provides that the parties shall be given a reasonable
opportunity to comment on any advice offered by a legal adviser or assessor to the arbitrator. The effect is that before the arbitrator issues his
formal decision on the advice of his assessor the parties have a further opportunity to comment on or dispute that advice. This last aspect of
the procedure is sometimes unfortunate and cumbersome where there have been full written submissions on the issues. The making of
further comments would be akin to a draft judgment being subject to further substantive discussion and criticism by the parties after the close
of argument in a case. A possible convenient course is for the parties to agree in advance that this last step in the procedure is dispensed
with. Having received the advice of the legal assessor, and any comments on it if they are required, the arbitrator then issues his decision on
the issue or issues of law before him. In practice, arbitrators often state that they agree with the advice received on the issues and the reasons
given for that advice. However, it is important to remember that the formal decision is that of the arbitrator. All that he receives from the
assessor is advice. Consequently, it is quite lawful, although rare, for an arbitrator not to accept or follow the advice which he has received
from his legal assessor. In any event it is good practice for the arbitrator to consider carefully the advice received and to state that he has
done so before he issues his formal decision. Legal assessors should also be careful to confine their advice to questions of law and not to
usurp the function of the arbitrator on matters such as his discretion. For example, a preliminary issue may arise as to whether certain expert
evidence which a party proposes to adduce is admissible having regard to some connection between the expert witness and the party on
whose behalf he is to give evidence (a subject discussed in paras HR A[4347]-[4353]). A sensible course of action would be for a legal
assessor to explain to the arbitrator what are the legal principles which govern a decision on such a preliminary question and, where there is
a discretion to be exercised by the arbitrator in accordance with those principles, to leave that discretion to the arbitrator.
4 See paras HR A[4264]-[4266].
HR A[4263]
The control of the court over arbitrations is now contained in three provisions in the Arbitration Act 1996: (a) an appeal
to the court on a point of law; (b) an application to the court based on serious irregularity in the arbitration; and (c) a
challenge to the jurisdiction of the arbitrator.
HR A[4264]
Under the Arbitration Act 1950 a party to an arbitration could require the arbitrator to state a case for the consideration
of the court on a point of law. This procedure was considered unduly cumbersome and as something which reduced the
speed and finality expected with arbitration. Accordingly, it was replaced in the Arbitration Act 1979 by a procedure
which permitted an appeal on a question of law to the High Court against an award of an arbitrator but only with the
leave of the court. Certain conditions were laid down in the Act for the decision whether to grant leave, and further
guidelines were established by the courts themselves1. The Arbitration Act 1996 maintains the same system of
permitting an appeal on a question of law with the leave of the court and itself sets out criteria on whether leave should
be granted similar to those previously established by the courts. Many of the issues which arise during rent review
arbitrations are questions of valuation not of law, and the court has no jurisdiction to entertain an appeal on anything
except a question of law2.
HR A[4265]
Page 840
1 See The Nema [1982] AC 724, [1981] 2 All ER 1030; The Antaios [1985] AC 191.
2 Arbitration Act 1996, s 69. Matters such as whether or how premiums should be devalued or turned into a rental equivalent, and whether
any assistance may be gained from rating assessments, are clearly matters of valuation not of law: Safeway Stores v Legal and General
Assurance Society Ltd [2005] 1 P & CR 129.
HR A[4266]
The parties may agree that an appeal may be brought. Unless there is agreement (something which is unlikely to be
forthcoming from the party who has succeeded in the arbitration) leave will be granted only if the court is satisfied on
four matters1:
(a) that the determination of the question of law will substantially affect the rights of one or more of
the parties2;
(b) that the question is one which the arbitrator was asked to determine3;
(c) that, on the basis of the findings of fact in the award, either (a) the decision of the arbitrator on the
question is obviously wrong or (b) the question is one of general public importance and the decision of
the tribunal is at least open to serious doubt4, and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in
all the circumstances for the court to determine the question.
HR A[4267]
2 In Safeway Stores v Legal and General Assurance Company Ltd [2005] 1 P & CR 129, the arbitrator had made an obvious error of law
in that he had misunderstood the area demised under the hypothetical lease and had not properly understood the terms of the user clause in
the hypothetical lease. However, it was apparent from the way in which the arbitrator had used evidence from comparables to arrive at the
rent of the demised premises that his errors had had no significant effect on the rent which he determined so that it was impossible to say that
the decision on the point of law by the court would substantially affect the rights of the parties. In these circumstances, leave to appeal was
refused.
3 If a question of law was never put before the arbitrator during the arbitration proceedings, it may be too late to raise that question of law
by way of an appeal to the court since it will not be a question which the arbitrator was asked to determine: Marklands Ltd v Virgin Retail
Ltd [2004] 2 EGLR 43.
4 This requirement is based closely on the guidelines established by the courts in The Nema [1982] AC 724, [1981] 22 All ER 130 in
connection with applications for leave to appeal under the Arbitration Act 1979.
HR A[4268]
Certain ancillary provisions and restrictions govern applications for leave to appeal. An application has to be made
within 28 days of the award1. No application can be made unless the party applying has exhausted the limited power
which exists for an arbitrator to correct or clarify his award2. The court can order the arbitrator to give reasons for his
Page 841
award so that the court can properly consider any application or appeal before it3. An application for leave to appeal is
determined without a hearing unless it appears to the court that a hearing is required4.
HR A[4269]
2 AA 1996, s 70(2).
3 AA 1996, s 70(4).
4 AA 1996, s 70(5). Article 6.1 of the Convention for the Protection of Human Rights which creates the right of everyone to a fair and
public hearing in the determination of his civil rights and obligations, and s 6(3) of the Human Rights Act 1998, which requires courts to act
in a way which is compatible with convention rights, do not mean that in all circumstances an applicant for leave is entitled to an oral
hearing.
HR A[4270]-[4280]
When it grants leave and hears an appeal the court may confirm the award of the arbitrator or may vary it or remit it
back to the arbitrator for reconsideration in whole or in part or set it aside in whole or in part1. If the appeal succeeds on
the question of law raised the usual course would be a remission to the arbitrator for him to reconsider his award in the
light of the law as explained by the court. Arbitrators are sometimes willing to make an alternative award when a clear,
single point of law arises. What this means is that the arbitrator makes his award on the view of the law which he
favours but also states what his award would be (the so-called alternative award) if the other view of the law were
correct. The purpose is that if on an appeal the court decides that the other view of the law is correct all that it then
needs to do is to vary the award by substituting the alternative figure.
HR A[4281]
HR A[4282]
It is sometimes convenient to have a question of law authoritatively determined prior to the decision of the arbitrator.
Such a process can avoid time being wasted on evidence which on one view of the law may be unnecessary. It can also
reduce the likelihood of an appeal under the procedure just mentioned. There is nothing to stop the parties agreeing to
the court considering the matter on an application for declaratory relief in advance of the arbitration. However, if one
party seeks such relief and the other party asks for a stay of the proceedings on the ground that the matter is within the
remit of the arbitration agreement he is likely to obtain that stay1. Once an arbitrator has been appointed there is a
procedure under the Arbitration Act 1996 for an application to the High Court for the determination of a preliminary
question of law2. The application can be made only with the consent of all the parties to the arbitration or by one party
with the consent of the arbitrator. In the latter case the court must be satisfied that the determination of the question is
likely to produce substantial savings in costs and that the application was made without delay.
Page 842
HR A[4283]
1 Arbitration Act 1996, s 86.
2 AA 1996, s 45.
HR A[4284]
The second area of control by the court arises when a party to the arbitration can establish serious irregularity which has
caused or will cause substantial injustice to him1. A serious irregularity is an irregularity of one or more of the
following kinds:
(a) failure by the tribunal to comply with s 33 of the Arbitration Act 1996 (general duty of tribunal);
(b) the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction);
(c) failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the
parties;
(d) failure by the tribunal to deal with all the issues that were put to it;
(e) any arbitral or other institution or person vested by the parties with powers in relation to the
proceedings or the award exceeding its powers;
(f) uncertainty or ambiguity as to the effect of the award;
(g) the award being obtained by fraud or the award or the way in which it was procured being contrary
to public policy;
(h) failure to comply with the requirements as to the form of the award; or
(i) any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal
or by any arbitral or other institution or person vested by the parties with powers in relation to the
proceedings or the award.
These categories of irregularity replace the previous concept of misconduct which gave grounds for an intervention by
the court under the Arbitration Act 1950.
HR A[4285]
HR A[4286]
No leave of the court is needed for an application to the High Court on the ground of serious irregularity. However, as
with appeals on questions of law, the application must be made within 28 days of the award, and the applicant must first
exhaust any powers there may be to secure an amendment or clarification of the award where there has been a clerical
or similar error. If satisfied that the ground relied upon has been made out the court may remit the award to the
Page 843
arbitrator for reconsideration, set aside the award, or declare the award to be of no effect, in each case either in whole or
in part1. The fact that an arbitrator takes into account his own personal knowledge in evaluating the evidence does not
in itself amount to a serious irregularity2.
HR A[4287]
1 Arbitration Act 1996, s 68(3). A failure by the arbitrator to allow one party to deal with issues which have a substantial impact on the
award, eg a deduction for a notional rent-free period or its absence which neither party had raised or argued, may be a substantial irregularity
within the meaning of s 68 which justifies the Court exercising its discretion to remit the award to the arbitrator for further consideration:
Guardcliffe Properties Ltd v City and St James [2003] EWHC 215 (Ch), [2003] 25 EG 143. The same would be true of a decision by an
arbitrator to treat the premium paid in respect of a comparable transaction as a payment wholly for the cost of fitting out the comparable
premises as opposed to an element leading to a lower rent where there was no factual basis for that conclusion: Guardian Properties Ltd v
City & St James. An award was remitted to the arbitrator for reconsideration when his valuation had determined a question (whether there
should be a discount to the rent on account of onerous terms in the lease) which had not been put before him by the parties in their written
representations. In addition, the arbitrator had confused two valuation methodologies: see St George's Investment Co v Gemini Consulting
Ltd [2004] EWHC 2353 (Ch), [2005] 1 EGLR 5. In this case, the arbitrator had used a particular comparable, an award of a different
arbitrator relating to premises on a different floor in the same building as the subject premises, and had adjusted the rent downwards by 9%
as an adjustment for a difference in the terms of the two leases. The serious irregularity was that the landlord had no proper opportunity
within the written representations procedure to deal with the point and that the arbitrator seems not to have understood that the arbitrator who
dealt with the comparable premises had specifically declined to make a downwards adjustment for the terms in question. However, an award
will only be remitted under s 68 where it can be seen that the procedure adopted by the arbitrator fell so far below that which could
reasonably be expected of the arbitral process that the Court could be expected to take action, and s 68 is said to be regarded as a long stop
so that it should only be used in extreme cases where the arbitrator has gone so far wrong in his conduct of the arbitration that justice calls
for a remedy: Warborough Investments Ltd v Robinson [2003] New Property Cases 75, per Jonathan Parker LJ.
2 Checkpoint Ltd v Strathclyde Pension Fund [2003] EWCA Civ 84, [2003] 14 EG 124. However, an arbitrator does not have blanket
permission to use his own expert knowledge to arrive at an award. If he proposes to take into account matters which have not been ventilated
in evidence or discussed by the parties it is his duty to inform the parties of the matter and to invite their comment: see St George's
Investment Co v Gemini Consulting Ltd [2005] 01 EG 96. The principle was explained as follows by Bingham J in Zermalt Holdings SA v
Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14 at p 15:
'If an arbitrator is impressed by a point that has never been raised by either side then it is his duty
to put it to them so that they have an opportunity to comment. If he feels that the proper approach
is one that has not been explored or advanced in evidence or submission then again it is his duty
to give the parties a chance to comment. If he is to any extent relying on his own personal
experience in a specific way then that again is something that he should mention so that it can be
explored. It is not right that his decision should be based on specific matters which the parties
have never had the chance to deal with, nor is it right that a party should first learn of advance
points in a decision against him.'
HR A[4288]
The third area of control by the court concerns the jurisdiction of the arbitrator. Arbitrators have power to rule on the
question of their own jurisdiction1. The questions which arise relate to what is called substantive jurisdiction, that is
whether there is a valid arbitration agreement, whether the arbitral tribunal is properly constituted, and what matters
have been submitted to arbitration in accordance with the arbitration agreement. A party who objects to the substantive
jurisdiction of the arbitrator should raise the matter at the outset of the proceedings or as soon as possible after the
matter alleged to be beyond the jurisdiction of the arbitrator is raised. A later objection can be raised if the arbitrator
Page 844
considers that the delay is justified2.
HR A[4289]
2 AA 1996, s 31.
HR A[4290]-[4298]
An arbitrator, faced with an issue as to substantive jurisdiction, can rule on the matter when raised in an award as to
jurisdiction or can deal with the objection in his ultimate award on the merits1. A party who is dissatisfied has two
courses open to them. There is a power to apply to the High Court for a preliminary determination on the question of
jurisdiction. After an award is made an application can be made to the High Court challenging the award as to its
substantive jurisdiction2.
HR A[4299]
2 AA 1996, s 67.
HR A[4300]
The general law today is that an appeal lies from the High Court to the Court of Appeal with the permission either of the
High Court or of the Court of Appeal. There are special restrictions in respect of appeals on questions of law, the
determination of preliminary points of law and challenges to the jurisdiction of an arbitrator. Under the arbitration
procedures just explained there is no appeal to the Court of Appeal from the decision of the High Court not to give leave
to appeal to that court or a decision of the High Court that the conditions specified for the consideration of a preliminary
point of law or a preliminary point of jurisdiction have not been met. If the High Court does adjudicate on any of these
questions there is no appeal to the Court of Appeal from the decision of the High Court without the leave of the High
Court which will not be given unless the court considers that the question is one of general importance or is one which
for some other special reason should be considered by the Court of Appeal1. The effect is that however much the Court
of Appeal considers that the decision of the court below was in error, it normally has no power to intervene if that court
has not given leave to appeal2. Nonetheless, the Court of Appeal has a residual jurisdiction to give relief in a case of
unfairness. One instance in which the residual jurisdiction exists and may be exercised is where the process by which
the High Court decides whether to grant leave to appeal to itself on a question of law does not comply with Article 6 of
the European Convention on Human Rights as applied in this country by the Human Rights Act 19983.
HR A[4301]
Page 845
1 Arbitration Act 1996, s 69(6),(8): appeal on point of law; s 45(5),(6): determination of preliminary point of law; s 38(5),(6):
determination of preliminary point of jurisdiction. See Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd [2001] QB
388, [2001] 1 All ER 257, CA.
2 It is not clear why the Court of Appeal does not have the power to give leave to appeal in the above instances. The absence of this power
on the part of the Court of Appeal can cause difficulties. An instance is the decision of Walton J on appeal from an arbitrator in National
Westminster Bank plc v Arthur Young McLelland Moores and Co (a firm) [1985] 2 All ER 817, [1985] 1 WLR 1123n where the Judge
refused leave to appeal and reached a decision which was clearly demonstrated by subsequent decisions, including a decision of the Court of
Appeal to be incorrect on the question of whether the hypothetical lease should contain rent reviews. See paras HR A[3926]-[3927] and HR
A[4330].
3 North Range Shipping Ltd v Seatrans Shipping Corporation [2002] EWCA Civ 405, [2002] 1 WLR 2397, CA. It was held in BLCT Ltd
v J Sainsbury Plc [2004] 2 P & CR 32 that the fact that an applicant for leave to appeal to the High Court had his application considered on
paper only and was not given an oral hearing of his application was not such an unfairness or breach of Article 6 of the European
Convention as would lead the Court of Appeal to intervene. Section 6(5) of the Arbitration Act 1996 provides that the High Court shall
determine an application for leave to appeal without a hearing unless it appears to the court that a hearing is required.
(c) Expert determination
HR A[4302]
The function of an expert is very different from that of an arbitrator. An expert should carry out himself all necessary
investigations for the purposes of his valuation and should apply his own experience and expertise towards making his
valuation. For instance, a valuer who is not familiar with the market in a particular area should take steps to inform
himself of the values of local properties and of any other circumstances which might affect value 1. A person acting as
an expert is not obliged to make findings on submissions made to him in the same way as a court or an arbitrator; it
seems that he may even reject matters which have been agreed between the parties if he does not himself agree with
those matters2. In many cases he will receive representations from the parties and while he will naturally take these into
account they do not absolve him of the duty to carry out his own investigations. A benefit to an expert of receiving
submissions from the parties is that if these submissions refer to a number of comparables the expert may feel satisfied
as a reasonable surveyor that these comparables give him sufficient guidance and that it is not necessary for him to seek
further comparable evidence by his own investigations3. He is not obliged to provide reasons for his decision unless the
terms of his appointment require this, although he may choose to do so. He is entitled to take further specialist advice on
questions such as matters of law if he thinks it necessary to do so. An arbitrator is immune from negligence in regard to
his functions in the arbitration4. An expert owes a duty of care to his clients and can be sued by either party for damages
for professional negligence if he fails to observe that duty. The standard of care required of an expert who determines
the rent on a rent review is that of a reasonably competent surveyor. The position in law of an expert appointed to
determine a valuation dispute between two parties must be clearly distinguished from the position of an expert who is
instructed to provide a report and to give expert evidence in litigation or arbitration on behalf of a party. An expert of
the latter description enjoys immunity from claims for negligence5.
HR A[4303]
1 Baxter v FW Gapp & Co Ltd [1938] 4 All ER 457 (appeal dismissed at [1939] 2 KB 271, [1939] 2 All ER 752, CA).
2 Palacath Ltd v Flanagan [1985] 2 All ER 161.

Page 846
3 Wallshire Ltd v Aarons [1989] 1 EGLR 147. The fact that the expert does not consult with another expert who is conducting a
contemporaneous rent review on nearby premises where similar questions may arise for consideration may not be proof of negligence:
Curry's Group plc v Martin [1999] 3 EGLR 165.
4 Arenson v Casson Beckmon Rutley & Co [1977] AC 405, [1975] 3 All ER 901; Palacath Ltd v Flanagan [1985] 2 All ER 161.
5 Stanton v Callaghan [1998] 4 All ER 961. The immunity extends to the preparation of reports and participation in joint and agreed
statements. The reason is said to be that a witness owes no duty to anyone except to the court and that his only duty is to tell the truth and to
assist the court. However, it seems that expert witnesses may be ordered to pay wasted costs: Phillips v Symes [2004] EWHC 2336 (Ch).
Advocates, whether barristers or solicitors, enjoy no such immunity from actions for negligence: Arthur J S Hall & Co (a firm)v Simons
[2002] 1 AC 615.
HR A[4304]
It is often said that valuation is not an exact science and that, when arriving at the rental value of property, there is no
figure which alone is correct. Normally there is a range or bracket of values within which reasonably competent valuers
may differ as to the exact figure to be adopted1. It is clear that, unless the valuer has acted negligently in some way in
his approach or methodology, he will not be negligent, providing his valuation falls somewhere within the acceptable
limits2. The extent of the bracket is a matter for evidence in each particular case. A span of 10% on either side of a
notionally correct figure is often taken as the acceptable bracket. However, where the valuation is particularly difficult,
for instance where there are no good comparables or where some method of valuation such as a residual valuation
where it is difficult to be precise is necessary, the bracket may be rather greater3. A question which has caused some
conflict of authority is whether a valuer who has determined a figure within the bracket may nonetheless be liable for
negligence because he has made an error of some sort. For example, suppose that the bracket for the rental value of
property is between £28,000 and £32,000 per year, and suppose that the valuer determines the rent at £31,000 per year
but, apart from an admitted error in his method (eg misunderstanding the facts of a comparable transaction), he would
have determined the rent at £28,000 per year.
HR A[4304.1]
1 See Singer and Friedlander Ltd v John D Wood & Co [1977] 2 EGLR 84 per Watkins J at p 86; Belvedere Motors Ltd v King [1981] 2
EGLR 131.
2 Zubaida v Hargreaves [1995] 1 EGLR 127, CA per Hoffmann LJ at p 128. In Preferred Mortgages Ltd v Countrywide Surveyors Ltd
[2005] 31 EG 81 (CS), it was held that the valuer would not have been liable even if his valuation had fallen outside the appropriate bracket
since he had displayed the necessary degree of skill, care and competence.
3 See eg Nykredit Mortgage Bank plc v Edward Erdman Group Ltd [1996] 1 EGLR 119 at p 120, per Staughton LJ. It will therefore be
usual to have evidence from expert valuers as to what is the permissible bracket but, in the absence of that evidence, a court is entitled to use
its own judgment on the basis of such evidence as is brought forward in order to determine the bracket. In Preferred Mortgages Ltd v
Countrywide Surveyors Ltd [2005] 31 EG 81, the property being valued was unusual in that it was a chapel converted to residential use but
without ordinary facilities, such as mains electricity, water and drainage. It was held that a wide bracket of 15% was appropriate.
HR A[4305]
One view, backed by substantial authority, is that the tenant has no cause of action against the valuer because he cannot
surmount the initial burden of showing that the figure determined as the value was outside the permissible range1. The
second view is that in these circumstances the valuer was negligent, and is liable for the loss caused to the tenant by his
Page 847
error2. The second view is clearly preferable. The fact that the valuer happened to get to a result within what is in any
event an uncertain bracket is no logical reason for his being absolved from the consequences of his negligence. To
revert to the example in para HR A[4304], it seems absurd that the valuer escapes liability for his negligent error on the
figures given, but would be liable if his valuation, motivated by the same error, had been £32,500 per year.
HR A[4305.1]
1 Mount Banking Co Ltd v Brian Cooper & Co [1992] 2 EGLR 142; Craneheath Securities v York Montague Ltd [1996] 1 EGLR 130;
Legal & General Mortgage Services Ltd v HPC Professional Services [1997] PNLR 567; Merivale Moore plc v Strutt & Parker [1999] 2
EGLR 171, CA; Currys Group plc v Martin [1999] 3 EGLR 165.
2 Lion Nathan Ltd v C-C Bottlers [1996] 1 WLR 1438, PC, where the point is clearly explained by Lord Hoffmann at p 1445. This is a
decision of the Privy Council on an appeal from New Zealand, so that the decisions of the Court of Appeal referred to in footnote 1 may bind
courts in this country in accordance with the rules of precedent: see Currys Group plc v Martin [1999] 3 EGLR 165 at p 170. See also Arab
Bank plc v John D Wood (Commercial) Ltd [1999] EGCS 133, CA per Mance LJ.
HR A[4306]
A question which sometimes arises is that of challenging the determination of an expert in the courts. The question
arises in two circumstances, one where a determination has been made and one where the decision of the court is sought
prior to the expert issuing his determination. The same principles apply to both sets of circumstances. The critical point
is whether the rent review provisions specify that a particular issue is wholly and exclusively within the jurisdiction of
the expert. If they do so specify then the jurisdiction of the court is excluded and the court cannot and will not consider
the issue. On the other hand the rent review provisions may not have this effect, in which case the court has jurisdiction
to consider and reach a decision on the issue1. Which conclusion is correct is a matter of the construction of the rent
review provisions. On such a question of construction each lease must depend on its own terms and be read in its own
context, and only limited assistance can be gained from comparing one document with another2. For example, if the
lease provides that the expert is to determine the open market rental value of the demised premises and gives no further
directions it is unlikely that the court would have jurisdiction to decide the question of the basis on which the market
rent was to be determined. It would be a question exclusively for the expert. However, if the lease provides more
detailed guidance by way of specified assumptions to be made and matters to be disregarded (as is usually the case) the
court is likely to have jurisdiction to interpret the meaning of the assumptions and disregards. In the latter case the
question of whether the expert is acting within his contractual remit may depend on the correct interpretation in law of
the assumptions and disregards3. It is therefore of the greatest importance to determine whether a particular issue is
something which is within the contractual power of the expert so that his decision on it, whether of law or of fact,
cannot be questioned in a court4, or is something which defines the ambit of the contractual power of the expert, so that
the court has jurisdiction to decide it. Where the expert has wrongly interpreted and applied a provision which defines
the limits of his power he is sometimes said to have answered the wrong question. Earlier cases have suggested that the
courts will be slow to hold that an issue is in the second category5, but more recent authority tends to support the
jurisdiction of the court to intervene6. Even if the question in dispute is one on which the expert has exclusive
jurisdiction the court will intervene in the case of fraud or collusion on the part of the expert7.
If the issue in dispute is in the second category, so that the court has jurisdiction to decide it, there is still a discretion as
to whether the court will do so, presumably on the principle that the relief sought is declaratory and that the court has a
discretion whether or not to make a declaration of the rights of the parties8. Where proceedings are brought after the
expert has made his decision and the allegation is that he has exceeded his contractual power by misinterpreting a
condition on the exercise of that power it is not easy to see the circumstances in which the court would refuse even to
consider whether he has done so.
Page 848
The present state of the law on this subject is similar to that which applies in administrative law to the question whether
an inferior tribunal has exceeded its jurisdiction. The classical doctrine is that the court will decide whether the tribunal
has exceeded its jurisdiction but, if the tribunal has acted within its jurisdiction, the court has no power to intervene
even if the decision is, in the view of the court, incorrect9.
The current law as to the jurisdiction of the court to intervene in the decisions of experts who determine rent reviews
may be summarised as follows.
(a) The court will declare void a determination which is tainted by fraud or collusion.
(b) Subject to this, if, as a matter of the interpretation of the lease, a question has been left to the
exclusive power of an expert to determine the court has no jurisdiction to intervene and substitute its
view of the correct answer to the question. The question so left to the exclusive jurisdiction of the expert
may be one of fact or of law.
(c) Where the dispute between the parties is as to a question which defines the limits of the contractual
power of the expert a court has jurisdiction to determine that question.
(d) The jurisdiction of the court to determine questions of this last kind my be exercised before or after
the determination of the expert, but it is a discretionary jurisdiction10.
HR A[4307]
1 National Grid Co plc v M25 Group Ltd [1999] 1 EGLR 65, [1999] 08 EG 169, CA; Director General of Telecommunications v Mercury
Communications Ltd [1996] 1 WLR 48, HL.
2 Norwich Union Life Assurance Society v P & O Property Holdings Ltd [1993] 1 EGLR 164, per Sir Donald Nicholls V-C at p 166.
3 See National Grid Co plc v M25 Group Ltd [1999] 1 EGLR 65, [1999] 08 EG 169, CA.
4 Jones v Sherwood Computer Services plc [1992] 2 All ER 170, [1992] 1 WLR 277, CA.
5 Nikko Hotels (UK) Ltd v MEPC plc [1991] 2 EGLR 103; Pontsarn Investments Ltd v Kansallis-Osake-Pankki [1992] 1 EGLR 148;
Morgan Sindall plc v Sawston Farms (Cambs) Ltd [1999] 07 EG 135.
6 National Grid plc v M25 Group Ltd [1999] 1 EGLR 65, [1999] 08 EG 169, CA.
7 Jones v Sherwood Computer Services plc [1992] 2 All ER 170, [1992] 1 WLR 277, CA.
8 National Grid plc v M25 Group Ltd [1999] 1 EGLR 65, [1999] 08 EG 169, CA.
9 See Wade & Forsyth on Administrative Law (9th edition, 2004) Ch 8. There has arisen in this field a doctrine that an error at law by the
inferior tribunal or body is always an excess of jurisdiction: see Pearlman v Keepers and Governors of Harrow School [1979] QB 56, [1979]
1 All ER 365. In Pontsarn Investments Ltd v Kansallis-Osake-Pankki [1992] 1 EGLR 148 the argument that a similar doctrine should apply
to decisions by experts was rejected as not appropriate in the field of private law.
10 In British Shipbuilders v VSEL Consortium plc [1997] 1 Lloyd's Rep 106 Lightman J laid down the principles which governed the
power of the court to intervene in relation to the determination of an expert. These principles were considered by Pomfrey J at first instance
in National Grid plc v M25 Group Ltd [1999] 1 EGLR 65, [1999] 08 EG 169, CA). The principles must now be read in the light of the
decision of the Court of Appeal in the latter case. The five principles were:
Page 849
(a) Questions as to the role of the expert, the ambit of his remit (or jurisdiction) and the
character of his remit (whether exclusive or concurrent with a like jurisdiction vested in the court)
are to be determined as a matter of construction of the agreement [under which the expert is
appointed].
(b) If the agreement confers upon the expert the exclusive remit to determine a question
(subject to (c) and (d)), the jurisdiction of the court to determine that question is excluded
because (as a matter of substantive law) for the purposes of ascertaining the rights and duties of
the parties under the agreement the determination of the expert alone is relevant and any
determination by the court is irrelevant. It is irrelevant whether the court would have reached a
different conclusion or whether the court considers that the expert's decision is wrong, for the
parties have in either event agreed to abide by the decision of the expert.
(c) If the expert in making his determination goes outside his remit, for example, by
determining a different question from that remitted to him or in his determination fails to comply
with any conditions which the agreement requires him to comply with in making his
determination, the court may intervene and set his decision aside. Such a determination by the
expert as a matter of construction of the agreement is not a determination which the parties
agreed should affect the rights and duties of the parties, and the court will say so.
(d) Likewise the court may set aside a decision of the expert where the agreement so provides
if his determination discloses a manifest error.
(e) The court has jurisdiction ahead of a determination by the expert to determine a question as
to the limits of his remit or the conditions which the expert must comply with in making his
determination, but (as a result of procedural convenience) will (save in exceptional
circumstances) decline to do so. This is because the question is ordinarily merely hypothetical,
only proving live if, after seeing the decision of the expert, one party considers that the expert got
it wrong. To apply to the court in anticipation of his decision (and before it is clear that he has got
it wrong) is likely to prove wasteful of time and costs--the saving of which may be presumed to
have been the, or at least one of the, objectives of the parties in agreeing to the determination by
the expert.
HR A[4307.1]
There is no clear authority on the attitude which a court would take if it were shown that an expert had failed to observe
the fundamental tenets of natural justice, for example if he had heard and considered representations from one party but
had declined to listen to representations from the other party. It is probably correct to say that compliance with
fundamental principles of justice is impliedly a condition precedent to the acceptance by a party of the decision of an
expert. If so, a failure to comply with such principles would entitle the court to set aside the decision in accordance with
the above principles.
Page 850
review/The date from which rent becomes payable
The date from which rent becomes payable
HR A[4308]
The parties may settle the amount of the reviewed rent by the review date, but in many cases agreement may be reached
only at a later date. If the question has to go to the determination of an arbitrator or an expert it is unlikely that it will be
settled by the review date since it is not generally practicable for valuers to determine a value of property on a given
date in advance of that date1. Consequently, in many cases the reviewed rent is not determined until after the review
date, and sometimes not until some considerable time after that date. The question is when the new rent becomes
payable. Three points need to be considered: (a) it must be ascertained from what date the new rent is payable; (b) it
must be ascertained what mechanism there is for the payment of any arrears accrued due; and (c) there is the matter of
interest. A reviewed rent is generally higher than the previous rent so that the questions relate to the payment of extra
rent. In principle the same answers should apply if the result of the rent review is a decrease in the level of rent payable.
HR A[4309]
1 See para HR A[3708]. The reason is that events which affect the rental or other value may occur between the date of the determination
and the review date.
(a) The date
HR A[4310]
In nearly all cases the reviewed rent will be payable from the review date in substitution for the rent previously payable.
A well drawn rent review clause will provide expressly that this is to occur. In the absence of an express provision it
will be held as a matter of construction that this was the intention of the parties1. It would be a very unusual express
provision which stated that the rent did not become payable in respect of any review until it had actually been
determined. Such a provision would be an incentive to delay for the person against whose interests the review was
likely to work.
HR A[4311]
1 Bailey (CH) Ltd v Memorial Enterprises Ltd [1974] 1 All ER 1003, [1974] 1 WLR 728. This decision was approved by the House of
Lords in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, [1977] 2 All ER 62.
(b) The mechanism

Page 851
HR A[4312]-[4320]
Rent, at any rate under commercial leases, is usually payable quarterly in advance. If the reviewed rent has not been
determined by the review date the previous rent will remain payable until the determination. If the rent is payable
quarterly in arrear not in advance no problem will, of course, arise if the determination takes place after the review date
but before the next quarter day. A late determination of the rent will mean that a lump sum of arrears (ie the difference
for each quarter from the review date to the date of determination between the amount of the previous rent and the
amount of the new rent) will be payable. Many rent review clauses specify how and when this lump sum is to be paid,
either at the date of the determination or on the next day for the payment of rent after the determination, usually the next
quarter day. Where the review provisions do not provide the answer the lump sum of accumulated arrears will be
payable on the next rent day after the determination, in addition of course to the ordinary rent due on that day1.
HR A[4321]
1 South Tottenham Land Securities Ltd v R & A Millett (Shops) Ltd [1984] 1 All ER 614, [1984] 1 WLR 710. There is no reason why a
landlord should be kept out of his money any longer than is necessary and it is arguable that it might have been better if the accumulated
arrears had been held to be payable as soon as the reviewed rent had been determined.
HR A[4322]
In summary, in the event of a late determination of the reviewed rent, and subject always to an express provision to the
contrary, (a) the previous rent will continue to be payable from the review date, (b) when the reviewed rent is
determined a calculation should be done of the total additional amount which becomes payable, and (c) that total
additional amount will be payable on the next date for the payment of rent after the date of the determination. In
principle the same process applies if the rent is decreased as a result of the rent review save that, of course, a lump sum
of overpayments will then be payable by the landlord to the tenant on the next rent day.
(c) Interest
HR A[4323]
There is no implied term that interest will be payable in respect of the late payment of rent in the circumstances under
consideration1. Often, leases provide expressly for payment of interest. Until 1997 a landlord who was kept out of his
money, sometimes for a considerable period, had no entitlement to interest in the absence of an express provision in the
lease. This is still the situation today where the reviewed rent is determined by agreement or by the decision of an
expert. However, where the rent is determined by arbitration a power to award interest has been conferred on arbitrators
by the Arbitration Act 1996.
HR A[4324]
Page 852
1 Trust House Forte Albany Hotels Ltd v Daejan Investments Ltd [1980] 2 EGLR 123.
HR A[4325]
The Act gives the arbitrator a wide discretion over the award of interest1. The discretion is as to: (a) whether interest
should be awarded; (b) the rate of interest; (c) whether interest is simple or compound; (d) the sums on which interest is
awarded; and (e) the period over which it is awarded. The jurisdiction is somewhat more flexible than that available in
the High Court and the county court where, for instance, only simple interest can be awarded2. An award by an
arbitrator in a rent review arbitration will nearly always be of a declaratory nature, that is it will declare what is the
amount of the reviewed rent rather than ordering that a sum of money be paid. The jurisdiction of the arbitrator to order
the payment of interest extends to the making of awards of a declaratory nature3.
HR A[4326]
1 Arbitration Act 1996, s 49. The new legislation came into effect on 1 February 1997.
2 See Supreme Court Act 1981, s 35A; and see Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC
669, [1996] 2 All ER 961.
HR A[4327]
It is too early for there to be any wide experience of how the new jurisdiction will be exercised. Certain points of
principle may be mentioned:
(a) An arbitrator should not try to add to or reverse any express provision which the parties have made
in the lease to deal with interest on late payment. It is for the parties to agree what they wish about their
financial relationship.
(b) In the absence of an express provision it will generally be appropriate to order the payment of
interest. An exception will be where the landlord has himself brought about or contributed to any delay
in the determination of the rent. In some such cases it may be proper to order that interest shall run for
only a part of the period.
(c) Interest is meant to compensate the landlord for being kept out of money which would otherwise
have been paid to him. It follows that the rate of interest can properly be related to either that at which
the landlord could borrow the money or that at which he could invest it if it had been paid to him.
(d) In the commercial field there is a strong case for awarding compound interest, calculated with
appropriate rests.
(e) It must be remembered that what a landlord will generally have failed to obtain on a late
determination is an amount of rent each quarter day from the review date to the date on which he is paid
the total balance due. Interest should therefore relate to these periods. It would plainly be unjust that
interest on the whole accumulated rental shortfall should run from the review date to the ultimate date of
payment since most of it will not have been payable on the review date.
Page 853
review/Recording the rent review
Recording the rent review
HR A[4328]
When the reviewed rent is determined its proper recording is as important as the recording of the rent initially payable
under the lease. The reviewed rent will constitute the obligation of the parties for the whole period covered by the
review and may have an effect beyond it. It may be a platform below which the rent cannot fall on the next review.
Some rent review clauses provide that the amount of the reviewed rent is to be endorsed on the lease by way of a
memorandum. The means of the determination of the reviewed rent may take a number of forms. There may be an
agreed amount settled in an exchange of correspondence. The rent may be determined by the operation of a default
provision, for example, it may be that stated in a landlord's notice where the tenant fails to serve notice in time objecting
to the amount so stated within the prescribed time and time is of the essence. The rent may be determined by the
decision of an arbitrator or an expert. In these last cases there will at least be a final determination or award. In other
cases the determination may obviously be less formal. It is therefore excellent practice if the amount of the reviewed
rent is recorded by a memorandum on the lease and the counterpart lease even if the lease does not require that this be
done.
HR A[4328.1]
The determination of the reviewed rent may have future implications for the parties. If the rent has been decided by an
arbitrator and in arriving at his decision the arbitrator has decided certain matters of principle, such as the meaning of
parts of the rent review clause, then an issue estoppel may arise. An issue estoppel means a decision on an issue within
the arbitration which was necessary if the arbitrator was to arrive at a final figure. The principle is that the decision on
that issue thereafter binds the parties to the lease including their successors in title. Obviously this may be important at
future arbitrations where a party will not be able to raise again the issue which has been decided but will be bound by
the decision1.
HR A[4328.2]
1 An issue estoppel may arise out of the decision of a court or of an arbitrator. The doctrine of issue estoppel is not wholly inflexible and
in special circumstances a court has a jurisdiction to allow a party to re-open a point on which he would normally be bound by the principle
of issue estoppel. Estoppel generally, including issue estoppel, is of course a general aspect of the law. There is a good example of the
operation of the doctrine within the area of rent reviews. As explained in paras HR A[3926]-[3927], the general rule is that the hypothetical
lease will be subject to rent reviews on the same terms as the actual lease. An early decision of Walton J, on appeal from an arbitrator, in
National Westminster Bank plc v Arthur Young McLelland Moores and Co (a firm) [1985] 2 All ER 817, [1985] 1 WLR 1123n was contrary
to this principle. The premises the subject of the decision were Rolls Buildings in Fetter Lane in central London. The decision of Walton J
was in respect of one rent review under the lease. By the time of a subsequent review the decision of Walton J had been shown to be wrong
in law by a number of subsequent decisions. The question was whether the parties to the lease on the subsequent review were to be held to
the decision of Walton J by reason of the principle of issue estoppel. In Arnold v National Westminster Bank plc [1991] 2 AC 93, [1991] 3
All ER 41 the House of Lords held that there were special circumstances which justified a party not being bound by an issue estoppel, the
special circumstances being that the decision which in that case would otherwise have given rise to the issue estoppel had been shown
subsequently to be wrong by a later line of more authoritive decisions.
Page 854
HR A[4328.3]
A further aspect of the law of estoppel which may be of relevance to agreements reached in the context of rent reviews
is estoppel by convention. This component of the law of estoppel arises where parties to a contract have operated the
contract under a common but erroneous assumption of fact or of law. One party may be prevented in the future from
resiling from the common assumption where it would be inequitable for him to be allowed to resile from that
assumption1. An example in the area of rent reviews might be where there were four rent reviews under a 25 year lease
and the parties had conducted three of them on the assumption that the hypothetical lease was for a term equal to the
unexpired residue of the actual lease at each rent review date and at the last review one party wished to raise the
argument that the hypothetical lease was for the whole of the 25 years measured from that rent review date. It is
possible that he might be prevented from doing so by reason of the doctrine of estoppel by convention2.
HR A[4328.4]
1 See, for example, Amalgamated Investments and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, [1981] 1
All ER 923 (Robert Goff J); approved in the Court of Appeal [1982] QB 84, [1981] 3 All ER 577. In Riverside Housing Association Ltd v
White [2005] EWCA Civ 1385, [2005] 50 EG 91 (CS), an allegation of an estoppel by convention was rejected in the context of a rent
review under an assured tenancy since to have relied upon the estoppel would have been to have used the principle as a sword and not a
shield.
2 See paras HR A[3722]-[3725] for a general consideration of the question of the length of the hypothetical lease.
HR A[4328.5]
It may be useful for the purposes of clarity to classify the possible effects for future reviews of an agreement on a rent
review.
HR A[4328.6]
(a) Agreement on a rental figure
If there is an agreement on a rental figure and nothing more it is unlikely that the agreement will have any substantial
impact on a later review. It may have some importance if it constitutes a base figure in respect of an upwards only rent
review clause, so that at the next review date the rent cannot fall below that which has been previously agreed. Also,
arguments are sometimes advanced on rent reviews of increases of rental levels based on general indices. If such an
approach is adopted then the rent agreed at a previous review may form a base to which the index is to be applied and to
that extent may have an effect on a future review.
HR A[4328.7]
(b) Agreement on a point of principle
An agreement on a point of principle is unlikely to have any important effect on future reviews since either party may
Page 855
take a different view on a subsequent occasion.
HR A[4328.8]
(c) Common assumption of principle
It is possible that the operation of a number of rent reviews on some common assumption of principle, such as the
meaning of an aspect of the rent review clause, may give rise to an estoppel by convention which prevents either party
arguing in the future for a different construction.
HR A[4328.9]
(d) Formal determination of a question of principle
A formal determination of a question of principle by an arbitrator or a court will normally constitute an issue estoppel
which will be binding on the parties and their successors in title on future rent reviews under the lease.
HR A[4328.10]
(e) Formal agreement on meaning
Of course parties may make a formal agreement on the meaning of some part of the rent review provisions or of the
lease intended to be binding for future rent reviews. Needless to say such an agreement should be formally recorded. It
would be good practice to attach the agreement to the lease and the counterpart lease.
Page 856
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/E Valuation
E
Page 857
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/E Valuation/General
matters
General matters
HR A[4329]
Valuation of land is a specialist subject with its own qualified practitioners and its own textbook material. It would not
be appropriate in this book to go into its many detailed techniques. Even so, a general account of the main matters
which arise in rent review valuations may be helpful.
HR A[4330]-[4340]
The object of a rent review valuation, certainly in the great majority of cases where a hypothetical letting of the demised
premises on the rent review date has to be envisaged, is to determine what would be the result of a notional negotiation
between a hypothetical willing lessor and a hypothetical willing lessee1. In any actual negotiations for a lease the
outcome in terms of the amount of the rent agreed is obviously conditioned by the terms of the lease, its duration and its
other provisions. Before there can be a meaningful consideration of the hypothetical negotiation enjoined by most rent
review clauses it is necessary to determine what are the terms. Often there will be no dispute on the terms, especially if
the rent review clause is well drafted. However, in the event of a dispute over the terms of the hypothetical lease in all
logic this dispute must be settled before the valuer can reach a true judgment on the result of the hypothetical
negotiations2. No negotiation can proceed in a vacuum and this is as true for the 'hypothetical higgling'3 to be assumed
for the purposes of a rent review as it is for any other negotiation.
HR A[4341]
1 The exact conception of a willing lessor and a willing lessee is discussed in detail in paras HR A[3684]ff.
2 See Cardshops Ltd v Davies [1971] 2 All ER 721, [1971] 1 WLR 591 in which the logic of this approach was emphasised by the Court
of Appeal in connection with the similar exercise of determining the rent for a new tenancy ordered to be granted under Pt II of the Landlord
and Tenant Act 1954.
3 The expression 'happy hypothetical higglers' was used in the judgment of Donaldson J in Evans (FR) Leeds v English Electric Co Ltd
(1977) 36 P & CR 185, [1978] 1 EGLR 93.
HR A[4342]
The proper approach is, therefore: (a) to ascertain the full terms of the hypothetical lease except the rent (usually a
question of law if there is a dispute); and (b) then to determine the rent at which the property would let on those terms.
To some extent this introduces an air of unreality into the process. It suggests that terms of a lease are being offered
which are totally immutable and not subject to any negotiation. In reality a landlord may offer a lease on certain terms
but will normally be willing to negotiate on at least some of the terms. For example, a lease for a shorter or longer term
Page 858
may be open to negotiation, as may other important terms such as the user clause or rent review provisions in the lease.
A landlord who refused to negotiate on any of these matters would be adopting an inflexible attitude which could
reduce interest in the market or the ultimate rent. The hypothetical negotiations should correspond as closely as possible
with real negotiations and the correct analysis is that the willing lessor is to be envisaged as taking the ordinary,
reasonable and flexible stance which an actual landlord would take in trying to attract tenants but with the proviso that
the end result of the negotiations is a lease on the exact terms which the rent review clause prescribes for the
hypothetical lease. It is for the valuer to decide the likely course of the hypothetical negotiations within the principles
explained.
HR A[4343]
The grant of the hypothetical lease has to be assumed to take place on a specific day since rental values change over
time and a valuation is meaningless unless anchored to a specific date. In nearly all real lettings of commercial property
the conclusion of negotiations is preceded by what is very often a substantial period of marketing, advertising and
negotiating, perhaps with a number of prospective tenants. In order, again, that the hypothetical letting shall be as close
as possible to an actual letting it is necessary to assume a period of marketing and negotiation prior to the review date
which is appropriate to the property in question. In general, the larger and the more valuable the property the more
extensive is the period and scale of the prior marketing likely to be.
HR A[4344]
Many commercial leases are preceded by a binding agreement for a lease. Rent review clauses nearly always refer to a
letting on a certain day. Since an agreement for a lease binds the parties it should not make any difference to the rent
whether it is a binding agreement or an actual letting which is assumed to occur on the rent review date.
HR A[4344.1]
When large commercial premises are let it is frequent practice that the parties, sometimes advised by valuers, will come
to an agreement which is described as 'heads of terms'. This is a document which sets out the main elements of the lease
intended to be granted, including the critical factor of the rent. Thereafter the matter may go to lawyers to draft the
details of what may be a long and complex lease. The expectation is that the basic terms agreed as part of the heads of
terms, including the rent, will not change but will be reproduced in the formal agreement for lease or lease which may
be entered into some six or eight weeks later or even after a longer gap. Such heads of terms are not a binding legal
document and it is quite open to the parties to resile from them or to seek to change them. However, the practice is that
important changes are not likely to be made unless there are major unanticipated events between the heads of term stage
and the binding legal document which eventually emerges in full legal form between the parties. The significance of
this process is that if the market is rising or falling the reality is that the agreement on the amount of the rent, at the
heads of terms stage, may be to some degree different from what it would have been if there had been no agreement of
any form until the final binding legal agreement between the parties. It follows that in some circumstances the existence
of a heads of terms stage could affect the amount of rent which would be contained in a legally binding document
entered into on the review date. Two views have been expressed about this matter. One is that a purpose of rent reviews
is to reproduce in the hypothetical world so far as possible, and so far as is consistent with the rent review provisions,
that which would have happened in the real world had there been a letting of premises of the nature and type in
question. In that event it appears reasonable to conclude that, subject to the evidence from valuation experts, there
would have been a heads of terms stage and that the effect on rent of the agreement reached at that stage should be
reflected in the amount of the rent determined as the open market rent for the purposes of the review. The other view is
that there is but one rent review date and valuation date and that any agreement must be on the strict basis of rental
Page 859
values prevailing as at that date. There is no decision which finally determines which of these two viewpoints is correct
although as a matter of theory the former view has much to commend it1.
HR A[4344.2]
1 In Daejan Investments Ltd v Cornwall Coast Country Club [1985] 1 EGLR 77 Peter Gibson J at p 80 referred to the preliminary steps
towards a letting being taken in what he described as a dateless continuum of time immediately before the hypothetical letting. This
observation is sometimes taken to support the second view. However, the decision in question concerned the issue of whether it could be
assumed that the willing lessee had at some stage prior to the date of the hypothetical letting obtained the necessary consents in public law,
that is the consent of the Gaming Board and a Justices' licence, which were necessary to carry out use as a casino in the demised premises,
that use being one of the uses permitted by the hypothetical lease. It was held that no assumption of this nature could be made. The argument
in favour of such an assumption being made was founded in part on the proposition that there should be imagined to exist a conditional
agreement, the condition being the coming into existence of the necessary public law consents, prior to the actual letting on the valuation
date. The context of the observation is therefore somewhat different to that which underlies the problem discussed above.
HR A[4345]
The role of the valuer is, therefore, that of forming a skilled professional judgment of what would be the rental outcome
of the assumed negotiations. In doing this he is not himself a negotiator, still less an advocate. Sometimes the valuer can
be placed in a situation that is not altogether easy. In discussions and negotiations on behalf of a party who is carrying
out a rent review the valuer may negotiate for his client in the usual way, perhaps taking an initial negotiating stance
which is better than that which in the end he expects to achieve. There is, of course, no objection to such a process.
However, when it comes to the determination of the reviewed rent by a third party, be it an arbitrator or an expert, after
a failure to reach agreement the role of the professional valuer changes. It then becomes his duty to put forward his
honest opinion of what the hypothetical negotiations would achieve by way of a negotiated rent1. The Royal Institution
of Chartered Surveyors in 1997 published a practice statement and guidance notes for any chartered surveyor who gives
evidence, orally or in writing, and whether voluntarily or under compulsion, in legal proceedings including arbitration.
This is a valuable document and makes a number of points clear, for example the duty of a chartered surveyor to be
complete in his coverage of relevant matters. It is because of this changing role of the expert valuer that in arbitrations it
is far from unknown for one party's valuer to reach a view that on at any rate some part of the valuation is more
favourable to the other party than his own client. The danger in taking an extreme line in initial negotiations is that what
he has suggested as a negotiator may be quoted or held against a valuer if he later has to give evidence or make a
submission in an arbitration. The danger can be avoided if all earlier negotiations are conducted on an expressly without
prejudice basis. The rule that without prejudice communications cannot be referred to in arbitration proceedings is strict
and an award of an arbitrator reached with the admission of without prejudice material may in appropriate
circumstances be set aside by the court2.
HR A[4346]
1 There is a well-known passage in the judgment of Cresswell J in National Justice Compania Naviera SA v Prudential Assurance
Company Ltd (The Ikarian Reefer) [1993] 2 Lloyd's Reports 68 which summarises in numbered paragraphs as follows the duties and
responsibilities of an expert. It is applicable to, though not confined to, an expert witness in rent review and valuation disputes.
(a) Expert evidence presented to the court should be, and should be seen to be, the independent
Page 860
product of the expert uninfluenced as to form or content by the exigencies of litigation.

(b) An expert witness should provide independent assistance to the court by way of objective
unbiased opinion in relation to matters within his expertise. An expert witness in the High Court
should never assume the role of an advocate.
(c) An expert witness should state the facts or assumption upon which his opinion is based. He
should not omit to consider material facts which could detract from his concluded opinion.
(d) An expert witness should make it clear when a particular question or issue falls outside his
expertise.
(e) If an expert's opinion is not properly researched because he considers that insufficient data
is available, then this must be stated with an indication that the opinion is no more than a
provisional one. In cases where an expert witness who has prepared a report could not assert that
the report contained the truth, the whole truth and nothing but the truth without some
qualification, that qualification should be stated in the report.
(f) If, after exchange of reports, an expert witness changes his view on a material matter having
read the other side's expert's report or for any other reason, such change of view should be
communicated (through legal representatives) to the other side without delay and when
appropriate to the court.
(g) Where expert evidence refers to photographs, plans, calculations, analyses, measurements,
survey reports or other similar documents, these must be provided to the opposite party at the
same time as the exchange of reports.
2 Finnay Lock Seeds v George Mitchell (Chesterhall) [1979] 2 Lloyd's Rep 301.
HR A[4347]
Recent developments in the law have emphasised the critical importance of the independence of an expert witness on
valuation matters. In English law the fundamental principle is that a witness who gives evidence before a court or
tribunal gives evidence of fact and does not give his opinion. Any questions of opinion or of judgment are for the
tribunal to determine. The most obvious exception to this principle is that evidence of expert opinion may be given if
certain tests are satisfied. The established tests are:
(a) that the subject matter of the expert opinion evidence is something on which the tribunal needs
expert guidance in order for it to reach its decision; and
(b) that the person giving the expert evidence is qualified to do so by way of training or experience or
both.
The giving of expert evidence by a suitably qualified valuer in a rent review arbitration clearly satisfies the two tests.
HR A[4347.1]
Modern authorities have focussed on a third possible test, namely that the expert valuer is truly independent of the
parties. An example of the difficulty which may arise is where one party to a rent review is a local authority or similar
organisation who have employed an 'in-house' valuer. In many cases such a valuer would expect to give evidence on
behalf of his employer. There is said to be no rule that he cannot do so but there are disadvantages in such a course. It
has been said that in such a case it should be made clear that the witness is fully familiar with the need for objectivity,
and that it may be appropriate that the local authority should have provided some training for the witness, to which they
Page 861
can point, in order to show that he has the necessary understanding of the difficult role of an expert. It is open to the
other side to suggest that less weight should be given to the evidence of an employed expert witness than to the
evidence of one who has no such connection with the authority, and there are advantages to an arbitrator in having an
expert witness who is not employed by one side1. Another example of the difficulty is where an expert witness is paid
under some contingency fee arrangement, so that the amount of his remuneration depends wholly or partly on how well
the party for whom he is giving evidence fares in the outcome of the litigation. It has been said that it would be in a very
rare case indeed that a court will be prepared to consent to an expert being instructed under a contingency fee
arrangement2.
HR A[4348]
1 Field v Leeds City Council [2000] 1 EGLR 54.
2 R (Factortame Ltd) v Secretary of State for Transport, Environment and the Regions (No 2) [2003] QB 381, [2002] 4 All ER 97.
HR A[4348.1]
The principle therefore appears to be that a court or tribunal or arbitrator has a power to refuse to receive expert
evidence from an expert who is not truly independent. The discretion will not necessarily be exercised against the
receipt of the evidence and important factors to be considered will be:
(a) the degree of connection between the witness and the party for whom he wishes to give evidence;
(b) whether the witness has been adequately instructed as to his duty of independence;
(c) whether it would have been practical for a truly independent expert to have been instructed to give
the evidence; and
(d) whether an objection to the evidence has been taken promptly.
An example of where an expert witness has been refused permission to give evidence in a valuation dispute is a recent
decision of the Lands Tribunal in Hong Kong in a rating appeal where one party was not allowed to call as an expert on
a particular issue a senior employee of that party1.
HR A[4348.2]
1 Hong Kong Air Cargo Terminals Ltd v Comr of Rating and Valuation (Lam J, 20 April 2004, unreported).
HR A[4348.3]
It is important to draw a clear distinction between the admissibility of expert evidence and the weight to be attached to
that evidence. The above principle indicates that in an appropriate case a court or tribunal or arbitrator may refuse to
accept the expert evidence of a witness who is not fully independent. If that is the ruling the evidence is inadmissible. In
proceedings before courts and tribunals there are generally procedural rules which require that the consent of the court
Page 862
or tribunal is obtained before a witness can give expert evidence1. There is no such general procedure before arbitrators,
but the principle is that wherever possible the question of the admissibility of such evidence should be determined in
advance of any oral hearing within the arbitration. In courts such a procedure is described as a matter of case
management. Before an arbitrator it may be appropriate that such questions are determined at a preliminary hearing2. If
the evidence of a witness is ruled to be admissible despite objection being taken to it on the ground of a lack of
independence, or even if no objection to the admissibility of the evidence is taken, a party is still entitled to make a
submission that only limited weight should be given to the evidence because the witness who gives it is not fully
independent. The view has recently been taken in to the courts in Australia that the question of expert evidence to be
given by a person who is not fully independent is always a question of weight and not admissibility. The Court of
Appeal of Victoria concluded, after a long and erudite analysis of authority within the common law world, that the court
had no power to exclude the evidence of an expert witness on the ground of a lack of independence and that accordingly
any objection was wholly one which went to the weight to be accorded to that evidence3. As mentioned above this view
does not appear to be in accordance with the principles as applied by the courts in England or in Hong Kong.
HR A[4348.4]
1 See, for example, the Civil Procedures Rules in the High Court and the county court and the Lands Tribunal Rules.
2 See R (Factortame Ltd) v Secretary of State for Transport, Environment and the Regions (No 2) [2003] QB 381, [2002] 4 All ER 97, at
para 70. It is therefore important that an objection to the evidence of an expert witness on the ground of a lack of independence is taken at an
early stage. A late objection may be one of the factors which would incline a court or arbitrator to rule that the evidence should be admitted:
see para HR A[4348.1]. Normally a party will be entitled to a sight of the proposed evidence before he decides whether he wishes to object
to it.
3 FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33.
HR A[4349]
A rent review valuation may require other forms of expert input besides that of valuers. Issues can arise on the physical
or structural state of the premises which may require engineering expertise. The cost of fitting out work or of
improvements needed to the property, or of improvements carried out and to be disregarded, may require an input from
building surveyors or quantity surveyors. The suitability or otherwise of the premises to accommodate certain uses may
require an input from architects or space planners.
HR A[4350]
The law does not prescribe a method of valuation1. The method chosen is a matter for the judgment of the valuer
concerned. In particular, three methods of valuation are commonly used: (a) a valuation by the use of comparables; (b) a
valuation on the profits method; and (c) a form of residual valuation. These techniques may be combined in an attempt
to find a rental value. The first method is easily the most frequently used, at any rate for rental valuations of commercial
property. Of course the lease may itself provide a method of valuation or a combination of methods and in that case the
valuers must adhere to the direction so given2. The valuer is entitled to consider any material which he considers to be
logically probative of the open market rental value of the property being valued, and in some cases indices of rental
movements of property in an area, the way in which the rent of other property has moved over the period since the last
review, and rating assessments may in principle be of assistance3.
Page 863
HR A[4351]
1 Eg in SI Pension Trustees Ltd v Ministerio de Marina de la Republica Peruano [1988] 1 EGLR 119 Mervyn Davies J said that an
experienced arbitrator should not be directed as to the kind of comparables he may consider.
2 For example, in Marklands Ltd v Virgin Retail Ltd [2004] 2 EGLR 43 the lease of a large retail unit directed that the valuer should
determine the open market rental value 'on the basis of a letting of a store on an overall per square foot basis rather than on a zoning basis'. In
such a case a valuer or an arbitrator is not bound as a matter of principle to disregard comparable transactions where the rent has been
determined on a zoning basis, but he is entitled to disregard such transactions if in his opinion they are not helpful.
In United Co-operatives Ltd v Sun Alliance & London Assurance Co Ltd [1987] 1 EGLR 126 the lease directed that the reviewed rent of a
department store in Lancaster should be arrived at as the greater of the application of a formula to the letting value of the zone A parts of the
premises and the rental value of a department store of comparable size and location in a comparable town or city in England. It was
suggested that the first method would produce a rent to which was only about a quarter of that produced by the second method. For the use
of zoning in the valuation of shop premises see para HR A[4421].
3 In Safeway Stores v Legal and General Assurance Company Ltd [2005] 1 P & CR 9, the arbitrator had rejected as unhelpful evidence
from one of the parties which compared the rateablel value of the subject property with the rateable value of some of the comparable
properties. It was held in the High Court that the arbitrator had not erred in law. The Judge, Lewison J, observed that intuitively this was a
very unlikely method of valuation or even cross-check. A reason why rating assessments may not often be of assistance is that the rating
hypothesis is substantially different from that usually prescribed as the basis of the hypothetical letting under rent reviews.
HR A[4352]
It must never be forgotten that in deciding on which valuation method or methods to use, and in using those methods,
the valuer is not carrying out a process akin to a mathematical theorem. At all stages an element of judgment is
involved. The correct result will therefore depend heavily on the competence and expertise of the valuer. On the other
hand, the more the valuation can be underpinned with indisputable facts, such as the agreed rents of closely comparable
properties, the more impressive it is likely to be. A valuer may rely on his background knowledge of the market and of
how people behave in a particular market to help him towards his conclusion. In doing this he will be drawing help not
from specific transactions which he analyses but from a wealth of other transactions and knowledge available to him
from his work and experience. To this extent his approach will be almost intuitive. The end result in terms of a rental
valuation of the demised premises may be to a degree something which, in the words of a Judge experienced in this
area, defies detailed analysis1. It is possible that a valuation rests wholly on general experience and feeling and not on
any of the traditional valuation methods. It is then described sometimes as an ipse dixit valuation and sometimes as a
'spot' valuation. None the less, it would be a unusual valuer who was prepared to rely wholly on his own general
experience and intuition when there was hard evidence available from which to assess the rent.
HR A[4353]
1 See English Exporters (London) Ltd v Eldonwall Ltd [1973] Ch 415 at 434, [1973] 1 All ER 726 at 743, per Megarry J. The expression
used was in the context of finding an interim rent under the Landlord and Tenant Act 1954, s 24A and the process of 'tempering' the market
rent required under that section.
Page 864
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/E Valuation/The use
of comparables
The use of comparables
HR A[4354]
The primary technique of the valuer is to ascertain what would have been the rent of the demised premises by
considering actual rents agreed or otherwise determined for other properties which are similar or comparable to the
demised premises. The hypothetical is in this way proved by the reality. In the nature of things there is rarely the perfect
comparable, and different comparables may point to a different figure for the rent of the demised premises. If the
comparables are good and consistent there is not likely to be much dispute on the rental value of the demised premises.
For example, if the demised premises are a shop in a parade of modern identical shop properties and two or three other
shops in the parade have been recently let at the same or a very similar rental level it would be very difficult to argue
that the rent which would be obtained on the review date on a hypothetical letting of the demised premises would be
much different from the rents actually achieved for the other shops.
HR A[4355]
In principle, a recent transaction concerning the actual property to which the rent review relates, may be the best
possible comparable. Since the property is actually let in the case of a rent review, such a transaction will be a rarity.
Even so it may occur, for example if a rent review is being conducted under a headlease and shortly before the review
date the tenant has underlet the whole of the property on the open market. Unless there is something special in the
underletting transaction, it will provide cogent evidence of what would have been agreed on a hypothetical letting of the
property at the review date1. Sometimes a headlease and an underlease have contemporaneous rent reviews so that, if
one is settled by agreement or by arbitration in advance of the other, the result of the first review will be of obvious
weight in the conduct of the second review2. In other areas involving property valuation it is perhaps more likely that a
recent transaction in the property being valued will have occurred so as to provide strong evidence of value, one
instance being a valuation for the purposes of compensation for compulsory purchase where the property had been sold
on the open market to the owner claiming compensation at a date which was near to the valuation date3. Of course, the
strength of the recent transaction in the property may be impugned if there is something unusual in the transaction. It
may not have been a true arm's length transaction or the property may not have been properly marketed in such a way as
to obtain the best rent4.
HR A[4356]-[4362]
1 See also para HR A[4430]. An example of the weight which may be accorded to an actual letting of property as an indicator of the
letting value of the property is Blockbuster Entertainments Ltd v Leakliff Properties Ltd [1997] 1 EGLR 28. In that case the tenant was
permitted to underlet the property but only at a rent not less than the open market rent. The tenant marketed the property and wished to
accept the highest rental bid. It was concluded that the best evidence of what a particular property was worth on the open market is the rent
payable under a binding agreement for the letting of the property after it has been properly exposed to the market. See also para HR
A[2648].
2 See para HR A[4424] as to the admissibility in evidence of an award of an arbitrator on a rent review.
Page 865
3 In Windward Properties Ltd v Government of St Vincent and the Grenadines [1996] 1 WLR 279 the property which was being
compulsorily acquired had been purchased on the open market by the claimants at a date which was shortly after the valuation date. The
reason for this curious situation was the unusual provisions of the Land Acquisition Act in force in St Vincent and the Grenadines which
provided for a valuation date prior to the actual compulsory acquisition of the property. It was held that the Tribunal assessing compensation
was entitled to rely on the evidence of the actual acquisition as the foundation of its valuation.
4 It will normally be presumed that a sale of the property to be valued is a sale on the open market in the absence of evidence to the
contrary: see Windward Properties Ltd v Government of St Vincent and the Grenadines [1996] 1 WLR 279.
HR A[4363]
Where the situation is not as clear cut as that just mentioned the valuer who relies on comparables will usually have a
threefold task. First, he must establish those comparable transactions which are of assistance to him. Secondly, he must
make any necessary adjustments to bring the rent agreed for each of the comparable transactions into line with that
which would be appropriate for the demised premises. Thirdly, where there is more than one comparable and the rents
which they suggest for the demised premises are different he must make a judgment on the weight which he attributes to
the various comparables. Depending on the complexity of the available evidence the whole of this process is likely to be
necessary (perhaps combined with use of a further valuation method) before the rent of the demised premises can be
determined.
(a) Stage one
HR A[4364]
The first element of the process is in large part a task of gathering information which may be of assistance from such
sources as are available to the valuer. At this point the experience of the valuer in the market and his contacts become
important. Expert valuers sometimes divide themselves into those who are in the market doing deals (the 'market men'
or those 'at the coalface' as they are sometimes described) and those who do professional work in the sense of providing
formal valuations and, inter alia, advising on rent reviews1. It is those in the former category who are likely to have the
most experience of collating facts about actual transactions. A difficulty at this stage may be simply that of establishing
all the facts relevant to a transaction. If the transaction is a letting on the open market it will be necessary to obtain
realistic information as to (a) the property, (b) the date, and (c) the terms of the lease including, of course, the rent
agreed. The matter of whether there has been a rent free period or other inducement will be important. It may be
significant to know whether the property has been properly marketed and how long it took to find a tenant. It is possible
that a letting was part of or associated with or influenced by some other transaction, for example, a lease of one property
could have been granted in return for a surrender of a different property. It is essential that the full facts surrounding the
transaction are gathered in since matters such as those just mentioned may affect the rent and explain what otherwise
appears to be an unusually high or low rent. A failure to ascertain all the facts which could be relevant may reduce the
weight of the comparable as evidence of value and may adversely affect the reliability of a valuation which relies on the
comparable. If there is some particular characteristic of the lessee which makes him a special purchaser this also must
be investigated since this again may affect the rent2. A practical difficulty may be that of obtaining information
regarding comparables when that information is confidential. A party to the transaction relied on as a comparable may
be willing to divulge information about the transaction (even then there may, in some cases, be a confidentiality clause
in the transaction itself). Valuers are accustomed to obtaining details of transaction from other valuers or agents who
have acted in the transaction. It must always be remembered that a valuer owes a professional duty not to divulge
confidential information relating to his client, and this includes information relating to a transaction which he has
negotiated or concluded on behalf of his client3.
Page 866
HR A[4365]
1 In major rent reviews with large sums in issue expert advisers and witnesses from both areas of the valuers' profession may be involved.
2 For the meaning of a special purchaser see para HR A[3702].
3 See HRH Prince Jeffry Bolkiah v KPMG [1999] 2 AC 222. A practical analysis of the problem is provided by Mr Geoffrey Dale FRICS
in Estates Gazette, 24 February 2007, at p 134.
HR A[4366]
Comparable transactions are generally of two sorts, open market lettings and other rent reviews. It is possible that other
types of transaction could be of assistance. If a lease of comparable premises has been assigned at a premium (because
the rent payable under the lease is below the open market rent of the premises at the time) it will be possible to use
valuation techniques to convert the premium into a rental equivalent. This rental equivalent can then be added to the
actual passing rent in order to demonstrate the true open market rental value of the property assigned. Such a process
may often be of less cogency as evidence of rental value than a letting since the process of converting the premium into
a rental equivalent will involve an area of judgment and of possible dispute1.
HR A[4367]
1 The element of judgment, and perhaps of dispute, will usually be the interest rate to apply in the conversion process from a capital sum
to a rental equivalent, or 'decapitalisation'. An example of how a rent which is below the market rental level (so that there is a 'profit' rent) is
converted into a capital sum which is obtainable as a premium on the assignment of a lease is as follows:
Full rental value £4,000 per annum
Less Rent under lease £2,000 per annum
Profit rent £2,000 per annum
YP for 14 years at 9%/21/2% 6.6429
Capital value of leasehold interest £13,286.
HR A[4368]
Where the comparable is itself a rent review settlement it is necessary to ascertain the facts relevant to it. The terms of
the actual lease of the comparable premises which gave rise to the rent review must, of course, be ascertained and the
rent review clause and the assumptions made in the rent review process must be carefully scrutinised to see whether
they are to the same as or different from those relating to the property where the settlement is used as a comparable. In
itself this may not be too difficult since the relevant information will be in the rent review clause of the lease of the
comparable premises. Much greater difficulty may attach to finding what view the parties took towards certain aspects
of the rent review. It is apparent from the earlier material in this chapter on the terms and nature of the hypothetical
lease that there can be considerable uncertainty and complexity on many points. A prime example would be how
directions as to the premises being fitted out or as to a headline rent are to be interpreted and applied1. If the appropriate
assumptions on matters such as these are different for the rent review of the comparable premises that factor may
diminish the strength of the settlement of that rent review as a comparable or at least may necessitate adjustments to the
Page 867
rent as settled to enable it properly to be used as a comparable. The vital question is not what the comparable rent
review clause meant as a matter of abstract legal analysis but what the parties to the settlement or their advisers believed
it meant. It is the latter factor which would have been crucial to their settlement. There are several difficulties. The first
is the basic difficulty of knowing just what it was that the parties to the settlement thought that certain aspects of their
rent review really meant. They may not have articulated their thoughts. Secondly, it may well be that the two sides took
a different view of the meaning of the rent review provisions. Thirdly, it may be that any view taken, by one party or
both parties, was tentative and uncertain, and this uncertainty may have played a part in the settlement reached on the
rent. The initial stage is one of gathering facts about comparable transactions, but enough has been said to make it clear
that rent review settlements may be particularly risky as a source of evidence on which to base a rent of the premises
being valued. In gathering together the relevant comparable evidence an expert should not be selective. He should not
rely on just the evidence which assists his own client2.
HR A[4369]
1 See paras HR A[3944]ff, as to fitting out and paras HR A[3949]ff, as to inducements and headline rents.
HR A[4370]-[4380]
The task of the valuer is to ascertain the facts relating to all comparables which assist in the valuation of the property
before him. To adopt legal phraseology he should have regard to all that is logically probative of the rent of the
premises which it is his function to determine. It is possible that the terms of the rent review clause may restrict the
material which he is able to consider. Provisions in rent reviews are replete with expressions such as 'having regard to
rents of comparable premises in the locality'. Such expressions in most cases are surplusage in the sense that they add
nothing to the ordinary task of the valuer. The expression 'having regard to' is of a particularly vague and uncertain
nature1. In nearly all cases nothing more is meant than that the valuer is to have regard to what would in any event be
relevant material in his determination. It does not mean that he is bound to attach some special weight or significance to
the material which is mentioned to the detriment of other relevant material. There are perhaps two points of significance
which arise from such expressions. One is that they may throw light on the nature of the valuation and of the
hypothetical lease which forms the substratum of the valuation. If regard is directed to a particular type of comparable it
may be an indication that the basis of valuation under the hypothetical lease is of the same nature as the comparables.
Thus, if the valuer is directed to have regard to values for property let with vacant possession the inference may be that
the hypothetical letting of the demised premises is to be with vacant possession and not subject to subtenancies2. The
other point is that it could be that a direction to have regard to certain evidence was impliedly a direction not to have
any regard to other evidence which would otherwise have been logically probative and helpful. Such a conclusion is
unlikely. The usual effect of the requirement to have regard to a particular matter is one of emphasising that which
would already be the case and no more. The expression is therefore one which is best avoided. The gathering of relevant
material relating to comparables is sometimes inhibited by a fear that, in a dispute relating to the rent review, it may be
difficult to 'prove' the facts of the comparable. Something which causes particular difficulty is the hearsay rule of
evidence, the principle that in some circumstances evidence of a fact must be direct evidence and not that which the
person giving evidence has heard from someone else. This difficulty is now rarely of importance in disputes concerning
rent reviews since, in any arbitration, the Civil Evidence Act 1995 provides that hearsay evidence is admissible. The
only practical inhibition is that in the event of a dispute as to important facts or circumstances surrounding a comparable
evidence of those facts may have less weight if it is hearsay evidence as compared with being direct evidence, that is
usually the evidence of someone who was actually and directly involved in the transaction in question.
Page 868
HR A[4381]
1 Landlord and Tenant Act 1954, s 24A(3) refers to the duty of the expert in fixing an interim rent to 'have regard to the rent payable
under the terms of the tenancy'. As Megarry J pertinently pointed out in English Exporters (London) Ltd v Eldonwall Ltd [1973] Ch 415,
[1973] 1 All ER 726 the question apropos of such an expression was 'How much regard is to be had, and what weight is to be attached to the
regard when it has been had?'
2 Bishopsgate (99) Ltd v Prudential Assurance Co Ltd [1985] 1 EGLR 72. See para HR A[3846].
(b) Stage two
HR A[4382]
In theory, the first stage should produce a corpus of factual data not itself subject to dispute. Either a particular property
was let at a certain rent or it was not. As just mentioned in practice the situation is often not as clear cut as this. At the
second stage, that of adjustments to comparables, one leaves the area of fact and enters that of valuation judgment. If a
comparable transaction is so good and so close in all its facts to those of the property being valued no dispute is likely
on the rent of the property being valued. The comparable will provide its own answer1. In the more usual situation
where important differences do exist it is necessary to go on to adjust the rent disclosed by the comparable to make it
appropriate to that for the subject property.
HR A[4383]
HR A[4384]
It is best to illustrate this process by an example. Suppose that the property to be valued (the 'subject property')
prescribes in the rent review clause a hypothetical lease starting in June 1998 for a term of 25 years with rent reviews at
five-yearly intervals. Suppose that in a location a mile away other premises were let in June 1996 for 14 years with one
rent review after seven years at a rent which was £50 per square foot of the property let. It would plainly be absurd to
suggest without further thought that the reviewed rent for the subject property should be £50 per square foot on the basis
of this comparable. What the valuer has to ask himself is what would have been the rent at which the comparable
premises would have been let if: (a) they had been in the location of the subject premises, not a mile way; (b) they had
been let on the same terms as the hypothetical lease required to be assumed for the purposes of the rent review of the
subject property; and (c) they had been let in June 1998 not June 1996. Each difference may require an adjustment.
HR A[4385]
The adjustments which may be necessary to a comparable can usefully be divided into three categories. The physical
Page 869
circumstances of the comparable property are usually different from those of the subject property. Its location may be
superior or inferior in that it is nearer the centre of a business area, is better placed for access to main roads or public
transport, or is quieter. The visual appearance may be superior. The comparable may be a self-contained building
whereas the subject property is a part of a building with shared access and other facilities. The comparable may be a
newer building. The standard of construction or the amenities may be superior, for example, if it is an office it may have
modern amenities such as raised floors and suspended ceilings and air conditioning as found in recently constructed or
refurbished property. The lifts may be superior. The possible physical differences are endless, ranging from points
where a comparison can easily be made (for example, the floor to ceiling heights of each storey) to subjective factors
such as the 'image' of the building. The valuer must weigh up all relevant differences and make the necessary
adjustment. He may be able to make a single overall adjustment to reflect all the factors within this category, or he may
find it necessary to set some, where the comparable is superior, off against others, where it is inferior1.
HR A[4386]
1 See para HR A[4404], for a description of how adjustments are usually carried out.
HR A[4387]
A second category is an adjustment for a difference in time. The transaction in the comparable property may be
significantly earlier or later than the valuation date for the hypothetical letting of the subject property1. Since property
values change over time an adjustment may be necessary for this factor. The valuer may have various tools at his
disposal with which to estimate the adjustment. There may be actual transactions in other property in the area which
give a good indication of how values changed over the relevant time. Various indices are published of property values,
both commercial and residential, and reference to these may be a more scientific approach. It must be remembered that
the values of different types of property change at a different speed. For instance, in recessionary times when the supply
of property to let exceeds demand the rents of good modern properties may fall at a slower rate than those of less good
and older properties. The size and reliability of the data base from which an index is built up may also be an indication
of its reliability. Finally, the valuer may rely on his own general impression of how relevant rental values have changed
over recent periods. What must not be forgotten is that at the time of the rent review experts can usually see with
hindsight the way in which rents have risen or fallen in the recent past including the period covering the rent review
date. The hypothetical negotiating parties do not have the same blessing, and what is crucial is their perception of the
market at the time of their negotiation.
HR A[4388]
1 See para HR A[3710], for the use of comparable transactions which occur later than the valuation date of the subject property.
HR A[4389]
A third category is adjustments for differences in the terms of the letting of the comparable property compared with that
to be assumed for the hypothetical letting. Any difference may affect value but certain types of difference are
particularly likely to do so. Terms of the two lettings which are especially significant in this connection include the
length of the tenancies, the existence or otherwise of a break clause, the rent review pattern, the provisions as to use,
Page 870
alienation and alterations to the property and the provisions for the payment of rent. Other provisions in leases are of a
fairly standard nature, for instance forfeiture clauses and repairing obligations, and minor differences of wording are not
so likely to affect rental value. The underlying principle of course is that any unusually onerous provision affecting the
tenant is likely to reduce the rent which he would be willing to pay. It is therefore a task of the valuer to compare all the
provisions of the comparable transaction with all those of the hypothetical lease and to decide whether any adjustment
or adjustments are necessary. Obviously, some differences may suggest that the rent derived from the comparable
should be reduced to equate to that appropriate to the hypothetical letting, as will be the case where the terms of the
comparable letting are more beneficial to the tenant, while other differences, where the terms of the comparable letting
are more onerous or restrictive, may suggest an increase to equate the rent to that which is appropriate for the
hypothetical letting. It is often extremely difficult not only to know whether a specific difference requires an adjustment
but also to know the amount of an appropriate adjustment. The surest guide would be a number of lettings where the
circumstances were the same except for a particular difference in the terms so that the effect of the difference could be
seen in isolation. Unfortunately, the raw data available is rarely so illuminating and in real lettings many factors may
combine together to produce the rent agreed. All too often the valuer is reduced to using a rule of thumb method such as
a possible proposition, not supported by any hard evidence, that a very restrictive user clause in a shop letting can
reduce the rent by about 5%. One instance in which an adjustment might be needed would be where the transaction at
the comparable premises involves the payment of a premium so that it would be necessary to ask what the rent of those
premises would have been in the absence of the premium. This process is sometimes called the 'devaluation' of the
premium1.
HR A[4389.1]
1 The process by which this is done has been described as a valuation question par excellence and not a question of law: Safeway Stores v
Legal and General Assurance Society Ltd [2005] 1 P & CR 129.
HR A[4389.2]
Rent review clauses usually provide that the reviewed rent shall be payable over the whole period from the rent review
date either to the next rent review date or to the end of the lease. Consequently, the hypothetical lease is usually stated
to be on the same footing, that is a lease under which the rent will be payable from the commencement of the lease1.
However, the rentals for comparable properties may have been agreed in return for an inducement granted by a landlord
to the tenant. For example, the rent of a comparable may have been agreed in return for the tenant having an initial
period in which he pays no rent, that is a rent free period. A rent so agreed is often called a headline rent. The task of the
valuer, using that comparable as a guide to the rent which will be agreed under the hypothetical lease of the subject
premises, will be to convert that headline rent into the rent that would have been agreed for the comparable premises if
there had been no rent free period but a rent had been payable from the commencement of the lease. The conversion or
adjustment is necessary to bring the rent for the comparable onto the same basis as the rent under the hypothetical lease
of the premises for which the rent review is being conducted. There is no agreed approach to how this adjustment is to
be made. One method is to adjust the headline rent on what is called a straight-line basis over the period up to the next
rent review under the lease of the comparable. For example, suppose that the rent under the comparable transaction has
been agreed at £50 psf for a property of 20,000 sq. ft., ie a rent of £1 million per year for a 15-year term with rent
reviews at the fifth and the tenth years, but that the tenant has been allowed an initial 30-month rent free period. The
actual rent payable over the first five years will be £2.5 million not £5 million, and £2.5 million is equivalent to £25 psf
per year. It can be argued on this basis that the adjusted rent of the comparable to be used to determine the rent of the
subject premises is £25 psf. This approach has the merits of simplicity, but there are two reasons why it may be flawed
as an accurate method of adjusting the headline rent:
Page 871
(a) It is not inevitable that in the above example the adjustment is done over five years. The
justification for carrying out the adjustment over five years is that the benefit to the tenant of the rent free
period relates to that five years. This reasoning ignores the fact that the landlord may have a different
benefit from the headline rent. If, as will usually be the case, the rent review at the fifth year is upwards,
only the headline rent will form a floor below which the rent cannot fall on that review. It may occur that
the rent on a non-headline basis will not have reached the specified level of headline rent by that review,
in which case the landlord will have obtained a benefit from the stated headline rent (indeed, this may be
one of the reasons why he has been willing to grant a rent free period in return for a headline rent). A
possible method of taking account of this potential benefit to the landlord is that the devaluation process
is carried out over ten years and not five years. If this is done, the total rent over the ten years of the lease
will be £7.5 million, or £750,000 per year, which equates to a rent of £37.5 psf per year.
(b) The straight-line basis of devaluation is not strictly accurate over whatever period it is applied. In
true economic terms, the value to the landlord of a rent of nil for two and a half years and then £1 million
per year for two and a half years years is not the same as the value to him of a rent of £500,000 per year
for five years. The supposed equivalence takes no account of the dates on which the rental payments are
due over the period and of the fact that it is a benefit to the tenant to postpone his payments to a later part
of the five years. A more accurate analysis would be to use a discounting process to find the present
value of the right to receive the rent on the two bases being compared, and then to compare the amount
of those two present values.
The valuers in cases involving substantial rents may have to grapple with problems of the nature just outlined. The
Royal Institution of Chartered Surveyor have published information paper No.8 - The analysis of commercial lease
transactions - which deals with the issue2.
HR A[4389.3]
1 See HR A[4426] for a further consideration of headline rents.
2 See also a brief but illuminating article by Mr Geoffrey Dale FRICS in the Estates Gazette, 27 May 2006, p 128.
HR A[4390]-[4400]
A further major difficulty is that some of the terms of the hypothetical letting as enjoined by the lease may be such as
are rarely if ever encountered in actual current lettings in the market. A good example of this is a hypothetical lease with
rent reviews at 21-year intervals. It is extremely unlikely that in the real world today a landlord would be willing to let
commercial premises with rent reviews only at such long intervals. There is therefore no market evidence on which the
valuer can draw to find what extra rent a tenant would pay to obtain the unobtainable, ie a long lease with rent reviews
only at intervals of 21 years. It is possible in such a situation to make theoretical calculations of the financial benefit to a
tenant of such a review pattern. More often, a valuer can look only at what has been agreed or determined in other rent
reviews which themselves may have been based on no true market evidence1.
HR A[4401]
Page 872
HR A[4402]
If the comparable transaction is a rent review settlement the process of making any necessary adjustments may be all the
more problematical. In such a case what is needed is an adjustment to reflect not a difference between an actual and a
hypothetical transaction but a difference between a hypothetical transaction on one set of terms in comparable premises
and a hypothetical transaction on another set of terms in the subject premises. Thus, what is important as regards the
hypothetical transaction in the comparable property is what the parties to the actual lease of that property agreed would
be the result of a hypothetical transaction in that property. The formidable difficulties in obtaining accurate information
on this subject has been explained. The making of an adjustment may be an equally formidable task1.
HR A[4403]
1 Suppose that the rent review clause in the lease of the comparable premises required an assumption that the premises were fully fitted
out but the rent review clause in the lease of the subject premises contained no such provision. In theory it is necessary to assess: (a) whether
the assumptions made any difference to those who agreed the rent review of the comparable premises; and (b) if so, what difference it made
to the rent agreed for the comparable. In practice, it is often assumed that the factor made a difference so that an adjustment is necessary. The
only way in which an accurate picture may be obtained on these matters is from the evidence of those involved in the previously settled rent
review, including a perusal of any written negotiations if they exist.
HR A[4404]
Once the various areas of difference which require an adjustment have been identified the next step is that of
quantifying the adjustments. One method is to look at all relevant differences identified and to assess a suitable overall
adjustment so as to bring the rent of the comparable to a level suitable for the subject premises. This method has the
merit of simplicity and perhaps accords best with the way in which comparable transactions are looked at in the real
market. Its disadvantage is that it is not possible to see clearly and explicitly how each element of the adjustment
process is dealt with. Another method is to make a separate and specific adjustment for each of the identified
differences. For example, the comparable may be in a location which is 30% superior to that of the subject property,
may have been let at a time when rents were 10% lower and may have been let on a lease with terms judged to be 5%
more onerous than those of the hypothetical lease of the subject property. The adjustments are then netted off against
each other so as to arrive at an overall adjustment of a 15% reduction in the rent of the comparable letting needed to
bring it to a level appropriate for the hypothetical letting of the subject property. This method is more transparent and
allows a consideration of whether each component of the adjustment process is correct. It also means that if a number of
comparables are used with similar adjustments being necessary the whole process is carried out on a consistent basis.
On the other hand, it may pretend to a degree of arithmetical precision not typical of the real market. Naturally, a
combination of the two methods may be used with an overall general adjustment but one or two matters being treated
separately. Not surprisingly, different valuers have different ideas on which method is more appropriate, and a choice of
approach may depend on the property being valued and the number of comparables available1.
HR A[4405]
Page 873
1 Even when the various percentage adjustments are worked out there may still be scope for a difference of detailed method. Sometimes
the adjustments are all applied to the actual rent derived from the comparable as a common base. Sometimes the adjustments are done on a
'compound' basis with each percentage change applied to the figure obtained after the application of the previous percentage change or
changes. In the latter case arithmetically the end figure is the same in whatever order the adjustments are applied.
HR A[4406]
It has been assumed that each of the comparables is a completed transaction, whether a letting or a rent review, with a
rent at the end of it. Sometimes reference is made to the asking price of properties which are not yet let. Plainly, such
data is not as useful as an actual comparable, but it may still have its uses. The fact that a landlord is asking or quoting a
rent for a particular property at least shows that the open market rent of that property on the terms offered does not
exceed the asking rent. In times of an excess of supply over demand and falling rents asking prices may be reduced,
perhaps more than once, before a letting is effected and this may be evidence of a decline in rental levels over the
relevant period. Of course, an asking rent may be unrealistically high and by itself is not much of an indication (except
as a ceiling) of the true rental value of the property in question.
(c) Stage three
HR A[4407]
A valuer using the comparables methodology, having ascertained the relevant comparables and carried out the
necessary adjustments to each, is left with the final stage, namely the use of the adjusted comparables to find a value for
the subject property. The adjusted comparables will usually be presented on a value per unit area basis, ie £ per square
foot or per square metre. It may be that the adjusted comparables present a range of values which cluster around a
particular figure. If so, the final task of finding a value for the subject property is not difficult. It may be that most of the
comparables cluster around a particular figure with one or two exceptions. The exceptions can then be rejected as out of
line with general rental levels or as caused by some unusual feature not properly allowed for in the adjustments. In some
cases there are only one or two comparables. Perhaps the greatest difficulty is present when the adjusted comparables
span a wide range of values.
HR A[4408]
A number of techniques are used in this last situation to find the rent of the subject property. A possible approach is just
to average the comparables. Its demerit is that it assumes that all of the comparables are of equal weight and reliability
as evidence of value. The other extreme is to select one comparable which is much better evidence than the others and
to use it as the true indicator of value. The demerit of this approach is that the other comparables are rejected as of no
assistance and the valuation in the end proceeds on one comparable only. A third technique is to value by reference to
one or two comparables considered to be of particular weight and then to temper the result somewhat by reference to the
adjusted values of other comparables. One of the most difficult tasks confronting any valuer is to judge how properly to
use a range of comparables. It is rare that all comparables are of equal probative weight. In general, the more
adjustments that have had to be made to a comparable the more is its evidential weight reduced since each adjustment
multiplies the scope for error. There is also a view, often expressed and with considerable justification, that an actual
open market letting is a better comparable than a rent review settlement. The justification is that in the first case the
evidence is directly that of what two parties were willing to agree whereas in the latter case the evidence is only that of
what two parties agreed as that which other hypothetical parties would have agreed. In some instances a comparable
becomes of only secondary importance or can be used only as a general check on value because of some special feature
(for example, its very small size or the age of the transaction) which differentiates it from the other comparables and the
Page 874
circumstances of the hypothetical letting.
(d) Floor areas
HR A[4409]
Once the comparables have been used to establish a rate, say in £ per square foot or metre, for the subject property it
remains only to multiply the rate by the floor area to reach the overall rent. Measurements of floor area are often agreed
either from recorded information, such as a previous rent review or letting particulars produced at the beginning of the
lease, or from a joint measurement. It is possible that the lease will itself state the floor area to be used on rent reviews1.
The Royal Institution of Chartered Surveyors have published a standard method of measurement which prescribes what
is and is not to be included in a floor area measurement of commercial property. For offices there are various bases of
measurement, gross external area, gross internal area and net internal or net lettable area. Rental valuations usually
proceed on the basis of the net lettable area2. Obviously, it is important that when the rent of a comparable letting is
analysed so as to produce a rent per unit area the basis of measurement is the same as that to be applied in the valuation
of the subject premises.
HR A[4410]-[4420]
1 The purpose of this is to prevent disputes and the need for remeasurements. See para HR A[3730].
2 For office and similar premises four bases of measurement are commonly used: (a) the gross external area is the total floor area of a
building including the external walls; (b) the gross internal area is the total floor area of a building excluding the width of the external walls
and wholly vacant areas such as lightwells; (c) the net internal area, or net lettable area, is the most important measurement for rental
valuation purposes. It is the total floor area excluding the width of external walls and internal walls and excluding areas such as stairs, lifts,
lavatories, and plant rooms; (d) the net usable area is a concept sometimes used by designers and architects. It means the net internal area but
excluding essential circulation space, for example, a part of an open plan office floor which has to be kept clear for people to reach the lifts
and stairs and to move around the floor.
HR A[4421]
In the valuation of shop premises a somewhat different technique known as the zoning method is often used. With
premises such as offices and industrial and storage buildings what is important is the total amount of floorspace
available not where it is located in relation to the entrance and the outside street. With shops it is different. There it is
very important to know how much of the floorspace has a street frontage, for purposes of window displays and the
attraction of customers, and how far back the floorspace is from the entrance. The zoning method means that the total
floor area of the shop is divided into successive depth zones working back from the main street frontage. The zones are
usually 20 feet in depth, and are called zones A, B, C, etc. For example, a shop of 1,000 sq ft in all might have 400 sq ft
in zone A, 400 sq ft in zone B and 200 sq ft in zone C. The valuer then seeks to find a zone A value in £ per square foot.
He applies this to the zone A area, and halves it for the zone B area, and applies a quarter of it to the zone C area, and so
on. In the above example, a zone A value of £60 per square foot would be applied to the 400 sq ft of zone A space, a
value of £30 per square foot to the 400 sq ft of zone B space, and a value of £15 per square foot to the 200 sq ft of zone
C space. In practice, the arithmetic is done by halving the area of each zone as one moves back to give an equivalent
zone A area (abbreviated to ITZA). In the example the ITZA would be 700 sq ft. The zone A value can then be applied
to the ITZA. The zoning method has several advantages as a valuation technique. It means that a shop can be valued
with proper account being taken of the importance of its floor configuration in relation to the street. It also means that it
Page 875
is easy to use comparables since the rent of the comparables can be expressed as a zone A value so avoiding
adjustments for the layout of each shop.
(e) The final valuation
HR A[4422]
There are two further points to be considered before a final assessment is made of the rent which would be payable
under the hypothetical lease. First, there may need to be some increase or decrease in the overall value to reflect some
factor special to the demised premises or to the hypothetical letting. Illustrations of special factors are some peculiarity
in the demised premises, such as very poor natural light to some of the floors, or a particularly tight user clause in the
hypothetical lease which restricts both changes of use and, indirectly, alienation, or a long period between rent reviews
in the hypothetical lease. Either of these might justify a percentage reduction in the rent which would otherwise be
assessed or some other means of adjustment. Care is necessary at this point in the valuation exercise to ensure that the
special factor has not already been taken into account either by being present in the comparables or by being the subject
of an earlier adjustment1. To take the second illustration just mentioned, a very restrictive user clause, if the rent is
derived from comparables where the leases have a similar restriction the disadvantage of the restrictive provision has
already been taken into account in the rent agreed for those comparables. A restrictive provision may have been the
subject of a specific adjustment, or a part of an overall adjustment, when the rent of a comparable was brought to a level
appropriate for the subject property. To make a further adjustment in such circumstances would be double counting.
Relevant factors such as a restrictive provision should be reflected somewhere in the valuation, and it is for the valuer to
ascertain whether (a) they are already in the rents agreed in the comparables, (b) they are the subject of an adjustment to
the rent of particular comparables, or (c) they are reflected in the type of final adjustment mentioned here.
HR A[4422.1]
1 It is important that the various stages in the valuation process are not confused or conflated whether by the valuers or an arbitrator or an
expert. An illustration of such possible confusion is given in the decision of the High Court in St George's Investment Co v Gemini
Consulting Ltd [2005] 01 EG 96. In the rental valuation of the ground floor of business premises the arbitrator at the invitation of the parties
founded his valuation on an arbitral award which had been made in a rent review of the third floor of the premises. He reduced the rent
appropriate to the ground floor by 40% so as to reflect differences between the third floor and the ground floor. He then made a further 9%
deduction for onerous terms in the lease. The confusion arose out of the fact that the rent as determined on the review of the third floor had
already taken account of the same onerous terms which were in the lease of that floor (in fact the arbitrator had not made a discount for the
terms). It therefore appears that the 9% deduction may have been double counting. The award was remitted by the High Court to the
arbitrator for reconsideration under s 68 of the Arbitration Act 1996 because of a serious irregularity: see para HR A[4287], note 1.
HR A[4423]
The final point is that the rent obtained by applying the unit rate derived from the comparables to the floor area of the
subject property may need a rounding. In the real world rents are usually agreed as a round figure, ie £140,000 per year
not £140,123 per year. Consequently, a valuation which aims to reproduce the circumstances of the real world may need
a rounding up or rounding down to the nearest £1,000, or even the nearest £10,000 for very valuable properties.
(f) Other matters

Page 876
HR A[4424]
It has been held that an arbitral award in comparable premises is not admissible as evidence of the value of the subject
premises1. The decision is based on technical aspects of the law of evidence and on the consideration that the decision
of the arbitrator cannot be fully evaluated unless it is known on what evidence he reached his decision2. This rule is of
some surprise to valuers and adds an air of unreality to the proceedings3. The rule does not, of course, prevent agreed
rent reviews of comparable premises being used in evidence at an arbitration. The parties can also agree that past
arbitral awards shall be adduced in evidence at a later arbitration if they wish. It is doubtful whether an expert who
determines a rent is prevented from having regard to past arbitral awards since his determination is not based on
evidence in the same way as is that of an arbitrator. A party to an arbitration should, however, be careful before he
agrees to the admissibility of awards of arbitrators in other arbitrations since the introduction of such material may work
to his disadvantage. Even if such other awards are admitted by agreement they may have limited weight unless the full
material which was before the other arbitrator can be put before the present arbitration in order that the evidence and
basis on which the previous arbitrator made his award can be precisely ascertained.
HR A[4425]
1 Land Securities plc v Westminster City Council [1993] 4 All ER 124, [1993] 1 WLR 286. Under s 34 of the Arbitration Act 1996 the
arbitrator may direct that the strict rules of evidence do not apply. A result of such a direction is probably that the above rule does not apply.
2 In particular, the rule in Hollington v F Hewthorn & Co [1943] KB 587 that the decision of one court cannot be used to prove facts in
subsequent and different proceedings.
3 Suppose that in a row of identical shops two recent arbitrations have produced the same or very similar rental figures. It seems
unrealistic that an arbitrator considering the rent of a third shop is expected to ignore the two previous awards.
HR A[4426]
There are occasions on which a valuer will be required to determine not a true or ordinary market rent, but a headline
rent, that is the rent which a hypothetical willing lessee would pay in return for an inducement given to him1. In some
cases the rent determined on this basis is likely to be higher than the true market rent. On the other hand, it is sometimes
asserted that a rent determined on a headline basis on a rent review will be lower than the true market rent. The basis for
this suggestion is that the hypothetical lease to be assumed for the purposes of the rent review will itself contain
provisions for the determination of a rent on a headline basis and any willing lessee taking a hypothetical lease with
such an unsatisfactory and uncertain provision in it may be willing to pay only a reduced initial rent. Arguments of this
sort raise difficult points of valuation and are primarily matters for a valuer to determine. An initial difficulty is that the
valuer is presented with the task of deciding two interdependent variables, one being the level of the inducement and the
other the amount of the rent. Furthermore, the inducement may take various forms, the most usual being the granting of
a long rent-free period, or the payment to the tenant of a capital sum, perhaps ascertained in accordance with the
fitting-out costs of the tenant. Logic suggests that the proper course for the valuer will often be to decide the level of the
inducement, and then to determine what rent would be negotiated with the benefit to the tenant of that inducement. It
may be that the level and type of inducement allowed to tenants in open market transactions in the area will form
guidance at the first stage2. More often the valuer may be compelled to have recourse to his general feel of the market at
the relevant time in order to decide what inducement would be appropriate in the case of the particular hypothetical
transaction before him. Once the value of the inducement is decided, it may be possible to use arithmetical techniques to
convert that value into a rental equivalent, and so to determine the additional rent above the true market rent which the
Page 877
tenant would pay in return for the inducement.
HR A[4427]
1 See paras HR A[3941] and HR A[3961] for a discussion on headline rents. See also HR A[4389.2] for a discussion on how a headline
rent agreed for a comparable premises is to be converted or adjusted into a rent appropriate to be used as a guide to the rent of the subject
premises on a rent review of those premises.
2 Currys Group plc v Martin [1999] 3 EGLR 165. However, in considering what rent a hypothetical willing lessee would agree to pay in
return for an inducement, some consideration should be given to the type of person who would constitute the willing lessee. The reason is
that different types of person or company might have a different attitude to inducements and resultant high headline rents. A small company
starting up a business might welcome a high inducement in return for a high later rent, whereas a large established company might take a
very different view.
HR A[4428]
It has been explained above that comparable transactions which occurred after the review date may be considered as
evidence of value1. This is not because the knowledge of these transactions could have affected the minds of the
hypothetical parties but because the transaction may be of probative value as to what the parties would have agreed. It is
sometimes asserted that because post-review date comparables could not have been known to the willing lessor or the
willing lessee at the time of the hypothetical letting they should be accorded less weight as evidence of value than
pre-review date comparables.
HR A[4429]
HR A[4430]
A transaction which involves the subject property itself may be a very good guide to its value on the review date. An
illustration of this in the rental field might be an actual subletting of the demised premises just prior to the review date.
The rent payable by a subtenant may be strong evidence of what a willing lessee would be willing to pay on the review
date. A valuer who disregards evidence of such a cogent character could be guilty of negligence1. Sometimes the rent
agreed for the subject premises at the previous rent review or at the start of the lease may be of assistance. If the prices
of comparable premises can be shown to have changed by a particular proportion over the period since the previous rent
was agreed that may be some indication that the rent of the subject premises has changed by a similar amount. It would
be unusual to use calculations of this nature as a primary mode of valuation but they may be useful as a check on a
valuation reached by some other mode.
HR A[4431]
Page 878
1 See also para HR A[4363]. Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1995] 2 All ER 769. The valuations in this
case were carried out for the purposes of persons intending to lend money for the acquisition of property with the property used as a security.
The transactions to which proper attention ought to have been paid by the valuers were those under which it had been agreed to purchase the
properties.
Page 879
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/E Valuation/The
profits method
The profits method
HR A[4432]-[4440]
A valuation by reference to anticipated profits is a radically different valuation method. Its essence is that the valuer
tries to estimate the annual profit which the willing lessee would expect to make from carrying out a business at the
demised premises. A proportion of that profit is then attributed to rent and becomes the rental value. The method is self
evidently inappropriate for a lease of premises where no commercial activity is to be carried on, such as residential
premises, or where the commercial activity does not create a profit in itself but supports other profit making activities
elsewhere, for example, the headquarters office of a large company. Its use is principally in the field of recreation and
entertainment, and hotels, public houses, casinos, etc, are often valued using the profits method. The justification for its
use is (a) that in the actual market tenants of such premises often do approach rental negotiations adopting this method;
and (b) with properties such as hotels each property tends to be unique in its characteristics and it may not be easy to
find suitable comparables. A type of profits method valuation may also be used when the hypothetical lease is of a
property which is likely to be sublet in parts by the willing lessee to a number of occupying subtenants, for example, a
parade of shops1. Sometimes the profits and the comparables methods are used together, one being a check on the other.
HR A[4441]
HR A[4442]
The concept which underlies the profits method of valuation is easy to describe. Essentially, there are three steps in the
process.
(a) An estimate is made of the income from the business. In the case of a hotel this will mean that an
estimate is made of the likely income from such sources as the letting of rooms, the restaurant and bars
and ancillary functions such as holding conferences or running a health club. In the case of a casino an
estimate will be made of the amount which members of the club will gamble and how much will be
retained by the operators.
(b) An estimate is then made of the various expenses and outgoings involved in the operation of the
premises. To take again a hotel as an example there will be staff expenses, purchases of items such as
food and drink, and outgoings such as fuel, rates, insurance and advertising.
(c) The difference between the income and the running costs is the net profit. This amount is available
for the payment of rent. The final step is therefore to decide what proportion of the net profit should be
taken as that which the willing lessee would be willing to pay as rent.
HR A[4443]
Page 880
The preparation of the evidence to support each stage of the valuation is a skilled and specialised task. For example, an
estimate of the anticipated income from letting rooms to guests in a hotel involves: (a) ascertaining the number and type
of lettable rooms; (b) estimating a tariff room rate (that published by the hotel as the room rate); (c) estimating an actual
average room rate, having regard to the fact that many rooms may be let under special arrangements at a rate below the
tariff rate; and (d) estimating an average occupancy rate of rooms over a year. Accountants and others with experience
in the hotel trade will be needed to provide this type of evidence. There are various publications which provide
statistical information on matters such as average occupancy rates of different types of hotel.
HR A[4444]
In most rent reviews the hotel will have been operated in the past, and it might be thought that the actual operating
records were the best guide to estimates of future operation. There are decisions in the Court of Appeal which suggest
that this may indeed be the case1. However, it has more recently been held that such information is not admissible in
relation to rent reviews on the reasoning that the information is private to the actual operator and would not be available
generally in the market or to the hypothetical willing lessee2. Obviously, it is correct that a willing lessee cannot be
influenced by that which he does not know and cannot ascertain. What the above reasoning may miss is that in rent
reviews there may be material which is logically probative of what the hypothetical parties would have agreed even
though it is not material which they could have had in mind. A good example is evidence of transactions in comparable
premises effected after the review date. The parties to the hypothetical lease could not have known of this but it may be
a guide to an arbitrator of what they would have agreed and as such is admissible as evidence3. By parity of reasoning
where conflicting evidence is given of, say, the estimated room income of an hotel the actual room income in the past
may be a guide to an arbitrator in deciding which estimate is to be preferred4. Companies are required to file certain
accounts under company law legislation, and regard can be had to these if they were in the public domain at the review
date. Such accounts are often of a nature that discloses no useful information relating to individual properties. When the
profits method has been used in rating valuations, it has sometimes been held that it is proper to consider the actual
profits over the period of a hypothetical tenancy earned by the occupier of the premises5.
HR A[4445]
1 WJ Barton Ltd v Long Acre Securities Ltd [1982] 1 All ER 465, [1982] 1 WLR 398; Harewood Hotels Ltd v Harris [1958] 1 All ER
104, [1958] 1 WLR 108.
2 Cornwall Coast Country Club v Cardgrange Ltd [1987] 1 EGLR 146; Lynall v IRC [1972] AC 680, [1971] 3 All ER 914.
4 Suppose that in a rent review dispute one party estimates that the room income of a hotel will be £5m per year and the other party
estimates that it will be £3m per year. The fact that the hotel has operated efficiently for the last three years with a room income of £4.9m,
£4.95m and £5.1m is surely some evidence that the estimate of £5m per year is the more sound.
5 See the decision of the Lands Tribunal in Hong Kong in China Light and Power Company Limited v Commissioner of Rating and
Valuation [1994-95] CPR 618, in which it was said that it was not just permissible, but mandatory, for a valuer to have regard to the actual
profits and returns of the occupier of the premises of which the rating assessment was being made.
HR A[4446]
Page 881
Persons who conduct rent reviews using the profits method of valuation do in practice often make use of past trading
accounts as a guide to the future. Sometimes they do so by consent even in a formal process such as an arbitration. If
this is done it must be remembered that actual trading records are necessarily those of an actual operator of the
premises. What is crucial for this type of valuation used in a rent review is the anticipation which a willing lessee would
have of the profits which he would make in the future. A willing lessee might regard the previous operation in the
premises as inefficient or badly organised, and might expect to do better.
HR A[4447]
A willing lessee of premises such as a hotel would be likely to be faced with substantial initial expenditure. The rule,
explained earlier, that all tenant's fixtures are taken to be removed means that the incoming lessee would have to
provide items such as bedroom furniture and equipment for the restaurant and common parts1. When a comparables
method of valuation is used it is not usually necessary to do a calculation of initial fitting out costs since the need to fit
out the premises will be a factor already taken into account in the rent agreed or determined for the comparables2. The
use of the profits method entails the cost of fitting out and similar work being brought into the calculations since it is a
cost which will be borne by the lessee in order to make a profit. The usual means of paying regard to this aspect of the
operation is to estimate the capital cost involved and then to rentalise it over the period of the expected life of the
equipment3. The annual or rentalised sum will then be an item of expenditure to be put into the notional accounts. A
similar process would be necessary if a willing lessee would expect to carry out improvements to the premises.
HR A[4448]
2 If there are special fitting out costs applicable to the subject premises but not the comparables, eg expensive equipment needed to
support an operation of premises to be used for financial dealing, a separate valuation may be needed.
3 For example, if the total cost of providing bedroom and bathroom equipment for a hotel is £500,000 and the equipment is estimated to
have a life of ten years the annual or 'rentalised' sum will be that amount which each year for ten years would have to be provided to pay
interest on a borrowing of £500,000 together with a sum which each year would have to be set aside to build up a fund which with interest
and annual accretions would produce £500,000 at the end of the ten years to repay the loan.
HR A[4449]
The type of premises where a profits method of valuation is most appropriate is also likely to be the type of premises
where an accumulated goodwill is of most benefit to the operation and to the level of profits. The meaning of goodwill
and the fact that its effect on value has generally to be disregarded in rent review valuations has been explained earlier1.
To take a hotel or a public house as examples it has to be assumed that the goodwill built up by the previous operator is
not in existence so that it may take the willing lessee some years before he can build up a trading reputation and a body
of customers likely to return. The result is that he would expect a few initial years of reduced profits before he built up
to a full and sustainable level of profitability. The usual practice is to base the calculations on the anticipated full level
of profitability so that the existence of the early less profitable years may have to be reflected in a lower proportion of
the full anticipated profits being paid as rent.
HR A[4450]-[4458]
Page 882
HR A[4459]
Those who use the profits method sometimes point to a further factor which can be taken into account. A willing lessee
would expect that after some years of successful operation he would have built up a business in the demised premises
which would enable him at any time to realise a capital sum by assigning the lease and selling the business. It is
sometimes suggested that this opportunity is something which would induce a new lessee to be willing to pay an
enhanced rent.
HR A[4460]
A variant of the more traditional method ascertaining the rent which a willing lessee would pay for premises from
which he conducts a profit-making business is that sometimes used in applying the profits method to rating valuations1.
The principle is that the anticipated net profits of the business are calculated by deducting the expenses from the gross
income. That proportion of the net profits which would be paid as rent is that which is calculated by finding the capital
value of the assets which the hypothetical tenant would have to provide in order to run the business and then calculating
the annual rate of return he would require on that capital value. Once that acquired annual return has been deducted
form the net profits the balance is available as rent2. A contentious part of the overall calculation is often the
determination of what percentage of the capital value of the tenant's assets he would require as his return for investing
that capital sum into the business. Economic models, such as a capital asset pricing model, may be used in this process.
The underlying theory is that the required rate of return on the capital invested can be calculated by considering how
much of the capital the hypothetical lessee would raise by borrowing (debt) and by the issue of shares (equity) - the debt
to equity ratio - and then by calculating the cost of raising the proportions of capital by these means. It must be
remembered that the use of such a methodology has been developed in the field of rating law and practice which
contains artificial assumptions not present in rent review valuations, for instance the statutory concept of a tenancy from
year to year and the rule established by the courts that in the context of such a profits valuation the hypothetical lessee is
assumed to have been able to acquire the assets of the previous occupier at their open market value at the beginning of
the hypothetical tenancy and to dispose of them at their then market value at the end of the hypothetical tenancy. No
such assumptions are generally present in the operation of rent review valuations. The rating methodology is
appropriate where the valuation involves large utilities, such as telecommunications or electricity supply premises. In
such cases, the purpose is to find the rental value of the hereditament and it is generally the case that the hypothetical
tenant would himself provide very substantial assets for the operation of the business so that the cost of providing them
can be calculated and a reasonable return on that cost assessed. The circumstances are very different where the profits
method is applied towards finding the rental value of premises where the hypothetical tenant would himself provide
assets of a very moderate value. Where the profits method is used as a valuation technique, an issue which may arise is
whether, and to what extent, the actual returns, costs and profits of the business at the premises following the valuation
date can be used in order to assess the returns, costs and profits that the willing lessee would anticipate making from the
business. These actual returns may be known where the valuation is carried out some time, perhaps some years, after the
valuation date. In principle, these actual returns should not be taken into account as something that the willing lessee
would have available at the valuation date when he decided the rent that he was willing to pay under the hypothetical
lease. However, if there is a dispute as to what returns would have been anticipated by the willing lessee at the valuation
date, the actual returns may be evidence that one estimate is likely to be more reliable than another. For example, if one
valuer opines that the actual profits over the three years following the valuation date would be an average of £20 million
per year and the other expert states that the figure would be £3 million per year, if the actual profits are seen to be £21
Page 883
million per year this may be some indication that the estimate of the first valuer is more reliable. Of course there may
have been events, not anticipated at the valuation date, which affected the actual profits, for example a collapse in
business following a terrorist attack, which may explain why the actual profits of a business differ from those
anticipated at the valuation date. The question of the use of post-valuation date events, sometimes called the use of
hindsight, has been discussed earlier3.
HR A[4461]
1 See Ryde on Rating and the Council Tax at para E[665]ff.
2 There is a well known explanation of the process as used in rating law and practice in the speech of Lord Cave in Kingston Union
Assessment Committee v Metropolitan Water Board [1926] AC 331, HL. A further explanation, together with an account of the history of the
process, was given by Lord Hailsham LC in Railway Assessment Authority v Southern Railway Co [1936] AC 266.
3 See HR A[3710]-A[3720].
HR A[4462]
As with the comparables method the use of the profits method may require some final adjustments to the rent. There
may be some peculiarity in the hypothetical lease which would justify an overall addition to the rent (for example, a
long period between rent reviews) or decrease in the rent (for example, a very restrictive user provision). A rounding
may be necessary at the end1.
HR A[4463]

Page 884
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/E Valuation/Residual
valuations
Residual valuations
HR A[4464]
A residual valuation means a valuation of property as a clear site calculated by first estimating the value of the land as
developed and then estimating the cost of carrying out the development on the site so that the value of the clear site is
the residue of the value as developed after deducting the cost of the development. Its purpose is to arrive at the value of
a clear or undeveloped site. The capital value of the site so ascertained can be converted into a rental value for the site.
The finding of a site value in rent reviews is usually necessary when the land as let is an undeveloped site with the
intention that the lessee will develop it. In such cases it may be provided that the rent reviews are to up-to-date site or
ground rents1.
HR A[4465]
1 See para HR A[3808], for a consideration of ground rents and the circumstances in which they may be prescribed as the basis of rent
reviews.
HR A[4466]
Rent review clauses where it is desired to find a rental value for the site alone do not always proceed by requiring a
rental valuation of the site. A similar result can be achieved by other provisions, for instance that the rent on each
review is to be a specified proportion of the full rental value of the site and any buildings on it or that the rent is to be a
proportion of the income obtained from subletting the site and the buildings. The reason that the residual method of
valuation is used when it is necessary to find a ground rent is often the difficulty in finding adequate comparables. The
letting in the market of sites for development is obviously rarer than the letting of completed buildings. In the absence
of comparables there may be no alternative except to proceed by a residual valuation.
HR A[4467]
The problem with a residual valuation is that the calculation involved includes so many factors where there is scope for
error and in respect of which there may be little hard evidence. The two principal components of such a valuation are
(a) estimating the value of the property after it has been developed; and (b) estimating the cost of the development. The
first component may be complicated by the need to ascertain first a rental value and then to capitalise the value. It is
usual to take rental values as prevailing on the date of the valuation even though any value could not be realised until
some future date when the development had been completed. The second component contains a number of elements
such as the building cost and the cost of financing the project until a return can be realised. A further important element
in a residual valuation is that of the developer's profit. The theory is that a developer would not carry out a development
unless he expected a substantial profit to compensate him for the risks and effort involved. This profit is usually
expressed as a percentage of the total costs to which the developer has to commit himself, including as a cost the
Page 885
amount he will have to pay for the land which is being valued. Such a percentage may be 15% or 20% or more of the
total cost of the development, and the more risky and speculative the development is the higher the percentage will be.
The principle of a residual valuation is therefore to estimate the value of the completed development, to estimate the
total cost of the development and to estimate a developer's profit as a percentage of that cost. When the cost and the
developer's profit are deducted from the value of the completed development, the difference or residue is that sum
available to purchase the site and is the value of the site. There will also be lesser elements such as the cost of marketing
the property and agents' and legal fees to be brought into the overall calculation. Despite these uncertain elements
residual valuations are often adopted and, as mentioned above, there may be no alternative in terms of valuation
techniques.
Page 886
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/E Valuation/General
evidence
General evidence
HR A[4468]
Whatever method or methods of valuation are relied upon the end result may be affected by the general economic
circumstances which prevail at the valuation date. Valuers often think it pertinent to pay close regard to the wider
economic and market circumstances of the time, such as recent movements in gross domestic product and general
inflation. The rationale is that the amount which a lessee is willing to pay to take a lease may depend not only on precise
calculations based on comparable transactions or the level of anticipated profit but on the prevailing mood of the
market. At times of general retrenchment and economic gloom a willing lessee may be less ready to commit himself to
a rent than he would in more buoyant and optimistic times. The prevailing mood of the property market at a particular
time may also be of significance and can be established not only from the recollection of those who were active in the
market at the time but also from contemporaneous material in the property press.
HR A[4469]
The weight to be attached to this type of general evidence should not be exaggerated, especially when the valuation
proceeds in reliance on comparables. If the comparables are approximately contemporaneous with the valuation date
then it can be expected that the relevant mood of the general business community and of the property world in particular
will have been reflected in the rents agreed for the comparable properties. There may not then be much to be gained by
setting it all out in detail since it cannot affect the rents actually agreed and on which the valuation of the subject
property is to be based. General evidence of the type indicated may have two more specific uses. Where the date of a
particular comparable transaction is some time before or after the valuation date it may help to explain why and to what
extent the rent derived from that comparable needs to be adjusted before being used to demonstrate the value of the
subject property1. Secondly, general economic circumstances may help to establish the strength of the market within
which the hypothetical letting is assumed to take place. The economic mood may suggest that the subject premises
would have attracted a great deal of interest if put on the market (or may, of course, suggest the opposite)2.
HR A[4470]-[4480]
1 See para HR A[4387], for adjustments for time.
2 See para HR A[3690]. The parties to a rent review dispute may adduce formal evidence of specific persons or companies who would or
would not have been interested in taking a lease of the subject premises had they been available for letting on the valuation date.
Page 887
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/E
Valuation/Subletting
Subletting
HR A[4481]
Most rent reviews assume that the hypothetical letting is with vacant possession, but in some cases the letting is taken to
be subject to one or more subsisting subleases1. In the latter case the valuation will be of the right to receive the rents
from subtenants. The length of the sublease, its rent review pattern, the strength of covenant of the subtenant and the
other terms of the sublease are all factors to be taken into account in deciding what a willing lessee will pay for a lease
subject to a sublease.
HR A[4482]
HR A[4483]
Unless the rent review clause directs otherwise, the hypothetical lease must be assumed to be a single letting to one
willing lessee. However, with some types of property the intention of the willing lessee will not be to occupy the
property himself but to sublet it in whole or in parts to occupiers. His interest in the property will be to make a profit
from the return by way of rental income. A hypothetical lease of a block of flats or of a parade of shops would plainly
fall into this category. In such cases the valuation of the rent which the willing lessee would pay for the headlease would
be likely to proceed by a species of the profits method. Where a valuation of this type is used on a rent review it is likely
to contain three steps: (a) First an estimate is made of the rent which would be obtained for each component part of the
property to be sublet. These rents are then aggregated. (b) Secondly, a series of deductions from the aggregated rental
income is made to take account of factors such as the cost of administering the lettings and collecting rent (ie a
management sum) and the risk of voids (properties which temporarily cannot be let) and rent free periods after
properties are first let. It would be usual that the rents from sublettings would include a contribution under service
charge provisions which would meet the cost of insuring the properties and cleaning and repairing common parts and
any common structure. If not a further deduction will be needed to cover these expenses. (c) Thirdly, the willing lessee
will expect a profit from the enterprise including an allowance for the risk which he takes. He will be bound to pay the
rent agreed to the willing lessor but has no certainty that he will continue to achieve the estimated level of rents from
subtenants. A further deduction will be appropriate to cover this profit and risk element.
Page 888
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/E
Valuation/Improvements
Improvements
HR A[4484]
It has been explained that rent review clauses often require that there be disregarded the effect on rent of improvements
carried out by the tenant1. The method adopted by the valuer to give effect to this requirement is in the main a matter of
valuation not of law, although the decided cases suggest certain principles2. Two main approaches are possible: (a) It
may be assumed that the improvements are not in existence and a valuation may proceed relying on a comparables or
profits method. The comparables should then be of premises which also do not contain the improvements. The estimate
of profits on the profits method should also be on the basis of premises which do not contain the improvements. (b) The
premises may initially be valued taking into account the improvements and then a deduction made for the rentalised cost
of effecting the improvements.
HR A[4485]
2 GREA Real Property Investments v Williams [1979] 1 EGLR 121; Estates Projects v London Borough of Greenwich [1979] 2 EGLR 85.
HR A[4486]
Neither of the methods can be categorised as wrong in principle. If the valuation as a whole proceeds by reference to
comparables and no substantial comparables exist relating to properties in an unimproved state it may not be practical to
use the first approach. For example, if the improvement to be disregarded is the installation of an air conditioning
system into offices by the tenant there may be good comparables which are all air conditioned offices. It would then
seem sensible to value the subject premises by reference to these comparables as air conditioned offices and then to
make a deduction based on the rentalised cost of installing air conditioning.
HR A[4487]
It is often considered preferable to use the first method if it can be achieved. The preference rests on several sound
reasons.
(a) It avoids dispute about the cost of carrying out the improvement. It is inherent in the second
method that the cost of the work at the review date is estimated. There may be evidence of the actual
historic cost of carrying out the improvement and indices of building costs may be used to bring that cost
up to current values. In other cases the improvements may have been carried out by a predecessor in title
of the current tenant and no records of the cost are available.
Page 889
(b) Once the capital cost of the work is estimated it is necessary to reduce this to a rental equivalent so
as to deduct it from the rent arrived at in respect of improved premises. The rentalisation process needs a
decision on the interest rate to be used and the notional period over which the rentalisation takes place.
Both elements can be the subject of further dispute.
(c) A rentalisation of the capital cost of improvements as just described proceeds on the implicit
footing that the cost and the value are the same, ie that if the improvements cost £1/2m the rental effect is
the rentalised equivalent of £1/2m. This is not necessarily so.
(d) The second method could be unfair to the landlord. If the improvements as carried out by the
tenant did not exist the space occupied by the improvement would be available for other possible
improvements. The prospect of these could provide a higher rent for the premises.
HR A[4488]
If the first method is used, so that the improvements are simply regarded as not in existence, it must be ascertained what
would be the state of the demised premises if there were no improvements. If the improvements have been work of
construction on a vacant part of the demise, such as the building of an extension to a building, the answer is that there is
nothing there. Often, improvements are adaptations of existing structures. The proper approach on the first method is
then to value the premises in the physical condition in which they were before the making of the improvement.
HR A[4489]
The principle is that he who asserts something must prove it. It will usually be the tenant who asserts that certain
improvements are to be disregarded for the purposes of the rent review. Therefore, it is for him to prove that the works
are improvements and were carried out in circumstances such that their effect on value is to be disregarded under the
terms of the rent review clause1. This may mean showing who carried out the works and the existence of any necessary
consent from the landlord.
HR A[4490]-[4500]
1 See paras HR A[3768]ff, for a consideration of what has to be shown under the usual form of improvements disregard.
Page 890
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 7 Rent reviews/E Valuation/Particular
clauses
Particular clauses
HR A[4501]
Any provision in the hypothetical lease may have an effect on value. Modern leases have become increasingly long and
frequently contain a mass of provisions which are of a fairly standard nature. It is unlikely that any major difference to
the market value will be occasioned by small differences in the language of these provisions. The features of the
hypothetical lease which are most likely to affect the rental are: (a) its length and the existence of a break clause; (b)
any particular restrictive provisions as to use, alienation or alterations; (c) the service charge arrangements; (d) any
unusual feature of the repairing covenant (for instance an obligation to rebuild the premises when necessary as well as
to keep them in repair); (e) a provision for payment of rent in arrear not in advance (a benefit to the tenant which is
unusual in commercial leases); and (f) the question of rent reviews in the hypothetical lease. Some of these provisions
have been mentioned in connection with the hypothetical lease and its terms and a comment has been made on the
valuation implications1. It remains to consider rent reviews in the hypothetical lease.
HR A[4502]
1 See para HR A[3722] (duration), para HR A[3862] (rent payable in arrear), para HR A[3890] (user).
HR A[4503]
The hypothetical lease may have rent reviews at unusually long intervals. This will usually be because there are long
intervals between rent reviews in the actual lease and the same periods are reproduced in the hypothetical lease. The
question for the valuer is how he is to reflect in the rent these extended intervals. If the rent reviews are upwards only
(as is usually the case in commercial leases) a long period to the next rent review must be of benefit to the willing
lessee. To take an example, if it is 14 years to the next rent review not five years the lessee will know that his rent
cannot increase for 14 years. If the rent review is due in five years the lessee has a risk of a rent increase after that
period. If the reviews are upwards and downwards the benefit to the willing lessee of a long period between reviews is
less obvious since he loses the prospect of securing a reduction in the rent at an earlier date. In practice, it is generally
assumed that rents are more likely to rise than to fall over a future period so that any potential benefit is seen as
belonging principally to the lessee.
HR A[4504]
The obvious method by which a valuer could estimate how much more, if anything, a lessee would pay for a rent review
delayed for 14 years instead of five years would be to see what lessees actually agreed by way of increased rent in
market transactions for such benefits. Unfortunately, there is unlikely to be any data available since in modern
conditions leases of commercial premises are rarely granted with rent reviews separated by as long as 14 years1. The
exercise therefore becomes theoretical as opposed to being based on empirical data. It is rarely possible to do a
Page 891
convincing mathematical analysis of the benefit since such an analysis would have to rest on assumptions about the
future increase in nominal rental values. Forecasting inflation is notoriously unreliable for one year ahead let alone 14
years. In practice what often happens is that some arbitrary figure is selected to indicate the increased rent attributable to
the benefit. One such method is to take a percentage increase in the rent (say 1% or 2%) for each year to the next rent
review in excess of five years. Thus, if the rent would have been £100,000 per year on a five-year rent review pattern
the rent under a hypothetical lease with a ten-year rent review pattern would be £110,000 on the basis of an increase of
2% for every year over five. Other settlements in other rent reviews are cited as evidence of the amount of the addition,
but these settlements are themselves somewhat arbitrary and the process is less than wholly convincing. When the
period to the next rent review becomes very high the 'percentage increase per year over five' method becomes
impractical. It would be a bold valuer who would suggest that for a 99-year term without a review the increase should
be 188% (ie 99 less 5 x 2%). Some valuers deny that there is any real evidence or basis for an increase in the rent when
the period to the next review is not much above the traditional five years.
HR A[4505]
1 See per Hoffmann J in MFI Properties Ltd v BICC Group Pension Trust Ltd [1986] 1 EGLR 115 at 117.
HR A[4506]
The hypothetical lease may not be subject to rent reviews at all. This may occur (a) in those exceptional cases where the
language of the rent review clause in the actual lease so provides1; and (b) where the rent review is the last before the
end of the actual lease. In principle the same considerations apply to the hypothetical lease as those just explained. If the
term of the hypothetical lease is of some length it may be possible to argue for an addition to the rent by reason of the
benefit which a substantial term without rent review gives to a lessee.
HR A[4507]
HR A[4508]
The addition to the rent discussed in the previous paragraph is sometimes called an uplift or overage. A logical question
to ask is above what it is an overage. The whole argument depends on there being a normal rent review pattern of, say,
reviews at five-year intervals so that with a longer review pattern the overage is for a departure from the norm which
benefits the lessee. It must also be remembered that the departure is only justified to the extent that the rent established
by the comparables is for a normal rent review pattern. As mentioned when the use of comparables was discussed an
overage addition is usually made by a specific adjustment at the end of the valuation1.
HR A[4509]
Page 892
HR A[4510]-[4520]
Although the hypothetical lease may contain rent reviews at normal intervals the details of the reviews may be unusual.
The form of rent review assumed will generally follow that in the actual lease1. If the form of rent review is unusually
onerous or beneficial to the willing lessee that is a factor which in principle may affect the rent he agrees to pay. The
best illustration of the principle is the incidence in the actual lease of rent reviews to a headline rent. This interpretation
of rent reviews will be resisted as a matter of construction but on occasions may be the only interpretation which the
language of the rent review clause will bear2. It is an onerous form of rent review since it requires the tenant under the
actual lease to pay a rent assessed on the basis of a rent free period being allowed when in reality the tenant has no such
rent free period. Rent reviews of this nature in the actual lease will be reproduced in the hypothetical lease. Since they
are onerous and particularly unfair to the willing lessee it should in all logic follow that he will reduce the rent which he
would otherwise pay on account of the burden to him. The validity of this reasoning is a matter for a valuer as is the
amount (if any) by which the rent would be reduced. However, if the principle is correct it does temper the apparent
unfairness of a headline rent on a rent review3.
HR A[4521]-[4620]
1 If the rent review in the actual lease has a 'geared' rent provision (eg a review to 75% of the open market rent) the gearing will not be
reproduced in the reviews in the hypothetical lease. See para HR A[3864].
2 See paras HR A[3949]ff, where the subject and the authorities are discussed in detail.
3 As an illustration of what is meant suppose that there is a lease for 25 years with rent reviews at five-year intervals to a headline rent. On
the first rent review there will be a hypothetical lease of 20 years with three rent reviews due under it. The open market rent at the date of the
first review under the actual lease may be £80,000 per year, but market practice at the time would be to allow a tenant a rent free period of
one year in return for a rent of £100,000 per year payable for the next four years until the next rent review. At this point it would appear that
the tenant would be required to pay £100,000 per year for each of the sixth to tenth years of the term even though the open market rent was
only £80,000 per year. It thus has the unfairness of headline rent provisions on a rent review. However, the hypothetical willing lessee would
realise that that form of rent review provision would appear in his lease with a potential for unfairness at the three reviews due under the
lease. This realisation might lead him to reduce the rent he would pay, even with a year rent free, to below £100,000 per year. It might be
bold to argue that the amount should be reduced to £80,000 per year, but the point of principle should obviously be considered by a valuer.
One matter which might weigh with the willing lessee is that he would not know how the headline rent clause would affect future reviews
under his 20-year term. The impact would depend on market conditions in the future. If at a future review date there was no practice of
granting rent free periods as inducements to take leases (for instance because there was a landlord's market at the date) the headline rent
provisions in the hypothetical lease would be of no real effect at that review. The complex nature of rent reviews is demonstrated in this
reasoning, since what is being envisaged is a hypothetical letting itself subject to hypothetical lettings on its own rent reviews.
Page 893
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress
Chapter 8 Distress
Editor
Jonathan Karas
Page 894
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/A Introduction
A
Page 895
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/A Introduction/1 Nature of
law of distress
1 Nature of law of distress
HR A[5001]
Distress is a summary remedy by which a person is entitled without legal process to take into his possession the
personal chattels of another person, to be held as a pledge to compel the performance of a duty, or the satisfaction of a
debt or demand1. The term 'distress' by almost universal sanction is now used interchangeably to designate the process
of taking, and the chattels taken2, though originally it applied only to the taking. The law of distress enables the
landlord to secure the payment of rent or the performance of certain obligations due to him by seizing the goods and
chattels found upon the premises in respect of which the rent or obligations are due.
HR A[5002]
1 See Bradby Law of Distress, p 1.
2 3 B1 Com 6.
HR A[5003]
The right to distrain is given either by common law1, by contract2, or by statute3.
HR A[5004]
1 At common law. See para HR A[5022].
2 By contract, eg power to distrain off the demised premises, owers given by mortgages (see Re Willis, ex p Kennedy (1888) 21 QBD 384
at 395, CA); powers in brewers' leases to distrain for price of goods supplied (see Stevens v Marston (1890) 60 LJQB 192) or in mining
leases and licences, or in deeds apportioning rents. For attornment or express authority to distrain for what is not rent, or for rent in respect of
which the common law conditions do not exist.
3 Eg by the Distress For Rent Act 1737; see paras HR A[5147] and [6055]; by the Law of Property Act 1925, s 121(1), (2), see para HR
A[20113]. A statutory power of distress, such as that for rates and taxes, is entirely the creature of the Act which creates it, and it confers no
further rights than those expressly given by the statute.
HR A[5005]
The remedy of distress has been characterised as archaic1 and has been subjected to criticism by the Law Commission2
Page 896
and its abolition provisionally recommended. In practice it had not been regarded as of much importance. However,
since the seventeenth edition of this work when the predecessor of this chapter was reduced in length, distress has again
become a common remedy. Accordingly, this chapter has been restored to its previous detail. Because by its nature
distress is a remedy to which resort may be made without judicial process, which by its nature involves the taking of
property (including the property of third parties) and which, in some instances, involves an interference with the tenant's
home, there must be doubt as to whether this remedy can in all instances be exercised in compliance with the European
Convention on Human Rights3.
HR A[5006]
1 Abingdon RDC v O'Gorman [1968] 2 QB 811, [1968] 3 All ER 79, per Denning MR.
2 Landlord and Tenant: Distress for Rent (Law Com no 194).
3 See, in particular, art 6 (right to a fair trial), art 8 (respect for privacy and home) and art 1 of the First Protocol (protection of property)
of the Convention. See also Fuller v Happy Shopper Markets Ltd [2001] 1 WLR 1681,[2001] 25 EG 159, para 27, per Lightman J.
HR A[5007]
At common law the right of distress was given in respect of a great number of services in regard to tenure which are
now obsolete. A right of distress was inseparably incident to a 'rent-service', which is the rent due from landlord to
tenant1. The right to distrain for rent-service arises without the need for express agreement2.
HR A[5008]
1 See Littleton's Tenures, s 213. See paras HR A[2983] and [3006].
2 See Jolly v Arbuthnot (1859) 4 De G & J 224 at 242.
HR A[5009]
The common law right of distress for rent in arrear is a right for the landlord to seize whatever movables he finds on the
premises out of which the rent or service issues, and to hold them until the rent is paid or the service performed1.
HR A[5010]-[5020]
1 Lyons v Elliott (1876) 1 QBD 210 at 213, per Blackburn J.
HR A[5021]
Page 897
By statute, in all cases of rent upon any demise, the distrainor may sell the distress unless relevied within five days1.
1 Distress for Rent Act 1689, s 1. See para HR A[5901].

Page 898
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/B The right to distrain
B
Page 899
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/B The right to distrain/1
Tenancy
1 Tenancy
HR A[5022]
The common law right to distrain does not arise before the relationship of landlord and tenant is complete1. Further,
distress cannot be levied after the lease has determined2 (apart from under the Landlord and Tenant Act 1709)3.
However, possession taken by the tenant under an agreement for a tenancy which can be specifically enforced gives the
landlord the right to distrain4.
HR A[5023]
1 Dunk v Hunter (1822) 5 B & Ald 322.
2 Williams v Stiven (1846) 9 QB 14.
3 LTA 1709, s 6; see para HR A[5322].
4 Walsh v Lonsdale (1882) 21 Ch D 9, CA; Mechelen v Wallace (1836) 7 Ad & El 54n; Fox v Slaughter (1919) 35 TLR 668.
HR A[5024]
Provided there is a demise, the nature or duration of the tenancy is immaterial. It may be a tenancy at will1 or a weekly
tenancy2. The right of distress also exists where, after the expiration of a previous tenancy, a tenant by the consent of
both parties continues in possession under such circumstances as to warrant the inference that there is a tacit renewal of
the contract of tenancy or the inference that a new tenancy has been created3. But there must be facts to warrant the
inference of a renewal of the tenancy. The landlord cannot distrain after treating the tenant as a trespasser by bringing an
ejectment for forfeiture4. A tenancy at sufferance, which is not created by demise, does not authorise a distress, the only
remedy being by action for use and occupation5. Apart from express provision, no right to distrain is conferred on a
licensor6.
HR A[5025]
1 Anderson v Midland Rly Co (1861) 3 E & E 614; Morton v Woods (1869) LR 4 QB 293, Ex Ch.
2 Yeoman v EIlison (1867) LR 2 CP 681.
3 See Right d Flower v Darby (1786) 1 Term Rep 159; Dougal v McCarthy [1893] 1 QB 736, CA.
Page 900
4 Bridges v Smyth (1829) 5 Bing 410. As to the loss of right to distrain, see para HR A[5346].
5 Alford v Vickery (1842), Car & M 280; Jenner v Clegg (1832) 1 Mood & R 213.
6 Hancock v Austin (1863) 14 CBNS 634 (right to 'standings' for machines in factory); Rendell v Roman (1893) 9 TLR 192 (stall at
exhibition to be used between certain hours); see also Provincial Bill Posting Co v Low Moor Iron Co (1909) 2 KB 344, CA; Interoven Stove
Co Ltd v Hibbard and Painter and Shepherd [1936] 1 All ER 263. As to the distinction between lease and licence, see paras HR A[549]ff.
Apart from mining licences, an express provision for distress is seldom included.
Page 901
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/B The right to distrain/2
Rent
2 Rent
HR A[5026]
The landlord's right to distrain is founded on the principle that the rent reserved by his demise issues out of the land and
he distrains by taking possession1. For rent to form the subject matter of distress it must be reserved out of lands and
tenements. There can be no common law right of distress for a payment in the nature of rent reserved upon a letting of
incorporeal hereditaments, since the landlord retains possession of the land2.
HR A[5027]
1 British Mutoscope and Biograph Co Ltd v Homer [1901] 1 Ch 671 at 674, per Farwell J. See also para HR A[3004].
2 Co Litt 47a; Buszard v Capel (1828) 8 B & C 141 at 150.
HR A[5028]
Sums reserved for the use of chattels confer no right of distress, but when chattels are let with houses or land at one
entire rent, the payment issues out of the land and may be distrained for without need to apportion it as between the land
and chattels1. So also, where an entire rent is payable for the exclusive occupation of a room or defined space in a
factory, with supply of power, the rent is deemed to issue out of the room or land2.
HR A[5029]
1 Newman v Anderton (1806) 2 Bos & PNR 224; Swift v Macbean [1942] 1 KB 365 at 383. See also para HR A[3050].
2 Selby v Greaves (1868) LR 3 CP 594 at 602; Marshall v Schofield & Co (1882) 52 LJQB 658, CA.
(a) Payment for which distress not available
HR A[5030]-[5040]
Payments agreed upon during the currency of the tenancy for the outlay for additions or improvements to be made by
the landlord on the premises1 or an annual sum agreed to be paid over and above the rent towards compensation for the
goodwill or the like2, where they are not in fact rent, but sums in gross cannot be distrained for3. However, rent
Page 902
increased upon review in accordance with a reservation at the time of the demise is rent which issues out of the land
upon which distress can be made3. A reservation in the demise itself of an increased rent equal to a percentage on the
landlord's outlay is good, and will support a distress4. Any attempt to alter the rent by a collateral agreement, not
amounting to a new demise or a variation of the lease itself, only operates as a personal contract between the parties and
cannot be distrained for5.
HR A[5041]
1 Hoby v Roebuck (1816) 7 Taunt 157; Donellan v Read (1832) 3 B & Ad 899; Lambert v Norris (1837) 2 M & W 333. See para HR
A[3066].
2 Smith v Mapleback (1786) 1 Term Rep 441; 18 Digest (Rep) 357, 79.
3 See United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 at 935 and see HR A[3066].
4 Re Knight, ex p Voisey (1882) 21 Ch D 442 at 456, CA, per Jessel MR.
5 Donellan v Read (1832) 3 B & Ad 899 and see HR A[3066]; Jenkin R Lewis Ltd v Kerman [1971] Ch 477, Ch.
(b) Express power to distrain
HR A[5042]
By express agreement between the parties a power to distrain may be conferred for payments which are not rent, and in
cases where the common law requisites are absent1. Under an express power of distress only the goods of the person
giving the power can, as a rule, be taken2.
HR A[5043]
1 Pollitt v Forrest (1847) 11 QB 949 at 961; on appeal (1848) 11 QB 962; as to what are the common law requisites in the case of rent,
see para HR A[5022].
2 Freeman v Edwards (1848) 2 Exch 732; Gibbs v Cruikshank (1873) LR 8 CP 454; Re Willis, ex p Kennedy (1888) 21 QBD 384 at 395,
CA, per Lindley LJ. In the case of a rentcharge probably only the goods of the owner of occupier of the land for the time being could be
taken; but see Saffery v Elgood (1834) 1 Ad & El 191; Johnson v Faulkner (1842) 2 QB 925. See also Law of Property Act 1925, s 121.
HR A[5044]
With regard to powers of distress given by contract, it must be borne in mind that an instrument giving such a power as
security for any present or future debt is, as a rule, deemed to be a bill of sale, and, unless registered, it is, as regards the
chattels seized under the power, void as against a trustee in bankruptcy, creditors under a deed of arrangement, or
Page 903
execution creditors1. An express power of distress for rent, which is due under a lease and is not a security for some
other debt, is not within this rule2, unless it is a power to distrain on property entirely unconnected with the demised
premises3.
HR A[5045]
1 See Green v Marsh [1892] 2 QB 330, CA.
2 Re Roundwood Colliery Co, Lee v Roundwood Colliery Co [1897] 1 Ch 373 at 391, CA, per Lindley LJ.
3 Re Roundwood Colliery Co, Lee v Roundwood Colliery Co [1897] 1 Ch 373 at 396, 399.
HR A[5046]
It is apprehended that an express power of distress given to secure the payment of a rent charge is not within the Bills of
Sale Act 18781, in as much as the instalments of the rentcharge would seem not to be debts within s 6 of that Act. And
it is provided by statute2 that a power of distress given by way of indemnity against a rent3 or any part thereof payable
in respect of any land or against the breach of any covenant or condition relating to land is not a bill of sale within the
Bills of Sale Acts 1878 and 18824. It is further provided by statute5 that such a power of distress by way of indemnity is
outside the rule against perpetuities.
HR A[5047]
1 Re Blackburn and District Benefit Building Society, ex p Graham (1889) 42 Ch D 343 at 346, 347, CA, per Lord Esher MR. See also as
to the object of the Act, Charlesworth v MilIs [1892] AC 231 at 235, per Lord Halsbury LC.
3 'Rent' in the statute includes a rent service or a rentcharge or other rent, toll, duty, royalty, or annual or periodical payment in money or
money's worth, reserved or issuing out of or charged upon land, but does not include mortgage interest: LPA 1925, s 205(1)(xxiii).
4 This removes a doubt which had been suggested, that a power of distress so given might be void under these Acts.
5 Law of Property Act 1925, s 162(1)(a).
(c) Rent must be certain
HR A[5048]
A distress can only be levied for a rent which is certain1. The rent is certain if, by calculation and upon the happening of
certain events, it becomes certain, and the mere fact of rent being fluctuating does not make it uncertain2. The necessary
Page 904
certainty may be implied from the acts and dealings of the parties3. However, until the rent is certain, no distress can be
levied: thus if the procedures for ascertaining the rent have not been completed, no distress can be levied4.
HR A[5049]
1 Regnart v Porter (1831) 7 Bing 451 at 454, per Anderson J. See also Townsend v Charlton [1922] 1 KB 700 and Concorde Graphics
Ltd v Andromeda Investments SA (1982) 265 Estates Gazette 386.
2 Re Knight, ex p Voisey (1882) 21 Ch D 442, CA. As to certainty of rent, see also para HR A[3028] and Greater London Council v
Connolly [1970] 2 QB 100; [1970] 1 All ER 870, CA; C H Bailey Ltd v Memorial Enterprises Ltd [1974] 1 All ER 1003, [1974] 1 WLR
728, CA; and United Scientific Holdings v Burnley Borough Council [1978] AC 904, [1977] 2 All ER 62, HL.
3 Where a tenant entered under an agreement for a lease which did not state the amount of rent to be paid, and no lease was ever executed,
but the tenant paid a certain rent for two years, the landlord was held entitled to distrain for subsequent rent at the rate previously paid:
Knight v Benett (1826) 3 Bing 361.
4 See Concorde Graphics Ltd v Andromeda Investments SA [1983] 1 EGLR 53 (service charge unascertained); Eren v Tranmac Ltd
[1997] 2 EGLR 211 (interim rent under Landlord and Tenant Act 1954, s 24A unascertained when subject of an appeal).
(d) Rent must be in arrear
HR A[5050]-[5060]
Distress cannot be made until the rent is in arrear. It is not in arrear until after the last moment of the day on which it is
made payable, and therefore there can be no distress until the day after the rent becomes due1. If payment is postponed
by statute, a distress cannot be made during the period of postponement2.
HR A[5061]
1 Dibble v Bowater (1853) 2 E & B 564; see further as to this, paras HR A[3163], [5302], see also Clun's Case (1613) 10 Co Rep 127a;
Child v Edwards [1909] 2 KB 753.
2 See Aquis Property Co v Hollebone, as reported in (1914) 59 Sol Jo 102 (a decision under the Postponement of Payments Act 1914
(repealed)); and see Shottland v Cabins Ltd (1915) 31 TLR 297, a case where a distress was levied before the date of proclamation of a
moratorium under the above Act, but the goods had not been sold.
HR A[5062]
Rent payable in advance, either by reservation1 or by custom2, may be distrained for on the day following that fixed for
payment, unless the rent is expressed to be payable in advance 'if required', in which case a demand for payment must
be made before a distress3; but in the latter case the demand may be made after the day on which the rent thereby
reserved becomes due4; and the landlord may distrain immediately after demand, if his rights are in peril5. When an
Page 905
express power of distress is given to be exercised after the rent has been 'legally demanded', it has been held not
necessary to follow the strict common law rules as to demand6.
HR A[5063]
1 Lee v Smith (1854) 9 Exch 662; Harrison v Barry (1819) 7 Price 690; Walsh v Lonsdale (1882) 21 Ch D 9, CA.
2 Buckley v Taylor (1788) 2 Term Rep 600.
3 Where rent was reserved payable quarterly or half-quarterly if required, and the landlord received it quarterly for a year, it was held that
he could not without notice distrain for a half-quarter's rent (Mallam v Arden (1833) 10 Bing 299). Where a yearly rent was reserved payable
in advance if the landlord required it, nothing being said as to days of payment, and after the first quarter he demanded a quarter's rent only,
it was held that he was not thereupon entitled to distrain for the whole year's rent (Clarke v Holford (1848) 2 Car & Kir 540).
4 Witty v Williams (1864) 12 WR 755.
5 London and Westminster Loan and Discount Co v London and North Western Rly Co [1893] 2 QB 49.
6 Thorp v Hurt [1886] WN 96. Cf para HR A[8604] for the common law rules.
HR A[5064]
Where a tenant has a valid claim against the landlord entitling the tenant to a legal or equitable 'set-off' against the rent,
the rent will not be due and in arrear; the landlord in such circumstances has no right to distrain1.
HR A[5065]
1 Eller v Grovecrest Investments Ltd [1995] QB 272, CA (in which the old authorities which indicated that the equitable defence of set-off
could not be used to prevent the legal remedy of distress were reviewed): see para HR A[3388].
HR A[5066]
An assignee of the term is not liable to be sued for rent due prior to the assignment of the term to him1: similarly, it has
been held that an assignee of the term will not be liable to distress for rent due prior to the assignment of the term to
him2.
HR A[5067]
1 See Parry v Robinson Wyllie Ltd (1987) 54 P & CR 187, [1987] 2 EGLR 133, paras HR A[3525] and [2227].
Page 906
2 Wharfland Ltd v South London Co-operative Building Co Ltd [1995] 2 EGLR 21; compare Whitham v Bullock [1939] 2 KB 81 at 86 and
see paras HR A[2201]ff.
Page 907
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/C Who may distrain
C
Page 908
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/C Who may distrain/1
Generally
1 Generally
(a) Distress incident to legal reversion
HR A[5068]
Distress is a legal remedy and depends on the existence at law of the relation of landlord and tenant1. Any person in
whom the reversion incident to a term of years is vested2 may, by virtue of the common law, and subject to any
restrictions imposed by statute3 distrain for rent due. The right of distress ceases when the reversion or the whole of the
estate is parted with4 but the right has, by statute and otherwise, been extended to various classes of persons in whom
no reversion is vested5.
HR A[5069]
1 Manchester Brewery Co v Coombs [1901] 2 Ch 608 at 617-618, per Farwell J.
2 See Littleton's Tenures, ss 214, 215; Gilbert on Distresses pp 24, 25; Bullen on Distress (2nd edn). See also Rhodes v Allied Dunbar
Pension Services Ltd [1989] 1 All ER 1161 at 1163, CA.
3 See eg Rent Act 1977 s 147 (HR C[1412]) and para HR A[5304].
4 See paras HR A[5347] to [5365].
HR A[5070]-[5080]
The only legal estates in land now capable of subsisting are a fee simple absolute in possession and a term of years
absolute1. Tenants for terms of years, who sublet and retain even a day's reversion, can distrain, as also can a tenant
who sublets from year to year or for a term2.. However, a tenant whose term has expired cannot distrain upon an
undertenant if such undertenant has declined to recognise further the tenant as his landlord3. A reversion by estoppel on
the other hand will also support a distress4 though in such a case the goods of a third party cannot be taken5. A tenant,
however, who assigns his term cannot distrain (even though he has reserved a rent) because he has no reversion6; and
where a tenant purports to grant an underlease but without retaining a reversion cannot distrain7.
HR A[5081]
Page 909
1 Law of Property Act 1925, s 1(1). See para HR A[6].
2 Oxley v James (1844) 13 M & W 209 at 214, per Parke B.
3 See Burne v Richardson (1813) 4 Taunt 720.
4 See para HR A[86] and Morton v Woods (1869) LR 4 QB 293, Ex Ch; Jolly v Arbuthnot (1859) 4 De G & J 224; Evans v Mathias
(1857) 7 E & B 590.
5 Tadman v Henman [1893] 2 QB 168.
7 Lewis v Baker [1905] 1 Ch 46.

Page 910
Joint owners
2 Joint owners
HR A[5082]
One of several joint owners may distrain for the whole rent due1 without the need for express authority from the other
joint owners: if the other joint owners merely decline to authorise the distress this will not prevent the distress from
being legal2. Where co-owners demise premises to one of their number, they may distrain when rent is in arrear3.
HR A[5083]
1 Pullen v Palmer (1696) 3 Salk 207.
2 See Robinson v Hofman (1828) 4 Bing 562 and Leigh v Shepherd (1821) 2 Brod & Bing 465.
3 Cowper v Fletcher (1865) 6 B & S 464. Cf Stavely v Allcock (1851) 16 QB 636 (severance of reversion prior to Law of Property Act
1925, s 36(2)); Sneglor v Henston (1621) Cro Jac 611 (one tenant in common able to distrain upon another).
Page 911
Mortgagees
3 Mortgagees
(a) Mortgage subsequent to lease
HR A[5084]
In the case of a mortgage of land subsequent to a lease (other than a charge by deed expressed to be by way of legal
mortgage), the mortgagee becomes reversioner on the lease1 and has the same rights against the lessee and those
claiming under him as the mortgagor had2; in the case of a mortgage created by a charge expressed to be by way of
legal mortgage, the mortgagee has the same powers as if he had a term, such powers including the right to distrain3. The
lessee must continue to pay rent to the mortgagor4 unless he receives notice from the mortgagee of his intention to take
possession or to enter into receipt of the rents and profits of the mortgaged land. After receiving such notice the lessee
must pay rent to the mortgagee, who can distrain if necessary, even if the lessee after such notice has paid the
mortgagor5. Payment before knowledge of the mortgage is protected, but such payment must be strictly in accordance
with the terms of the lease, and cannot apply to rent paid in advance of the due date6. The notice necessary should be by
the grantee, but notice by a cestui que trust instead of by trustees is sufficient7.
HR A[5085]-[5087]
1 See Law of Property Act 1925, ss 85, 86, Sch 1, Pts VII, VIII.
2 LPA 1925, s 41. No attornment by the tenant to the mortgagee is necessary: LPA 1925, s 51(1).
3 See LPA 1925, s 87 and see Grand Junction Co Ltd v Bates [1954] 2 QB 160, [1954] 2 All ER 385.
5 Moss v Gallimore (1779) 1 Doug KB 279; confirmed in Birch v Wright (1786) 1 Term Rep 378 at 384; Rogers v Humphrey's (1835) 4
Ad & El 299. Davies v Law Mutual Building Society (1971) 219 Estates Gazette 309, DC.
6 De Nicholls v Saunders (1870) LR 5 CP 589: the rent in such a case would be considered an advance to the landlord. See also para HR
A[3165].
7 Lumley v Hodgson (1812) 16 East 99: the notice was sufficient to put defendant on his guard.
(b) Lease subsequent to mortgage
HR A[5088]
Page 912
Where a mortgagor grants a lease subsequent to the mortgage, the mortgagee has no right to distrain1: a lease by a
mortgagor subsequent to the mortgage unless made under an express power given by the mortgage2 or statute3 is void
as regards the mortgagee who cannot distrain as there is no relationship of landlord and tenant between them4.
However, even where the lease is void as against the mortgagee, as between the mortgagor who granted the lease and
the tenant, the mortgagor can distrain for rent due5, the tenancy being good by estoppel as between mortgagor and
tenant6. The relationship of landlord and tenant may arise between the mortgagee and the tenant enabling the mortgagee
to distrain where there is express or implied agreement such as to create a new tenancy between mortgagee and tenant7;
but the mere payment of rent by the tenant to the mortgagee will not give rise to an implication of a tenancy relating
back to the time when the tenant first had notice of the mortgage8. The question as to whether a new tenancy between
the mortgagee and the tenant has been created is one of fact: mere notice of the mortgage deed and the interest being in
arrear accompanied by a demand for rent is not sufficient to give the mortgagee a right to distrain. but the fact that rent
is paid in accordance with such notice is evidence of a tenancy9.
HR A[5089]
1 Evans v Elliott (1838) 9 Ad & El 342 at 354; Rogers v Humphreys (1835) 4 Ad & El 299.
2 Compare Lever Finance Ltd v Trustee of Property of LN and HM Needleman [1856] Ch 375, [1956] 2 All ER 378. See also Keech v
Hall (1778) 1 Doug KB 21; Pope v Biggs (1829) 9 B & C 245; Rogers v Humphreys (1835) 4 Ad & El 299; Partington v Woodcock (1835) 6
Ad & El 690.
3 Law of Property Act 1925, s 99. See HR A[5089.1] below.
4 Dudley and District Benefit Building Society v Emerson [1949] Ch 707; Rust v Goodale [1957] Ch 33; Britannia Building Society v Earl
[1990] 2 All ER 469, [1990] 1 WLR 422, CA.
5 Iron Trades Employers Insurance Association Ltd v Union of House and Land Investors Ltd [1937] Ch 313; Dudley and District Benefit
Building Society v Emerson [1949] Ch 707.
7 Evans v Elliott (1838) 9 Ad & El 342.
8 Evans v Elliott (1838) 9 Ad & El 342; but an express attornment may relate back: see Gladman v Plumer (1845) 10 Jur 109.
9 See Evans v Elliott (1838) 9 Ad & El 342. Compare Towerson v Jackson (1891) 2 QB 484, CA; see also Corbett v Plowden (1884) 25
Ch D 678 at 681, CA, per Lord Selborne LC; Stroud Building Society v Delamont [1960] 1 All ER 749, [1960] 1 WLR 431; Chatsworth
Properties Ltd v Effiom [1971] 1 All ER 604, CA. See para HR A[202].
(c) Mortgage under statute
HR A[5089.1]
If a mortgagor makes a lease complying with the provisions of the Law of Property Act 1925, it will be good against the
mortgagee and, is treated as if made with his authority and concurrence1. The mortgagor is entitled to distrain while in
Page 913
possession, and the mortgagee by virtue of his mortgage term has a reversionary estate expectant on the end of the lease,
and he can distrain after he has given notice that he intends to exercise his rights to act as lessor under the terms of the
lease2. Collateral agreements between the mortgagor and the tenant do not bind the mortgagee3.
HR A[5089.2]
1 See Law of Property Act 1925, s 99. But, in relation to agricultural land, see Law of Property Act 1925, s 99(13) and 13A; Agricultural
Holdings Act 1986, Sch 14, para 12; Agricultural Tenancies Act, s 31(3).
2 Municipal Permanent Investment Building Society v Smith (1888) 22 QBD 70, CA; see also Wilson v Queen's Club [1891] 3 Ch 522.
3 Municipal Permanent Investment Building Society v Smith (1888) 22 QBD 70, CA.
(d) Attornment in mortgage
HR A[5090]-[5100]
Where there is an attornment in the mortgage deed, the mortgagee may distrain on the mortgagor for rent thereby
reserved1. Attornment clauses, however, are deemed to be bills of sale2 and are not now relied on for giving a power of
distress. The tenancy arising from an attornment clause will determine on the death of the mortgagor and the payment of
interest by his successor in title will not create a new tenancy so as to justify distress3.
HR A[5101]
1 Morton v Woods (1869) LR 4 QB 293, Ex Ch.
2 Bills of Sales Act 1878, s 6 cf Re Willis, ex p Kennedy (1888) 21 QBD 384, CA; Green v Marsh [1892] 2 QB 330, CA.
3 Scobie v Collins [1895] 1 QB 375 at 377.
(e) Mortgagor in possession
HR A[5102]
A mortgagor for the time being entitled to the possession or receipt of the rents and profits of any land as to which the
mortgagee has not given notice of his intention to take possession or enter into the receipts of the rents and profits
thereof is entitled to distrain for rent due, whether the lease be prior or subsequent to the mortgage1. When the
mortgagee, pursuant to the provisions of the Law of Property Act 1925, s 101(1)(iii), has appointed a receiver, the latter
has a statutory power to distrain and the mortgagor cannot distrain without the receiver's authority, even after the
receiver has refused to do so, and may be restrained by injunction from attempting to do so2. The mortgagor, in the
Page 914
absence of a mortgagee in possession or the appointment of a receiver, is not liable to account for the rents to the
mortgagee3.
HR A[5103]
1 Law of Property Act 1925, ss 98, 141; Re Ind, Coope & Co, Ltd, Fisher v Ind Coope and Co Ltd [1911] 2 Ch 223. At common law the
mortgagor in receipt of the rents and profits of the land could distrain for them as bailiff of the mortgagee (see Trent v Hunt (1853) 9 Exch
14, approved in Snell v Finch (1863) 13 CBNS 651); see also Christchurch, Oxford (Dean and Chapter) v Buckingham and Chandos (Duke)
(1864) 17 CBNS 391, per Willes J, at pp 413-414; Reece v Strousberg (1885) 54 LT 133. See also Rhodes v Allied Dunbar Pension Services
Ltd [1989] 1 All ER 1161, [1989] 1 WLR 800, 807 E, CA.
2 Woolston v Ross [1900] 1 Ch 788; Bayly v Went (1884) 51 LT 764.
3 Ex p Wilson (1813) 2 Ves & B 252; Trent v Hunt (1853) 9 Exch 14.
(f) Mortgagee in possession
HR A[5103.1]
No obligation lies on a mortgagee in possession to distrain, nor can he be called upon so to do by the owner of the
equity of redemption, nor is he bound as a distraint to continue and defend at law any seizure he may have made1.
HR A[5103.2]
1 Cocks v Gray (1857) 1 Giff 77.

Page 915
Persons beneficially entitled to the reversion
4 Persons beneficially entitled to the reversion
HR A[5104]
Where the reversion on a demise is held in trust the cestui que trust is not entitled to distrain for rent in arrear1 since he
is entitled not to the rent but only to an account from the trustee of the profits received from the trust property. Although
it has been held that an equitable assignee of the reversion to a lease who has not been registered as the legal owner is
entitled to the benefit of a condition in the lease entitling the landlord to forfeit, it has not been directly decided that a
person without a legal estate is entitled to exercise the legal remedy of distress2.The traditional learning is that in order
to exercise the legal remedy of distress one must be entitled to the legal reversion3, albeit that the reversion by estoppel
will support distress4.
HR A[5105]
1 Schalit v Joseph Nadler Ltd [1933] 2 KB 79. Scribes West Ltd v Relsa Anstalt and others (No 3) [2004] EWCA Civ 1744 at [23]-[25].
2 Scribes West Ltd v Relsa Anstalt [2004] EWCA Civ 1744, [2005] 02 EG 100 (CS).
3 See para HR A[5068] above but see also Scribes West Ltd v Relsa Anstalt [2004] EWCA Civ 1744 [23]-[25].
4 See para HR A[5070]-[5080].

Page 916
Executors and administrators
5 Executors and administrators
HR A[5106]
A personal representative1, when the reversion incident on the legal estate is vested in him, can distrain for all rent
accruing due to him after the testator's death2. An executor can distrain before probate. Administrators, however, in
spite of the doctrine of the relation back of the letters of administration to the date of death, cannot distrain before the
grant3. A personal representative may distrain upon land for arrears of rent due or accruing to the deceased in like
manner as the deceased might have done had he been living. Such arrears may be distrained for after the termination of
the lease or tenancy as if the lease had not determined, if the distress is made within six months after the determination
of the lease or tenancy, and during the continuation of the possession of the lessee or tenant from whom the arrears are
due4.
HR A[5107]
1 'Personal representative' means the executor, original or by representation, or administrator for the time being of a deceased person
(Administration of Estates Act 1925), s 55(i)(xi).
2 2 Bac Abr tit Distress, A. Newlands v Palmer (1849) 13 LTOS 116.
3 The probate refers back to the testator's death (R v Horsley Inhabitants (1807) 8 East 405 at 410, per Lord Ellenborough CJ. Cf
Whitehead v Taylor (1839) 10 Ad & El 210; Woolley v Clark (1822) 5 B & Ald 744.
HR A[5108]
A personal representative may also distrain for arrears of a rentcharge due or accruing to the deceased in his lifetime on
the land affected or charged therewith, so long as the land remains in the possession of the person liable to pay the
rentcharge or of the persons deriving title under him, and in like manner as the deceased might have done had he been
living1.
HR A[5108.1]

Page 917
Receivers and agents
6 Receivers and agents
HR A[5109]
A receiver, appointed by the High Court, has power, where necessary, to distrain for rent, without application to the
court; but he must distrain in the name of the person entitled to the rent, and if there is any doubt upon the point he
should apply to the court for an order1. The receiver, however, can issue distress and justify in his own name where the
tenant has attorned to him personally, or where he has in his own name granted the lease2. Attornment to a receiver
does not enure for the benefit of the person who is ultimately found to have the legal estate3. A receiver can even
distrain where a purchaser under the court's order has paid the purchase-money before the execution of the conveyance;
in this event he is regarded as a trustee for the purchaser, and will be restrained from carrying out the distress to the
purchaser's detriment4.
HR A[5110]-[5120]
1 Pitt v Snowden (1752) 3 Atk 750; Bennett v Robins (1832) C & P 379; Cf Brandon v Brandon (1821) 5 Madd 473. Quaere: will a
manager appointed under the Landlord and Tenant Act 1987, Pt II be entitled to distrain? (see paras HR A[47857380.701.19]ff).
2 Hughes v Hughes (1790) 1 Ves 161; Dancer v Hastings (1826) 4 Bing 2. The usual form of order is that the tenant do attorn and pay the
rents in arrear and growing rents to the receiver see Yorkshire Banking Co v Mullan (1887) 35 Ch D 125.
3 Evans v Mathias (1857) 7 E & B 590. The attornment creates an estoppel between the actual parties only.
4 Re Powers, Manisty v Archdale (1890) 63 LT 626.
HR A[5121]
A receiver appointed out of court or an agent has not, by virtue of such appointment, any power to distrain, nor does an
authority to tenants 'to pay rent to an agent whose receipt shall be their discharge' confer this right; a receiver or agent in
such circumstances can only distrain on behalf of his principal1. A receiver can, however, be appointed either in a
mortgage deed or by a separate instrument with a power of distress under an attornment by the mortgagor2.
HR A[5122]
1 Ward v Shew (1833) 9 Bing 608. See also Woolston v Ross [1900] 1 Ch 788. A formal power of attorney to distrain was held good in
Eagleton v Gutteridge (1843) 11 M & W 465. An agent would, however, have to justify in his principal's name; see Trent v Hunt (1853) 9
Exch 14.
Page 918
2 Jolly v Arbuthnot (1859) 4 De G & J 224; Dancer v Hastings (1826) 4 Bing 2. Lord Chelmsford LC, in the first-mentioned case left it
doubtful if attornment to a receiver (without a formal power of distress) created an estoppel, when the absence of the reversion was apparent
in his title.
HR A[5123]
A receiver appointed by a mortgagee under the Law of Property Act 19251 has a statutory power of distress, in the
name of the mortgagor or of the mortgagee2. After his appointment, the mortgagor cannot himself distrain, even if the
receiver has been negligent in collecting the rents, or has himself declined to distrain or allow the mortgagor to distrain
personally, as long as the receivership is in force3.
HR A[5124]
1 Law of Property Act 1925, s 101(1)(iii).
2 LPA 1925, s 109(3).
3 See Bayly v Went (1884) 51 LT 764, and Woolston v Ross [1900] 1 Ch 788. Two parties cannot have a concurrent right to distrain for
the same arrears of rent.
(a) Corporations
HR A[5125]
Corporations sole can distrain according to the nature of their estate1. Corporations aggregate also have the same power
of distress at common law, while by statute their rights are extended to the recovery of rents seck, chief rents, and rents
of assize2. Corporations distrain by a bailiff, whose appointment may be by writing, not under seal3; an officer of a
corporation (such as the director of a company) distraining can only justify as bailiff, and not otherwise4.
HR A[5126]
1 See Bullen on Distress (2nd edn) p 84.
3 Bac Abr corporations, E (3); see Cary v Matthews (1688) 1 Salk 191, note; Smith v Birmingham Gas Co (1834) 1 Ad & El 526. See para
HR A[5061]ff for the appointment of bailiffs.
4 Hogarth v Jennings [1892] 1 QB 907, CA.
(b) Local authorities and sequestrators

Page 919
HR A[5127]
Local authorities, where they have properly granted leases, can distrain in the same way as corporations1.
HR A[5128]
HR A[5129]
Sequestrators of any ecclesiastical benefice can levy a distress in the same way as the incumbent might have done had
the benefice not been sequestrated1.
HR A[5130]-[5140]
1 Sequestration Act 1849, s 1 and see 13 Halsbury's Laws (4th edn) 22 and 14 Halsbury's Laws (4th edn) 892ff as to sequestrators
generally.
(c) No subrogation
HR A[5141]
Since the right to distrain may only be exercised by a person entitled to the reversion it does not pass by subrogation to
an original tenant or surety who discharges arrears of rent on behalf of an assignee of the lease1.
HR A[5142]
1 Re Russell Russell & Shoolbred (1885) 29 Ch D 254.

Page 920
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/D What may and may not
be distrained
D
Page 921
be distrained/1 General rule
1 General rule
(a) What may be distrained
HR A[5143]
Under the common law a landlord can prima facie seize and distrain for rent in arrear all goods and chattels found on
the premises out of which the rent issues; the goods and chattels may be the property of the tenant, or of a stranger, the
landlord being entitled to have recourse to all chattels actually on his tenant's premises without reference to their
ownership1. The rule, however, applies only to goods and personal chattels, while chattels of an incorporeal nature and
incorporeal hereditaments, such as advowsons, rights of common, fairs, tithes, markets, privileges, franchises, and
patent rights, are incapable of physical possession and seizure, and cannot be the subject of distress, although the actual
goods the subject of these rights may be taken2.
HR A[5144]
1 3 Bl Com p 8; Gilbert on Distresses p 35; Simpson v Hartopp (1744) Willes 512; Gorton v Falkner (1792) 4 Term Rep 565; Gilman v
Elton (1821) 3 Brod & Bing 75; Muspratt v Gregory (1838) 3 M & W 677, Ex Ch; Cramer v Mott (1870) LR 5 QB 357 at 360, per
Blackburn J; Lyons v Elliott (1876) 1 QBD 210; Clarke v Millwall Dock Co (1886) 17 QBD 494, CA; Challoner v Robinson [1908] 1 Ch 49,
CA.
2 Co Litt 47a; British Mutoscope and Biograph Co Ltd v Homer [1901] 1 Ch 671.
HR A[5145]
Moreover, in the case of personal chattels certain exceptions have been engrafted upon the general rule some by the
common law and some by statute1; these exceptions depend in part on the person in whose possession, or the place
wherein, the goods may be found, and in part on the nature of the goods themselves. But any one claiming the benefit of
one of these exceptions must satisfy the court that his case falls within it. These exceptions are stated in the form of
rules and not of principles, and the court will not travel beyond the definitions of the exceptions prescribed2. Of these
exceptions some are absolute and some are conditional, that is, the goods within them can only be taken if there is no
other sufficient distress3. It does not matter in whose possession the demised land may be4.
HR A[5146]
1 The exceptions are set out in detail in paras HR A[5161]ff.
2 See 3 Bl Com p 8; Gilbert on Distresses p 35; Simpson v Hartopp (1744) Willes 512; Gorton v Falkner (1792) 4 Term Rep 565; Gilman
Page 922
v Elton (1821) 3 Brod & Bing 75; Muspratt v Gregory (1838) 3 M & W 677, Ex Ch; Cramer v Mott (1870) LR 5 QB 357 at 360, per
Blackburn J; Lyons v Elliott (1876) 1 QBD 210; Clarke v Millwall Dock Co (1886) 17 QBD 494, CA; Challoner v Robinson [1908] 1 Ch 49,
CA. See also Simpson v Hartopp (1744) Willes 512, where the leading common law exceptions are precisely stated.
3 For absolute exceptions, see paras HR A[5161]ff, and for conditional exceptions, paras HR A[5227]ff.
4 Humphry v Damion (1612) Cro Jac 300; Groom v Bluck (1841) 2 Man & G 567.
(b) Growing corn and sheaves of corn, etc
HR A[5147]
At common law growing corn, etc, could not be distrained1, but now by statute the landlord may seize, for arrears of
rent, all sorts of corn and grass, hops, roots, fruit, pulse, or other product growing on any part of the land demised2.
HR A[5148]
1 Roll Abr 666 and Co Litt 47b (note 299 of Hargrave); Griffin v Scott (1726) 1 Barn KB 3.
2 Distress For Rent Act 1737, ss 8, 9. As to sale, see para HR A[5929]. A grantee of a rentcharge is not a landlord within this provision:
Miller v Green (1831) 8 Bing 92. For statutory restrictions in the case of Agricultural Holdings see HR F[718]ff.
HR A[5149]
At common law sheaves or cocks of corn were not distrainable1, but now by statute sheaves or cocks of corn, or corn
loose or in the straw, or hay lying in any barn or granary or upon any level stack or rick, may be seized and may be
detained in the place where it shall be found, until it is replevied, and in default of replevy until it is sold; it must not,
however, be removed until replevied or sold, to the damage of the owner2.
HR A[5150]-[5160]
1 Co Litt 47a.
2 Distress for Rent Act 1689, s 2. In default of a replevy it must be sold within five days (Piggott v Birtles (1836) 1 M & W 441 at 448,
per Parke B), unless this time is extended under s 6 of the Law of Distress Amendment Act 1888, which also avoids the necessity of
appraisement in ordinary cases. See LDAA 1888, s 5 and paras HR A[5901]ff and [5929].
Page 923
be distrained/2 Things absolutely privileged
2 Things absolutely privileged1
HR A[5161]
Some chattels have absolute privilege from distress. Such chattels cannot be distrained.
HR A[5162]
1 As to the protection afforded to the goods of undertenants, lodgers, etc, under the Law of Distress Amendment Act 1908, see paras HR
A[5229]ff.
(a) Crown privilege
HR A[5163]
The property of the Crown, whether in the possession of the Crown or on premises demised to a subject, is privileged
from distress1.
HR A[5164]
1 Secretary of State for War v Wynne [1905] 2 KB 845; where a horse was lent to a member of the yeomanry and distrained on his farm.
HR A[5165]
The goods and chattels of ambassadors or other public ministers, of foreign princes of states authorised and received as
such by the sovereign of this country (including the Ambassador of the Republic of Ireland) and of the High
Commissioners in the United Kingdom of Commonwealth countries, and of certain representatives of foreign powers
attending international conferences in the United Kingdom, and, in some circumstances, of the domestic servants of any
such ambassador or minister, High Commissioner or representative, are privileged from distress1. Diplomatic privilege
may be waived2.
HR A[5166]
Page 924
1 The law is now in general contained in the Diplomatic Privileges Act 1964 which replaces much of the old law on the subject. See also
State Immunity Act 1978. See also Diplomatic and Consular Premises Act 1987.
2 See art 32 of the Vienna Convention 1961 and see the Diplomatic Privileges Act 1964, s 2(3).
(b) Goods in possession of the law
HR A[5167]
Goods in possession of the law by reason of execution are immune from distress1 except in the case of distress by the
Crown2 or when the execution is collusive3. The execution creditor may, however, waive his rights4. The privilege
only endures for the period during which the goods remain in the possession of the law and will be lost if the sheriff
relinquishes possession5 or the goods, having been sold in execution, remain on the demised premises for more than a
reasonable time for their delivery6. The mere bankruptcy of a tenant does not place his goods custodia legis7.
HR A[5168]
1 Re Mackenzie, ex p Sheriff of Hertfordshire [1899] 2 QB 566 at 573, CA; see Co Litt 47a; Gilbert on Distresses pp 44, 45; Wharton v
Naylor (1848) 12 QB 673; Lewis v Davies [1914] 2 KB 469, CA; Potts v Hickman [1941] AC 212.
2 R v Cotton (1751) Park 112; R v Dale (1719) Bunb 42; A-G v Leonard (1888) 38 Ch D 622; see also R v Hill (1818) 6 Price 19.
3 Smith v Russell (1811) 3 Taunt 400.
4 Seven v Mihill (1756) 1 Keny 370.
5 Peacock v Purvis (1820) 2 Brod & Bing 362; Re Davis ex p Pollen's Trustees (1885) 55 LJQB 217.
6 Blades v Arundale (1813) 1 M & S 711.
7 Re Mackenzie ex p Sheriff of Hertfordshire [1899] 2 QB 566.
HR A[5169]
In general goods seized by the sheriff under a process of execution of the High Court on a judgment inter partes cannot
be removed until any arrears of rent (not exceeding one year) have been paid by the creditor1. In the county court the
landlord is also protected to a limited extent2.
HR A[5170]-[5180]
1 Landlord and Tenant Act 1709, s 1; see para HR A[20000].

Page 925
2 County Courts Act 1984, s 102; see para HR A[20212].
(c) Trade privilege
HR A[5181]
Things delivered to a person exercising a public trade, to be carried, wrought, worked up, or managed in the way of his
trade are privileged from distress for rent due from the person in whose custody they are1.
HR A[5182]
1 Simpson v Hartopp (1744) Willes 512 at 515; 1 Smith LC, 13th edn 494; Gisbourn v Hurst (1710) 1 Salk 249; see also Challoner v
Robinson [1908] 1 Ch 49.
HR A[5183]
Delivery for the purposes of trade is essential, and this rule does not extend to all cases in which goods happen to be on
premises for these purposes1. To come within the exemption the tenant must carry on a 'public trade'. This has been
defined as a trade or business carried on generally for the benefit of all persons who choose to avail themselves of it, as
distinguished from a special employment by particular individuals2. The basis of this privilege is said to be public
policy for the benefit of trade3.
HR A[5184]-[5186]
1 Parsons v Gingell (1847) 4 CB 545; Clarke v Millwall Dock Co (1886) 17 QBD 494; Challoner v Robinson [1908] 1 Ch 49.
2 Muspratt v Gregory (1836) 1 M & W 633, per Parke B (dissenting); see also Tapling & Co v Weston (1883) Cab & El 99.
3 Lyons v Elliott (1876) 1 QBD 210 at 214, per Blackburn J.
HR A[5187]
The trade in question must be carried on upon premises either regularly or temporarily occupied by the trader, and must
not be upon premises occupied by the owner of the goods1. The goods must, however, be in the trader's possession for
the actual purpose of his trade2.
HR A[5188]
Page 926
1 Lyons v Elliott (1876) 1 QBD 210.
2 Thompson v Mashiter (1823) 1 Bing 283.
HR A[5189]
The goods must be put into the trader's hands that he may exercise his trade upon them; work and skill need not be
bestowed upon the goods sent, if the trade in question does not involve such work and skill, and mere storage, whether
for sale or otherwise, is enough if the storage or sale constitutes the trade in question, but goods sent to a trader who
merely stores them instead of exercising his regular trade upon them are not exempt from distress1.
HR A[5190]-[5200]
1 Re Russell, ex p Russell (1870) 18 WR 753. See also Parsons v Gingell (1847) 4 CB 545.
(d) Fixtures
HR A[5201]
Whatever is part of or annexed to the freehold cannot be distrained1. No fixtures (so long as they continue such) are
distrainable whether such fixtures are irremovable or fixtures severable by a tenant2. The exemption of fixtures from
distress rests upon two reasons; first they are not chattels at all, but form part of the thing demised, and secondly, as the
distress was historically only a pledge, fixtures could not be restored in the same condition as when taken3.
HR A[5202]
1 Co Litt 47b; Gilbert on Distresses pp 38, 39; Simpson v Hartopp (1744) Willes 512 at 515; 1 Smith LC, 13th edn 494; Pitt v Shew
(1821) 4 B & Ald 206. See also Niblet v Smith (1792) 4 Term Rep 504.
2 Crossley Bros Ltd v Lee [1908] 1 KB 86; see also Provincial Bill Posting Co v Low Moor Iron Co [1909] 2 KB 344, CA, where
advertisement hoardings, although removable by the tenant, could not be distrained.
3 See Bullen on Distress (2nd edn) p 105. Pitt v Shew (1821) 4 B & Ald 206 at 207. See generally on fixtures para HR A[1641]ff.
(e) Things in actual use
HR A[5203]
To avoid breaches of the peace, things in actual use such as the horse which a man is riding, or an axe being used for
Page 927
cutting wood, or a net in a man's hand are privileged during that time1. If this rule did not exist there would perpetually
be a risk of a breach of the peace2.
HR A[5204]
1 Co Litt 47a; Gilbert on Distresses p 39; Read v Burley (1597) Cro Eliz 596; In Simpson v Hartopp (1744) Willes, 512, 517; 1 Smith LC,
13th edn 494, a stocking frame being used by a weaver was held to be privileged.
2 See Storey v Robinson (1795) 6 Term Rep 138.
(f) Wearing apparel, bedding, and tools of trade
HR A[5205]
By statute1 there are exempted from distress: (a) such tools, books, vehicles and other items of equipment as are
necessary to the tenant for use personally by him in his employment, business or vocation; and (b) such clothing,
bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the
tenant and his family2. This protection does not apply where the lease, term, or interest of the tenant has expired and
possession of the premises in respect of which the rent is claimed has been demanded, and the distress is made not
earlier than seven days after such demand3. Where, in spite of this statute, such goods and chattels have been taken
under a distress, a court of summary jurisdiction may on complaint direct their restoration, and, if they have been sold,
may order the persons who levied or directed the levy to pay to the complainant such sum as the court may determine to
be their value4.
HR A[5206]-[5208]
1 This includes a bedstead: Davis v Harris [1900] 1 QB 729.
2 Law of Distress Amendment Act 1888, s 4; County Courts Act 1984, s 89 (as amended by the Courts and Legal Services Act 1990, s
15(2) which removed the limitation on this exemption to goods of a prescribed value). See Brookes v Harris [1995] 1 WLR 918, per Ferris J
(records, tapes and discs were 'tools of trade' of a presenter of musical programmes on television and radio).
3 LDAA 1888, s 4. The terms of this proviso are apparently cumulative.
4 LDAA 1895, s 4. See also para HR A[5227].
(g) Miscellaneous common law privilege
HR A[5209]
Page 928
Things of perishable nature, or such as cannot be restored again in the same state and condition that they were before
being taken or must necessarily be damaged by removal or severance, are exempt from distress1. It is on this principle
that cocks and sheaves of corn etc were formerly held not distrainable2. Sheaves of corn are now dealt with by statute3.
HR A[5210]-[5220]
1 1 Roll Abr tit Distress, 667; Bac Abr tit Distress, B, 697; Co Litt 47a; Simpson v Hartopp (1744) Willes, 512; 1 Sm LC 13th edn 494.
See also Darby v Harris (1841) 1 QB 895.
2 Wilson v Ducket (1675) 2 Mod Rep 61.
HR A[5221]
Money in a bag or chest may be distrained but not loose money, since the identical pieces could not be earmarked and
restored again1.
HR A[5222]
1 Gilbert on Distresses p 31; Bac Abr tit Distress, B, 697. The reason of this rule is to be found in the original law when distress was
merely a form of pledge; see also Wilson v Ducket (1675) 2 Mod Rep 61.
HR A[5223]
Animals ferae naturae in which there is no right of property are exempt from distress1.
HR A[5224]
1 Co Litt 47a; 3 Bl Com 7, 8.
(h) Miscellaneous statutory privilege
HR A[5225]
In the case of holdings to which the Agricultural Holdings Act 1986 applies there is an absolute exemption from distress
in respect of live stock of all kinds the bona fide property of a person other than the tenant, and which are on the
premises solely for breeding purposes; and also in respect of agricultural and other machinery the bona fide property of
Page 929
a person other than the tenant, and on the premises of the tenant under a bona fide agreement for the hire or use thereof
in the conduct of his business1. Other statutes conferring privilege from distress are the Railway Rolling Stock
Protection Act 18722, the Water Industry Act 19913, Gas Act 19864, the Electricity Act 19895.
HR A[5226]
1 Agricultural Holdings Act 1986, s 18(1). See HR F[725].
2 Railway Rolling Stock Protection Act 1872, ss 3, 5.
3 Water Industry Act 1991, s 179(4).
4 Gas Act 1986, Sch 5, para 19 cf Gas Light & Coke Co v Hardy (1886) 17 QBD 619, CA; Gas Light & Coke Co v Herbert Smith & Co
(1886) 3 TLR 15.
5 Electricity Act 1989, Sch 6, para 9.

Page 930
be distrained/3 Things conditionally privileged
3 Things conditionally privileged
HR A[5227]
In certain cases goods can be distrained only if there is no other sufficient distress upon the premises1. These include
agisted animals2 beasts of the plough and sheep3 growing crops that have been seized in execution4 and instruments of
trade5. In actions for wrongful distress at common law, the onus of proof in showing that there is no other sufficient
distress lies upon the distrainor6. Where on a fair estimate of the goods on the premises the distrainor bona fide believed
that the distress would not be satisfied without taking goods conditionally privileged, no action will lie against the
distrainor for distraining on them, even if it is ultimately shown that the remaining goods would have been of sufficient
value to satisfy the landlord's claim, for the circumstances of the distress at the time it is made constitute the test, and no
rule exists that if the distrainor in such a case acts bona fide and reasonably the other goods must be disposed of before
those conditionally privileged are sold7. A landlord can also seize goods conditionally privileged if, though there is
other sufficient distress on the premises (such as growing crops), it is not immediately available8.
HR A[5228]
1 Simpson v Hartopp (1744) Willes 512, 1 Smith LC (13th edn) 494; Muspratt v Gregory (1838) 3 M & W 677, Ex Ch; Lyons v Elliott
(1876) 1 QBD 210 at 215, per Lush J.
2 Agricultural Holdings Act 1986, s 18(2). See HR F[725].
3 Davies v Aston (1845) 1 CB 746; Keen v Priest (1859) 4 H & N 236; Swaffer v Mulcahy [1934] 1 KB 608; 51 Hen 3 St 4.
5 Nargett v Nias (1859) 1 E & E 439. See also Law of Distress Amendment Act 1888, s 4; see para HR A[5205].
6 Nargett v Nias (1859) 1 E & E 439; cf Gonsky v Durrell [1918] 2 KB 71.
7 Jenner v Yolland (1818) 6 Price 3.
8 Piggott v Birtles (1836) 1 M & W 441.

Page 931
be distrained/4 Goods of undertenants, lodgers and strangers
4 Goods of undertenants, lodgers and strangers
(a) Exception to common law rule
HR A[5229]
The common law rule that a landlord could distrain for rent on all goods on the demised premises. even though not the
property of the tenant1, is subject to many qualifications. As already noted, exceptions have been grafted on to the rule
in the interests of trade, husbandry, and public convenience2, and, further, a landlord may by his own act or conduct be
estopped from setting up a right to seize the property of a third person. Thus, a landlord cannot distrain on the goods of
a third person brought on the demised premises by himself3 or with his consent4, and by his conduct he may be held to
have waived5 his right of distress on a stranger's goods, an agreement not to distrain being implied from the
circumstances, where necessary6.
HR A[5230]-[5240]
3 Paton v Carter [1883] Cab & El 183; in this case the goods had originally been brought on to the premises by the third party, and
wrongly removed by the distrainor's servants before they were returned by the distrainor to the demised premises.
4 Fowkes v Joyce (1689) 2 Vern 129.
5 Cf Cresswell v Jeffreys (1912) 28 TLR 413 (reversed on another point, 29 TLR 90, CA); Welsh v Rose (1830) 6 Bing 638.
6 Horsford v Webster (1835) 1 Cr M & R 696; Giles v Spencer (1857) 3 CBNS 244.
7 3 Bl Com 8; Exall v Partridge (1799) 8 Term Rep 308; see also Edmunds v Wallingford (1885) 14 QBD 811 at 814, CA; and Re Button,
ex p Haviside [1907] 2 KB 180, CA.
(b) Remedy of stranger where distress lawful
HR A[5241]
When a stranger's (or lodger's or subtenant's) goods, which are lawfully on the premises, are lawfully distrained by the
landlord for rent due from someone else, the owner of the goods is entitled to reimbursed their value from the person
from whom the rent was due1.
Page 932
HR A[5242]
1 3 Bl Com 8; Exall v Partridge (1799) 8 Term Rep 308; see also Edmunds v Wallingford (1885) 14 QBD 811 at 814, CA; Re Button, ex p
Haviside [1907] 2 KB 180, CA.
(c) Statutory protection for undertenants, lodgers, etc
HR A[5243]
By the Law of Distress Amendment Act 19081 an additional measure of protection has been given to certain
undertenants, and to lodgers, and any other person whatsoever not being a tenant of the premises or of any part thereof,
and not having any beneficial interest in any tenancy of the premises or of any part thereof2.
HR A[5244]
1 Law of Distress Amendment Act 1908, s 1. See Rhodes v Allied Dunbar Pension Services Ltd [1989] 1 WLR 800 at 803-805, CA, per
Nicholls LJ. Provisions almost exactly similar to those contained in LDAA 1908, ss l and 2 were contained in the repealed Lodgers Goods
Protection Act 1871, but were restricted to lodgers only, and the cases decided under the previous Act are treated as authorities for the
interpretation of the later Act.
2 LDAA 1908, s 1. See Cunliffe Engineering Ltd v English Industrial Estates Corpn [1994] BCC 972 (bank with charge over tenant's
chattels unable to rely on s 1).
HR A[5244.1]
The LDAA 1908 does not define the term 'lodger', but does state that it is not included in the terms 'tenant' or
'undertenant'1. The word is probably used in its popular meaning2. The onus of proving that he is within the statute lies
on the person claiming protection as a lodger3. Whether the claimant is a lodger is a question of fact. A person can be a
lodger and an undertenant at the same time4.
HR A[5244.2]
1 Law of Distress Amendment Act 1908, s 9.
2 On the meaning of 'lodger' see Toms v Luckett (1847) 5 CB 23, 38 per Maule J; Bradley v Baylis (1881) 8 QBD 195 at 219, CA per
Jessel MR; Kent v Fittall [1906] 1 KB 60 at 70, 76, CA (electoral register cases); Morton v Palmer (1881) 51 LJQB 7, CA; Ness v
Stephenson (1882) 9 QBD 245; Heawood v Bone (1884) 13 QBD 179; see also Allan v Liverpool Overseers (1874) LR 9 QB 180 at 191;
Page v Vallis (1903) 19 TLR 393; Honig v Redfern [1949] 2 All ER 15 at 17, DC (alien's registration case). See too Street v Mountford
[1985] AC 809.
Page 933
3 Morton v Palmer (1881) 51 LJQB 7, CA; see also Thwaites v Wilding (1883) 12 QBD 4 at 7, CA per Bowen LJ and Bensing v Ramsay
(1898) 62 JP 613.
4 Phillips v Henson (1877) 3 CPD 26.
(d) Goods excluded from the protection of the Act
HR A[5245]
The LDAA 1908 does not protect goods of the following categories:
(a) goods belonging to the husband or wife of the tenant whose rent is in arrear1;
(b) goods comprised in any bill of sale, hire-purchase agreement, or settlement made by such tenant2;
(c) goods in the possession, order, or disposition of such tenant by the consent and permission of the
true owner under such circumstances that such tenant is the reputed owner thereof3. This provision is not
satisfied merely by showing that where a wife hires goods they are found on the premises where she is
living with her husband4. Where it is sought to exclude the doctrine of reputed ownership by evidence of
usage, that usage must be strictly proved5;
(d) any live stock to which the Agricultural Holdings Act 1986 applies6;
(e) goods of a partner of the immediate tenant7;
(f) goods (not being goods of a lodger) upon premises where any trade or business is carried on in
which both the immediate tenant and the undertenant have an interest8;
(g) goods (not being goods of a lodger) on premises used as offices or warehouses where the owner of
the goods neglects for one calendar month after notice (which is to be given in a like manner as a notice
to quit) to remove the goods and vacate the premises9;
(h) goods belonging to and in the offices of any company or corporation on premises the immediate
tenant whereof is a director or officer or in the employment of such company or corporation10.
It is competent for a stipendiary magistrate or, where there is no stipendiary magistrate, for two justices, upon hearing
the parties, to determine whether any goods are in fact goods included within heads (e) to (h) above11.
HR A[5246]
1 Law of Distress Amendment Act 1908, s 4(1).
2 LDAA 1908, s 4(1). See para HR A[5247] regarding hire purchase agreements.
3 LDAA 1908, s 4(1). See also Times Furnishing Co Ltd v Hutchings [1938] 1 KB 775; North Central Wagon and Finance Co Ltd v
Graham [1950] 2 KB 7, [1950] 1 All ER 780 (on automatic determination of a hire-purchase agreement, goods remain in disposition of
hirer); Chappell Co Ltd v Harrison (1910) 103 LT 594; Re Parker, ex p Turquand (1885) 14 QBD 636; Moorgate Mercantile Co v Finch
[1962] 1 QB 701, CA; Perdana Properties Bhd v United Orient Leasing Co Sdn Bhd [1982] 1 All ER 193, [1981] 1 WLR 1496, PC;
Cunliffe Engineering Ltd v English Industrial Estates Corpn [1994] BCC 972; and Salford Van Hire (Contracts) Ltd v Bocholt
Developments Ltd [1995] 2 EGLR 50, CA.
Page 934
4 Salford Van Hire (Contracts) Ltd v Bocholt Developments Ltd [1995] 2 EGLR 50 at 51, 53, CA (hired vans not within reputed
ownership of tenant). See also Re Parker, ex p Turquand (1885) 14 QBD 636, CA (hired furniture in hotel not within reputed ownership of
tenant, judicial notice taken of common practice of hiring furniture in such situations); contrast Chappell & Co v Harrison (1910) 103 LT
594 (hired piano in theatre was in reputed ownership of tenant).
5 Rogers, Eungblut & Co v Martin [1911] 1 KB 19, CA (hired piano).
6 Law of Distress Amendment Act 1908, s 4(2)(a).
7 LDAA 1908, s 4(2)(b).
8 LDAA 1908, s 4(2)(c). For notice to quit see paras HR A[8127]ff.
9 LDAA 1908, s 4(2)(d).
10 LDAA 1908, s 4(2).
11 LDDA 1908, s 4(2) proviso.
(f) Hire purchase etc
HR A[5247]
Goods let to a hirer on hire purchase remain the property of the owner but will not thereby be protected from distress1.
Goods bailed under a hire-purchase agreement or a consumer credit agreement, or agreed to be sold under a conditional
sale agreement are, where the relevant agreement has not been terminated, excluded from the application of the Law of
Distress Amendment Act 1908 except during the period between the service of a default notice under the Consumer
Credit Act 1974 in respect of the goods and the date on which the notice expires or is earlier complied with2. Goods
comprised in a bill of sale are excluded from the application of LDAA 1908, except during the period between service
of a default notice under the Consumer Credit Act 1974 in respect of goods subject to a regulated agreement under
which a bill of sale is given by way of security and the day on which the notice expires or is earlier complied with3.
HR A[5248]
2 Law of Distress Amendment Act 1908, s 4A(1). The words of LDAA 1908, s 4A on their face are capable of excluding from protection
goods bailed under a hire purchase agreement etc to and at the time when distress is levied, in the possession of any person: cf Shenstone &
Co v Freeman [1910] 2 KB 84, DC; Rogers Eungblut & Co v Martin [1911] 1 KB 19, CA; see also A W Gamage Ltd v Payne (1925) 134 LT
222, DC.
3 Law of Distress Amendment Act 1908, s 4A(2).
HR A[5249]
Page 935
A creditor or owner is not entitled to enforce a term of a regulated agreement1 by recovering possession of any goods or
treating any right conferred on the debtor or hirer as terminated, restricted or deferred except by or after giving the
debtor or hirer not less than seven days notice in a prescribed form of his intention to do so; similar notice is to be
required of an intention to terminate a regulated agreement otherwise than on the ground of a breach by the debtor or
hirer2.
HR A[5250]-[5260]
1 Ie a consumer credit agreement or consumer hire agreement (other than an exempt agreement: Consumer Credit Act 1974, s 189(1)).
2 CCA 1974, ss 76-98.
HR A[5261]
Where a hire purchase agreement is terminated and no contractual rights subsist in the goods it seems that the goods
will no longer be within this exception to the protection provided by the Law of Distress Amendment Act 1908 and
distress will be illegal. However, if any contractual rights still subsist the goods will remain within the scope of this
exception and may be subject to distress1. In any event, even if the hire purchase agreement is determined the goods
remaining in the possession of the hirer may be within his reputed ownership and thus still liable to distress2.
HR A[5262]
1 See Hackney Furnishing Co v Watts [1912] 3 KB 225; Jay's Furnishing Co v Brand & Co [1915] 1 KB 458, CA; Smart Bros Ltd v Holt
[1929] 2 KB 303. See also Perdana Properties Bhd v United Orient Leasing Co Sdn Bhd [1982] 1 All ER 193, [1981] 1 WLR 1496, PC.
2 Times Furnishing Co Ltd v Hutchings [1938] 1 KB 775.
(g) Distress on protected person
HR A[5263]
If any 'superior landlord' (which includes a landlord in cases where the goods seized are not those of an undertenant or
lodger1) levies or authorises the levy of a distress on any goods of any person protected by the Law of Distress
Amendment Act 1908 for arrears of rent due to such superior landlord by his immediate tenant, any person so protected
may serve such superior landlord or the bailiff or other agent employed by him to levy such distress, with a declaration
in writing, setting forth that such immediate tenant has no right of property or beneficial interest in the goods so
distrained or threatened to be distrained upon, and that such goods at the property or in the lawful possession of such
person, and are not goods or live stock to which the Act is expressed not to apply2. If the person serving the declaration
is an undertenant or lodger he must also set forth the amount of rent (if any) then due to his immediate landlord, and the
amount of and times at which future instalments of rent will become due, and the declaration must contain an
undertaking to pay to the superior landlord any rent so due or to become due to his immediate landlord until the arrears
of rent in respect of which distress is levied have been paid off3.
Page 936
HR A[5264]
2 LDAA 1908, s 1; see Druce & Co Ltd v Beaumont Property Trust [1935] 2 KB 257.
3 LDAA 1908, s 1.
HR A[5265]
The declaration need not, if no rent is due, in terms say so, and if the declaration does not state that any rent is due it
will be read as stating that no rent is due1. In the case of a partnership, it may be made by one partner with the authority
of the other partners2 and in the case of a company may be signed by its duly authorised agent3. The declaration need
not be a statutory declaration4.
HR A[5266]
1 Ex p Harris [1885] 16 QBD 130, CA.
2 Rogers, Eungblut & Co v Martin [1911] 1 KB 19, CA.
3 Lawrence Chemical Co Ltd v Rubinstein [1982] 1 All ER 653, CA.
4 Rogers, Eungblut & Co v Martin [1911] 1 KB 19, CA.
HR A[5267]
To the declaration must be annexed a correct inventory subscribed by the person so claiming protection for the goods
referred to in the declaration1. Goods includes furniture and chattels2; but what constitutes a 'beneficial interest' in such
goods is not defined3. If a person knowingly or wilfully makes a statement in such declaration or inventory which is
false in a material particular he is guilty of an offence4.
HR A[5268]
1 Law of Distress Amendment Act 1908, s 1; Godlonton v Fulham and Hampstead Property Co [1905] 1 KB 431.
2 LDAA 1908, s 1.
3 LDAA 1908.
Page 937
4 Perjury Act 1911, s 5.
(h) When declaration is to be made
HR A[5269]
A declaration must be subsequent to the seizure or threat of seizure, so that a declaration made in consequence of one
distress is not available for a second distress, even if the facts in the declaration originally made are still correct at the
time of the second distress1. The Law of Distress Amendment Act 1908 does not specify any time within which the
declaration must be served, but if the landlord proceeds to sell within the five days mentioned in the Distress for Rent
Act 16892 an action will lie at the suit of the person protected by the Law of Distress Amendment Act 1908, although
he has not served any declaration or inventory3. In any event, if the goods of a protected person are taken on an
improper distress he has an action against the landlord4.
HR A[5270]-[5280]
1 Thwaites v Wilding (1883) 12 QBD 4, CA. The rights of the parties must be ascertained at the moment distress is levied: (1883) 12 QBD
4 at 7, per Bowen LJ.
3 Sharpe v Fowle (1884) 12 QBD 385.
4 See Fisher v Algar (1826) 2 C & P 374.
(i) Penalty for disregard of Act
HR A[5281]
If after being served with a declaration and inventory, and in the case of an undertenant or lodger, after an undertaking
has been given and the rent, if any, then due has been paid or tendered in accordance with that undertaking, the superior
landlord, or any bailiff or other agent levies or proceeds with a distress on the furniture, goods or chattels of any person
protected by the Act, he is deemed guilty of an illegal distress, and any person so protected may apply to a justice of the
peace for an order for the restoration to him of the goods1. The superior landlord will also be liable to an action at law
at the suit of the person so protected and so too will the bailiff2.
HR A[5282]

Page 938
2 Lowe v Dorling & Son [1905] 2 KB 501, DC, [1906] 2 KB 772, CA.
(j) Procedure to 'avoid distress'
HR A[5283]
In cases where the rent of the immediate tenant of the superior landlord is in arrear, such superior landlord may serve
upon any undertenant or lodger a notice stating the amount of such arrears of rent, and requiring all future payments of
rent, whether already accrued due or not, by such undertenant or lodger to be made direct to the superior landlord, until
such arrears shall have been duly paid, and such notice will operate to transfer to the superior landlord the right to
recover, receive and give a discharge for such rent1.
HR A[5284]
HR A[5285]
The object of the above provision being that the notice should come to the notice of the person for whom it was
intended, such notice may be served personally instead of by registered post or recorded delivery1.
HR A[5286]
1 Jarvis v Hemmings [1912] 1 Ch 462.
HR A[5287]
The marginal note in the statute is 'to avoid distress' but there is no provision which prevents a landlord from distraining
upon his immediate tenant after service of the notice; nor is any provision made for an undertenant or lodger to take
proceedings corresponding to interpleader, if informed by the immediate tenant that the superior landlord's notice is in
any way wrongful.
HR A[5288]
The appointment of a receiver or manager by the holder of a debenture executed by the tenant does not prevent the
landlord serving a notice upon the subtenant1.
HR A[5289]
Page 939
1 Rhodes v Allied Dunbar Pension Services Ltd [1989] 1 All ER 1161, [1989] 1 WLR 800, CA.
(k) Payment to constitute rent
HR A[5290]-[5300]
For the purposes of the recovery of any sums payable by an undertenant or lodger to a superior landlord under such a
notice under section 6 or under the undertaking mentioned above, the undertenant or lodger is deemed to be the
immediate tenant of the superior landlord, and the sums payable are deemed to be rent; but, where the undertenant or
lodger has, in pursuance of any such notice or undertaking as mentioned above, paid any sums to the superior landlord,
he may deduct the amount thereof from any rent due, or which may become due from him to his immediate landlord,
and any person (other than the tenant for whose rent the distress is levied or authorised to be levied) from whose rent a
deduction has been made in respect of such payment may make the like deductions from any rent due or which may
become due from him to his immediate landlord1. The effect of a notice is a statutory assignment of a chose in action
consisting of the right to receive rent and does not amount to taking possession of the tenant's property2.
HR A[5301]
1 Law of Distress Amendment Act 1908, s 3. The superior landlord, if this notice is not acted upon, is apparently entitled to distrain on the
undertenant or lodger direct.
2 Wallrock v Equity and Law Life Assurance Society [1942] 2 KB 82, CA.
Page 940
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/E When distress may be
made
E
Page 941
made/1 No distress until rent in arrear
1 No distress until rent in arrear
HR A[5302]
A landlord may not distrain until rent is in arrear (ie until it is ascertained, due, and unpaid1). Rent, although previously
demandable, is not actually due until the last instant of the due day, so that the earliest period at which a distress for rent
may be made is on the day following that on which it falls due2. Rent is prima facie not due till the end of each year of a
term, but in practice the due date is generally provided by agreement3, and by this means or by custom rent may be
payable in advance, so that in default of payment distress is legitimate at the beginning of each quarter or other period4.
Agreement may also postpone the right to distress5, but express words will be needed; thus if the parties agree an
affirmative special right of distress, it will not oust the common law rights6.
HR A[5303]
1 3 Bl Com s 7. See too para HR A[5050].
2 Co Litt 47b; Com Dig tit Distress, A, 2; Gilbert on Distresses p 50; Clun's Case (1613) 10 Co Rep 127a; Duppa v Mayo (1669) 1 Wms
Saund 275 at 287; Rockingham (Lord) v Oxenden (1711) 2 Salk 578; Cutting v Derby (1776) 2 Wm Bl 1075 at 1077, per Blackstone J;
Leftley v Mills (1791) 4 Term Rep 170, 174; Dibble v Bowater (1853) 2 E & B 564.
4 Lee v Smith (1854) 9 Exch 662 and Buckley v Taylor (1788) 2 Term Rep 600, where a custom was proved that a half-year's rent was
payable on the day of the tenant's entry into possession; see also Walsh v Lonsdale (1882) 21 Ch D 9, CA. A periodic tenancy expires at
midnight on the day before the anniversary of its commencement, see Sidebotham v Holland [1895] 1 QB 378; Crate v Miller [1947] KB
946, [1947] 2 All ER 45, CA; Schnabel v Allard [1967] 1 QB 627, [1966] 3 All ER 816.
5 Giles v Spencer (1857) 3 CBNS 244; Horsford v Webster (1835) 1 Cr M & R 696. See para HR A[5503].
6 Re River Swale Brick and Tile Works Ltd (1883) 52 LJ CH 638.

Page 942
made/2 Leave of the court
2 Leave of the court
HR A[5304]
In the case of a protected or statutory tenancy within the Rent Act 1977 or assured tenancies within the Housing Act
1988 distress may only be levied with the leave of the county court1. The leave of the court is also required where the
tenant is a service man not serving under a period of regular service or the dependant of such a service man2.
HR A[5305]
1 Rent Act 1977, s 147, see HR C[1412]; Housing Act 1988, s 19, HR C[2141].
2 Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951, s 2(2)(a) and the Reserve Forces Act 1980.
Page 943
made/3 Other requisites for distress
3 Other requisites for distress
HR A[5306]
An actual previous demand for the rent due is generally unnecessary, but by agreement it may be provided that no
distress may be made without a previous demand, or may only be made at a fixed or reasonable time after demand1. A
demand in fact is also requisite in the case of a penal rent, or where the time for payment is at the election of the
landlord, although (depending on the construction of the agreement) no interval need necessarily intervene between the
demand and the levy2.
HR A[5307]
1 Browne v Dunnery (1618) Hob 208; Kind v Ammery (1619) Hut 23; Witty v Williams (1864) 12 WR 755; see para HR A[5062].
2 Mallam v Arden (1833) 10 Bing 299 (prima facie the tenant by his bargain ought to be at hand to pay his rent when due). See also
Clarke v Holford (1848) 2 Car & Kir 540; London and Westminster Loan and Discount Co v London and North Western Rly Co [1893] 2
QB 49, (where the question of 'rent in advance if required by the landlord' was considered).
HR A[5308]
The latest time for distress is considered later1, but in any event a landlord cannot distrain after his reversion has
expired2, nor after he has resumed actual possession under a right of re-entry3.
HR A[5309]
3 Murgatroyd v Silkstone and Dodsworth Coal and Iron Co Ltd, ex p Charlesworth (1895) 65 LJ CH 111. See also para HR A[5070].
HR A[5310]-[5320]
Distress for rent may not be made at night1; night for this purpose is the interval between sunset and sunrise, and not
between dusk and daybreak2, and, if necessary, the time of sunset and sunrise must be proved as a fact3; a landlord who
prevents removal by a third party during the night so that he may distrain in the morning is not guilty of conversion4,
though he may be liable to an action of trespass5. In the past it was held that distress might not take place on a Sunday6
Page 944
but that this irregularity could be waived7, and that a distress for rent due on a Sunday could be levied on the Monday
following8.
HR A[5321]
1 Aldenburgh v Peaple (1834) 6 C & P 212; Lamb v Wall (1859) 1 F & F 503.
2 Tutton v Darke (1860) 5 H & N 647; Nixon v Freeman (1860) 5 H & N 647 at 652.
3 Collier v Nokes (1849) 2 Car & Kir 1012, as the court does not take judicial notice of the hours in the calendar.
4 England v Cowley (1873) LR 8 Exch 126; 28 LT 67.
5 England v Cowley (1873) LR 8 Exch 126 at 132, per Kelly CB.
6 Sunday Observance Act 1677, s 6; Werth v London and Westminster Loan and Discount Co (1889) 5 TLR 521 at 522. But see Statute
Law (Repeals) Act 1969; cf CCR Ord 7, r 3.
7 See Werth v London and Westminster Loan and Discount Co (1889) 5 TLR 521, which, however, has been criticised, and Perring & Co
v Emerson [1906] 1 KB 1 at 6, per Wills J.
8 Child v Edwards [1909] 2 KB 753, where Ridley J, held that by the common law payment of rent on a Sunday was not illegal.
Page 945
made/4 Statutory right to distress after expiration of term
4 Statutory right to distress after expiration of term
HR A[5322]
Distress may be made for any rent in arrear or due upon any lease after the determination of such lease in the same
manner as it might have been made but for the determination of such lease whether the lease be for years, or for years
determinable on the dropping of a life, or at will; provided that such distress be made within six calendar months after
the determination of the lease1, and during the continuance of the landlord's title or interest, and during the possession
of the tenant from whom such arrears became due2.
HR A[5323]
2 LTA 1709, s 7. See Beavan v Delahay (1788) 1 Hy Bl 5. LTA 1709, ss 6 and 7 are confined to cases between landlord and tenant, and
have no application to the case of a claim by an execution creditor: Lewis v Davies [1914] 2 KB 469, CA.
HR A[5324]
The possession in question must be that of the tenant, unless an executor or administrator enters on the land as such
representative during the term and holds over; mere continuance of occupation by a testator's wife or servant does not
constitute a possession by the tenant within the meaning of the statute, even if the wife or other occupier becomes the
representative of the late tenant after a distress1. In any event, the statute cannot apply to a tenancy at will which has
been determined by the tenant's death2.
HR A[5325]
1 Braithwaite v Cooksey (1790) 1 Hy Bl 465; Turner v Barnes (1862) 2 B & S 435.
2 Turner v Barnes (1862) 2 B & S 435; see also Scobie v Collins [1895] 1 QB 375 at 377, per Vaughan Williams J.
HR A[5326]
Further, the statute does not apply where a new tenancy is created between the same parties before or at the expiration
of the old tenancy, even if the new tenancy relates only in part to the original premises; the test is whether the tenant
continues in possession under a new right and title or not1. There is no new tenancy where a tenant gives up possession
of land but is permitted to occupy the house without paying rent until the landlord requires it2.
Page 946
HR A[5327]
1 Wilkinson v Peel [1895] 1 QB 516.
2 Lewis v Davies [1913] 2 KB 37 (reversed on other grounds, [1914] 2 KB 469, CA). See also Foster v Robinson [1951] 1 KB 149; [1950]
2 All ER 342, but where a person is ab initio allowed to occupy premises rent free, there appears to be a tenancy at will: see Buck v Howarth
[1947] 1 All ER 342. See para HR A[202] as to tenancies arising by implication.
HR A[5328]
The statute does not apply where an end has been put to the tenancy by a tenant's own wrongful disclaimer or by
forfeiture1 but it applies to determination by lapse of time, and, probably, by notice to quit2; the continuance of the
possession need not be tortious3, and it is not confined to a holding over of the whole of the premises but the distress
must be made on the part where possession is retained4. If the landlord treats the occupier as a trespasser he cannot
afterwards distrain5.
HR A[5329]
1 Doe d David v Williams (1835) 7 C & P 322; Grimwood v Moss (1872) LR 7 CP 360 at 365, per Willes J; Kirkland v Briancourt (1890)
6 TLR 441. If the landlord treats the occupier as a trespasser he cannot afterwards distrain: Bridges v Smyth (1829) 5 Bing 410.
2 See Williams v Stiven (1846) 9 QB 14.
3 Nuttall v Staunton (1825) 4 B & C 51, where the holding over was by permission of the landlord; Taylerson v Peters (1837) 7 Ad & El
110 at 114, per Patteson J; Gray v Stait (1883) 11 QBD 668 at 673, CA, per Cotton LJ; and see Lewis v Davies [1913] 2 KB 37 at 42-43, per
Channel J; on appeal, [1914] 2 KB 469, CA.
4 Nuttall v Staunton (1825) 4 B & C 51.
5 Bridges v Smyth (1829) 5 Bing 410.
HR A[5330]-[5340]
Possession by the tenant after determination of the term is evidenced by the keeping of the premises as the party's own,
to the exclusion of other people; a small thing, if left on the premises with a view to maintaining the tenant's retention of
possession, will serve, but the mere fact of part or of the whole of the tenant's goods being left on the demised premises
does not in itself conclusively indicate that the tenant is continuing in possession1. Thus, a tenant who left a cow and
some pigs on the premises without intending to return was not continuing in possession2; but a tenant who returned to
premises to pick apples in circumstances where an intention to continue possession could be inferred did continue in
possession3.
HR A[5341]
Page 947
1 Taylerson v Peters (1837) 7 Ad & El 110
2 Gray v Stait (1883) 11 QBD 668, CA esp at 673.
3 Aston v Williams (1910) 45 L Jo 273.

Page 948
made/5 Continuing possession
5 Continuing possession
HR A[5342]
Where by custom or agreement the interest and connection between the landlord and the tenant is extended beyond the
term, and for this purpose the possession of the tenant is allowed to continue, the tenancy is by such custom or
agreement so far prolonged during such further possession as to allow the landlord to distrain1. When a tenant, under
statute2, holds over in lieu of emblements, the rent may be recovered by distress3.
HR A[5343]
1 Beavan v Delahay (1788) 1 Hy Bl 5; Lewis v Harris (1778) 1 Hy Bl 7n; Re Powers, Manisty v Archdale (1890) 63 LT 626.
2 Agricultural Holdings Act 1986, s 21. See HR F[784]-[786].
3 Haines v Welch (1868) LR 4 CP 91.

Page 949
made/6 General exclusion of distress after the expiration of tenancy
6 General exclusion of distress after the expiration of tenancy
HR A[5344]
Except in the cases above stated, a landlord is not entitled to distrain after the expiration of the term or tenancy, even
though the tenant continues in occupation after notice to quit has expired1.
HR A[5345]
1 Co Litt 47b; Com Dig tit Distress, A, 2: 'for he is not in, in privity of the lease': Pennant's Case (1596) 3 Co Rep 64a; Williams v Stiven
(1846) 9 QB 14; Turner v Barnes (1862) 2 B & S 435 at 450.
Page 950
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/F How the right to distrain
may be lost
HR A[5346]
The right to distrain may be lost in several ways.

Page 951
may be lost/1 Assignment of reversion
1 Assignment of reversion
HR A[5347]
The assignment by the landlord of his reversion (including the assignment for a limited duration by the grant of a
concurrent term) destroys the assignor's remedy of distress for arrears of rent due at the date of assignment1.
In the case of tenancies granted before 1 January 1996, by statute rent reserved by a lease is annexed and incident to and
goes with the reversionary estate in the land2. By virtue of this statutory provision, the assignee of the reversion may
sue for rent in arrear at the date of the assignment and may distrain for such rent3.
In the case of tenancies granted on or after 1 January 1996, the assignee of the reversion becomes entitled to the benefit
of the tenant's covenant for rent as from the assignment but does not have any right to sue for rent in relation to any time
falling before the assignment4 (unless the right is expressly assigned), but the benefit of a right of re-entry passes on
assignment5. Accordingly (at least in the absence of an express assignment of the benefit of rent), the assignee of the
reversion has no right to distrain for rent falling due before the assignment.
Further, the right of distress is a legal right and depends on the possession of a legal reversion and is not taken away by
a mere agreement by a person to sell or assign his reversionary interest in the premises6; but after a sale and payment of
the purchase money, and before a conveyance of the property, the vendor is a trustee for the purchaser and, although he
has the legal estate and therefore the right to distrain, he will be restrained from exercising his legal right in such a way
as to prejudice the purchaser7. A contract by the landlord to sell the freehold of the premises to the tenant suspends the
right of distress pending completion8.
HR A[5348]
1 See HR A[5068]. See too Smith v Maplehack (1786) 1 Term Rep 441; Smith v Day (1837) 2 M & W 684; Stavely v Allcock (1851) 16
QB 636 for the law prior to the Conveyancing Act 1881.
2 See the Law of Property Act 1925, s 141 (re-enacting, with modifications in wording, the Conveyancing Act 1881, s 10); and HR
A[1909].
3 London and County (A & D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764, [1970] 2 All ER 600, CA; Arlesford Trading Co Ltd v
Servansingh [1971] 3 All ER 113, [1971] 1 WLR 1080, CA.
Before 1881 (ie before the enactment of the Conveyancing Act 1881: see fn 1), it had been decided that an assignee had title to the next rent
due after the assignment but not to the antecedent rent (see Flight v Bentley (1835) 7 Sim 149), but that case was overruled by London and
County (A & D) Ltd v Wilfred Sportsman Ltd at 784 and 606 per Russell LJ). It would also appear that any other pre-1881 decision, in so far
as it may indicate that a disposition by the landlord of a reversion of a lease destroys the remedy for distress for arrears of rent due at the date
of the disposition (see, for example Smith v Day (1837) 2 M & W 684; Stavely v Allock (1851) 16 QB 636), is no longer good law (see Re
King, Robinson v Gray [1963] Ch 459 at 490, [1963] 1 All ER 781 at 793, CA, per Upjohn LJ).
4 Landlord and Tenant (Covenants) Act 1995, s 3(3). See HR A[1943].

Page 952
5 Landlord and Tenant (Covenants) Act 1995, s 23. See HR A[1943].
6 Manchester Brewery Co v Coombs [1901] 2 Ch 608.
7 Re Powers, Manisty v Archdale (1890) 63 LT 626.
8 Ellis v Wright (1897) 76 LT 522. See also para 678 post.

Page 953
may be lost/2 Grant of future lease: no parting with reversion until commencement
2 Grant of future lease: no parting with reversion until commencement
HR A[5349]
The grant of a second lease to commence on the expiration of an existing lease formerly conferred only an interesse
termini, and created no estate in the property until the arrival of the day appointed for the commencement and actual
entry1. It did not amount to a parting with the reversion in the meantime, or take away the right of distress under the
first lease2. Though the doctrine of interesse termini is abolished3, and a future lease now takes effect without actual
entry, it takes effect only from the date of commencement of the term4. Hence, if the future lease is granted to a third
person, it still does not amount to a parting with the reversion, so as to take away the lessor's right of distress5 until it
commences; while, if it is granted to the first lessee, it operates as an extension of his term6.
HR A[5350]-[5360]
1 Doe d Rawlings v Walker (1826) 5 B & C 111, 119.
2 Smith v Day (1837) 2 M & W 684.
3 Law of Property Act 1925, s 149(1). See paras HR A[290]-[300].
4 LPA 1925, s 149(2). But a term, at a rent or granted in consideration of a fine, must be limited to take effect not more than 21 years from
the date of the instrument creating it, otherwise it is void (LPA 1925, s 149(3)); see Re Strand and Savoy Properties Ltd, D P Development
Co Ltd v Cumbrae Properties Ltd [1960] Ch 582, [1960] 2 All ER 327.
5 Not only is the effect of the future term postponed till its commencement, but it is expressly provided by LPA 1925, s 149(4), that
nothing in sub-ss (1) and (2) is prejudicially to affect the right of any person to recover any rent.
6 Knight v City of London Brewery Co [1912] 1 KB 10 where the addition of a reversionary term to a term in possession was not allowed.
See Llangattock (Lord) v Watney, Combe, Reid & Co Ltd [1910] AC 394. The effect of these cases is preserved for terms or interests created
before 1 January 1926, by the Law of Property Act 1925, s 149(4). The addition of the future term to the present term prevents the right of
distress being lost in circumstances such as occurred in Lewis v Baker [1905] 1 Ch 46.
Page 954
may be lost/3 Determination of interest and surrender of reversion
3 Determination of interest and surrender of reversion
HR A[5361]
Where the landlord is himself only a lessee his right to distrain ceases with the determination of his interest1.
HR A[5362]
1 Burne v Richardson (1813) 4 Taunt 720; and where the lessor has only some other defeasible interest the expiration of such interest
determines his right to distrain: Hopcraft v Keys (1833) 9 Bing 613.
HR A[5363]
The common law right to distrain expires with the tenancy1. This right is by statute extended for six months after the
determination of the tenancy2, but unless the remedy is exercised within the statutory limit, the right to distrain will be
lost as it will if the tenant continues in occupation under a new tenancy3.
HR A[5364]
1 Stanfill v Hicks (1697) 1 Ld Raym 280; Serjeant v Nash, Field & Co [1903] 2 KB 304.
HR A[5365]-[5465]
When the reversion is surrendered or merges, the rent so far as regards the person who was entitled to that reversion
becomes extinguished, and his right to distrain for arrears due at the date of the surrender or merger is lost1.Where,
however, a lease out of which underleases have been derived is surrendered for the purpose of a renewal, the remedy by
way of distress for rent due from the underlessees remains the same as if: (a) the reversion under the original lease had
been kept on foot; or (b) a new underlease, derived out of the new lease, had been granted to the underlessee or person
deriving title under him (so far as the rent reserved does not exceed that reserved by the original lease)2, and in the case
of any other surrender or merger the estate which as against the underlessee confers the next vested right to the land,
will become the reversion on the underlease, with all incidents, including the right of distress3.
Page 955
HR A[5466]
1 Webb v Russell (1789) 3 Term Rep 393; Threr v Barton (1570) Moore (KB) 94; Thorn v Woollcombe (1832) 3 B & Ad 586; Preece v
Corre (1828) 5 Bing 22; Lewis v Baker [1905] 1 Ch 46.
2 Law of Property Act 1925, s 150(5) re-enacting the provisions of the Landlord and Tenant Act 1730, s 6.
3 Law of Property Act 1925, s 139. In the case of a tenancy continuing by virtue of any provision of the Landlord and Tenant Act 1954,
the Law of Property Act 1925, s 139(1) applies as if references to surrender or merger included references to the coming to an end of the
reversion for any other reason than surrender or merger; Landlord and Tenant Act 1954, s 65(2).
Page 956
may be lost/4 By payment of or judgment for the rent
4 By payment of or judgment for the rent
HR A[5467]
Payment of the rent or its equivalent extinguishes the right to distrain. But the taking of a bill of exchange or promissory
note for the rent will not, until payment is actually made, operate to take away or postpone the landlord's right to
distrain, unless there is an agreement to that effect1, though it is some evidence of an agreement by the landlord to
suspend his remedy by distress during the currency of the bill or note2. An unsatisfied judgment on the bill will not
interfere with the right of distress3, but it will be otherwise if the landlord discounts the bill4. The remedy of distress is
not affected by an agreement to take interest on the arrears5.
HR A[5468]
1 Davis v Gyde (1835) 2 Ad & El 623; Harris v Shipway (1744) Bull NP 182a. But see paras HR A[3267]ff: methods of payment of rent.
2 Palmer v Bramley [1895] 2 QB 405, CA. But where a lease states that a tenant shall 'pay' a yearly rent, evidence of a prior parol
agreement whereby the landlord agreed to take a bill payable at three months by way of payment of each quarter's rent as it became due is
inadmissible as substituting the terms of an antecedent parol agreement for a subsequent formal contract: Henderson v Arthur [1907] 1 KB
10, CA. See also In re J Defries & Sons Ltd; Eichlnolz v J Defries & Sons Ltd [1909] 2 Ch 423 at 429.
3 Drake v Mitchell (1803) 3 East 251 (note or bill operating as collateral security); Wegg Prosser v Evans [1895] 1 QB 108, CA.
4 Parrott v Anderson (1851) 7 Exch 93.
5 Skerry v Preston (1813) 2 Chit 245.
HR A[5469]
If the landlord recovers judgment for the rent, even though it is unsatisfied, the remedy by distress is lost, since the rent
is merged in the judgment1.
HR A[5470]-[5480]
1 Chancellor v Webster (1893) 9 TLR 568; Potter v Bradley & Co (1894) 10 TLR 445 at 446. See para HR A[5468], nn 3 and 4.
Page 957
may be lost/5 By tender of the rent
5 By tender of the rent
HR A[5481]
Tender of the rent, with any proper costs, will deprive the landlord, according to the stage at which it is made, either of
the right to distrain or the right further to pursue the remedy by distress. A tender to the landlord or his authorised agent
by the tenant or his agent of the rent without any costs (even though the landlord has incurred costs) before seizure,
extinguishes the right to distrain, and makes the subsequent distress illegal1. A tender after distress taken, but before it
is impounded or removed, of the rent and costs of the distress makes the subsequent removal or detainer unlawful2.
Even after impounding, a tender of the rent and the proper expenses of the distress made within the time allowed for the
replevying makes a subsequent sale of the distress irregular and gives a right of action for so selling3. In the case of
growing crops seized under the Distress For Rent Act 1737, a tender made before they are ripe and cut or gathered puts
an end to the distress4.
HR A[5482]
1 Bennett v Bayes (1860) 5 H & N 391; Branscomb v Bridges (l823) 1 B & C 145; Bird v Hildage [1948] 1 KB 91, [1947] 2 All ER 7,
CA.
2 Loring v Warburton (1858) EB & E 507; Vertue v Beasley (1831) 1 Mood & R 21; Six Carpenters' Case (1610) 8 Co Rep 146a; 1 Smith
LC, 13th ed 134; Evans v Elliott (1836) 5 Ad & El 142.
3 Johnson v Upham (1859) 2 E & E 250, overruling Elils v Taylor (1841) 8 M & W 415; cf Ladd v Thomas (1840) 12 Ad & El 117;
Singleton v Williamson (1862) 7 H & N 747.
4 Distress For Rent Act 1737, s 9; see Owen v Legh (1820) 3 B & Ald 470 at 473, Abott CJ.
HR A[5483]
When a landlord after a lawful distress and impounding accepts the rent in arrear and the charges of distress, he is not
liable for merely retaining possession of the goods, but if he actually refuses to deliver them up to the tenant he will be
liable for conversion1.
HR A[5484]
1 West v Nibbs (1847) 4 CB 172.

Page 958
may be lost/6 Mode of tender
6 Mode of tender
HR A[5485]
The tender may be made to the landlord himself notwithstanding the fact that he has authorised a bailiff to distrain and
left the matter in his hands1, or to his agent authorised to receive the rent though such agent has delivered a distress
warrant to the bailiff2, and tender may be made to the bailiff authorised to distrain though his employer may have
instructed him not to receive the rent3. But tender to a mere man in possession who is not the bailiff holding the warrant
to distrain is not good4.
HR A[5486]
1 Smith v Goodwin (1833) 4 B & Ad 413.
2 Bennett v Bayes (1860) 5 H & N 391.
3 Hatch v Hale (1850) 15 QB 10. See para HR A[5647].
4 Boulton v Reynolds (1859) 2 E & E 369.
HR A[5487]
The tender need not be made by the tenant; it may be made by a third person with the tenant's prior authority or
subsequent ratification. But if a stranger, without any interest in the property, voluntarily tenders the rent, the landlord is
not bound to receive it1, though the subsequent adoption of the act by the tenant would make the tender valid.
HR A[5488]
1 Co Litt 206b Watkins v Ashwicke (1585) Cro Eliz 132. See also para HR A[3181].
HR A[5489]
The tender must be of the proper amount and be made unconditionally, so that the landlord may accept it without
prejudice to his right to recover more if actually due1. The question of whether or not a tender was made
unconditionally is one of fact2. Accompanying words which do not require the landlord to make any admission as to the
amount of rent due as a condition of its receipt do not amount to a conditional tender3.
Page 959
HR A[5490]-[5500]
1 Finch v Miller (1848) 5 CB 428.
2 Eckstein v Reynolds (1837) 7 Ad & El 80; Marsden v Goode (1845)2 Car & Kir 133, per Cresswell J and cf Smith v Cox [1940] 2 KB
558, [1940] 3 All ER 546.
3 Bowen v Owen (1847) 11 QB 130; Bull v Parker (1842) 2 Dowl NS 345; Jones v Bridgman (1878) 39 LT 500. Thus, a tender of a sum if
the plaintiff who claimed a larger sum would accept it as the whole balance really due (Evans v Judkins (1815) 4 Camp 156), tender of a sum
in payment of the half-year's rent due at Lady Day (Hastings (Marquis) v Thorley (1838) 8 C & P 573), and a tender of a quarter's rent with a
demand for a receipt to a particular day, it being in dispute whether one or two quarters' rent was due (Finch v Miller (1848) 5 CB 428; cf
Richardson v Jackson (1841) 8 M & W 298), have been held to be invalid tenders. On the other hand, 'I have sent you £26 to settle one
year's rent of N' (Bowen v Owen (1847) 11 QB 130); 'Here is your quarter's rent' (Jones v Bridgman (1878) 39 LT 500, disapproving
Hastings (Marquis) v Thorley (1838) 8 C & P 573) and a tender under protest (Scott v Uxbridge and Rickmansworth Rly Co (1866) LR 1 CP
596; Greenwood v Sutcliffe [1892] 1 Ch 1, CA; Manning v Lunn (1845) 2 Car & Kir 13) have been held to be unconditional tenders.
Page 960
may be lost/7 Second distress
7 Second distress
HR A[5501]
A distress is ordinarily a bar to a second distress. The circumstances in which a second distress may be possible are
dealt with below1.
HR A[5502]
1 See paras HR A[5983]-[6004].

Page 961
may be lost/8 Agreement not to distrain
8 Agreement not to distrain
HR A[5503]
The right to distrain may be lost, postponed, or suspended by express or implied agreement not to distrain1 or by
conduct on the part of the landlord inducing the owner of the chattels to believe that he will not take them under a
distress2.
HR A[5504]
1 See para HR A[5302]; Oxenham v Collins (1868) 2 F & F 172; cf Re Smith and Hartogs, ex p Official Receiver (1895) 73 LT 221.
2 See Miles v Furber (1873) LR 8 QB 77; Pape v Westacott [1894] 1 QB 272, CA.
Page 962
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/G Place where distress
may be made
G
Page 963
may be made/1 General rule
1 General rule
HR A[5505]
The general rule is that a distress can only be made of goods found upon some part of the premises out of which the rent
issues1. If part of a public highway is, by presumption of law, included in the demise a distress may be made on that
part of the highway2; but otherwise no person can make a distress on the highway3.
HR A[5506]
1 Capel v Buszard (1829) 6 Bing 150, Ex Ch; see Lewis v Read (1845) 13 M & W 834.
2 That is, to the middle of the road. See Doe d Pring v Pearsey (1827) 7 B & C 304; Hodges v Lawrence (1854) 18 JP 347; Gillingham v
Gwyer (1867) 16 LT 640.
3 52 Hen 3. Statute of Marlborough 1267, Chap 15; but see exception (c), para HR A[5523].
HR A[5507]
Goods upon any part of the demised premises may be distrained for the whole rent1. But if several parcels of property
are let to the same person by separate demises at separate rents, though in the same deed, a joint distress cannot be made
on any one parcel for more than the rent which issues out of that parcel, though all are in arrear2. If where the demises
are separate there be rent due on each parcel, and no more be taken on each than is due in respect of each, the distress is
regular3.
HR A[5508]
1 Hargrave v Shewin (1826) 6 B & C 34.
2 Rogers v Birkmire (1736) 2 Stra 1040.
3 Phillips v Whitsed (1860) 2 E & E 804 at 809.

Page 964
may be made/2 Exceptions to the general rule
2 Exceptions to the general rule
(a) Agreement
HR A[5509]
By agreement between the parties the landlord may distrain on goods on other lands than those out of which rent
issues1. However, unless the property is connected with the demised premises, the agreement may be within the Bills of
Sale Act 18782.
HR A[5510]-[5520]
1 Daniel v Stepney (1874) LR 9 Exch 185, Ex Ch; Re Roundwood Colliery Co, Lee v Roundwood Colliery Co [1897] 1 Ch 373, CA.
2 Re Roundwood Colliery Co, Lee v Roundwood Colliery Co [1897] 1 Ch 373, CA.
(b) Cattle on appurtenant common
HR A[5521]
A landlord may distrain for arrears of rent the cattle or stock of his tenant feeding upon any common appendant or
appurtenant or in any way belonging to the premises demised1.
HR A[5522]
1 Distress For Rent Act 1737, s 8.
(c) Pursuit onto highway or other land
HR A[5523]
If the landlord on coming to distrain sees the tenant's cattle on the premises, and the tenant to prevent the distress drives
them off the premises, the landlord may make fresh pursuit and seize them in the highway or any other place off the
lands demised. But if the cattle of their own accord go out of the lands demised or onto the highway within his view, he
Page 965
cannot pursue them; neither can he if they be driven off the lands for any other purpose than to avoid distress1.
HR A[5524]
1 Co Litt 161a.
(d) Fraudulent removal
HR A[5525]
In case of fraudulent or clandestine removal the landlord may seize the goods removed whenever they are found in
accordance with the provisions of the Distress For Rent Act 1737, which is dealt with at paras HR A[6005]ff.
Page 966
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/H For what amount
distress may be made
H
Page 967
distress may be made/1 General rule
1 General rule
HR A[5526]
Apart from statutory restriction as regards arrears, the amount of rent for which a distress may be levied is dependent
upon the terms of the reddendum. That which according to the terms of the reservation has become an ascertained part
of the render to be made for the use of the land, and which is unsatisfied either in whole or in part at the time of the
levy, may be distrained for to the extent to which it is unsatisfied1.
HR A[5527]
1 Townsend v Charlton [1922] 1 KB 700.
HR A[5528]
Where a tenant has been in possession of the premises before the grant of the lease and the reddendum relates back to
the time of entry, rent may be distrained for even though it relates back to a period before the grant1.
HR A[5529]
1 M'Leish v Tate (1770) 2 Cowp 781 at 784.

Page 968
distress may be made/2 Fluctuating rents
2 Fluctuating rents
HR A[5530]-[5540]
There is nothing to prevent distress in respect of rent reserved in the reddendum in such a manner that the amount of
rent may fluctuate during the term, for example, pursuant to a rent review clause. However, where the reddendum
provides for a method of ascertaining the rent but the rent has not yet been ascertained, distress cannot take place: the
rent can only be distrained for when it is certain and in arrear1.
HR A[5541]
1 See para HR A[5048]. Concorde Graphics Ltd v Andromeda Investments SA [1983] 1 EGLR 53. See also Eren v Tranmac Ltd [1997] 2
EGLR 211, CA.
Page 969
distress may be made/3 Distress for distinct rents
3 Distress for distinct rents
HR A[5542]
The form of the demise, or the existence of a succession of demises, may make what was apparently one rent, or an
accumulation of arrears of the same rent, distinct rents requiring separate distresses for the separate amounts. Though
there may be one distress for any number of instalments of rent reserved by the same demise, there may not be a joint
distress for several rents reserved under separate demises, whether contemporaneous1 or subsequent2.
HR A[5543]
1 Rogers v Birkmire (1736) 2 Stra 1040. See para HR A[5507].
2 Stanfill v Hicks (1697) 1 Ld Raym 280
HR A[5544]
On the other hand, although a number of instalments of rent under the same demise may be in arrear, they may be
separately distrained for, and it is immaterial in what order1.
HR A[5545]
1 Palmer v Stanage (1661) 1 Lev 43; Gambrell v Falmouth (Earl) (1835) 4 Ad & El 73. But if the rent is one entire rent, the whole must
be distrained for at the same time, if there are sufficient chattels to satisfy it: Bagge v Mawby (1853) 8 Exch 641.
Page 970
distress may be made/4 Set-off
4 Set-off
HR A[5546]
It was previously considered that a tenant was not entitled to raise a set-off against distress for rent either at common
law or in equity1. This is no longer true: a landlord is not entitled to distrain for rent against which the tenant has an
equitable set-off2.
HR A[5547]
1 Absolon v Knight and Barber (1743) Barnes 450; Laycock v Tufnell (1787) 2 Chit 531; Willson v Davenport (1833) 5 C & P 531;
Townrow v Benson (1818) 3 Madd 203; Pratt v Keith (1864) 10 Jur NS 305.
2 Eller v Grovecrest Investments Ltd [1995] QB 272, [1994] 4 All ER 845, CA; Fuller v Happy Shopper Markets Ltd [2001] 1 WLR
1681, [2001] 25 EG 159, Lightman J. See paras HR A[3384]ff on set-off against rent generally.
HR A[5548]
In the case of holdings to which the Agricultural Holdings Act 1986 applies, it is, however, provided that, where
compensation due under that Act or under any custom or contract has been ascertained before the landlord distrains for
rent due, the amount of such compensation may be set off against the rent and the balance only distrained for1.
HR A[5549]
1 Agricultural Holdings Act 1986, s 17, see HR F[722].

Page 971
distress may be made/5 Deductions other than 'set-off'
5 Deductions other than 'set-off'
HR A[5550]-[5561]
The amount for which a landlord may distrain may have been satisfied in part by payments made before the levy. These
may be either payments made to the landlord himself or payments made on his behalf and with his express or implied
authority1. Thus, where the tenant has paid on behalf of the landlord sums which it was the landlord's duty to pay and
which are charged upon the land, so that the failure to pay them would prevent the tenant's peaceable possession of the
property, the tenant is considered as authorised by the landlord to make such payments and treat the same as made in
satisfaction or part satisfaction of the rent, so that the landlord can only distrain for the balance, if any2.
HR A[5562]
1 See para HR A[5263] for payments made by undertenants under the Law of Distress Amendment Act 1908.
2 Graham v Allsopp (1848) 3 Exch 186; Jones v Morris (1849) 3 Exch 742; Carter v Carter (1829) 5 Bing 406; Valpy v Manley (l845) 1
CB 594; O'Donoghue v Coalbrook and Broadoak Co Ltd (1872) 26 LT 806, Ex Ch.
HR A[5563]
Sums paid by the tenant in discharge of the landlord's rates and taxes go in reduction of the amount for which a distress
may be made. Thus, for example, tax which was payable by the landlord, if paid by the tenant might be deducted from
the rent falling due next after payment1. The same rule applies to all expenses, which, in the absence of agreement
between the parties, are to be borne by the landlord, though payable in the first instance by the tenant2.
HR A[5564]
1 Franklin v Carter (1845) 1 CB 750. The amount of the taxes could not afterwards be retained or recovered by action: Cumming v
Bedborough (1846) 15 M & W 438; Denby v Moore (1817) 1 B & Ald 123; Andrew v Hancock (1819) 1 Brod & Bing 37; Dawes v Thomas
[1892] 1 QB 414, CA; Mile End Old Town Vestry v Whitby (1898) 78 LT 80; Beaufort (Duke) v IRC v Marquess of Anglesey [1913] 3 KB
48, CA; Hill v Krishenstein [1920] 3 KB 556 (except under a special agreement (Lamb v Brewster (1879) 4 QBD 607, CA), or where the
payment was made under a distress for the whole rent (Graham v Tate (1813) 1 M & S 609), or to avoid a distress, with an express saving of
the tenant's right (Baker v Greenhill (1842) 3 QB 148).
2 For these, see paras HR A[3327]ff.
HR A[5565]
Page 972
If by mistake and without fraud the tenant is permitted to make deductions from his rent in respect of outgoings which
he ought to have borne himself, and the receipt is given for the balance expressing it to be such, the deductions are
treated as payment, and distraint cannot afterwards be levied for them1.
HR A[5566]
1 Waller v Andrews (1838) 3 M & W 312; Bramston v Robins (1826) 4 Bing 11.
Page 973
distress may be made/6 Double rent
6 Double rent
HR A[5567]
There is one instance in which the law allows the landlord to distrain for double rent, namely, in case the tenant gives
notice of his intention to quit the premises at a particular time. and does not deliver up possession accordingly, he
becomes liable to pay the landlord double the former rent for the whole time he holds the premises after the expiration
of such notice; such double rent may be levied and recovered as the former single rent might have been1.
HR A[5568]

Page 974
distress may be made/7 Arrears recoverable by distress: limitation
7 Arrears recoverable by distress: limitation
HR A[5569]
No distress for arrears of rent can be made except within six years next after they became due or next after a written
acknowledgment of the same shall have been made1. But the right to distrain for six years' arrears subsists as long as the
relationship of landlord and tenant continues, notwithstanding the non-payment of rent for any number of years2.
HR A[5570]-[5580]
2 Archbold v Scully (1861) 9 HL Cas 360.
HR A[5581]
A distress upon a holding to which the Agricultural Holding Act 1986 applies is limited to rent which became due in
respect of such holding not more than one year before the making of such distress1.
HR A[5582]
1 Agricultural Holdings Act 1986, s 16 (see HR F[718]). Crosse v Welch (1892) 8 TLR 401 at 709, CA, a case decided under an earlier
Act (which did not apply on the facts of that case) now replaced by AHA 1986.
Page 975
distress may be made/8 Arrears due before assignment of term
8 Arrears due before assignment of term
HR A[5583]
It has been held that a landlord may not levy a distress against goods of an assignee of the tenancy in relation to arrears
of rent which become due before the assignment and owed by the assignor1.
HR A[5584]
1 Wharfland Ltd v South London Co-operative Building Co Ltd [1995] 2 EGLR 21. See paras HR A[5066], [3525], [2227].
Page 976
distress may be made/9 Costs of distress
9 Costs of distress
HR A[5585]
In addition to the actual amount of rent due the landlord may distrain sufficient chattels to cover the expenses of the
distress1.
HR A[5586]
1 Distress for Rent Act 1689, s 1; see also para HR A[5961].
HR A[5587]
If after the bailiff distrains the rent is paid to the landlord so that the rent is satisfied, the bailiff has no right to go on and
sell for his expenses1.
HR A[5588]
1 Harding v Hall (1866) 14 WR 646.

Page 977
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/I Levying the distress
I
Page 978
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/I Levying the distress/1
Introductory
1 Introductory
HR A[5589]
The landlord may distrain either in person or by an authorised bailiff or agent1. The process of distress consists of three
stages: the entry onto the premises, the seizure of goods, and the subsequent securing of the goods (generally called
impounding)2.
HR A[5590]-[5600]
2 Evans v South Ribble Borough Council [1992] QB 757 at 764, [1992] 2 All ER 695 at 699.
Page 979
The warrant
2 The warrant
(a) Authority of bailiff
HR A[5601]
A landlord may distrain either in person or by an authorised bailiff or agent1. The bailiff distrains as agent for the
landlord2.
HR A[5602]
1 Symonds v Kurtz (1889) 61 LT 559, DC. As to who may be a bailiff, see para HR A[5627]. As to fees for levying, see para HR
A[5961].
2 Re Caidan, ex p Official Receiver v Regis Property Co Ltd [1942] Ch 90 at 96, [1941] 3 All ER 491 at 496 (Morton J).
HR A[5603]
When a bailiff makes a distress he must have authority to do so from his employer1. As the distrainee is entitled to
know by what right the bailiff is acting, this authority is generally, and should properly be, in writing, and is commonly
called a distress warrant or warrant of distress; but it is not essential to his authority that a bailiff should be appointed in
writing. Even a corporation aggregate may appoint a person to distrain without deed or warrant2.
HR A[5604]
1 Symonds v Kurtz (1889) 61 LT 559, DC. As to who may be a bailiff, see para HR A[5627]. As to fees for levying, see para HR
A[5961].
2 Cary v Matthews (1688) 1 Salk 191; Randle v Dean and Pope (1700) 2 Lut 1496 at 1497; Smith v Birmingham Gas Co (1834) 1 Ad &
El 526.
HR A[5605]
A distress made without previous authority may be afterwards recognised and adopted by the landlord, and the adoption
relates back to the time of taking the distress and will be as effectual as a previous authority would have been1.
Page 980
HR A[5606]
1 Trevillian v Pine (1708) 11 Mod Rep 112; notes to Potter v North (1669) 1 Saund 346 at 347; Haseler v Lemoyne (1858) 5 CBNS 530;
Duncan v Meikleham (1827) 3 C & P 172; and see Whitehead v Taylor (1839) 10 Ad & El 210 (ratification by executor after probate); Smith
v Birmingham Gas Co (1834) 1 Ad & El 526; see also Church v Imperial Gas Light and Coke Co (1838) 6 Ad & El 846 at 861 (ratification
by corporation).
HR A[5607]
The authority conferred by a warrant to distrain may be withdrawn at any time before the goods are actually sold1.
When a warrant to distrain is in fact given to one man, it cannot be executed by another man not named in it2.
HR A[5608]
1 Harding v Hall (1866) 14 LT 410.
2 Symonds v Kurts (1889) 61 LT 559.
HR A[5609]
In the case of a joint distress, as by joint tenants, the warrant may be signed by all the parties entitled1 or be given by
one only to authorise a distress for the rent due to all2.
HR A[5610]-[5620]
1 Buller's Case (1587) 1 Leon 50.
2 Leigh v Shepherd (1821) 2 Brod & Bing 465; Robinson v Hofman (1828) 4 Bing 562; Stedman v Bates (1695) 1 Ld Raym 64. See para
HR A[5082].
HR A[5621]
A distress warrant does not require to be stamped1.
HR A[5622]
1 Pyle v Partridge (1846) 15 M & W 20.

Page 981
(b) Nature of warrant
HR A[5623]
A warrant of distress creates an implied warranty on the part of the landlord that he has the right to distrain and an
implied undertaking to indemnify his agent the bailiff against any act properly done in exercise of the authority given to
him1. But it will not indemnify the bailiff against illegal or irregular acts done by him or his servants in the course of
the distress, in the absence of an indemnity expressly worded to cover them, unless the conduct of the landlord has been
such as to induce the bailiff to believe that he was acting under an indemnity from him covering such acts2. The bailiff
is not an officer of the court so as to relieve the landlord from liability for the irregular act of the bailiff.
HR A[5624]
1 Draper v Thompson (1829) 4 C & P 84.
2 Draper v Thompson (1829) 4 C & P 84; Toplis v Grane (1839) 5 Bing NC 636; Dugdale v Lovering (1875) LR 10 CP 196; Haseler v
Lemoyne (1858) 5 CBNS 530; Freeman v Rosher (1849) 13 QB 780; Lewis v Read (1845) 13 M & W 834. Thus, a warrant in the ordinary
form confers no authority on the bailiff to levy on privileged goods; but where the levy is made by the express direction of the landlord the
latter is bound to indemnify the bailiff: Toplis v Grane (1839) 5 Bing NC 636.
HR A[5625]
If the landlord, when the fact of illegal acts committed by the bailiff comes to his knowledge, disclaims or repudiates
them, he is not liable1. But a slight recognition of what has been done may amount to adoption and ratification; and the
presence of the landlord with the bailiff immediately after premises had been forced open by the latter and fixtures torn
down, was regarded as sufficient evidence of knowledge and adoption by the landlord2.
HR A[5626]
1 Hurry v Rickman and Sutcliffe (1831) 1 Mood & R 126.
2 Moore v Drinkwater (1858) 1 F & F 134.

Page 982
The bailiff
3 The bailiff
(a) Qualification of bailiff
HR A[5627]
No person may be employed as a bailiff to levy any distress for rent unless he is authorised to act as a bailiff by a
certificate in writing under the hand of a county court judge; and such certificate may be general or apply to a particular
distress or distresses1.
HR A[5628]
1 Law of Distress Amendment Act 1888, s 7; Distress for Rent Rules 1988, SI 1988/2050, rr 3-8. (as amended by SI 1999/2360). Re
Sanders, ex p Sergeant (1885) 54 LJQB 331.
HR A[5629]
The certificate may at any time be cancelled or declared void by the county court judge1.
HR A[5630]-[5640]
HR A[5641]
If any person not holding such a certificate levies a distress contrary to the provisions of the Act, the person so levying,
and any person who has authorised him so to levy, will be deemed to have committed a trespass1, not only as against
the tenant, but also as against a third party whose goods are seized2. The effect of this is to make a distress by an
uncertificated bailiff an illegal distress, with all the consequences of a trespass ab initio. In addition, an uncertificated
bailiff who levies a distress will (without prejudice to any civil liability) be liable on conviction to a fine on level one on
the standard scale3. A minor cannot be a bailiff4.
HR A[5642]
Page 983
2 Perring & Co v Emerson [1906] 1 KB 1.
3 Law of Distress Amendment Act 1895, s 2; Criminal Justice Act 1982, s 46.
4 Cuckson v Winter (1828) 2 Man & Ry KB 313.
(b) Landlord's right to distrain in person
HR A[5643]
An uncertificated landlord has the right to distrain in person, and after a levy he may leave to his certificated bailiff the
conduct of the distress from levy to sale. But the managing director of a company is not in the position of landlord to the
tenants of the company, and unless acting under a certificate as bailiff will be guilty of trespass in distraining1.
HR A[5644]
1 Hogarth v Jennings [1892] 1 QB 907, CA. In that case, however, only nominal damages were awarded as there had been no sale and the
goods had only been distrained for a few hours.
(c) Rights and liabilities of bailiff
HR A[5645]
A bailiff is liable to the landlord for damages sustained by the latter by reason of the former's negligence or misconduct
in exceeding his authority1.
HR A[5646]
1 Thus, a bailiff was held liable to recoup the landlord compensation paid to the tenant for an excessive distress (Megson v Mapleton
(1883) 49 LT 744) and to pay for the value of goods distrained and lost through the bailiff's negligence (White v Heywood (1888) 5 TLR
115). As to the liability of the landlord to indemnify the bailiff, see para HR A[5623].
HR A[5647]
A bailiff holding a warrant to distrain has implied authority to receive rent and costs when tendered, notwithstanding
express directions to the bailiff by the landlord not to receive them1.
Page 984
HR A[5648]
1 Hatch v Hale (1850) 15 QB 10. See para HR A[5485].
HR A[5649]
Where a distress is made by a bailiff he should show his warrant and the cause of taking the distress if required to do so,
but if not required he may distrain generally1.
HR A[5650]-[5661]
1 Buller's Case (1587) 1 Leon 50.
HR A[5662]
In any case he must deliver to the tenant or leave on the premises a memorandum, in the prescribed form, setting out the
amounts for which the distress is levied, and the fees, charges and expenses authorised by the Distress for Rent Rules
19881.
HR A[5663]

Page 985
The entry
4 The entry
(a) In general
HR A[5664]
The right to distrain necessarily involves the right to enter on the premises where the chattels are for the purpose of
taking possession of them1. The right implies a licence for the distrainor to enter the premises in any way short of
breaking into the premises, although he does that which in the case of any other person would be a trespass2.
HR A[5665]
1 Evans v South Ribble Borough Council [1992] 2 All ER 695, [1992] QB 757.
2 Long v Clarke [1894] 1 QB 119, CA: 'A landlord may enter the demised premises to levy a distress, and may commit in so doing an act
which in any one else would be a trespass, provided he does not break open any outer door': Long v Clarke [1894] 1 QB 119 at 122, per
Lopes LJ; American Concentrated Must Corpn v Hendry (1893) 68 LT 742, CA.
(b) Legal and illegal entry
HR A[5666]
In order to exercise a right of distress it is necessary to enter the premises1. Although a right to distrain necessarily
involves a right to enter, this can only be exercised lawfully, ie without breaking the premises. There is no right of
forcible entry2. The outer door may be opened in the ordinary way in which persons are accustomed to open it when it
is left so as to be accessible to those having occasion to go into the premises3. A licence to enter is implied from a door
being left unfastened though closed4. Thus, the latch of the door may be lifted, or a key left outside of the door turned,
or a bolt on the outside drawn back5. But the distrainor may not put his hand through a hole and remove a bar which
bars an outer door and thus effect an entry6.
HR A[5667]
1 Evans v South Ribble Borough Council [1992] 2 All ER 695 (service of a notice is not enough).
2 Evans v South Ribble Borough Council [1992] 2 All ER 695 at 699.

Page 986
3 Ryan v Shilcock (1851) 7 Exch 72 at 75.
4 Nash v Lucas (1867) LR 2 QB 590 at 593, per Lush J.
5 Ryan v Shilcock (1851) 7 Exch 72; Eldridge v Stacey (1863) 15 CBNS 458.
6 Fitzherbert Grand Abridgment, Distress p 121.
HR A[5668]
An outer door must not be broken open1. This immunity from being broken open extends to the outer door of any
building whatever, including an outhouse within the curtilage2, as well as a barn, stable, or out house not within the
curtilage of the dwelling-house3. It would seem that entry through an outer door which had been broken open by an
independent third party on his own account would not be illegal4. An inner door is not, however, part of the wall to a
man's 'castle', and once a distrainor has properly obtained admission to a building, he is justified in breaking open an
inner door or lock to find goods which are distrainable5.
HR A[5669]
1 Semayne's Case (1604) 5 Co Rep 9la; American Concentrated Must Corpn v Hendry (1893) 62 LJQB 388, CA.
2 Semayne's Case (1604) 5 Co Rep 9la; see Long v Clarke [1894] 1 QB 119 at 121, CA, per Esher MR.
3 Brown v Glenn (1851) 16 QB 254.
4 See Nash v Lucas (1867) LR 2 QB 590; Sandon v Jervis (1858) EB & E 935, Ex Ch.
5 Browning v Dann (1735) Bull NP 81c; Lee v Gansel (1774) 1 Cowp 1 at 8.
HR A[5670]-[5680]
An open window is a legitimate means of access for the purpose of distraining1, as also is an open skylight2, and when
partially open it may be further opened for the purpose of obtaining admission3. But as a window is not the usual means
of obtaining access to a house, a distrainor may not open a closed but unfastened window, for to do so is a breaking into
the house4. Much less can he obtain admission by breaking open a window5 or undoing the hasp6.
HR A[5681]
1 Tutton v Darke, Nixon v Freeman (1860) 5 H & N 647 at 653; Long v Clarke [1894] 1 QB 119 at 121.
2 Miller v Tebb (1893) 9 TLR 515, CA.

Page 987
3 Crabtree v Robinson (1885) 15 QBD 312.
4 Crabtree v Robinson (1885) 15 QBD 312; Nash v Lucas (1867) LR 2 QB 590.
5 Attack v Bramwell (1863) 3 B & S 520, followed in Grunnell v Welch [1906] 2 KB 555, CA.
6 Hancock v Austin (1863) 14 CBNS 634.
HR A[5682]
Gates may not be broken open or enclosures broken down1, but the distrainor may climb over a wall or fence from the
adjoining premises2.
HR A[5683]
1 Co Litt 161a.
2 Eldridge v Stacey (1863) 15 CBNS 458; Long v Clarke [1894] 1 QB 119, CA, doubting Scott v Buckley (1867) 16 LT 573.
(c) Forcible re-entry
HR A[5684]
After an entry has been made and not abandoned, but the distrainor has been forcibly expelled or driven away by the
tenant's violence, he may obtain the assistance of a peace officer and break open the outer door, even after a
considerable interval1.
HR A[5685]
1 Eagleton v Gutteridge (1843) 11 M & W 465; Eldridge v Stacey (1863) 15 CBNS 458. The interval in that case was three weeks. There
must have been a complete entry in the first instance. And where a person has merely got his foot and arm between the door and the lintel, or
by putting a stick or other article between the door and the lintel has prevented the door being closed, that is not such an entry as will entitle
him afterwards to break open a door or window to distrain: Boyd v Profaze (1867) 16 LT 431.
HR A[5686]
On the same principle, a forcible re-entry may be made where the man in possession voluntarily goes away for an
unavoidable purpose, and not with the intention of abandoning the distress, and on his return finds the door deliberately
locked. In such a case he may break open the door1. But a bailiff is not entitled to re-enter a dwelling-house by force
unless he has been expelled by force or has been deliberately excluded by the tenant2.
Page 988
HR A[5687]
1 Bannister v Hyde (1860) 2 E & E 627. It is always a question of fact whether the delay in attempting to re-enter amounts to an
abandonment: Eldridge v Stacey (1863) 15 CBNS 458; Bagshawes Ltd v Deacon [1898] 2 QB 173, CA) Lumsden v Burnett [1898] 2 QB
177 at 182. Permitting a third person to remove the goods for a temporary purpose is not an abandonment of them (Kerby v Harding (1851)
6 Exch 234); and cf Jones v Biernstein [1900] 1 QB 100, CA.
2 Khazanchi v Faircharm Investments Ltd [1998] 2 All ER 901, CA.
HR A[5688]
When a bailiff after having been evicted re-enters for the purpose of his distress, he should confine himself to the goods
originally seized1.
HR A[5689]
1 Smith v Torr (1862) 3 F & F 505.

Page 989
Seizure
5 Seizure
(a) Actual seizure
HR A[5690]-[5700]
To complete a distress a seizure of the chattels is necessary. A seizure may be either actual or constructive1. It is actual
by laying hands on the article, or on one of several articles, and claiming to detain it or them until the rent is satisfied2.
The most proper manner of making a distress is for the person distraining to go upon any part of the premises out of
which the rent issues and take hold of some personal chattel declaring that it is taken as a distress in the name of all the
goods, or of so much as will satisfy the rent in arrear, and this will be a good seizure of all3. No particular form of
words is, however, necessary provided the intention is manifest.
HR A[5701]
1 Cramer v Mott (1870) LR 5 QB 357 at 359, per Cockburn CJ, and see Central Printing Works Ltd v Walker and Nicholson (1907) 24
TLR 88, where the remaining of a bailiff on the premises for a few hours, while money to pay the rent was collected, and was then paid and
left, was held not to be a seizure; Evans v South Ribble Borough Council [1992] 2 All ER 695 at 699.
2 Cramer v Mott (1870) LR 5 QB 357 at 359; Wood v Nunn (1828) 5 Bing 10; Lloyds and Scottish Finance Ltd v Modern Cars and
Caravans (Kingston) Ltd [1966] 1 QB 764.
3 Dod v Monger (1704) 6 Mod Rep 215.
(b) Constructive seizure
HR A[5702]
A constructive seizure may occur in various ways. It is enough that the landlord or his agent interferes to prevent the
removal of the article from the premises on the ground that rent is in arrear, and he does this when he declares that the
article shall not be removed until the rent is paid1, and it is immaterial that the article is in fact subsequently removed2.
HR A[5703]
1 Where the owner of a piano let on hire to the tenant came upon the premises to remove his piano, the absolute refusal of the landlord to
allow him to remove the piano until the rent was paid was held a sufficient seizure without touching the piano: Cramer v Mott (1870) LR 5
QB 357.
Page 990
2 Werth v London and Westminster Loan Co (1889) 5 TLR 320 at 321 (doubted on different grounds in Perring & Co Emerson [1906] 1
KB 1).
HR A[5704]
Any acts indicative of an intention that antecedent steps should be treated as a distress, and assumed by the parties to
amount to a distress, will be sufficient evidence of a seizure1.
HR A[5705]
1 Hutchins v Scott (1837) 2 M & W 809; Swann v Earl of Falmouth (1828) 8 B & C 456; Wood v Nunn (1828) 5 Bing 10; Lloyds and
Scottish Finance Ltd v Modern Cars and Caravans Ltd (Kingston) [1966] 1 QB 764.
HR A[5706]
A mere intention to distrain which is obviously abandoned is not sufficient1; and as against third parties no action by
the landlord will lie for removal of goods which have not been actually seized2.
HR A[5707]
1 Spice v Webb and Morris (1838) 2 Jur 943.
2 Pool v Crawcour (1884) 1 TLR 165, CA.

Page 991
Notice of distress
6 Notice of distress
(a) In general
HR A[5708]
As soon as the seizure is complete, the distrainor should make an inventory of the goods intended to be included in the
distress, and give notice of the distress to the tenant. No notice was necessary at common law, because at common law
all that is required to be done is to seize the goods and impound them, and, if the impounding is in a private pound, to
give notice of the place to which they are taken1. But the statute that attached the right of sale to a distress enacted that,
before the distrainor can proceed to sale, he must cause notice of the fact of the distress having been made (with the
cause of the taking2) to be left at the chief mansion-house or other most notorious place on the premises charged with
the rent distrained for3. And now, by rules under subsequent statutes, a bailiff levying distress must in all cases deliver
to the tenant or leave on the premises a notice in the prescribed form setting out the amounts for which the distress is
levied and the authorised fees, charges and expenses4.
HR A[5709]
1 Kerby v Harding (1851) 6 Exch 234.
2 Whitworth v Maden (1847) 2 Car & Kir 517, per Wightman J.
3 Distress for Rent Act 1689, s 1. This notice must be in writing: Wilson v Nightingale (1846) 8 QB 1034; Kerby v Harding (1851) 6 Exch
234 at 240.
4 Distress for Rent Rules 1988, SI 1988/2050, rr 2(2), 10, 12(2).
(b) Contents of notice
HR A[5710]-[5721]
Statute requires some notice of the taking being left at the premises informing the tenant or the person whose goods are
taken giving notice of the goods taken as well as what amount of rent is in arrear. Where the landlord distrains in person
there is no prescribed form of notice, but any notice should state the following matters:
(a) The cause of the taking, that is, the amount of rent due1. At common law there is no duty cast on
the landlord distraining to inform the tenant what are the arrears of rent for which he distrains, as the
tenant is presumed to know what things are in arrear for his land2. Nor is he bound by an incorrect
Page 992
statement of the amount, since he may at common law distrain for one cause and afterwards in a replevin
or other action justify for a different cause3. An error in the time at which the rent distrained for became
due4, is immaterial, and it is not necessary to specify when the rent became due5.
(b) The goods taken6, including such information as will enable the tenant to know exactly what
particular goods have been seized7.
(c) The place of impounding8 if the goods are impounded off the premises9.
(d) The time when the goods will be sold unless replevied or the rent and charges paid10.
HR A[5722]-[5723]
1 Kerby v Harding (1851) 6 Exch 234. A misdescription of the name of the landlord has been held not to invalidate the notice: Wootley v
Gregory (1828) 2 Y & J 5336.
2 Tancred v Leyland (1851) 16 QB 669, Ex Ch.
3 Crowther v Ramsbottom (1798) 7 Term Rep 654 at 658; Etherton v Popplewell (1800) 1 East 139 at 142; Trent v Hunt (1853) 9 Exch
14; Phillips v Whitsed (1860) 29 LJQB 164 at 165, per Cockburn CJ. The mere fact of distraining for more rent than is due is not per se
actionable (Tancred v Leyland (1851) 16 QB 669, Ex Ch, overruling Taylor v Henniker (1840) 12 Ad & El 488) if the goods taken are not
more than sufficient to satisfy the rent actually due (Tancred v Leyland (1851) 16 QB 669, Ex Ch; French v Phillips (1856) 1 H & N 564).
Nor will an allegation that the excessive distress was maliciously made render it actionable in the absence of special damage (Stevenson v
Newnham (1853) 13 CB 285, Ex Ch).
4 Gambrell v Earl of Falmouth (1835) 4 Ad & El 73.
5 Moss v Gallimore (1779) 1 Doug KB 279.
6 This is generally done by furnishing a copy of the inventory. The distress must be restricted to the articles comprised in the inventory
(Sims v Tuffs (1834) 6 C & P 207), and the fact that goods not comprised in the inventory have been discovered after the notice was given
will not justify including them in the distress (Bishop v Bryant (1834) 6 C & P 484). The mere fact that articles not distrainable, eg fixtures,
are included in the list does not in itself give rise to a cause of action: Beck v Denbigh (1860) 6 Jur NS 998.
7 Kerby v Harding (1851) 6 Exch 234 at 240; Danes v Property and Reversionary Investments Corpn Ltd [1929] 2 KB 222.
9 Omitting to state that the goods are impounded will not make the impounding void: Tennant v Field (1857) 8 E & B 336.
10 The omission to give the requisite notice makes it irregular to sell, but does not render the distress illegal (Trent v Hunt (1853) 9 Exch
14); so that if, notwithstanding the want of notice, the landlord sells, the person aggrieved thereby can recover any special damage he may
have sustained: Distress For Rent Act 1737, s 19. See also paras HR A[6068]ff.
HR A[5724]
Where the bailiff distrains, the notice must be in the prescribed form1, which provides for the matters enumerated above
and also contains a statement of the fees, charges and expenses authorised.
HR A[5725]
Page 993
1 Distress for Rent Rules 1988, SI 1988/2050, rr 2(2), 10, 12(2), (3), App I and II, Form 7.
Page 994
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/J Proceedings between
seizure and sale
J
Page 995
seizure and sale/1 Impounding
1 Impounding
(a) Nature of impounding
HR A[5726]
After the seizure there follows the necessity to imprison and secure the chattels for safe custody until the cause of
distress is satisfied or the period has elapsed at the expiration of which the chattels can be sold lawfully by reason of the
tenant failing to replevy them1. This imprisonment, called impounding places the goods in the custody of the law, and
they are impounded not merely against the tenant but against any stranger2. If before the chattels are impounded the
tenant tenders a sufficient amount for rent and costs, it will be unlawful to proceed further with the distress3.
HR A[5727]
1 In former times when a distress could only be detained as a pledge the period of detention was indefinite and dependent upon the will of
the tenant to redeem the chattels. When the statutory right of sale was given in respect of goods distrained it was provided, in order to enable
the tenant to replevy, that the goods should not be sold for at least five days after seizure and notice given of the distress, which period may
be extended to 15 days (see paras HR A[5901]ff). In the meantime the law requires the landlord to see that the goods are kept safely: see
paras HR A[5748]ff; Evans v South Ribble Borough Council [1992] QB 757 at 765, [1992] 2 All ER 695 at 700-701.
2 Lavell & Co Ltd v O'Leary [1933] 2 KB 200, CA.
3 Vertue v Beasley (1831) 1 Mood & R 21.
HR A[5728]
Chattels may either be impounded on the premises or removed to a pound off the premises1. A pound is either overt
(open overhead) or covert (covered overhead).
HR A[5729]
1 Formerly, the practice was to remove goods to the public pound, as a distress could only be impounded on the premises with the consent
of the tenant. The Distress For Rent Act 1737, s 10 authorises impounding on the premises. And now distresses are usually impounded on
the premises unless the tenant otherwise requests, as public pounds have practically ceased to exist except as objects of antiquarian interest.
HR A[5730]-[5740]
When chattels are impounded off the premises, the seizure and removal to the pound are distinct acts with an
Page 996
appreciable interval between, and it is possible to say when the chattels reach the inside of the pound. When the goods
are impounded on the premises, the seizure and the impounding are practically concurrent acts, and if when a distress
has been made and inventory taken a man is left in possession, it is sufficient evidence of an impounding, though the
goods are otherwise undisturbed1.
HR A[5741]
1 Johnson v Upham (1859) 2 E & E 250; Jones v Biernstein [1899] 1 QB 470 at 473, per Channel J; affd [1900] 1 QB 100, CA; and see
Firth v Purvis (1793) 5 Term Rep 432.
(b) Impounding on the premises
HR A[5742]
When goods are impounded on the premises, the landlord ought not to deprive the tenant of the whole house, but should
put all the goods seized into one or more rooms, unless the tenant consents to their being left in their ordinary position,
of which consent very slight evidence will be sufficient1.
HR A[5743]
1 Abingdon RDC v O'Gorman [1968] 2 QB 811; [1968] 3 All ER 79; Tennant v Field (1857) 8 E & B 336; Washborn v Black (1774) 11
East 405n. And in no case should the whole house be locked up to the exclusion of the tenant unless it is necessary for the safe keeping of
the distress: Woods v Durrant (1846) 16 M & W 149; Cox v Painter (1837) 7 C & P 767; Etherton v Popplewell (1800) 1 East 139; Walker v
Woolcott (1838) 8 C & P 352 at 353. Even in an extreme case, rather than lock up the whole of the premises, the goods should be removed to
some convenient place off the premises: Smith v Ashforth (1860) 29 LJ Ex 259 at 260, Pollock CJ.
HR A[5744]
Cattle may be impounded in the open field by properly securing the gate1. When the landlord impounds the goods upon
the premises, merely leaving them there without any one in possession (a state of affairs known as 'walking possession')
this is sufficient custody for they are in the custody of the law2. If he puts a bailiff in possession it is not necessary that
such bailiff should retain continuous physical possession3. If the landlord or bailiff abandons goods, then the possession
reverts to the tenant. Whether or not his acts amount to an abandonment is always one of fact when the point arises4.
For the avoidance of doubt it is in all cases desirable to obtain the signature of the tenant to a 'walking possession'
agreement5 agreeing:
(a) to pay the lawful fees for the man in walking possession6;
(b) that re-entry may be made at any time while the distraint is in force;
(c) that none of the goods distrained will be removed from the premises;
(d) that the goods distrained are impounded on the premises;
(e) that any person who may visit the premises for the purpose of levying any other distress or
Page 997
execution will be informed of the distraint and that the distrainor or his bailiff will be informed of any
such visit.
HR A[5745]
1 Castleman v Hicks (1842) Car & M 266.
2 Swann v Earl of Falmouth (1828) 8 B & C 456; Lavell & Co Ltd v O'Leary [1933] 2 KB 200, [1933] All ER Rep 423, CA and cf
Watson v Murray & Co [1955] 2 QB 1, [1955] 1 All ER 350; See also In re Dalton (a bankrupt) [1962] Ch 336 at 346. However, walking
possession may have subsequent disadvantages as regards pound-breach by strangers: see Abingdon RDC v O'Gorman [1968] 2 QB 811,
[1968] 3 All ER 82, in which it was held that goods are not validly impounded as against strangers unless there has been a distinct act
making it clear that they have been impounded.
3 Bannister v Hyde (1860) 2 E & E 627; Jones v Biernstein [1899] 1 QB 470; affd [1900] 1 QB 100, CA; and see Kemp v Christmas
(1898) 79 LT 233, CA.
4 Lumsden v Burnett [l898] 2 QB 177 at 185, Chitty LJ.
5 For form of agreement see the Distress for Rent Rules 1988, SI 1988/2050, rr 2(2), 10, App I, para 3(i), App II, Form 8.
6 Authority for charging a fee for taking walking possession is given by the Distress for Rent Rules 1988, SI 1988/2050.
(c) Impounding off the premises
HR A[5746]
In impounding off the premises the distrainor must select a suitable pound. Cattle may be impounded in a pound overt,
but furniture and goods liable to be damaged by wet weather or to be stolen must be placed in a house or other pound
covert1.
HR A[5747]
1 Co Litt 47b. It seems doubtful if chattels can be brought back to the premises for the purpose of impounding after they have once been
impounded off the premises: Smith v Wright (1861) 30 LJ Ex 313 at 315, per Bramwell B.
HR A[5748]
Impounding is for safe custody, and the distrainor is answerable for the condition of the pound at the time the chattels
are put in. He must at his peril take care that the place (even though it may be a public pound) is in a fit and proper state,
and he is liable for the loss of or injury to the distress if it is not1.
Page 998
HR A[5749]
1 Wilder v Speer (1838) 8 Ad & El 547; Bignell v Clarke (1860) 5 H & N 485; Vaspor v Edwards (1702) 12 Mod Rep 658 at 665.
Impounding of Distress Act 1554, s 1: no distress of cattle may be driven out of the hundred, rape, wapentake, or lathe when taken, except to
a pound overt within the same shire not above three miles distant. By the Protection of Animals Act 1911, s 7, it is provided that any person
who impounds any animal pound, shall while the animal is so impounded or confined, supply it with a sufficient quantity of wholesome and
suitable food and water, and, if he fails to do so he shall be liable on summary conviction to a fine not exceeding level 1 on the standard
scale. And if any animal is impounded and is without food for successive hours, any person may enter the pound and supply the animal
therewith. The reasonable cost of the food and water supplied is recoverable summarily from the owner as a civil debt.
HR A[5750]-[5760]
There are two exceptions to the right to impound off the premises. First, sheaves or cocks of corn, or corn loose or in the
straw, or hay cannot be removed from the premises, but must be impounded where found1; and, second, growing crops
must, after they are cut, be placed in a proper place on the premises, and cannot be removed except where there is no
such proper place on the premises2. In that case notice of the place where the thing distrained is deposited must, within
one week after the depositing thereof in such place, be given to the tenant or left at his last place of abode3.
HR A[5761]
1 Distress for Rent Act 1689, s 2.
2 Distress For Rent Act 1737, s 8.
3 DRA 1737, s 9.
(d) Using the distress
HR A[5762]
Whether impounded on or off the premises, the landlord may not use or work the goods or cattle impounded. To this
rule there is the exception of chattels in respect of which use is necessary for the preservation of the thing distrained and
is really for the benefit of the owner, as in the case of milch cows, which may be milked1. The distrainor may permit the
tenant to use the chattels while impounded, and even license their removal for a temporary purpose2. If the landlord
abuses a distress by working it, the owner may interfere to prevent it, without being liable for pound breach or rescue3.
HR A[5763]
1 Bagshawe v Goward (1607) Cro Jac 147; Bac Abr tit Distress, D. The dictum of Powis J to the contrary effect in Vaspor v Edwards
(1702) 12 Mod Rep 658 at 662, would not, it is submitted, be good law now.
Page 999
2 Kerby v Harding (1851) 6 Exch 234.
3 Smith v Wright (1861) 6 H & N 821.

Page 1000
seizure and sale/2 Appraisement
2 Appraisement
(a) When necessary
HR A[5764]
An appraisement of the chattels distrained is only necessary now as a condition precedent to a sale, first, when the
tenant or owner of the chattels by writing requires such appraisement to be made1; and, secondly, in the case of growing
crops2. When appraisement is still necessary, the appraisers must be reasonably competent, though not necessarily
professional appraisers3, and they must be disinterested persons4.
HR A[5765]
2 The reason for appraisement in this case is the statute which makes growing crops distrainable (Distress For Rent Act 1737, s 81), which
provides that they are to be appraised when cut and gathered and not before, and the abolition of appraisement, which was effected by a
qualified repeal of the Distress for Rent Act 1689, does not refer to the later statute.
3 Roden v Eyton (1848) 6 CB 427.
4 Thus, the landlord cannot be one of the appraisers (Lyon v Weldon (1824) 2 Bing 334), nor can the bailiff who made the distress
(Westwood v Cowne (1816) 1 Stark 172; Rocke v Hills (1887) 3 TLR 298). But where the broker to save expense has valued the goods at the
instance of the person distrained upon. the latter cannot afterwards complain of it: Bishop v Bryant (1834) 6 C & P 484.
HR A[5766]
Two appraisers are necessary, whatever the amount of the rent, unless the tenant consent to one acting1.
HR A[5767]
1 Allen v Flicker (1839) 10 Add & El 640.

Page 1001
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/K Effect of insolvency,
execution and receivership
K
Page 1002
execution and receivership/1 Insolvency and receivership
1 Insolvency and receivership
HR A[5768]-[5824]
Insolvency and receivership are dealt with in Chapter 12. The following paragraphs deal with the effect upon distress of
the legislation dealing with insolvency: HR A[7382] (corporate voluntary arrangements); HR A[7387] (corporate
voluntary arrangements); HR A[7401] (corporate receivership); HR A[7407] (administration); HR A[7425]
(liquidation); HR A[7463] (individual voluntary arrangements); HR A[7467] (individual receivership); HR A[7485]
(bankruptcy).
Page 1003
execution and receivership/2 Execution against tenant
2 Execution against tenant
(a) Effect of execution
HR A[5825]
The levying of an execution upon the goods of a tenant places them in custodia legis and protects them from seizure by
the landlord1, except in the case of distress by the Crown2 or when the execution is collusive3. But the execution
creditor may waive his rights4.
HR A[5826]
1 Re Mackenzie, ex p Hertfordshire (Sheriff) [1899] 2 QB 566 at 574, CA, per Lindley MR; see Co Litt 47a; Gilbert on Distresses pp 44,
45; Wharton v Naylor (1848) 12 QB 673; Lewis v Davies [1914] 2 KB 469, CA; Potts v Hickman [1941] AC 212; [1940] 4 All ER 491.
2 R v Cotton (1751) Park 112, confirming R v Dale (1719) Bunb 42; A-G v Leonard (1888) 38 Ch D 622; see also R v Hill (1818) 6 Price
19.
3 Smith v Russell (1811) 3 Taunt 400.
4 Seven v Mihill (1756) 1 Keny 370.
(b) Landlord and Tenant Act 1709
HR A[5827]
By s 1 of the Landlord and Tenant Act 1709, in general1 goods seized by the sheriff under a process of execution2 of
the High Court on a judgment inter partes cannot be removed until any arrears of rent due at the time of execution (not
exceeding one year) have been paid to the landlord3.
HR A[5828]
1 See para HR A[5883] in relation to weekly tenancies and other tenancies for less than a year.
2 Potts v Hickman [1941] AC 212 ('execution' does not include a levy for rates since such levy is not based on a judgment inter partes).
Page 1004
3 Cox v Harper [1910] 1 Ch 480: a receiver may be a landlord for these purposes.
HR A[5829]
The provision does not apply to executions at the suit of the landlord1, nor to executions against a sublessee, so as to
enable a ground landlord to claim the benefit of the Landlord and Tenancy Act 1709 on an execution against an
underlessee2. But a sequestration has been treated as an execution within the equity of the statute3. The provision is not
confined to goods and chattels which are distrainable in point of law, but casts the duty upon the sheriff to take care that
the goods seized are not removed until the Act is complied with4. But, in as much as the goods of a stranger are not
liable to execution, the statute confers on the sheriff no power to seize such goods or to apply the proceeds of sale
thereof in payment of the rent5. Should he seize and remove goods belonging to a stranger, he will be liable for the
arrears of rent, as he has taken off the premises that which the landlord had the right to distrain6 and he will also be
liable to account to the real owner whether he has paid the landlord or not7.
HR A[5830]-[5840]
1 Taylor v Lanyon (1830) 6 Bing 536 at 544.
2 Bennet's Case (1727) 2 Stra 787; but see Thurgood v Richardson (1831) 7 Bing 428. The Act does not apply where the relationship of
landlord and tenant does not exist between the person claiming the rent and the execution debtor: Re Eastcheap Alimentary Products Ltd
[1936] 3 All ER 276, following Bennet's Case (1727) 2 Stra 787.
3 Dixon v Smith (1818) 1 Swan 457.
4 Risley v Ryle (1843) 11 M & W 16; see Smallman v Pollard (1844) 6 Man & G 1001 at 1009, per Erskine J. See also Re British
Salicylates Ltd [1919] 2 Ch 155.
5 Beard v Knight (1858) 8 E & B 865.
6 Forster v Cookson (1841) 1 QB 419.
7 White v Binstead (1853) 13 CB 304.
HR A[5841]
If two executions are levied the landlord cannot have a year's rent on each1.
HR A[5842]
1 Dod v Saxby (1735) 2 Stra 1024.
(c) When restriction upon removal obtains

Page 1005
HR A[5843]
Further, it may be taken to be established now that:
(a) The restriction upon removal does not apply except in the case of a subsisting tenancy1. But,
provided it be subsisting, it may be a tenancy created by an attornment in a mortgage deed2, or by a
stipulation in a purchase agreement under which the purchaser takes possession and pays a fixed yearly
rent until completion3.
(b) The tenancy must be one to which the right of distress is incident - that is to say, it must be at a
rent certain for which there is a present right to distrain4.
(c) The rent must be rent actually due at the time of seizure5, and not that which accrues afterwards,
though possession be retained by the sheriff6. If it is due it is immaterial that it is reserved payable in
advance7, and the full rent may be claimed though the landlord has been accustomed to remit a portion
to the tenant8. If the landlord is induced to withdraw a distress on the tenant's false assurance that a
particular debt is satisfied, and subsequently execution is levied for the debt, the landlord is entitled to
his year's rent under the statute9. The landlord protected by the LTA 1709 is the person immediately
entitled to the rent, or the person who has a title upon which he can recover in ejectment10.
HR A[5844]
1 Cox v Leigh (1874) LR 9 QB 333; Hodgson v Gascoigne (1821) 5 B & Ald 88; Lewis v Davies [1914] 2 KB 469, CA. It does not,
therefore, apply when the tenancy has determined before the seizure, though within six months of it: Cox v Leigh (1874) LR 9 QB 333.
2 Yates v Ratledge (1860) 5 H & N 249.
3 Saunders v Musgrave (1827) 6 B & C 524.
4 Riseley v Ryle (1843) 11 M & W 16, 25.
5 Gwilliam v Barker (1815) 1 Price 274.
6 Hoskins v Knight (1813) 1 M & S 245; Reynolds v Barford (1844) 7 Man & G 449; Re Davis, ex p Pollen's Trustees (1885) 55 LJQB
217.
7 Harrison v Barry (1819) 7 Price 690.
8 Williams v Lewsey (1831) 8 Bing 28.
9 Wollaston v Stafford (1854) 15 CB 278.
10 Colyer v Speer (1820) 2 Brod & Bing 67 at 69; and an action may be brought by the administrator of the landlord (Palgrave v
Windham (1719) 1 Stra 212), provided administration has been granted and demand of the rent made before the goods have been removed:
Waring v Dewberry (1718) 1 Stra 97.
Page 1006
HR A[5845]
Where an execution has been levied and the tenant becomes bankrupt the execution creditor is not liable to pay to the
landlord more than six months' rent (instead of one year's rent1) unless notice of claim for rent due has been served on
the sheriff by or on behalf of the landlord before the commencement of the bankruptcy2; and the landlord is not entitled
to claim rent in respect of any period subsequent to the date of such notice, unless the notice was served before the
commencement of the bankruptcy3. The landlord is liable to pay to the trustee in bankruptcy any sum he may have
received from the sheriff or execution creditor in excess of the amount he was entitled to be paid, but he may prove in
the bankruptcy for such excess4.
HR A[5846]
1 See para HR A[7485]; Insolvency Act 1986, s 347(6).
2 See Insolvency Act 1986, s 347(6), (7). For the commencement of bankruptcy see IA 1986, s 278. See also Re British Salicylates Ltd
[1919] 2 Ch 155.
3 IA 1986, s 347(6), (7).
4 IA 1986, s 347(2), (4).
(d) Removal of goods and relinquishment of possession by sheriff
HR A[5847]
The sheriff does not infringe the statute unless he removes or permits the removal of the goods without satisfying the
rent1. There must be an actual or constructive removal. It is not sufficient that the goods have been seized and sold if
there has been no removal2. The statute is, however, infringed by the removal of any portion of the goods seized3, and
if once removed the wrong cannot be purged by the subsequent return of the goods to the premises4. A landlord waives
the benefit of the statute by consenting to the removal, even if such consent is given upon the faith of an undertaking to
pay the rent which is unfulfilled5.
HR A[5848]
1 Re Davis, ex p Pollen's Trustees (1885) 55 LJQB 217.
2 Smallman v Pollard (1844) 6 Man & G 1001; White v Binstead (1853) 13 CB 304.
3 Colyer v Speer (1820) 2 Brod & Bing 67.
4 Lane v Crockett (1819) 7 Price 566, Ex Ch; Wren v Stokes [1902] 1 IR 167, CA.
Page 1007
5 Rotherey v Wood (1811) 3 Camp 24.
HR A[5849]
If the sheriff relinquishes possession of the goods, the possession reverts to the original owner, and they may be
distrained1. and so they are distrainable if not removed within a reasonable time after sale by the sheriff2.
HR A[5850]-[5860]
1 Ackland v Paynter (1820) 8 Price 95; Re Mackenzie, ex p Sheriff of Hertfordshire [1899] 2 QB 566 at 575, CA.
2 Re Davis, ex p Pollen's Trustees (1885) 55 LJQB 217; Peacock v Purvis (1820) 2 Brod & Bing 362 at 367; Wright v Dewes (1834) 1 Ad
& El 641.
(e) What is sufficient notice to sheriff
HR A[5861]
The sheriff is under no obligation to inquire whether any rent is in arrear, and he is under no liability to the landlord for
not keeping the goods, unless informed that rent is due1. But if the sheriff has notice before the goods are removed that
rent is due to the landlord, and nevertheless does not keep the goods on the premises, but sells them without paying the
landlord, the sheriff becomes liable to the landlord for the wrongful removal2. And express notice is not necessary; it is
sufficient if he has knowledge of the claim3; and if he be informed by notice that rent is due the form of the notice is not
material4. The notice is in time while goods or the proceeds of sale remain in the sheriff's hands5.
HR A[5862]
1 Re Mackenzie, ex p Sheriff of Hertfordshire [1899] 2 QB 566 at 574, CA; Waring v Dewberry (1718) 1 Stra 97; Palgrave v Windham
(1719) 1 Stra 212 at 214; Arnitt v Garnett (1820) 3 B & Ald 440.
2 Re Mackenzie, ex p Sheriff of Hertfordshire [1899] 2 QB 566 at 574, CA: Riseley v Ryle (1843) 11 M & W 16; Andrews v Dixon (1820)
3 B & Ald 645.
3 Re Mackenzie, ex p Sheriff of Hertfordshire [1899] 2 QB 566 at 574, CA.
4 Colyer v Speer (1820) 2 Brod & Bing 67.
5 Arnitt v Garnett (1820) 3 B & Ald 440.
(f) Goods not to be sold after notice until rent paid

Page 1008
HR A[5863]
Where notice has been given to the sheriff by the landlord that rent is due, the sheriff should call upon the execution
creditor to pay it, and should refuse to sell any of the goods until it is paid; even if there are goods upon the demised
premises of a value many times exceeding the amount of rent due, his duty is the same, and he should refuse to sell the
smallest part of the goods until the claim of the landlord is satisfied1. The landlord's claim must be paid without any
deduction for sheriff's fees2. The sheriff is not bound to advance the money to pay the rent out of his own pocket. If the
execution creditor declines to advance it, the sheriff may refuse to sell3. But if the sheriff is willing to do so, he may sell
and pay the landlord's rent and apply the surplus, if any, in satisfaction of the debt4 and if there is no surplus may return
nulla bona. If no one will pay the landlord's rent the sheriff can withdraw and return nulla bona5. When the goods on the
premises are not sufficient to satisfy the rent lawfully demanded the sheriff should withdraw6. When he withdraws the
landlord can distrain for his whole rent7.
HR A[5864]
1 Thomas v Mirehouse (1887) 19 QBD 563 at 566, per Lord Esher MR.
2 Gore v Gofton (1725) 1 Stra 643.
3 Cocker v Musgrove (1846) 9 QB 223; Thomas v Mirehouse (1887) 19 QBD 563.
4 Cocker v Musgrove (1846) 9 QB 223; Wintle v Freeman (1841) 11 Ad & El 539.
5 Wintle v Freeman (1841) 11 Ad & El 539; Re Mackenzie, ex p Sheriff of Hertfordshire [1899] 2 QB 566 at 575, CA.
6 Foster v Hilton (1831) 1 Dowl 35.
7 Re Mackenzie, ex p Sheriff of Hertfordshire [1899] 2 QB 566.
HR A[5865]
The statute forbidding the removal of goods by the sheriff without paying one year's rent does not authorise a distraint
on goods in custodia legis1.
HR A[5866]
1 Landlord and Tenant Act 1709, s 1; Wharton v Naylor (1848) 12 QB 673 at 679, per Patteson J.
(g) Liability for wrongful removal, etc

Page 1009
HR A[5867]
If the sheriff infringes the statute and permits the removal of the goods before the rent is paid, and in consequence the
landlord loses any part of his rent, the sheriff is liable at the suit of the landlord in an action on the statute for wrongful
removal without paying him1.
HR A[5868]
1 Re Mackenzie, ex p Sheriff of Hertfordshire [1899] 2 QB 566; Calvert v Joliffe (1831) 2 B & Ad 418.
HR A[5869]
The landlord has no right to require the goods to be sold for his benefit, and if they are sold he cannot maintain an
action against the sheriff for money had and received1. No action will lie against the execution creditor, as he has
nothing to do with the removal of the goods2.
HR A[5870]-[5880]
1 Re Mackenzie, ex p Sheriff of Hertfordshire [1899] 2 QB 566, CA; Green v Austin (1812) 3 Camp 260.
2 Cocker v Musgrove (1846) 9 QB 223.
HR A[5881]
The measure of damages in an action against the sheriff at the suit of the landlord is prima facie the amount of rent (not
exceeding a year, or six months if the tenant is bankrupt1) due, but it is open to the sheriff to prove in mitigation of
damages that the real value of the goods removed was not sufficient to pay the rent2.
HR A[5882]
2 Thomas v Mirehouse (1887) 19 QBD 563.
(h) Weekly tenancies, etc
HR A[5883]
Page 1010
In the case of weekly and other tenancies for less than a year the arrears of rent which may be claimed upon an
execution are further limited, for no landlord of any tenement let at a weekly rent has a claim or lien upon any goods
taken in execution1 under the process of any court of law for more than four weeks' arrears of rent; and if such tenement
is let for any term less than a year other than a weekly term the landlord has no claim or lien on such goods for more
than the arrears of rent accruing during four such terms or times of payment2.
HR A[5884]
1 The landlord has priority only over executions on judgments inter partes: Potts v Hickman [1941] AC 212, [1940] 4 All ER 491.
2 Execution Act 1844, s 67 which is repealed, except in so far as it relates to the High Court, by the Supreme Court Act 1981, s 152(4),
Sch 7. County court executions are governed by the County Courts Act 1984, s 102(4). In such executions the last words of para HR
A[5883] should read 'two such terms of payment and in any other case one year's rent'.
(i) Agricultural produce and farm animals
HR A[5885]
These are dealt with in the Sale of Farming Stock Act 1816. Where growing crops are seized or sold by a sheriff or
other officer in execution, such crops, as long as they remain on the land, are subject to distress for rent which may
accrue due to the landlord after any such seizure and sale, but only in default of other sufficient distress1.
HR A[5886]
(j) Execution out of county court
HR A[5887]
The Landlord and Tenant Act 1709 does not apply to goods taken in execution under the warrant of a county court1.
Under county court process the landlord is protected in respect of arrears to the extent:
(a) in the case of a weekly tenancy, four weeks' rent;

(b) in the case of a letting for any other period of less than a year, two instalments of rent;
(c) in any other case, one year's rent.
HR A[5888]
Page 1011
1 See County Courts Act 1984, s 102(1) and see s 102(4) as to the amount recoverable by the landlord.
Page 1012
execution and receivership/3 Receiver in possession
3 Receiver in possession
(a) Effect of appointment by court
HR A[5889]
Where a receiver appointed by the court is in possession of the premises, the rights of the landlord are not affected,
except that before distraining he must in all cases apply to the court for leave to do so1. If a landlord has distrained
before a receiver is appointed, he need not apply for leave to proceed with the distress; and if he does apply he will not
be allowed the costs of the application2. Leave is not necessary where a receiver in bankruptcy is in possession3 except
in cases where it is required under the general law.
HR A[5890]-[5900]
1 Sutton v Rees (1863) 9 Jur NS 456, where it was said that the landlord should issue the distress warrant with directions not to execute it
without further instructions and then apply for leave; Russell v East Anglian Rly Co (1850) 3 Mac & G 104 at 118. The application is made
by summons in chambers in the action in which the receiver was appointed: Searle v Choat (1884) 25 Ch D 723, CA.
2 Engel v South Metropolitan Brewing and Bottling Co [1891] WN 31; Evelyn v Lewis (1844) 3 Hare 472 at 475.
3 Re Mayhew, ex p Till (1873) LR 16 Eq 97; Re Mead, ex p Cochrane (1875) LR 20 Eq 282. As to receiver, see also Bankruptcy Act
1914, s 7.
Page 1013
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/L Sale of distress
L
Page 1014
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/L Sale of distress/1 In
general
1 In general
(a) Power of sale
HR A[5901]
Any goods distrained for rent, which have not been relevied within five days after the distress and notice thereof, may
be sold towards satisfaction of the rent, for the best price that can be obtained1.
HR A[5902]
1 Distress for Rent Act 1689, s 1; Landlord and Tenant Act 1730, s 5; Distress For Rent Act 1737, s l0; Co Litt (ed Hargrave and Butler)
47b; Com Dig tit Distress, D 7; 3 B) Com 14. As to replevin, see paras HR A[6101]ff.
HR A[5903]
Sale is optional and not imperative, and no action lies against the landlord for not selling1.
HR A[5904]
1 Philpott v Lehain (1876) 35 LT 855, confirming Lear v Edmonds (1817) 1 B & Ald 157 and Hudd v Ravenor (1821) 2 Brod & Bing
662. See judgment of Court in Piggott v Birtles (1836) 1 M & W 441 at 448, and as to loose corn, etc; see also, , Distress for Rent Act 1689,
s 2.
HR A[5905]
The existence of a distress is, until the sale, an answer to an action for the rent distrained for, whether the distress be
sufficient or not to satisfy the amount for which the distress is levied, for until sale, while the distress is being held, the
debt from the tenant is suspended, although the property in the goods is not divested1.
HR A[5906]
1 Lehain v Philpott (1875) LR 10 Exch 242 (in which the earlier authorities are reviewed), the tenant, before sale if he wishes to avoid
sale, must take proceedings in replevin (see paras HR A[6101]ff and by this principle two concurrent actions on the same point are avoided.
Page 1015
HR A[5907]
On the sale of the distress, the proceeds of the sale are an instantaneous executed satisfaction of the rent, vesting to that
amount in the landlord, and the tenant has only an interest in the surplus (if any)1. If the proceeds of the sale are
insufficient to satisfy the landlord's claim the landlord can recover the balance due by action or otherwise2.
HR A[5908]
1 Moore v Pyrke (1809) 11 East 52. An undertenant therefore cannot sue his immediate landlord for value of goods distrained as being
money paid to his use.
2 Philpot v Lehain (1876) 35 LT 855; see also judgment of Court in Lehain v Philpott (1875) LR 10 Exch 242 at 245, 246.
(b) Matters prior to sale
HR A[5909]
Until sale, whether the statutory five days have elapsed or not, and even if the goods have been removed from the
premises, the tenant has the right to replevy them1; and a landlord ought not to sell the goods after a tender of the rent
and costs has been made at any time within five days, and if he does so he will be liable in damages2.
HR A[5910]-[5920]
1 Jacob v King (1814) 5 Taunt 451.
2 Johnson v Upham (1859) 2 E & E 250, overruling Ellis v Taylor (1841) 8 M & W 415 (see judgment of Lord Abinger CB ((1841) 8 M
& W 415 at 418, as to malicious sale after tender). If this were otherwise, the only way for a tenant to retain goods seized would be to go
through a replevin action, in which he would necessarily be defeated. Moreover, since the Distress For Rent Act 1737, seizure and
impounding are, as a rule, nearly concurrent, see para HR A[5729]. At common law a tender after impounding is bad: Firth v Purvis (1793)
5 Term Rep 432; Ladd v Thomas (1840) 12 Ad & El 117; Ellis v Taylor (1841) 8 M & W 415; Tennant v Field (1857) 8 E & B 336. The rule
stated in the text is due to an equitable construction of the statute, see Johnson v Upham (1859) 2 E & E 250.
HR A[5921]
An agreement between a tenant and the distrainor relating to the disposition of the goods seized does not debar the
tenant from claiming in an action damages for excessive distress1.
HR A[5922]
Page 1016
1 Sells v Hoare (1824) 1 Bing 401; Willoughby v Backhouse (1824) 2 B & C 821. As to excessive distress, see para HR A[6083].
(c) Irregularity in sale
HR A[5923]
An irregularity in the sale will make the landlord liable in an action for irregular distress to account not merely for the
proceeds, but for the value of the goods, and the tenant will be entitled by way of surplus to the full value of the goods
less the rent and charges1. But no damages can be recovered if no special damage has accrued2, or if the sale is wholly
void3.
HR A[5924]
1 Biggins v Goode (1832) 2 Cr & J 364 (sale without appraisement); Whitworth v Maden (1847) 2 Car & Kir 517 (no notice of distress);
Clarke v Holford (1848) 2 Car & Kir 540 (excessive distress); Knight v Egerton (1852) 7 Exch 407 (sale without appraisement).
2 Rodgers v Parker (1856) 18 CB 112; Lucas v Tarleton (1858) 3 H & N 116; see also Proudlove v Twemlow (1833) 1 Cr & M 326;
Knotts v Curtis (1832) C & P 322.
3 Owen v Legh (1820) 3 B & Ald 470; see also Beck v Denbigh (1860) 6 Jur NS 998.
(d) Bailiff may not sell to cover fees
HR A[5925]
After a landlord has directed a bailiff to withdraw, the landlord's claim being satisfied, a bailiff may not sell any of the
tenant's goods for the payment of his fees and expenses, and if he does so sell he confers no title on the purchaser1.
HR A[5926]
1 Harding v Hall (1866) 14 LT 4100.

Page 1017
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/L Sale of distress/2 Time
for sale
2 Time for sale
(a) Statutory limitation
HR A[5927]
The sale may not be held until five days have elapsed from the taking of the distress and notice thereof1; the five days
must be reckoned exclusively of the day of seizure, so that the sale cannot take place until the sixth day from the
seizure, from which the computation is made2. These five days, however (within which the tenant or owner of the
goods distrained is entitled to replevy)3, will be extended to a period of not more than 15 days, if the tenant or owner of
the goods makes a written request to the landlord or other person making the levy, and also gives security for any
additional cost occasioned by such extension of time. But the landlord or such person may, with the written request or
consent of the tenant or such owner, sell the goods and chattels distrained or part of them at any time before the
expiration of the extended period4. A landlord may remain in possession for an extended period at the tenant's request;
such an arrangement, however, might, as affecting the rights of third parties, be found collusive5.
HR A[5928]
2 Robinson v Waddington (1849) 13 QB 753, which brings this rule into line with the general law; cf Young v Higgon (1840) 6 M & W
49.
3 As to the replevin, see paras HR A[6101]ff; see also County Courts Act 1984, s 144, Sch 1.
4 Law of Distress Amendment Act 1888, s 6. The security to be given by the replevisor is settled by the county court district judge in
accordance with the County Courts Act 1984, s 144, Sch 1, paras 2-4.
5 Harrison v Barry (1819) 7 Price 690.
HR A[5929]
Growing crops cannot be sold until they are ripe, and a sale when unripe is wholly void1.
HR A[5930]-[5940]
1 Distress For Rent Act 1737, ss 8, 9; see paras HR A[20018] and [20019]. See also the Distress for Rent Act 1689, s 2.
Page 1018
(b) Premature sale
HR A[5941]
A premature sale involving no actual damage is an irregularity for which no damages can be recovered in an action1. A
person protected by statute, however, has a right of action against a landlord who sells before the requisite five days,
although he has not at the time served any declaration2. Although the landlord cannot sell until the expiration of the five
clear days, he may remain upon the premises a reasonable time beyond the five days for the purpose of selling the goods
distrained3. A continuance in possession or retention of the goods for an unreasonable time may constitute a trespass4.
HR A[5942]
1 Lucas v Tarleton (1858) 3 H & N 116, where the goods had been sold a day too soon. In this case a verdict was entered for the
defendants.
2 Sharpe v Fowle (1884) 12 QBD 385; and see Law of Distress Amendment Act 1908, s 1 and para HR A[20090].
3 Pitt v Shew (1821) 4 B & Ald 208; see also Philpott v Lehain (1876) 35 LT 855.
4 Griffin v Scott (1726) 2 Ld Raym 1424; Winterbourne v Morgan (1809) 11 East 395.
Page 1019
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/L Sale of distress/3 Place
of sale
3 Place of sale
(a) Where goods may be sold
HR A[5943]
The sale of distress generally takes place where the goods and chattels are impounded1, and if the goods are impounded
on the premises chargeable with the rent they may be sold on such premises, and any person or persons whatsoever may
enter on such premises for the purpose of taking part in the sale and of carrying off or removing goods on account of a
purchaser2. The tenant or owner of the goods or chattels distrained may by written request, however, require them to be
removed to a public auction room, or to some other fit and proper place specified in such request, and to be there sold,
the person making such request bearing the costs and expenses attending such removal and any damage to the goods
and chattels arising therefrom3.
HR A[5944]
2 Distress For Rent Act 1737, s 10. See Wood v Manley (1839) 11 Ad & El 34; as to a tenant's licence for any purchaser to enter his
premises to fetch away goods sold.
3 Law of Distress Amendment Act 1888, s 5; see this action discussed in Bullen on Distress (2nd edn) pp 306, 307. A request for removal
does not estop the plaintiff from complaining of an original wrongful seizure of the goods (see Masters v Fraser (1901) 85 LT 611).
HR A[5944.1]
Sheaves of corn etc must be sold on the land on which they are found1. Growing crops must be cut and sold at the place
where they are stored2.
HR A[5944.2]
1 Distress for Rent Act 1689, s 2. See para HR A[5149].
2 Distress For Rent Act 1737, s 8, at para HR A[20018].

Page 1020
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/L Sale of distress/4 Price at
sale
4 Price at sale
(a) Best price must be obtained
HR A[5945]
The goods must be sold at the best price that can be obtained for them1; no condition may be imposed at the sale that
may restrict the best price from being obtained, even though the tenant himself was bound by the condition in his own
user of the goods2, the landlord by the sale of distress waiving any covenant in the lease restraining such user3.
HR A[5946]
2 Hawkins v Walrond (1876) 1 CPD 280. The covenants referred to were by the tenant not to carry farm produce from the farm, but to
consume it on the premises. It was held that the Sale of Farming Stock Act 1816, s 11, only applies to purchasers from tenants.
3 Hawkins v Walrond (1876) 1 CPD 280 at 285, per Lindley J.

Page 1021
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/L Sale of distress/5 Mode
of sale
5 Mode of sale
(a) How good may be sold
HR A[5947]
Although the goods and chattels distrained are generally sold by auction, there is no statutory requirement that an
auction must be held1. In order, however, that the property may pass there must be an actual sale to a third person, and
the landlord for this purpose cannot take the goods to himself or be the purchaser thereof2. A landlord who himself
purports to purchase does not obtain a valid title, and is liable to be sued in conversion3, even if the form of a sale by
auction be gone through, the goods do not vest in him so as to deprive a third party of their ownership. Apparently,
however, the tenant, by agreement with the landlord, may cede his own goods which have been seized in satisfaction or
part satisfaction of the sum distrained for4. A true sale, however, although irregular, passes the property in the subject
matter of the distress5.
HR A[5948]
1 Neither in the Distress for Rent Act 1689, s 1, nor in the Law of Distress Amendment Act 1888. As to the auctioneer's position under a
distress, see Payne v Elsden (1900) 17 TLR 161, where it was held that an auctioneer purporting to sell under a distress warrant does not
give an implied warranty of title in so selling.
2 King v England (1864) 4 B & 5 782; Moore, Nettlefold & Co v Singer Manufacturing Co [1903] 2 KB 168, on appeal [1904] 1 KB 820,
CA.
3 Plasycoed Collieries Co Ltd v Partridge, Jones & Co Ltd [1912] 2 KB 345. Such sale is not a mere 'irregularity' within s 19 of the
Distress For Rent Act 1737; see para HR A[20035].
4 See n 1.
5 King v England (1864) 4 B & S 782, per Blackburn and Mellor JJ; see also Lyon v Weldon (1824) 2 Bing 334, confirming Wallace v
King (1788) 1 Hy B1 13.
(b) Overplus
HR A[5949]
The overplus after the sale, ie the residue after the payment of the rent and of the reasonable charges of distress,
appraisement, and sale (if any), should, in strict law, be left in the hands of the sheriff, under-sheriff, or constable for the
owner's use1; but in practice such overplus is generally paid over to the tenant direct2.
Page 1022
HR A[5950]-[5960]
2 Stubbs v May (1823) 1 LJOSCP 12; Taylor v Harrison (1832) 1 LJKB 155; Lyon v Tomkies (1836) 1 M & W 603.
HR A[5961]
The tenant's remedy, if he suffers damage owing to the provisions of the statute not being carried out, is by an action on
the case under the statute, and not for money had and received1; nor has an undertenant, whose goods have been
distrained, an action against the immediate tenant, who owed the rent, to recover the surplus paid over as money paid to
his use2; nor is a landlord liable to inquire into or act on any notice of claim by a third party either to the surplus
proceeds or to the surplus goods. In regard to the latter, although no provision is made by statute, it is the landlord's duty
to return unsold goods, which have been removed, to the place from which they were taken3.
HR A[5962]
1 Yates v Eastwood (1851) 6 Exch 805. Otherwise, a duty would be cast on the landlord to find the owner of the goods and to pay him the
surplus.
2 Moore v Pyrke (1809) 11 East 52.
3 Evans v Wright (1857) 2 H & N 527.

Page 1023
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/M Expenses of distress
M
Page 1024
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/M Expenses of distress/1
Regulated by statute
1 Regulated by statute
HR A[5963]
No person is entitled to any fees, charges or expenses for levying a distress for rent, or for doing any act or thing in
relation thereto, other than those specified in the Appendix annexed to the rules made pursuant to the Law of Distress
Amendment Acts 1888 and 18951.
HR A[5964]
1 Distress for Rent Rules 1988, SI 1988/2050, r 10 and App 1. A reduced fee for 'walking possession' is prescribed where the tenant signs
an agreement for 'walking possession' in DRR 1988, Form 8 in App II to the rules.
HR A[5965]
The fee for levying distress is one which the distraining bailiff may retain out of the proceeds of the distress by way of
remuneration1.
HR A[5966]-[5982]
1 Phillpps v Rees (1889) 24 QBD 17, CA, overruling Coode v Johns (1886) 17 QBD 714. Although this decision was actually on the
Schedule to the Agricultural Holdings (England) Act 1883 (repealed), the reasoning applies equally to App 1 to the Distress for Rent Rules
1988 (see especially the judgment of Lopes LJ (1889) 24 QBD 17 at 23).
Page 1025
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/N Second distress
N
Page 1026
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/N Second distress/1
General rule
1 General rule
HR A[5983]
The remedy by distress must not be used in an oppressive manner, and the general rule is that a landlord may not split
one entire demand and distrain twice for the same rent when he might have taken enough on the first occasion1.
HR A[5984]
1 If he levies for too small a sum or seizes goods of inadequate value when he had a fair opportunity to seize more it is his own fault, and
he cannot repair it by a second levy (Dawson v Cropp (1845) 1 CB 961; Wallis v Savill (1701) 2 Lut 1532 at 1536; Hutchins v Chambers
(1758) 1 Burr 579 at 589; Owens v Wynne (1855) 4 E & B 579; Bagge v Mawby (1853) 8 Exch 641; Grunnell v Welch [1905] 2 KB 650 at
653, per Kennedy J; on appeal [1906] 2 KB 555, CA).
HR A[5985]
The rule is limited to a second distress made for the same rent. Separate rents may be reserved under one lease in
respect of separate parcels and separately distrained for1. And where the rent in arrear consists of several instalments of
rent falling due on different days, there may be a separate distress for each2. It is immaterial that the first distress is
taken for the rent which last became due3. And the same goods, after being replevied, may be distrained upon a second
time for another instalment of rent4.
HR A[5986]
1 Shep Touch 81.
2 Gambrell v Earl of Falmouth (1835) 4 Ad El 73.
3 Palmer v Stanage (1661) 1 Lev 43.
4 Hefford v Alger (1808) 1 Taunt 218; see Wilton v Wiffen (1830) 8 LJOSKB 303.
Page 1027
Exceptions
2 Exceptions
HR A[5987]
This general rule is subject to the following exceptions:
(a) If there are not sufficient goods on the premises on the first occasion1.
(b) If the goods taken on the first occasion are of an uncertain or imaginary value, as pictures, jewels,
or racehorses, and the landlord has reasonably mistaken their value2.
(c) If the conduct of the tenant has prevented the landlord from realising the fruits of the distress3.
(d) If cattle die in the pound by an Act of God.
In any of these cases, a second distress may be taken.
HR A[5988]
1 Wallis v Savill (1701) 2 Lut 1532.
2 Hutchins v Chambers (1758) 1 Burr 579. There is a mistake in value when the opposition of the tenant and others prevent the market
value being obtained: Rawlence and Squarey v Spicer [1935] 1 KB 412, CA.
3 Bagge v Mawby (1853) 8 Exch 641; Lee v Cooke (1858) 3 H & N 203, Ex Ch. So also if a combination of other persons prevents the
sale from being effective: R v Judge Clements, ex p Ferridge [1932] 2 KB 535. See also Rawence and Sparey v Spicer [1935] 1 KB 412, CA.
HR A[5989]
The proceedings must be such that if carried out would have resulted in the landlord getting what he got by the second
distress; and where a purported first distress is a mere trespass and void ab initio as a distress, so that the landlord
cannot satisfy his claim for rent by means of that proceeding, he may lawfully distrain again for the same rent1.
HR A[5990]-[6000]
1 Grunnell v Welch [1906] 2 KB 555, CA.

Page 1028
Voluntary abandonment of distress
3 Voluntary abandonment of distress
HR A[6001]
The rule against second distress applies where the landlord having distrained enough voluntarily abandons the distress,
that is to say, where he surrenders or forbears to exercise his power of making the distress fruitful1.
HR A[6002]
1 Bagge v Mawby (1853) 8 Exch 64l; Dawson v Cropp (1845) 1 CB 961; Smith v Goodwin (1833) 4 B & Ad 413.
HR A[6003]
An exception to the application of the rule in the case of voluntary abandonment is where the landlord is induced in
good faith to withdraw the distress by the procurement of the tenant1. But the procurement must have been that of the
tenant, and not of a stranger2.
HR A[6004]
1 The following are instances of a second distress rendered lawful on this ground: where the landlord withdraws the distress at the request
and for the accommodation of the tenant (Bagge v Mawby (1853) 8 Exch 64l, per Parke B; Crosse v Welch (1892) 8 TLR 709 at 710, CA);
or was induced to withdraw by the false representation of the tenant (Wollaston v Stafford (1854) 15 CB 278), or by an arrangement which
the tenant failed to carry out (Thwaites v Wilding (1883) 12 QBD 4, CA).
2 Bagge v Mawby (1853) 8 Exch 64l.

Page 1029
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/O Fraudulent removal
O
Page 1030
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/O Fraudulent removal/1
General rule
1 General rule
HR A[6005]
When the tenant fraudulent or clandestinely removes from the demised premises his goods or chattels to prevent the
landlord from distraining them, the landlord, or any person empowered by him within 30 days after such removal may
seize such goods and chattels, wherever the same shall be found, and sell them as if they had actually been distrained
upon such premises1; provided they have not been sold bona fide and for a valuable consideration before such seizure to
any person not privy to the fraud2.
HR A[6006]
1 Distress For Rent Act 1737, s 1 at para HR A[20011]. At common law there was nothing to prevent a tenant from clandestinely and
fraudulently removing his goods to avoid their being distrained.
2 DRA 1737, s 2 at para HR A[20012].

Page 1031
When statute applies
2 When statute applies
HR A[6007]
The statute only applies where the following conditions are satisfied:
(a) The removal must be shown to have been fraudulent or clandestine. The burden of proof of fraud is
on the landlord1.
(b) The removal must have been made to avoid a distress2.
(c) The landlord must show that no sufficient distress remains on the premises after the removal3.
(d) The removal must have taken place after the rent has fallen due (though not necessarily in arrear),
that is, on or after the day fixed for payment4.
(e) The goods must have been those of the tenant and not of a stranger or lodger5.
(f) The goods must have been distrainable by the landlord either at common law or under the Landlord
and Tenant Act 17096 if they had remained on the premises7.
(g) The removal must have been on behalf of the tenant. If a mortgagee, creditor or other person
having a charge on the goods removes the goods in assertion of his title to them, with the privity and
sanction of the tenant, the statute does not apply8.
(h) In case the removed goods are claimed by a bona fide purchaser, he must prove his title to them9.
HR A[6008]
1 Inkop v Morchurch (1861) 2 F & F 501.
2 Parry v Duncan (1831) 7 Bing 243.
3 Parry v Duncan (1831) 7 Bing 243. This has, however, been questioned: see Gillam v Arkwright (1850) 16 LTOS 88; Gegg v Perrin
(1845) 9 JP 619.
4 Rand v Vaughan (1835) 1 Bing NC 767; Dibble v Bowater (1853) 2 E & B 564; Watson v Main (1799) 3 Esp 15.
5 Thornton v Adams (1816) 5 M & S 38; Fletcher v Marillier (1839) 9 Ad & El 457 at 461; Postman v Harrell (1833) 5 C & P 225;
Foulger v Taylor (1860) 5 H & N 202.
6 See para [20000].
7 Gray v Stait (1883) 11 QBD 668, CA.
8 Bach v Meats (1816) 5 M & S 200; Tomlinson v Consolidated Credit and Mortgage Corpn (1889) 24 QBD 135, CA.
Page 1032
9 Williams v Roberts (1852) 7 Exch 618.

Page 1033
Penalty for fraudulent removal
3 Penalty for fraudulent removal
HR A[6009]
It is provided that if a tenant fraudulently remove and convey away1 his goods or chattels to prevent the landlord from
distraining them, or if any person wilfully and knowingly aids or assists2 him in such fraudulent conveying away or
carrying off of any part of his goods or chattels or in concealing the same, every person so offending shall forfeit to the
landlord double the value of the goods or chattels by him carried off or concealed as aforesaid, to be recovered by
action3.
HR A[6010]-[6020]
1 His actual participation in the removal is not necessary if such removal is effected by a third person with his privity: Lister v Brown
(1823) 3 Dow & Ry (KB) 501.
2 In the case of a third person he must be shown to have actually assisted the tenant and to have been privy to his fraudulent intent: Brooke
v Noakes (1828) 8 B & C 537.
3 Distress For Rent Act 1737, s 3 at para HR A[20013].

Page 1034
Where goods removed do not exceed £50
4 Where goods removed do not exceed £50
HR A[6021]
An alternative remedy is provided where the goods fraudulently carried off or concealed do not exceed the value of £50.
In that case the landlord or his agent may exhibit a complaint in writing against the offender before two or more justices
of the area1, not being interested in the lands whence such goods were removed, who may determine in a summary way
whether the parties are guilty, inquire as to the value of the goods fraudulently removed, and order the offender to
forfeit double their value; and on default they may by warrant levy the same by distress and sale of the offender's goods,
and for want of such distress may commit the offender to prison2.
HR A[6022]
1 Justices of the Peace Act 1997, s 14.
2 Distress For Rent Act 1737, s 4 at para HR A[20014]; Justices of the Peace Act 1979, s 61(1). Even when the goods are under the value
of £50 the landlord may elect to proceed by action instead of before the magistrates: Stanley v Wharton (1822) 10 Price 138; Bromley v
Holden (1828) Mood & M 175; see Horsefall v Davy (1816) 1 Stark 169.
Page 1035
Forcible entry to remove goods, etc
5 Forcible entry to remove goods, etc
HR A[6023]
Where any goods fraudulently or clandestinely removed are put in any house, barn, or place locked up or otherwise
secured, so as to prevent such goods from being seized as a distress for arrears of rent, the landlord may seize such
goods as a distress for rent, first summoning a constable, who is required to assist; and, in the case of a dwelling-house,
oath being also first made before some justice of the peace of a reasonable ground to suspect that such goods are
therein, in the daytime may break open and enter into such house, barn, or place to seize such goods1.
HR A[6024]
1 Landlord has right to follow and seize goods fraudulently removed. Distress For Rent Act 1737, s 7.
Page 1036
Power of metropolitan police
6 Power of metropolitan police
HR A[6024.1]
Within the metropolitan police district any constable may stop and detain, until due inquiry can be made, all carts and
carriages (including motor vehicles and trailers1) which he finds employed in removing the furniture of any house or
lodging between the hours of eight in the evening and six in the morning, or whenever the constable has good grounds
for believing that such removal is made for the purpose of evading the payment of rent2.
HR A[6024.2]
1 See Road Traffic Act 1988, s 185(1).
2 Metropolitan Police Act 1839, s 67.

Page 1037
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/P Rescue and poundbreach
P
Page 1038
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/P Rescue and
poundbreach/1 Nature offences
1 Nature offences
HR A[6025]
In as much as a distress does not until sale divest the tenant of the property in the chattels, or, in point of law, vest the
possession of such chattels in the landlord, the latter cannot, in case the goods are taken away or otherwise interfered
with, maintain an action against the tenant or a stranger for conversion1. His remedy is in respect of the rescue or
poundbreach, as the case may be. Both are offences at common law, for which an action of trespass will lie, and for
which an additional and more satisfactory remedy has been provided by statute2.
HR A[6026]
1 R v Cotton (1751) 2 Ves Sen 288 at 294; Moneux v Goreham (1741) 2 Selwyns NP, 11th ed, 1335; Wilbraham v Snow (1670) 2 Wms
Saund 47; and see Turner v Ford (1846) 15 M & W 212.

Page 1039
poundbreach/2 Rescue
2 Rescue
HR A[6027]
Goods distrained are regarded as from the seizure as being taken by a process of law, and not merely by an assertion of
a private eight of the distrainor, and the taking of them out of the custody of the distrainor before they are impounded is
regarded in the light of a resistance of lawful authority, and is termed a rescue or rescous1. There can be no rescue until
the thing is actually distrained. To prevent a distress being made is not a rescue, but to prevent it being impounded. In
any case in which the distrainor abandons or quits possession of the chattels, the retaking by the owner is not a rescue2.
HR A[6028]
1 Com Dig tit Distress, D3. Rescous is a taking away and setting at liberty against law a distress taken or a person reserved by the process
or course of law (Co Litt 160b).
2 Dod v Monger (1704) 6 Mod Rep 215 at 216.

Page 1040
poundbreach/3 Poundbreach
3 Poundbreach
HR A[6029]
Poundbreach is the retaking from the custody of the law of a chattel which has been impounded. If a distress be taken
and impounded, though without just cause, the owner cannot break the pound and take way the distress1. It is
immaterial whether the goods are impounded on or off the premises; they cannot be removed against the will of the
distrainor without a poundbreach being committed, and if impounded or otherwise secured on the premises2 the offence
is no less committed because a bailiff has not continued in actual possession3. It is said that a person cannot be guilty of
poundbreach unless he has a guilty mind, an intention to break the pound knowing that the goods have been
impounded4. Force is not necessary to constitute the offence, which is committed by the removal of the chattels, though
the pound is unfastened5. Goods impounded on the tenant's premises are impounded not merely against the tenant, but
against any stranger because they are in the custody of the law6. Where goods are impounded or otherwise secured, then
if either the tenant or a stranger does that which, if the goods were the property of or in the possession of the landlord,
would as against him amount to conversion or trover, the offender is guilty of poundbreach7.
HR A[6030]-[6040]
1 Alwayes v Broome (1695) 2 Lut 1259 at 1262.
2 The phrase 'to impound or otherwise secure' is used in the Distress For Rent Act 1737, s 10, by which provision goods were first allowed
to be secured on the premises. See Lavell & Co Ltd v O'Leary [1933] 2 KB 200, CA.
3 Jones v Biernstein [1899] 1 QB 470.
4 Abingdon RDC v O'Gorman [1968] 2 QB 811, [1968] 3 All ER 79. In this case a bailiff took walking possession of a television set. The
set was on hire to the tenant. The owner of it removed it without knowledge that it had been impounded. The Court of Appeal held that there
was no poundbreach in the absence of knowledge of the impounding. As was pointed out by the court, the owner could have recovered the
set by notice under the Law of Distress (Amendment) Act 1908.
5 Jones v Biernstein [1899] 1 QB 470.
6 LaveIl & Co Ltd v O'Leary [1933] 2 KB 200, CA.
7 Thus, granting a replevin without authority may constitute poundbreach: Trevannian's Case (1704) 11 Mod Rep 32.
Page 1041
poundbreach/4 Justification of rescue and poundbreach
4 Justification of rescue and poundbreach
HR A[6041]
Rescue may be justified in certain cases where the distress is unlawful. Poundbreach is an offence against the dignity of
the law, and can never be justified1. If the distrainor himself takes the distress out of the pound for the unlawful purpose
of using it, the owner may retake possession of it from him, without being guilty of either rescue or poundbreach2.
HR A[6042]
1 Cotsworth v Betison (1696) 1 Ld Raym 104; Parrett Navigation Co v Stower (1840) 6 M & W 564; Firth v Purvis (1793) 5 Term Rep
432; Co Litt 47a.
2 Smith v Wright (1861) 6 H & N 821.

Page 1042
poundbreach/5 The remedies
5 The remedies
HR A[6043]
The remedies in the case of both offences are either by recaption or action, and in the case of poundbreach by
indictment also.
HR A[6044]
The right of recaption, that is, the right to pursue and retake the goods wherever the landlord may happen to find them,
obtains in each case1, but in exercising the right he must not commit a breach of the peace; and in the case of a rescue
the recaption must be 'upon a fresh pursuit', that is, without delay2, and there is authority for saying that the same
limitation applies in the case of poundbreach3.
HR A[6045]
1 Rich Woolley (1831) 7 Bing 651.
2 Rich Woolley (1831) 7 Bing 651 at 661.
3 See Turner v Ford (1846) 15 M & W 212.
HR A[6046]
The landlord has a common law right of action in the case of rescue and poundbreach1. But the action commonly
brought is a special action upon the case under the Distress for Rent Act 16892 (which gave the right to recover treble
damages against the offender, or against the owner of the goods distrained, in case the same have come into his
possession3). The action is maintainable by the landlord without proof of any special damage4, and it is not necessary
that notice of the distress shall have been given5. Tender of the rent and costs after the goods have been impounded is
no defence6. The action is a penal one, and the plaintiff is not entitled to a disclosure of documents7.
HR A[6047]
1 But not in trespass or trover: R v Cotton (1751) 2 Ves Sen 288 at 294. See para HR A[6025].

Page 1043
3 See Berry v Huckstable (1850) 14 Jur 718. Instead of treble costs, which were given by DRA 1689, but are abolished, the landlord is
entitled to a full and reasonable indemnity as to all costs and charges in and about the action: Limitations of Actions and Costs Act 1842, s 2.
4 Kemp v Christmas (1898) 79 LT 233, CA.
5 Belayse v Burbridge (1697) 1 Lut 2l3.
6 Firth v Purvis (1793) 5 Term Rep 432.
7 Jones v Jones (1889) 2 QBD 425.
HR A[6048]
Poundbreach is an indictable offence at common law1. The indictment lies where good have been taken out of the
custody of the law2.
HR A[6049]
1 R v Butterfield (1893) 17 Cox CC 598.
2 R v Bradshaw (1835) 7 C & P 233.

Page 1044
poundbreach/6 Goods on premises of third person
6 Goods on premises of third person
HR A[6050]-[6060]
The landlord has the same remedy for rescue and poundbreach whether the chattels are impounded on or off the
premises1. But it is doubtful whether an action can be maintained under the statute2 in the case of goods fraudulently
removed by the tenant and followed and distrained on the premises of a third person and afterwards rescued by such
third person3.
HR A[6061]
1 Distress For Rent Act 1737, s 10; Firth v Purvis (1793) 5 Term Rep 432.
3 Harris v Thirkell (1852) 20 LTOS 98.

Page 1045
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 8 Distress/Q Illegal, irregular or
excessive distress and the remedies therefor
Q
Page 1046
excessive distress and the remedies therefor/1 Illegal distress
1 Illegal distress
(a) Nature of illegal distress
HR A[6062]
An illegal distress is one which is wrongful at the very outset, that is to say, either because there was no right to distrain
or because a wrongful act was committed at the beginning of the levy invalidating all subsequent proceedings. In such a
case the distrainor is a trespasser ab inito1. As he has in himself no right to seize the particular chattels, he can confer no
title to them upon a person to whom, under colour of the distress, they may purport to have been sold.
HR A[6063]
1 Attack v Bramwell (1863) 3 B & S 520.
HR A[6064]
Where the act done is wrongful, but is so merely as to part of the goods, no wrong done as to the residue, the wrongdoer
is a trespasser as to that part of the goods only in respect of which the wrongful act is done1.
HR A[6065]
1 Harvey v Pocock (1843) 11 M & W 740.
HR A[6066]
The remedies for an illegal distress are rescue, replevin, or an action for damages1.
HR A[6067]
1 As to rescue, see paras HR A[6027] and [6041].

Page 1047
excessive distress and the remedies therefor/2 Irregular distress
2 Irregular distress
HR A[6068]
A distress is irregular when, although the levy was legal and in order, the subsequent proceedings have been conducted
in an unlawful manner.
(a) Effect of irregular distress
HR A[6069]
For a distress that is only irregular, and not illegal at the outset, the distrainor is not treated as a trespasser ab initio, and
the tenant can only recover the special damage he has suffered1.
HR A[6070]-[6080]
1 Distress For Rent Act 1737, s 19; Rodgers v Parker (1856) 18 CB 112. At common law there was no distinction between an illegal and
an irregular distress, and any irregularity in the conduct of the distress rendered the entire proceedings void and the party distraining a
trespasser ab initio: Six Carpenter's Case (1610) 8 Co Rep 146a; I Smith LC 13th ed 134. This was found to occasion hardships to landlords
and was remedied by DRA 1737. See Attack v Bramwell (1863) 3 B & S 520; Plasycoed Collieries Co Ltd v Partridge Jones & Co Ltd
[1912] 2 KB 345.
HR A[6081]
A person who purchases goods under a distress which is merely irregular acquires a good tile to the goods, for in such a
case trover does not lie against the landlord, and the remedy of the tenant is in damages as against his landlord1.
HR A[6082]
1 Wallace v King (1788) 1 Hy BI 13; Whitworth v Smith (1832) 1 Mood & R 193.
Page 1048
excessive distress and the remedies therefor/3 Excessive distress
3 Excessive distress
(b) Nature of excessive distress
HR A[6083]
The distrainor must be careful not to seize more goods than are reasonably sufficient to satisfy the rent in arrear and the
cost of the distress1. An excessive distress is wrongful both at common law and by statute2.
HR A[6084]
1 Where rent had been reduced by the payment of land tax and other liabilities which the tenant was entitled to pay and deduct from the
rent, if the landlord distrained for the whole rent, the tenant might properly sue for an excessive distress: Carter v Carter (1829) 5 Bing 406.
2 'Distress shall be reasonable and not too great, and they that take unreasonable and undue distresses shall be grievously amerced for the
excess of such distresses' (2 Co Inst 107); Statute of Marlborough, 1 267; Bayliss v Fisher (1830) 7 Bing 1 53; Piggott v Birtles (1836) 1 M
& W 441 at 447, per Parke B. Blackstone, however, says: 'An action of trespass is not maintainable on this account, it being no injury at
common law' (3 BI Com 1 2); see Lynne v Moody (1729) 2 Stra 851.
HR A[6085]
Excess is relative. The value of the goods seized must be obviously disproportionate to the rent and costs, taking into
consideration the conditions under which a forced sale of the effects must take place1. The landlord is authorised to
protect himself by seizing what any reasonable man would think adequate for the satisfaction of the claim2.
HR A[6086]
1 Field v Mitchell (1806) 6 Esp 71; Rapley v Taylor and Smith (1883) Cab & El 150, per Cave J.
2 Roden v Eyton (1848) 6 CB 427; Wells v Moody (1835) 7 C & P 59.
HR A[6087]
Taking a single chattel, though of considerably greater value than the rent, is not excessive if there is no other distress
on the land which can be taken, or even if there are other articles, but of an aggregate value less than sufficient to satisfy
the distress1. If the distrainor has the opportunity of taking goods of smaller value than he really takes and which would
be sufficient to cover the rent, he is wrong2.
Page 1049
HR A[6088]
1 2 Co Inst 107; Avenell v Croker (1828) Mood & M 172; Field v Mitchell (1806) 6 Esp 71.
2 If there were several things which might have been seized, some of which singly would have been adequate for the distress and others
more than adequate, the distrainor might be liable to an action for seizing that which was clearly more than adequate, as, for instance, if there
were several horses and the distrainor seized one of much more value than the others, when there were others of sufficient value for the
distress: Roden v Eyton (1848) 6 CB 427.
HR A[6089]
In cases of excessive distress the tenant cannot sue the person into whose possession the goods have come; his remedy
is against his landlord1.
HR A[6090]-[6100]
1 Whitworth v Smith (1832) 5 C & P 250.

Page 1050
excessive distress and the remedies therefor/4 Replevin
4 Replevin
(a) Definition of replevin
HR A[6101]
Replevin is a process to obtain a redelivery to the owner of chattels which have been wrongfully distrained or taken
from him, upon his finding sufficient security for the rent and costs of action, and undertaking that he will pursue an
action against the distrainor to determine the right to distrain. The term 'replevin' is applied both to the redelivery of the
goods and the action in which the right is tried1. Wherever the object of proceedings is to procure the restitution of the
specific chattels taken instead of compensation in damages, the proper course is an action of replevin2.
HR A[6102]
1 Co Litt 1 45b; Bac Abr tit Replevin.
2 Gibbs v Cruickshank (1873) LR 8 CP 454 at 459; Mennie v Blake (1856) 6 E & B 842.
(b) When available
HR A[6103]
Replevin is not available where the distress was originally lawful1. But whenever there has been a distress which is
wholly illegal, and not merely irregular or excessive, the tenant has his remedy by replevin.
HR A[6104]
1 Johnson v Upham (1859) 28 LJQB 252 at 256, per Lord Campbell. Thus, it will not lie if any part of the rent claimed was due, for in
such a case the distress is not illegal: White v Greenish (1861) 11 CB NS 209, a case in which a person who was entitled only to a moiety of
rent had distrained for the whole.
(c) Proceedings in replevin
HR A[6105]
Page 1051
Proceedings in replevin consist of two independent parts, namely, the replevy, which is the tenant giving security that
he will prosecute an action of replevin, whereupon the goods are restored; and the action so undertaken to be brought, in
which the right to the goods is tried. The tenant may replevy so long as the goods remain unsold1, but only within six
years2.
HR A[6106]
1 Jacob v King (1814) 5 Taunt 451.
2 Cp Limitation Act 1980, s 2.
HR A[6107]
The proceedings must be brought by the owner of the goods, that is the person who has the property, absolute or
qualified, in the goods1. A special property in them, such as that of the bailee or pledgee, is sufficient2. An executor
may sue in replevin to recover his testator's goods3.
HR A[6108]
1 Co Litt 1 45b; Peacock v Purvis (1820) 2 Brod & Bing 362; Fenton v Logan (1833) 9 Bing 676.
2 Co Litt 145b. See also Swaffer v Mulcahy [1934] 1 KB 608.
3 Arundell v Trevill (1662) 1 Sid 81 at 82.
HR A[6109]
The action will lie either against the person actually making the distress, or the person who has authorised the distress,
or both of them1.
HR A[6110]-[6120]
1 Bullen on Distress (2nd edn) p 279, see Clerk v Berwick Corpn (1825) 4 B & C 649.
(d) The replevy
HR A[6121]
Page 1052
Proceedings in replevin are commenced in the county court1.
HR A[6122]-[6123]
1 County Courts Act 1984, s 144, Sch 1, para 1.

Page 1053
excessive distress and the remedies therefor/5 Action for damages
5 Action for damages
(a) Illegal distress
HR A[6124]
An action for damages lies for any wrongful distress whether it is illegal, irregular, or excessive1.
HR A[6125]
1 See paras HR A[6066], [6069], [6089] and the Law of Distress Amendment Act 1908, s 2.
HR A[6126]
An action for illegal distress should be brought against the bailiff who committed the act complained of, and not against
the landlord, unless, as will usually be the case, it be shown that the latter authorised the wrongful act or sanctioned and
ratified it after it came to his knowledge, or unless he chooses to take upon himself without inquiry the risk of any
irregularity which the bailiff may have committed and to adopt all his acts1.
HR A[6127]
1 Lewis v Read (1845) 13 M & W 834; Moore v Drinkwater (1858) 1 F & F 134. For instances of ratification, see Carter v St Mary
Abbots, Kensington, Vestry (1900) 64 JP 548, CA and Becker v Riebold (1913) 30 TLR 142.
(b) Irregular and excessive distresses
HR A[6128]
In the case of an irregular distress the action will lie, at the election of the plaintiff, either against the bailiff or his
employer and it makes no difference that the act is done without the employer's knowledge or subsequent sanction1. If
thought fit, the employer and bailiff may be made co-defendants2, and this is the usual course.
HR A[6129]
Page 1054
1 Haseler v Lemoyne (1858) 5 CBNS 530.
2 Child v Chamberlain (1834) 6 C & P 213.
HR A[6130]-[6140]
In like manner an action for an excessive distress may be brought either against the bailiff or the landlord1. And where
an excessive distress has been made, the landlord may compensate the tenant and recover the amount against the bailiff.
HR A[6141]
1 Megson v Mapleton (1883) 49 LT 744.

Page 1055
excessive distress and the remedies therefor/6 Action for double value
6 Action for double value
(a) Scope of action
HR A[6142]
Beyond the remedy provided by the common law for a wrongful distress, in the particular instance of a distress for rent
when no rent is in arrear followed by a sale of the goods, the legislature has provided a punitive remedy for the owner of
the goods in the shape of compensation in double value of the goods taken and sold with full costs1.
HR A[6143]
1 Distress for Rent Act 1689, s 4. Only the owner of the goods can sue, see Chancellor v Webster (1893) 9 TLR 568. 'Full costs' only
means the usual party and party costs: Avery v Wood [1891] 3 Ch 115, CA.
HR A[6144]
The offence is not complete unless a sale of the chattels actually takes place1.
HR A[6145]
1 See Masters v Farris (1845) 1 CB 715.
HR A[6146]
The provision is absolute, so that less damages than double value cannot be awarded to a successful plaintiff1.
HR A[6147]
1 Masters v Farris (1845) 1 CB 715.

Page 1056
excessive distress and the remedies therefor/7 Injunction to restrain a distress
7 Injunction to restrain a distress
(b) When granted
HR A[6148]
An injunction may be granted in an action commenced by the tenant1 where he complains either that a distress made is
wrongful2 or that a wrongful distress is threatened3. In as much, however, as the right of a landlord to distrain for rent
is a legal right enabling him, if the rent is in arrear, to obtain security for its payment, the courts will not generally
interfere by injunction (unless it is a flagrant case) except upon the condition of the applicant paying the amount
claimed for rent into court4. The courts do not favour an interference with the right of distress by injunction. But in a
proper case the plaintiff frequently obtains the relief formerly only obtained by replevin, that is, possession of the
goods, while the question as to the right to distrain is being tried. And when the goods seized are not distrainable, he
may obtain relief for which replevin is not available.
HR A[6149]
1 Supreme Court Act 1981, s 37. Steel Linings Ltd v Bibby & Co [1993] RA 27 (distress for rates).
3 Shaw v Earl of Jersey (1879) 4 CPD 120, 359, CA.
4 Shaw v Earl of Jersey (1879) 4 CPD 120, 359, CA; Carter v Salmon (1880) 43 LT 490, CA; see also Steel Linings Ltd v Bibby & Co
[1993] RA 27 (distress for rates).
Page 1057
excessive distress and the remedies therefor/8 Summary proceedings in special cases
8 Summary proceedings in special cases
(a) Metropolitan Police District
HR A[6150]
The summary remedy within the Metropolitan Police District1 was abolished under the Statute Law (Repeals) Act 1986
HR A[6151]-[6161]
1 Metropolitan Police Courts Act 1839, s 39.
(b) Wearing apparel etc
HR A[6162]
The wearing apparel and bedding of the tenant or his family, and the tools and implements of his trade to the prescribed
value, are exempt from distress1. A court of summary jurisdiction, on complaint that goods or chattels so exempt from
distress for rent have been taken under a distress, may, by summary order, direct that the goods and chattels so taken, if
not sold, be restored, or if they have been sold, that such sum as the court may determine to be the value thereof shall be
paid to the complainant by the person who levied the distress or directed it to be levied2.
HR A[6163]
1 Law of Distress Amendment Act 1888, s 4; see para HR A[5204].
(c) Agricultural holdings
HR A[6164]
In the case of any holding to which the Agricultural Holdings Act 19861 applies, there are special provisions for settling
any dispute arising in respect of any distress having been levied contrary to the provisions of the Act.
Page 1058
HR A[6165]
1 See Agricultural Holdings Act 1986, s 19, at HR F[765].

Page 1059
excessive distress and the remedies therefor/9 Rescue
9 Rescue
(a) When lawful
HR A[6166]
Although a rescue1 is generally a breach of the law, there are some cases in which it is a legal remedy of an aggrieved
person, that is to say, when a distress is wholly wrongful and not merely irregular or excessive. The rescue must take
place before the goods are impounded, for after the impounding, whether the distress was lawful or not, the goods
cannot be retaken2, unless after impounding the distrainor abuses the distress by working it3.
HR A[6167]
2 Cotsworth v Betison (1696) 1 Ld Raym 104.
3 Smith v Wright (1861) 6 H & N 821.
HR A[6168]
Rescue in such cases can only be legally made by the tenant or the owner of the chattels or his servant or agent, and not
by a stranger1, so that if the goods of two persons be wrongfully taken in one distress each can rescue only his own
goods, in as much as he is a stranger as regards the other goods2.
HR A[6169]-[6280]
1 1 Roll Abr 673.
2 Fitz Nat Brev 102.

Page 1060
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 9 Rights and liabilities of the parties
Chapter 9 Rights and liabilities of the parties
Editor
Edward Cole
Page 1061
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 9 Rights and liabilities of the
parties/A Covenant for quiet enjoyment
A
Page 1062
parties/A Covenant for quiet enjoyment/1 Introduction
1 Introduction
HR A[6801]
Every lease contains either an express or an implied covenant for quiet enjoyment. As an express covenant it may be in
a qualified or in an absolute form. In the absence of an express covenant a covenant will be implied as an automatic
incident of the relationship of landlord and tenant or of an agreement for lease. As an implied covenant it is in the
qualified form. In the absolute form the covenant is that the lessor is entitled to grant some tenancy and that the lessee
will enjoy quiet possession without interruption by him or through the lawful acts of anyone claiming through or under
him or by title paramount. In the qualified form the lessor covenants to the same extent save that he assumes no
responsibility for the acts of persons claiming by title paramount. The covenant for quiet enjoyment is one of the
covenants formerly included in various forms of conveyance of land. In some deeds, such as a conveyance of the
freehold, it was accompanied by other covenants for title, but in a lease of land it was the only covenant for title given1.
In many cases there will be no practical difference between a claim based on the covenant for quiet enjoyment and one
based on the implied obligation not to derogate from grant2. Further, in many cases the addition of a claim for breach of
the covenant for quiet enjoyment will add nothing to a claim in nuisance3.
HR A[6802]
1 See per Lord Millett in Southwark London Borough Council v Mills [1999] 4 All ER 449 at 466. For covenants for title today implied in
leases by statute see the Law of Property (Miscellaneous Provisions) Act 1994.
2 But see the discussion at para HR A[6884] below for cases where the difference is significant.
3 B & Q plc v Liverpool Properties Ltd [2001] 1 EGLR 92, [2001] 15 EG 138.
Page 1063
parties/A Covenant for quiet enjoyment/2 Nature of the covenant
2 Nature of the covenant
HR A[6803]
The covenant for quiet enjoyment is an assurance against interruption in possession of the thing demised. It is a
covenant which runs with the land1. It is an undertaking that the tenant shall have the property unfettered by the
assertion of any lawful right which interferes with his ordinary and lawful enjoyment. Protection is not required under
such a covenant against unlawful interruptions because the tenant will have remedies at common law in such cases. The
covenant was originally a covenant for title and its original purpose was to secure title or possession. It warranted
freedom from disturbance by some adverse claim to the property demised2. The covenant has two aspects: a limited
undertaking as to title, and an undertaking against interruption. The precise extent of the protection conferred by the
covenant depends on whether it is in the qualified or absolute form. The covenant for quiet enjoyment is not a warranty
as to the fitness of the premises let. Accordingly, the landlord is not liable under the covenant for quiet enjoyment for
defects in the design of the premises or in the adequacy of their facilities (although such defects or inadequacy may
expose the landlord to a claim under an express obligation to keep facilities in repair and proper working order, or for
nuisance)3.
HR A[6804]
1 Campbell v Lewis (1820) 3 B & Ald 392; Booth v Thomas [1926] Ch 397 at 409, per Sargent LJ.
2 Southwark London Borough Council v Mills [1999] 4 All ER 449; Howell v Richards (1809) 11 East 633 at 642, per Lord Ellenborough;
Dennett v Atherton (1872) LR 7 QB 316; Jenkins v Jackson (1888) 40 Ch D 71; Hudson v Cripps [1896] 1 Ch 265.
3 Southwark London Borough Council v Long [2002] EWCA Civ 403 [2002] 15 EG 133 (CS).
Page 1064
parties/A Covenant for quiet enjoyment/3 Express covenant
3 Express covenant
HR A[6805]
An express covenant for quiet enjoyment may either be absolute or qualified. If it is absolute it extends also to
interruption by persons claiming by title paramount1. If it is qualified it is none the less a covenant that the lessee shall
peaceably hold and enjoy the demised premises without interruption by the lessor or persons claiming through or under
him during the term which is granted. The parties may frame an express covenant as they wish2, but the form of the
qualified covenant commonly adopted provides for quiet enjoyment 'without lawful interruption by the lessor or by
persons rightfully claiming from under or in trust for him'. The covenant frequently also provides that the lessee, paying
the rent and performing the covenants, shall quietly hold and enjoy the demised premises; but these words have been
held not to make the payment of rent a condition precedent to the performance of the covenant3. Under the qualified
form of covenant commonly adopted the landlord, whether or not his own title is defective, is not liable for the acts of
persons claiming by title paramount as the express qualified covenant excludes both the implied covenant for title and
the implied covenant for quiet enjoyment4. Thus, if the landlord has no title he is immune from action by the tenant on
the qualified covenant if the true owner or someone entitled to possession (that is to say, with title paramount) evicts his
lessee. The landlord under a qualified covenant will, therefore, normally be liable only for the acts of himself, of a
successor in title to his interest, and of an underlessee or sub-underlessee from him. Persons in the last two categories
are persons who, in the language of the traditional form of the qualified covenant, claim from or under the landlord. An
express covenant will be construed in the light of the intention of the parties at the time of the grant of the lease. In this
respect the covenant is construed in accordance with the ordinary rule for the construction of contracts, namely that a
document is to be given that meaning which it would convey to a reasonable person with all the background knowledge
which would reasonably have been available to the parties at the time of the making of the contract. For example, where
individual flats in a block of flats owned by one landlord are let to tenants, and discomfort is caused to the tenants
because of a lack of sound insulation in the walls, no tenant can complain that the common landlord is in breach of the
covenant for quiet enjoyment. The reason is that at the time of the letting of any flat the tenant must have known that the
other flats in whatever was their physical state were occupied or were to be occupied and that the noise associated with
that occupation would have to be endured, with the result that the covenant cannot have been intended to operate so as
to prevent that use5. For the same reason the location of the demised premises and the actual or anticipated use of
adjoining premises are material factors in the construction of the covenant in any particular case6.
HR A[6806]
1 Foster v Pierson (1792) 4 Term Rep 617.
2 Lettings by local authorities of their housing stock are often in an informal and standard form. Covenants which aim to achieve the same
result as the traditional covenant for quiet enjoyment will be construed and applied in the same way as the traditional covenant even though
the traditional language is not used. For example, in Southwark London Borough Council v Mills [1999] 4 All ER 449 a covenant by one
authority that 'The tenant's right to remain in and to enjoy the quiet occupation of the dwelling-house shall not be interfered with by the
Council...' and a covenant by another authority that 'The Council shall not interfere with the tenant's rights to quiet enjoyment of the
premises during the continuance of the tenancy' were both regarded as creating the same rights and obligations as a covenant in the more
usual form found in precedent books. See also Williams v Burrell (1845) 1 CB 402, in which the same effect as the common form of
covenant was produced where the lessor bound himself 'to warrant and defend' the lessee against all persons lawfully claiming the premises.
Page 1065
3 Dawson v Dyer (1833) 5 B & Ad 584; Edge v Boileau (1885) 16 QBD 117; Slater v Hoskins [1982] 2 NZLR 541; Taylor v Webb [1936]
2 All ER 763; revsd on other grounds [1937] 2 KB 283, [1937] 1 All ER 590. The principle has been considered and applied in the case of a
lease of a flat which imposed an obligation on the lessor to provide services subject to the payment by the lessee of the service contribution:
Yorkbrook Investments Ltd v Batten (1985) 52 P & CR 51, [1985] 2 EGLR 100 CA.
4 Woodhouse v Jenkins (1832) 9 Bing 431; Miller v Emcer Products Ltd [1956] Ch 304, [1956] 1 All ER 237, applying Line v Stephenson
(1838) 5 Bing N C 183.
5 Southwark London Borough Council v Mills [1999] 4 All ER 449.
6 In Lyttleton Times Co Ltd v Warners Ltd [1907] AC 476 it was agreed that the landlords' premises in Christchurch in New Zealand
should be rebuilt with the ground floor used for printing and the upper floors let to the tenants for use as hotel bedrooms. It was held by the
Privy Council that the tenants could not complain that the noise caused by the printing presses was a breach of the terms of the lease. The
case was decided on a claim of a breach of the implied obligation not to derogate from grant, but the reasoning of the court is equally
applicable to the covenant for quiet enjoyment.
Page 1066
parties/A Covenant for quiet enjoyment/4 Implied covenant
4 Implied covenant
HR A[6807]
An express covenant for quiet enjoyment excludes an implied covenant to the same effect1, but, in the absence of an
express covenant, the word 'demise' implies a covenant for quiet enjoyment2; and it is now settled that a like covenant is
implied from the mere contract of letting, in whatever form it is expressed3. Strictly speaking, where the lease is not
under seal the obligation will not be a covenant but a corresponding contractual obligation. But an action will not lie on
an agreement to grant a lease unless it is equivalent to an actual lease4. As with the express covenant the construction of
the implied covenant and its operation in any particular case may be affected by the location of the demised premises
and the actual and anticipated use of adjoining premises. The court will construe the covenant in the light of the
intention of the parties at the time5. A covenant for quiet enjoyment may be implied even in a licence6. An implied
covenant is restricted, like the usual express covenant, to the acts of the lessor and those claiming under him7. Like the
express covenant, the implied covenant protects the lessee against all disturbance by the lessor, whether lawful or not,
save under a right of entry8. But as against other persons it protects the lessee only against lawful disturbance. The
reason is that, as against other persons, the lessee will have his remedy in tort9.
HR A[6808]
1 Nokes's Case (1599) 4 Co Rep 80b; Merrill v Frame (1812) 4 Taunt 329; Stannard v Forbes (1837) 6 Ad & El 572; Line v Stephenson
(1838) 5 Bing NC 183; Clayton v Leech (1889) 41 Ch D 103 at 107, CA; Malzy v Eichholz [1916] 2 KB 308, CA; see Murphy v Bandon
Co-operative, Agricultural and Dairy Society [1909] 2 IR 510; Miller v Emcer Products Ltd [1956] Ch 304, [1956] 1 All ER 237, CA.
2 Burnett v Lynch (1826) 5 B & C 589 at 609; Iggulden v May (1804) 9 Ves 325 at 330; Mostyn v West Mostyn Coal and Iron Co (1876) 1
CPD 145.
3 Markham v Paget [1908] 1 Ch 697.
4 Drury v Macnamara (1855) 5 E & B 612.
6 Smith v Nottinghamshire County Council (1981) Times, 13 November, CA (student hostel).
7 Jones v Lavington [1903] 1 KB 253, discussed and considered in Markham v Paget [1908] 1 Ch 697, and see Miller v Emcer Products
Ltd [1956] Ch 304, [1956] 1 All ER 237. Prior to the decision in Jones v Lavington, it had been held that the covenant was an absolute one,
protecting the tenant in the event of disturbance under a paramount title (Nokes's Case (1599) 4 Co Rep 80b; Merrill v Frame (1812) 4 Taunt
329), and that a landlord was therefore bound to protect the lessee from distress by the superior landlord for rent due under the head lease
(Hancock v Caffyn (1832) 8 Bing 358 at 366), unless the sublessee had undertaken to pay such rent (Upton v Fergusson (1833) 3 Moo & S
88).
8 Andrews' Case (1591) Cro Eliz 214.

Page 1067
9 Hayes v Bickerstaff (1675) Vaugh 118; Wallis v Hands [1893] 2 Ch 75 at 83; see Granger v Collins (1840) 6 M & W 458.
HR A[6809]
The implied covenant for quiet enjoyment does not ensure the possession of the lessee during the whole term. It is
operative only during the continuation of the estate of the lessor by virtue of which he was able to give possession to the
lessee. If that estate ceases during the currency of the term, the liability on the covenant ceases too (save for breaches
which have already occurred). Consequently, where a lease was granted by a tenant for life which did not bind the
remainderman and the lessee was evicted after the death of the tenant for life, the lessee had no remedy on the implied
covenant1; and an underlessee for a term longer than the residue of the head term (granted to him by a mistake) has no
remedy if he is evicted at the expiration of the head term2.
HR A[6810]
1 Swan v Stransham and Searles (1566) 3 Dyer 257a; Adams v Gibney (1830) 6 Bing 656; Penfold v Abbott (1862) 32 LJQB 67. Under
the present system, whereby the legal fee simple is vested in the tenant for life with power to grant certain leases binding the remainderman,
this position is unlikely to arise.
2 Besley v Besley (1878) 9 Ch D 103; Schwarz v Locket (1889) 61 LT 719; Baynes & Co v Lloyd & Sons [1895] 1 QB 820; affd [1895] 2
QB 610, CA.
Page 1068
parties/A Covenant for quiet enjoyment/5 Lessor's obligation as to title
5 Lessor's obligation as to title
HR A[6811]-[6820]
The covenant for title is implied from the word 'demise'1 and from other words of letting2. This is not a covenant that
the lessor is entitled to grant the term he purports to grant3, but only that he is entitled to grant some term and that the
lessee shall have the quiet enjoyment to which he is entitled under the qualified covenant4. A covenant for quiet
enjoyment includes a covenant to put the lessee into possession and this is so whether there is a formal lease, an
agreement for a lease operating as a present demise, or an oral letting5. Certain covenants for title are now implied in
leases by virtue of statute6.
HR A[6821]
1 Burnett v Lynch (1826) 5 B & C 589 at 609; Line v Stephenson (1838) 5 Bing NC 183, Ex Ch; Miller v Emcer Products Ltd [1956] Ch
304, [1956] 1 All 237, CA.
2 Mostyn v West Mostyn Coal and Iron Co (1876) 1 CPD 145 at 152; see Hart v Windsor (1843) 12 M & W 68 at 85.
3 The implied covenant for title, whatever its nature, determines with the lessor's interest (Baynes & Co v Lloyd & Sons [1895] 2 QB 610
at 617, CA), hence it cannot be a covenant that the lessor is entitled to grant the lease for the full term; contra, Fraser v Skey (1773) 2 Chit
646.
4 Miller v Emcer Products Ltd [1956] Ch 304, [1956] 1 All ER 237, CA.
5 Miller v Emcer Products Ltd [1956] Ch 304, [1956] 1 All ER 237, CA, where the Court of Appeal distinguished Coe v Clay (1829) 5
Bing 440, and Jinks v Edwards (1856) 11 Exch 775, on the ground that the first was a case of an oral letting, in which no covenant for title is
implied and the second arose out of an agreement for a lease and both were decided at a time when there was conflict of authority as to
whether the covenant for quiet enjoyment should be implied in parol lettings and mere agreements. Wallis v Hands [1893] 2 Ch 75, in which
the principle of Coe v Clay (1829) 5 Bing 440 and Jinks v Edwards (1856) 11 Exch 775 was applied to the case of a formal lease, was
explained on the ground that the plaintiff had never entered and under the doctrine of interesse termini (which has since been abolished)
could not maintain an action on the implied covenant.
6 See the Law of Property (Miscellaneous Provisions) Act 1994.

Page 1069
parties/A Covenant for quiet enjoyment/6 Scope of the covenant: acts and omissions of the lessor
6 Scope of the covenant: acts and omissions of the lessor
HR A[6822]
The covenant, in its ordinary qualified form, extends to all acts of the lessor himself whether or not the acts are lawful,
and as against him it is still a breach even if, apart from the covenant, the lessor has the right to do the act complained
of. As against the lessor the court will not wholly have regard to the word 'lawful', or leave the lessee to his action in
trespass or nuisance1. But where the landlord enforces a judgment for possession which is subsequently reversed he
cannot be sued on the covenant for quiet enjoyment because at the moment of eviction he was acting lawfully2. In the
case of a sublease, if the superior landlord evicts the sublessee for non-payment of the headrent3, or for non-observance
by him of a covenant of which he received no notice from the sublessor4, the covenant for quiet enjoyment is not
breached; and the same was true where the landlord failed to pay land tax and distress for the arrears was levied on the
lessee5. But there will be a breach if the sublessor needlessly submits to judgment for possession in a case where there
is a defence to the claim, and where the sublessee is evicted in consequence6. The limitations (from the point of view of
the tenant) upon the efficacy of the qualified covenant were demonstrated in a case where X had granted leases of flats
with the benefit of rights of way over a driveway, and had then sold the reversion to Y who granted a lease to Z of an
area including the driveway. Z was prevented by the lessees of the flats from building on the driveway since their
easement would have been infringed. Z failed in an action against Y under a qualified covenant for quiet enjoyment
because the right asserted by the lessees of the flats was by way of title paramount to that of Y. The lessees were not
claiming under Y7. Where a landlord let the upper floors of a building to a lessee for use in connection with a
paper-making business, but was unaware at the date of grant that his own non-noxious use of the ground floor would
cause damage to the lessee (it not being common knowledge that such damage would result) he was not in breach of
covenant8.
HR A[6823]
1 Crosse v Young (1685) 2 Show 425 at 427; Andrews v Paradise (1724) 8 Mod Rep 318; Corus v ------ (1597) Cro Eliz 544; Lloyd v
Tomkies (1787) 1 Term Rep 671.
2 Hillgate House Ltd v Expert Clothing Service & Sales Ltd [1987] 1 EGLR 65.
3 Kelly v Rogers [1892] 1 QB 910 CA.
4 Spencer v Marriott (1823) 1 B & C 457; Dennett v Atherton (1872) LR 7 QB 316, Ex Ch.
5 Stanley v Hayes (1842) 3 QB 105.
6 Cohen v Tannar [1900] 2 QB 609, CA.
7 Celsteel v Alton House Holdings Ltd (No 2) [1987] 2 All ER 240, [1987] 1 WLR 291, CA.
Page 1070
8 Robinson v Kilvert (1899) 41 Ch D 88. See also Lyttleton Times Co Ltd v Warners Ltd [1907] AC 476, PC.
HR A[6824]
The interruption is frequently caused by a positive act, but it may be the result of an omission to act where that omission
constitutes a breach of duty. Where the landlord retained land adjoining the demised premises, and in breach of duty
neglected to keep in repair a culvert on the retained land, with the consequence that its disrepair led to the collapse of a
building on the demised premises, there was a breach of the covenant1. But in such a case the omissions must be of
such a character as would themselves amount or be liable to amount to wrongful acts2.
HR A[6825]
1 Booth v Thomas [1926] Ch 109; affd [1926] Ch 397, following observations made in Harrison, Ainslie & Co v Muncaster [1891] 2 QB
680, 689; Anderson v Oppenheimer (1880) 5 QBD 602; Cohen v Tannar [1900] 2 QB 609.
2 Penn v Gatenex Ltd [1958] 2 QB 210, [1958] 1 All ER 712, CA.

Page 1071
parties/A Covenant for quiet enjoyment/7 Acts of those claiming under the lessor
7 Acts of those claiming under the lessor
HR A[6826]
The covenant extends to the acts of persons claiming under the lessor or having authority from him to do them.
Examples of persons claiming under the lessor are: his authorised servants1; a person claiming under a settlement made
by the settlor under a power2; a remainderman under a settlement made by the lessor before the lease3; the lessor's
widow claiming under a fine levied before the lease4; a person claiming under a prior appointment by the lessor and
another5; a lessee claiming under a prior lease where the lessor was a party to the prior lease as trustee6. Examples of
cases in which a person has been held not to claim under the lessor are: a lessee under a prior lease to which a lessor of
the lease in question was not a party7; the remainderman where the lease is granted by the tenant for life8; the tenants of
adjoining premises granted by the present lessor's predecessor in title9. An assignee of the reversion, who becomes the
owner of adjoining land by an independent title, does not claim under the lessor as to such adjoining land so as to be
restricted in the use of it by the covenant10; and an assignee of the reversion who eg demolishes a building pursuant to
an order by a public authority cannot be said to do so claiming under the original lessor so as to make the latter liable
under the covenant for an act which he does not authorise11. If a public authority interferes with the enjoyment of the
tenant by exercising executive or statutory powers over which the lessor has no control and which he does not cause to
occur, there is no breach12. But where the landlord carries into effect statutory or similar requirements without
complying with all the formalities which the statute requires, there may be a breach13. Moreover, as regards persons
claiming under the lessor their acts will only constitute a breach of the covenant by the lessor if they are lawful acts,
since in the case of unlawful acts the lessee will have his remedy at common law, eg in the tort of trespass or nuisance,
and it does not matter that the words 'rightfully' or 'lawfully' do not appear in the covenant as the covenant only extends
to the act of someone claiming to do it as of right14. It follows that there is no breach if the interruption is caused by an
adjoining lessee whose lease, although granted by the same lessor, does not authorise the act causing the interruption15;
nor, in the case of a lease with a covenant for quiet enjoyment of sporting rights over a farm, if the farm tenant interferes
with the sporting rights in breach of the terms of his own lease16. However, if a lease does authorise the acts involved a
landlord may be liable for the conduct of one tenant which interferes with the quiet enjoyment of his land by another
tenant. For example, where a landlord let two adjoining fields to different tenants and gave to the tenant of the upper
field the right to drain across the lower field let to the other tenant, and the water discharged into the drain in the lower
field flooded that land, the landlord was held to be liable to the tenant of the lower field for a breach of the covenant for
quiet enjoyment in the lease of that tenant17. A council landlord was not liable in nuisance for failing to take steps to
prevent his tenants from harassing a neighbour who was not a tenant but a freeholder: the tenants' objectionable
behaviour did not involve the land let to them and the neighbour was not a tenant at all. The landlord had not authorised
the offensive behaviour18. A landlord is not liable in negligence or in nuisance towards an existing tenant because he
selects tenants for other property who commit nuisances19.
HR A[6827]
1 Seaman v Brownrigg (1591) 1 Leon 157.
2 Carpenter v Parker (1857) 3 CBNS 206.

Page 1072
3 Hurd v Fletcher (1778) 1 Doug KB 43; Evans v Vaughan (1825) 4 B & C 261.
4 Butler v Lady Swinnerton (1623) Cro Jac 656.
5 Calvert v Sebright (1852) 15 Beav 156.
6 Markham v Paget [1908] 1 Ch 697 at 711.
7 Re Griffiths, Griffiths v Rigg (1917) 61 Sol Jo 268.
8 Pease v Courtney [1904] 2 Ch 503.
9 Celsteel Ltd v Alton House Holdings Ltd (No 2) [1987] 2 All ER 240, [1987] 1 WLR 291.
10 Davis v Town Properties Investment Corpn Ltd [1903] 1 Ch 797, CA.
11 Williams v Gabriel [1906] 1 KB 155.
12 Crown Lands Comrs v Page [1960] 2 QB 274; Popular Catering Association v Romagnoli [1937] 1 All ER 167.
13 Trotter v Louth (1931) 47 TLR 335.
14 Tisdale v Essex (1616) Hob 34; Hayes v Bickerstaff (1675) Vaugh 118; notes to 2 Wms Saund (ed 1871) 524 at 515, note (3); Dudley v
Folliott (1790) 3 Term Rep 584; Anon (1774) Lofft 460; Matania v National Provincial Bank Ltd [1936] 2 All ER 633; and nuisance is not a
precondition to an action for breach of the covenant for quiet enjoyment: Southwark London Borough Council v Mills [1999] 1 WLR 409.
There may be liability in nuisance even where there is no claim under the covenant for quiet enjoyment: Southwark London Borough
Council v Long [2002] EWCA Civ 403 [2002] 15 EG 133 (CS).
15 Sanderson v Berwick-upon-Tweed Corpn (1884) 13 QBD 547; Matania v National Provincial Bank Ltd [1936] 2 All ER 633; Toff v
McDowell (1995) 69 P & CR 535. Mowan v Wandsworth London Borough Council [2001] EGCS 4 (local authority not liable to residential
tenant in nuisance or negligence for nuisance caused by its adjoining mentally disturbed tenant.
16 Jeffryes v Evans (1865) 19 CBNS 246.
17 Sanderson v Berwick-upon-Tweed Corpn, as explained in Southwark London Borough Council v Mills [1999] 4 All ER 449, per Lord
Hoffmann at 457; Mowan v Wandsworth London Borough Council [2001] EGCS 4 (see fn 15).
18 Hussain v Lancaster City Council (1998) 77 P & CR 89, [1998] EGCS 867.
19 Smith v Scott [1973] Ch 314, [1972] 3 All ER 645; O'Leary v Islington London Borough Council (1983) 9 HLR 81.
Page 1073
parties/A Covenant for quiet enjoyment/8 Acts of others
8 Acts of others
HR A[6828]
(1) A lessor is not liable under the covenant for quiet enjoyment for the acts of strangers even though
they purport to act under the lessor unless the covenant is sufficiently widely worded to embrace them, or
it names particular individuals or identifies a person by reference to a particular interest in property. In
such a case, which is unusual, the lessor will be liable for their acts whether lawful or unlawful1. In one
case an appropriately worded covenant was held to make sub-underlessors liable to their
sub-underlessees for the acts of their immediate landlord who had erected scaffolding2.
(2) A lessor is liable under the covenant to his lessee for a breach of the covenant in respect of a
nuisance committed by another of his lessees if he actively participates in the acts or authorises them. He
will not be liable merely because he knows of the acts and takes no steps to prevent them3.
(3) In particular a lessor is not liable under the covenant to one tenant for the ordinary use of the
demised premises by another tenant where the harm caused by those acts is due to the defective or
inadequate state of the premises. In the leading case on this subject flats in a block owned by a landlord
were let to different tenants. There was no adequate soundproofing in the block with the result that
throughout it each tenant was disturbed by the ordinary living activities of his neighbour such as the
flushing of a toilet. It was held that the lessor was not liable to the tenants under the covenant for quiet
enjoyment. One reason was that if there had been a liability on the lessor in these circumstances the
effect would have been to have imposed on him a liability to improve the premises which was not
contained in the lease. Another reason is that the covenant must be construed in accordance with the
intention of the parties and it cannot have been the intention of the parties when a lease was granted that
the lessor should immediately be in breach of covenant unless he improved the premises. A further
justification for the above principle is that the covenant relates to the quiet enjoyment of the premises as
demised and not to some different and improved premises4.
HR A[6829]
1 Foster v Mapes (1590) Cro Eliz 212 at 213; Nash v Palmer (1816) 5 M & S 374 at 380; Fowle v Welsh (1822) 1 B & C 29 and eg if the
covenant extends to persons 'claiming or pretending to claim' as in Chaplain v Southgate (1717) 10 Mod Rep 383; Perry v Edwards (1721) 1
Stra 400.
2 Queensway Marketing Ltd v Associated Restaurants Ltd [1988] 2 EGLR 49, in which the earlier authorities were discussed.
3 Smith v Scott [1973] Ch 314, [1972] 3 All ER 645; Malzy v Eicholz [1916] 2 KB 308; Matania v National Provincial Bank [1936] 2 All
ER 633; Sampson v Hodson-Pressinger [1981] 3 All ER 710; Toff v McDowell (1995) 69 P & CR 535; Mowan v Wandsworth London
Borough Council [2001] EGCS 4.
4 Southwark London Borough Council v Tanner [2001] 1 ACI, sub nom Southwark London Borough Council v Mills [1999] 4 All ER
449, HL; Southwark London Borough Council v Long [2002] EWCA Civ 403 [2002] 15 EG 133 (CS).
Page 1074
parties/A Covenant for quiet enjoyment/9 Breach of covenant
9 Breach of covenant
HR A[6830]-[6840]
The covenant for quiet enjoyment operates according to its terms to secure the lessee, not merely in the possession, but
also in the enjoyment of the premises for all usual purposes; and where the ordinary and lawful enjoyment of the
demised premises is substantially interfered with by the acts or omission1 of the lessor or those lawfully claiming under
him, the covenant is broken. Formerly, the covenant was described as a covenant to secure title and possession2. But the
law now is that a breach may occur although neither the title to nor the possession of the land is affected3. Whether this
interference has taken place is, in each case, a question of fact4. But the mere likelihood of interruption is not enough.
Hence, it is no breach if a judgment is obtained subjecting land to a right in common, but there is no entry on, or actual
disturbance of, the lessee5. Nor is an action for waste a disturbance6. Requisition of premises by the Crown under
emergency legislation is not a breach even where the lease is a Crown lease7. The covenant is most commonly breached
by positive acts of interference, but it may also be breached by omissions to act, as explained below. Where a lease
imposes repairing obligations on the landlord and it carries out necessary work of repair in performance of those
obligations causing disturbance to the tenant, the landlord is not in breach of its covenant for quiet enjoyment for failing
to take all possible, rather than all reasonable, precautions8.
HR A[6841]
1 Booth v Thomas [1926] Ch 397, CA (where the landlord omitted to repair a culvert in adjoining land, with the result that the escape of
water damaged some of the demised buildings); Cohen v Tannar [1900] 2 QB 609; Lavender v Betts [1942] 2 All ER 72 (doors and windows
removed by landlord); Owen v Gadd [1956] 2 QB 99, [1956] 2 All ER 28, CA (erection of scaffolding in front of windows and doors of
lock-up shop); cf Penn v Gatenex Co Ltd [1958] 2 QB 210, [1958] 1 All ER 712, CA (failure to supply power to a refrigerator demised as a
fixture not a breach of the covenant for quiet enjoyment); Lawson v Hartley-Brown (1995) 71 P & CR 242 (erection of scaffolding and
construction of two additional storeys on top of single storey retail unit). It was held in the Irish case of Gerard Bowes v Dublin Corpn
[1965] IR 476 that there was a duty under an implied covenant for quiet enjoyment to take reasonable steps to prevent any part of the
external walls of the building comprising the demised premises from becoming a source of danger to the demised premises.
2 Dennett v Atherton (1872) LR 7 QB 316 at 326.
3 Southwark London Borough Council v Mills [1999] 4 All ER 449; Sanderson v Berwick-upon-Tweed Corpn (1884) 13 QBD 547 at 551,
CA; Robinson v Kilvert (1889) 41 Ch D 88 at 96; Harrison, Ainslie & Co v Muncaster [1891] 2 QB 680 at 685, CA; Manchester, Sheffield
and Lincolnshire Rly Co v Anderson [1898] 2 Ch 394, CA; Williams v Gabriel [1906] 1 KB 155.
4 Sanderson v Berwick-upon-Tweed Corpn (1884) 13 QBD 547; Allport v Securities Corpn (1895) 72 LT 533.
5 Howard v Maitland (1883) 11 QBD 695, CA.
6 Morgan v Hunt (1690) 2 Vent 213.
7 Crown Lands Comrs v Page [1960] 2 QB 274, [1960] 2 All ER 726.

Page 1075
8 Goldmile Properties Ltd v Lechouritis [2003] EWCA Civ 49, [2003] 2 P & CR 1.
Page 1076
parties/A Covenant for quiet enjoyment/10 Acts involving interference
10 Acts involving interference
HR A[6842]
To constitute a breach of the covenant, there must be some interference with the enjoyment of the demised premises. At
one time it was supposed that only a limited class of acts could constitute a breach of the covenant. It was suggested
that, hearkening back to the origins of the covenant, there had to be an interference with title or possession before there
could be a breach1. A somewhat wider but still limited rule came to find favour, namely that there had to be a direct and
physical interference with the demised premises before there could be a breach2. Events such as an eviction by the
landlord or the incursion of water were considered to be a direct and physical interference. These limitations have now
been held not to be correct in law. The limitation to a direct and physical interference may itself have been founded on
the dichotomy once drawn in the law of nuisance between acts which caused material injury to the property and acts
which were productive of sensible personal discomfort3. This dichotomy has now been largely replaced by the principle
that both forms of harm are injuries to property. The correct statement of the current law is that the covenant may be
broken by any acts of the landlord or someone claiming under him which substantially interferes with the title to or
possession of the demised premises or the ordinary and lawful enjoyment of those premises by the tenant. The
interference need not be direct or physical. In a number of the older authorities harm caused by excessive noise was held
not to be a breach of the covenant because it was not a direct and physical injury. Those authorities are no longer good
law and the making of an excessive amount of noise may in principle constitute a breach of the covenant4. The
covenant extends to any conduct of the landlord or his agents which interferes with the tenant's freedom of action as a
tenant, and to any conduct calculated to interfere with the peace or comfort of the tenant or his family5. Threats by letter
and by shouting and banging on the door amounted to a breach as tending to deprive the tenant of the full benefit of the
right to possession where, by reason of a course of intimidation, the landlord sought to annul the demise6. There is
generally no basis for implying a term into the tenancy agreement that the landlord will enforce a term in the tenancy of
another of his tenants not to cause nuisance to neighbours7.
HR A[6843]
1 Jenkins v Jackson (1888) 40 Ch D 71, 74; Hudson v Cripps [1896] 1 Ch 265.
2 See eg Browne v Flower [1911] 1 Ch 219 at 228), per Parker J for the wider approach.
3 St Helen's Smelting Co v Tipping (1865) 11 HL Cas 642.
5 McCall v Abelesz [1976] QB 585, [1976] 1 All ER 727 at 730; Sampson v Floyd [1989] 2 EGLR 49, [1989] 33 EG 41, CA.
6 Kenny v Preen [1963] 1 QB 499, [1962] 3 All ER 814.
7 O'Leary v Islington London Borough Council (1983) 9 HLR 81.

Page 1077
HR A[6844]
Many breaches of the covenant will occur off the demised premises and the acts may be a breach if they interfere with
the ordinary and lawful enjoyment of the premises. Examples are where a lower stratum of minerals has been demised,
and the lessor works the upper stratum so as to cause the roof of the lower stratum to fall in and the mine to be
flooded1; or where, by a heating apparatus off the premises, the premises are overheated so as to become unsuitable for
the use contemplated when the lease was granted2. Where a tenant has been deprived of possession by a fraudulent trick
as opposed to force it is still an open question whether there has been a breach of the covenant for quiet enjoyment3.
HR A[6845]
1 Shaw v Stenton (1858) 2 H & N 858; Re Griffiths, Griffiths v Riggs (1917) 61 Sol Jo 268.
2 Robinson v Kilvert (1889) 41 Ch D 88, CA.
3 See Mafo v Adams [1970] 1 QB 548 at 557, per Sachs LJ. The plaintiff there succeeded under the tort of deceit.
Page 1078
parties/A Covenant for quiet enjoyment/11 Breaches caused by omissions to act
11 Breaches caused by omissions to act
HR A[6846]
If the landlord is under some other positive obligation to the tenant (eg to repair) and fails to perform it, the omission to
do so may result in a breach of the covenant for quiet enjoyment. A failure by the landlord to keep in repair a culvert on
adjoining land owned by him (which he was found to be under a duty to the tenant to keep in repair) constituted a
breach1. But where a landlord had granted his tenant an easement to use a drain running through the landlord's retained
property, there was held to be no duty on the landlord, as the owner of the servient tenement over which the easement
was exercised, to keep the drain in repair and no liability to the tenant when disrepair of the drain resulted in damage to
the demised premises 2. Yet where a landlord had granted a right of way to his tenant he was in breach of his covenant
for quiet enjoyment when he failed to prevent other tenants from obstructing the right of way3.
HR A[6847]
1 Booth v Thomas [1926] Ch 397.
2 Duke of Westminster v Guild [1985] QB 688; Hafton Properties Ltd v Camp [1995] 1 EGLR 67.
3 Hilton v James Smith & Sons (Norwood) [1979] 2 EGLR 44. The correctness of this decision may be doubted in the light of Duke of
Westminster v Guild [1985] QB 688.
Page 1079
parties/A Covenant for quiet enjoyment/12 Acts not amounting to breach
12 Acts not amounting to breach
HR A[6848]
The lessee cannot, however, by means of the covenant for quiet enjoyment, obtain over adjoining property an easement
or right which would not otherwise be included in the demise. The covenant does not enlarge what was previously
granted, but gives an additional remedy if the lessee cannot get or is deprived of that which previously has been
professed to be granted1. Consequently, when a successor in title to the reversion on a lease acquired adjoining
premises not held by the landlord at the grant of the lease that successor in title was not in breach of the covenant when
he erected a building on the adjoining premises which adversely affected the demised premises2. The principle is said to
be that the covenant must be construed by reference to its subject matter, and what amounts to an interference with land
which enjoys an easement over adjoining property may not amount to an interference with the enjoyment of land which
does not3. The covenant for quiet enjoyment does not prevent the ordinary user of adjoining premises of the lessor
unless this is detrimental to the purpose for which the demised premises were let4. The fact that such user of adjoining
premises increases the expense of the user of the demised premises does not constitute a breach5. Where a lease of
shooting and sporting rights over a farm contained a covenant for quiet enjoyment, this did not prevent the tenant of the
farm from using the land in the ordinary way, or from destroying furze and underwood in the ordinary course6. Nor, in
the case of a lease of corporate property, does the covenant prevent the corporation from exercising a statutory right,
such as the establishment of a market7. Where action is taken by a landlord in response to a statutory notice (in this case
requiring the erection of a wall for fire safety reasons under s 352 of the Housing Act 1985), the fact that the wall
prevents the tenant from enjoying an easement granted by the lease does not expose the landlord to a claim for breach of
its contractual obligations under the lease8.
HR A[6849]
1 Leech v Schweder (1874) 9 Ch App 463; Potts v Smith (1868) LR 6 Eq 311 at 317; Davis v Town Properties Investment Corpn Ltd
[1903] 1 Ch 797, CA.
2 Davis v Town Properties Investment Corpn Ltd [1903] 1 Ch 797, CA, disproving Tebb v Cave [1900] 1 Ch 642, in which it had been
held that building by the lessor on adjoining premises so as to deprive the demised premises of a current of air and cause the chimneys to
smoke was a breach of the covenant for quiet enjoyment.
3 Southwark London Borough Council v Mills [1999] 4 All ER 449, per Lord Millett at 468.
4 Robinson v Kilvert (1889) 41 Ch D 88, CA; Aldin v Latimer Clark, Muirhead & Co [1894] 2 Ch 437 at 444; Browne v Flower [1911] 1
Ch 219.
5 O'Cedar Ltd v Slough Trading Co [1927] 2 KB 123.
6 Jeffryes v Evans (1865) 19 CBNS 246; and see Newton v Wilmot (1841) 8 M & W 711.
7 Spurling v Bantoft [1891] 2 QB 384.

Page 1080
8 Elizabeth Jones v Christos Emmanuel Cleanthi [2006] EWCA Civ 1712. This was not a case that considered, specifically, an covenant
for quiet enjoyment, but the principle would appear to be applicable to such a covenant.
HR A[6850]-[6860]
Moreover, when the disturbance is not due to some act of direct interference with the premises, but to an act done off
the premises, there is no breach of covenant unless it was either foreseen in fact, or ought by reasonable care to have
been foreseen, that the interruption would follow as the consequence of the act. Thus, where a mine is demised, and an
adjoining mine is held under the same lessor, the fact that the working of the demised mine is disturbed by an
unforeseen rush of water into the adjoining mine does not constitute a breach of the covenant, although if the damage is
a foreseeable consequence of the use by the landlord of the land he retains, the opposite is the case1. A lessee of
sporting rights whose landlord subsequently sold part of the land for the construction of a house and loose boxes to be
used on training stables for race horses, which use interfered with the sporting rights, was held to have infringed the
right2, while a landowner who leased the sporting rights over certain land and later felled the timber on it, also
interfering with the sporting rights, was held not to have been in breach3. The difference between the latter two cases
appears to be that in the former the change of use of the landlord was dramatic and beyond the contemplation of the
parties at the time of the grant; whereas in the latter the felling of the trees was within their contemplation as part of
normal farming practice. The difference illustrates the principle that the covenant is to be construed in accordance with
the surrounding circumstances and the intention of the parties, objectively determined, at the grant of the lease4.
HR A[6861]
1 Harrison, Ainslie & Co v Muncaster [1891] 2 QB 680 at 689, CA; contrast Shaw v Stenton (1858) 2 H & N 858.
2 Peech v Best [1931] 1 KB 1.
3 Dick v Norton (1916) 85 LJ Ch 623.
4 Southwark London Borough Council v Mills [1999] 4 All ER 449. The same approach was adopted in Goldmile Properties Ltd v
Lechouritis [2003] EWCA Civ 49, [2003] 2 P & CR 1, where a landlord was not held to have been in breach of the covenant for quiet
enjoyment where it carried out necessary repairs pursuant to its repairing covenant, taking all reasonable (but not all possible) precautions
while doing so but nonetheless causing disruption to the tenant.
HR A[6862]
Disturbance of enjoyment which is merely temporary, and which does not interfere with the title or possession of the
lessee, may not be a breach of covenant1. Even if it does constitute a breach an injunction will not be granted where
there is no likelihood of repetition, although the lessee will have a remedy in damages2.
HR A[6863]
1 Manchester, Sheffield and Lincolnshire Rly Co v Anderson [1898] 2 Ch 394 at 401, CA; Phelps v City of London Corpn [1916] 2 Ch
255.
Page 1081
2 Leader v Moody (1875) LR 20 Eq 145.
HR A[6864]
The covenant is prospective in its nature1. The act or omission which causes the disturbance of enjoyment must be
subsequent to the granting of the lease; though if it is the act or omission of a person claiming under the lessor the title
or authority under which he claims to do the act may have been created or given before the lease2. Where the lessor
acquires adjoining land after the lease, he is not restricted by the covenant for quiet enjoyment in the user of this land
(although he may be liable to a claim that he has derogated from grant)3.
HR A[6865]
1 Southwark London Borough Council v Mills [1999] 4 All ER 449, per Lord Hoffmann at 455. See Norton on Deeds (2nd edn, 1928), pp
612-613.
2 Anderson v Oppenheimer (1880) 5 QBD 602, CA; Markham v Paget [1908] 1 Ch 697; but see Blatchford v Plymouth Corpn (1837) 3
Bing NC 691. Contrast the situation in Celsteel v Alton House Holdings Ltd (No 2) [1987] 2 All ER 240, [1987] 1 WLR 291.
3 Davis v Town Properties Investment Corpn Ltd [1903] 1 Ch 797, CA.

Page 1082
parties/A Covenant for quiet enjoyment/13 Action for breach before entry
13 Action for breach before entry
HR A[6866]
No action can be brought on the covenant for quiet enjoyment whether express or implied until the lessee is entitled to
possession1, but actual entry is not now necessary before the lessee can sue2. Before the abolition of the doctrine of
interesse termini it had been held that a tenant could not sue on the implied covenant for quiet enjoyment before he had
entered3. But the decision on this point was effectively overruled by the Law of Property Act 1925, s 149 which
abolished that doctrine and enacted that a term of years takes effect at law and in equity from the date fixed for
commencement of the term without actual entry. A covenant for quiet enjoyment, whether express or implied, can
therefore now be asserted by the tenant before actual entry. But the tenant still cannot sue in respect of an event which
occurred before the covenant was given4.
HR A[6867]
1 Ireland v Bircham (1835) 2 Bing NC 90.
2 Miller v Emcer Products Ltd [1956] Ch 304, [1956] 1 All ER 237, CA, distinguishing Wallis v Hands [1893] 2 Ch 75, contra.
3 Wallis v Hands [1893] 2 Ch 75.
4 Southwark London Borough Council v Mills [1999] 4 All ER 449, per Lord Hoffmann at 455; Celsteel v Alton House Holdings Ltd (No
2) [1987] 2 All ER 240, [1987] 1 WLR 291.
Page 1083
parties/A Covenant for quiet enjoyment/14 Limitations on covenant
14 Limitations on covenant
HR A[6868]
It will be apparent from the proceeding account of the covenant that there are a number of limitations on the generality
of its operation. The most important are as follows:
(1) In every case the covenant must be construed by reference to the surrounding circumstances at the
date of the grant of the lease1.
(2) One of the most important of the surrounding circumstances is likely to be the state of the demised
premises at the date of the grant. The covenant cannot be used to increase the repairing obligations of the
landlord or to impose on him a duty to improve the premises2.
(3) The covenant must be considered separately from liability in tort in the law of nuisance. There may
be a breach of the covenant by the landlord even though the conduct of the landlord does not amount to a
nuisance in tort3.
(4) There may be an overlap between liability under the covenant for quiet enjoyment and liability
under the implied obligation against deterioration from grant4.
(5) The covenant for quiet enjoyment should not be enlarged in its ambit to create new contractual
obligations as to the standard and amenities of property let, eg its fitness for human habitation. Such
matters are best left to the legislature5.
(6) The covenant should not be used to alter the established principles of the law of easements, for
instance the rule that the servient owner is not obliged to keep in repair the subject matter of the
easement6.
HR A[6869]
3 This is so whether or not the acts complained of are those of the landlord or of some person claiming under the landlord: Southwark
London Borough Council v Mills [1999] 4 All ER 449. The reverse may also be true. There may be liability in nuisance even though the
landlord is not liable for breach of the covenant for quiet enjoyment: Southwark London Borough Council v Long [2002] EWCA Civ 403
[2002] 15 EG 133 (CS).
6 Duke of Westminster v Guild [1985] QB 688, [1984] 3 All ER 144.

Page 1084
parties/A Covenant for quiet enjoyment/15 Remedies
15 Remedies
(a) Injunction
HR A[6869.1]
The primary remedy for a breach or threatened breach of contract, especially where there is a continuing relationship
such as that of landlord and tenant or covenantor and covenantee in the context of a restrictive covenant affecting
freehold land, is the grant of an injunction to restrain the wrongdoing. This is equally the case where the contractual
provision in question is a covenant for quiet enjoyment. The wrongdoer cannot "buy" the right to continue his
wrongdoing by insisting on an award of damages instead of submitting to an injunction.1 The burden does not lie on the
injured party to establish why damages should not be ordered, but on the wrongdoer to prove why an injunction should
not be granted. An injunction is all the more likely to be granted where the innocent party has protested before the
breach occurred.2 However, the grant of an injunction, being an equitable remedy, is discretionary and in a number of
circumstances the court may make an award of damages instead. If the following four features are present the court
might be dissuaded from granting an injunction: (1) where the injury is small; (2) where the claimant's loss is capable of
being estimated in money; (3) where the injury is capable of being compensated by a small payment; and (4) where it
would be oppressive to the wrongdoer to grant an injunction.3 An injunction may be refused where the wrongdoer did
not act in blatant and calculated disregard of the claimant's rights and did not appreciate the effect of the covenant.4
Different views have been expressed about the relevance of the claimant failing to seek an interim injunction.5 A
claimant may also be denied an injunction where he had indicated in advance by seeking a payment that the wrong
could be made good by an award of damages;6 or where his interest in the property in question was purely financial.7
HR A[6869.2]
1 This topic is fully treated in specialist textbooks on the subject and what follows is only the briefest of summaries.
2 Mortimer v Bailey [2005] 1 EGLR 75 and Regan v Paul Properties DPF No. 1 Ltd [2006] 3 EGLR 94.
3 Shelfer v City of London Electric Lighting Company [1895] 1 Ch 287.
4 Jaggard v Sawyer [1995] 1 WLR 269.
5 In Jaggard v Sawyer (above) it counted against the claimant; whereas in Mortimer v Bailey [2005] 1 EGLR 75 (involving the breach of
a restrictive covenant) the Court of Appeal doubted whether a person who had made his position clear before the breach occurred should be
disadvantaged by failing to seek interim relief.
6 Gafford v Graham [1999] 3 EGLR 75.
7 Midtown Ltd v City of London Real Property Co Ltd [2005] 1 EGLR 65 (among other reasons).
Page 1085
(b) Damages and the measure of damages
HR A[6870]
The damages in an action for breach of the covenant for quiet enjoyment are assessed in accordance with ordinary
contractual principles (including the ordinary principles as to foreseeability). Thus, the tenant is entitled to be put in the
same position as he would have been in if the contact had been performed and the breach had not occurred1. Ordinarily,
the damages will be assessed as at the date when the breach occurs2. The damage will normally be measured by the loss
of convenience resulting from the breach. If the lessee is evicted owing to the invalidity of the lease, he can recover the
value of the term, and the pecuniary loss he has suffered by the action to evict him; that is, the cost of defending the
action, and any sum recovered against him in the action as mesne profits3. If the lessee takes a substituted lease from
the lawful owner, the difference in value between the invalid lease and the substituted lease will be the measure of
damages4. If he has been compelled to leave the demised premises, the tenant can recover as special damages the
expense of removal, since this is loss which naturally flows from the breach of covenant5. Damages have also been
awarded in the case of the unlawful revocation of a licence6. Most cases involving a breach of the covenant for quiet
enjoyment involve residential premises, and often unlawful eviction is alleged. In such cases there is a statutory remedy
given by the Housing Act 1988, ss 27 and 28 which create a statutory tort and a statutory measure of damages7. But in a
commercial context substantial damages may also be awarded including, where appropriate, loss of profit, loss of
opportunity to trade as well as special damages8.
Where an injunction is sought but refused on discretionary grounds the Court has jurisdiction to make an award in
damages instead under section 50 of the Supreme Court Act 1981 (replacing what used to be referred to as Lord Cairns'
Act). Damages in this case are not awarded on a strictly contractually-based nor statutorily-based assessment as they are
quasi-equitable in nature, being awarded instead of the equitable remedy of an injunction. Three normal bases for
assessment have been identified: (1) traditional compensatory damages for past present and future losses as a result of
the breach but not for the loss of the covenant; (2) negotiating damages, i.e. what reasonable people dealing at arms'
length would agree in negotiation for a release of the covenant to the extent of permitting the past, present and future
breaches; and (3) an account, based on the profit that the wrongdoer has made and is likely to make as a result of the
breach9.
HR A[6871]
1 This is the general principle which underlies the assessment of damages: Robinson v Harman (1848) 1 Exch 850. See Mira v Aylmer
Square Investments (1990) 22 HLR 182, [1990] 1 EGLR 45, in which Dodd Properties (Kent) Ltd v Canterbury City Council [1980] 1 All
ER 928, [1980] 1 WLR 433 and Calabar Properties Ltd v Stitcher [1983] 3 All ER 759, [1984] 1 WLR 287 were followed and the first rule
in Hadley v Baxendale (1854) 9 Exch 341 was applied to enable the tenants to recover as damages the rents which they would have made
from subletting their flats but for the breach of covenant by their landlord.
2 In Conodate Investments Ltd v Bentley Quarry Engineering Co Ltd (1970) 216 Estates Gazette 1407 the defendants had conveyed to the
plaintiffs 'as beneficial owners' certain land nearly half of which had previously been acquired by a third party who in 1967 asserted his
rights and claimed possession. It was held that the covenant as to title was breached in 1962 when the conveyance was made, but that the
covenant for quiet enjoyment was a continuing one which was breached when the third party asserted its rights. But there may be
circumstances in which it is appropriate, when awarding damages instead of an injunction, to depart from the norm by selecting a different
valuation date or taking into account a specific post-valuation date event: Lunn Poly v Liverpool & Lancashire Properties Ltd [2007]
L.&T.R. 73 at para 29.
3 Williams v Burrell (1845) 1 CB 402; Rolph v Crouch (1867) LR 3 Exch 44; Sutton v Baillie (1891) 65 LT 528.
Page 1086
4 Lock v Furze (1866) LR 1 CP 441, Ex Ch, although the damages may be only nominal: Jones v Hawkins (1886) 3 TLR 59; Child v
Stenning (1879) 11 Ch D 82.
5 Grosvenor Hotel Co v Hamilton [1894] 2 QB 836, CA (where, however, the damages were given for the tort caused by nuisance, the
express covenant for quiet enjoyment not applying); Perera v Vandiyar [1953] 1 All ER 1109, [1953] 1 WLR 672, CA.
6 Tanner v Tanner [1975] 3 All ER 776, [1975] 1 WLR 1346. £2,000 was awarded but the facts of the case were rather special. Lord
Denning MR reached this figure as being what he considered a reasonable sum for the loss of the licence. Brightman J reached the figure on
the footing that it was an amount which the licensee might reasonably have requested, and which the licensor might reasonably have been
expected to pay, for a surrender of the licence.
7 HA 1988, ss 27 and 28. See HR C[2165]ff.
8 Stewart (Ricci) v Scottish Widows & Life Assurance Society plc [2005] EWHC 1831 (QB), [2005] All ER (D) 247 (Jun) (where breaches
of the covenant for quiet enjoyment and derogation from grant were admitted and the case focused on the assessment of quantum, among
other issues). The decision was reversed on appeal, but on other grounds and the judge's judgment on this issue was not considered in the
Court of Appeal: [2006] EWCA Civ 999.
9 Lunn Poly Ltd Liverpool & Lancashire Properties Ltd [2007] L.&T.R. 6
HR A[6872]-[6880]
Since an action for breach of a covenant for quiet enjoyment is an action for breach of contract, no damages can be
recovered for injured feelings or mental distress. This is the basic principle governing damages for breach of contract,
and breaches of a covenant for quiet enjoyment in a lease do not fall within the exception which applies to contracts
where the object of the contract is to provide peace of mind or pleasure1. However, even where the contract is not of
that exceptional kind it is possible that damages for mental suffering may be awarded where the mental suffering is a
direct consequence of physical inconvenience and discomfort caused by the breach2.
HR A[6881]
1 The basic principle that damages for breach of contract cannot include any element for injured feelings or mental distress was
established in Addis v Gramophone Co Ltd [1909] AC 488. The exception relating to contracts where the object is to provide pleasure,
relaxation, peace of mind or freedom from molestation derives from more recent authorities such as Jarvis v Swans Tours Ltd [1973] QB
233, [1973] 1 All ER 71; Jackson v Horizon Holidays Ltd [1975] 3 All ER 92, [1975] 1 WLR 1468, CA (contracts to provide a holiday) In
Branchett v Beaney [1992] 3 All ER 910 the Court of Appeal, in judgments stated to be obiter on the point, said that contracts for quiet
enjoyment fell within the basic principle and not within the exception, so that damages for injured feelings and mental distress were not
recoverable. Previous decisions of the same court to this effect were followed: see Perera v Vandiyar [1953] 1 All ER 1109, [1953] 1 WLR
672; Kenny v Preen [1963] 1 QB 499, [1962] 3 All ER 814. The observations to the contrary of Lord Denning MR in McCall v Abelesz
[1976] QB 585, [1976] 1 All ER 727, also obiter, were not followed. The decision of the Court of Appeal in Sampson v Floyd [1989] 2
EGLR 49, upholding an award of damages for breach of a covenant for quiet enjoyment which included an element for mental distress, was
said to have been made per incuriam.
2 Watts v Morrow [1991] 4 All ER 937, [1991] 1 WLR 1421, CA; Chiodi's Personal Representatives v De Marney (1988) 21 HLR 6.
Page 1087
parties/A Covenant for quiet enjoyment/16 Exemplary and aggravated damages
16 Exemplary and aggravated damages
HR A[6882]
Exemplary damages cannot be awarded for a breach of contract, and hence for a breach of a covenant for quiet
enjoyment. However a not dissimilar result is achieved by the increasing tendency of the courts to assess the damages
for a breach of contract on the principle of the sum of money which would have been arrived at between the parties by
agreement for a voluntary release of the contractual restriction1. Thus, if there has been a breach of the covenant for
quiet enjoyment, for instance by the erection of scaffolding by the landlord outside the demised premises, there seems
no reason in principle why the damages should not be assessed on the basis of what the landlord and the tenant would
have agreed in a fair negotiation for the tenant allowing the landlord to erect the scaffolding. Moreover, in many cases
conduct which constitutes a breach of a covenant for quiet enjoyment will also constitute a tort such as trespass,
nuisance or assault, and in these cases aggravated damages in tort can be recovered for injured feelings and mental
distress, as can exemplary damages in an appropriate case2. It is important in this context to distinguish between
aggravated damages, which are compensatory in nature and which compensate the plaintiff for injury to his proper
feelings of dignity and pride, and exemplary damages, which are awarded in order to punish the defendant and to ensure
that the landlord does not profit from his tort3. Examples of such behaviour are:
(a) removal of doors and windows by landlord with a view to forcing tenant to quit4;
(b) throwing the tenant's possessions into the street and evicting or threatening and assaulting the
tenant5;
(c) disconnection of electricity supply and interference with water supply and toilet and washing
facilities6;
(d) bulldozing part of the tenant's garden in order to make an access to the landlord's adjoining
property7;
(e) noise dust vibration fumes and interruption and discoloration of light over an extended period
during redevelopment of the unoccupied part of a building another part of which was let to the plaintiff.8
HR A[6883]
1 Jaggard v Sawyer [1995] 2 All ER 189, [1995] 1 WLR 269, CA; Wrotham Park Estate Co v Parkside Homes Ltd [1974] 2 All ER 321,
[1974] 1 WLR 798; Stoke-on-Trent City Council v W & J Wass Ltd [1988] 3 All ER 394 at 410, per Nourse LJ.
2 Branchett v Beaney [1992] 3 All ER 910, CA.
3 Rookes v Barnard [1964] AC 1129, [1964] 1 All ER 367; Cassell & Co Ltd v Broome [1972] AC 1027, [1972] 1 All ER 801 HL;
Ramdath v Daley and Daley (1993) 25 HLR 273, [1993] 1 EGLR 82.
4 Lavender v Betts [1942] 2 All ER 72.
5 Drane v Evangelou [1978] 2 All ER 437, [1978] 1 WLR 455 (£1,000 exemplary damages); McMillan v Singh (1984) 14 HLR 1; Tagro v
Page 1088
Cafane [1991] 2 All ER 235, [1991] 1 EGLR 279 (£31,000 under the Housing Act 1988, s 28); Jones v Miah [1992] 2 EGLR 50 (£11,000)
and Mason v Nwokorie [1994] 1 EGLR 59 (£4,500) also under the Housing Act 1988; Ramdath v Daley and Daley [1993] 1 EGLR 82.
6 Guppy's (Bridport) Ltd v Brookling (1983) 14 HLR 1, [1984] 1 EGLR 29 (exemplary damages for nuisance; £1,000 awarded to each of
the tenants). Amrani v Oniah [1984] CLY 1974.
7 Branchett v Beaney [1992] 3 All ER 910.
8 Meadows v Home Properties [1993] EGCS 50.

Page 1089
parties/B Derogation from grant
B
Page 1090
parties/B Derogation from grant/1 Introduction
1 Introduction
HR A[6884]
There is maxim of general application that a grantor may not derogate from his grant by doing anything which is
inconsistent with his grant1. Although it is usually invoked against a landlord, it may apply equally to a tenant who so
uses the demised premises as to interfere with the use by the landlord of the land he retains2. There is a substantial
overlap between the obligation not to derogate from grant and the covenant for quiet enjoyment. Indeed it has been said
that there is little, if any, difference between the scope of the two covenants3. The difference may be illustrated by an
example. Suppose that a person owns two adjoining properties, A and B. He lets property A to a tenant. Subsequently
he sells property B. The purchaser of property B is not liable to the tenant on the covenant for quiet enjoyment since he
is not and never has been, the landlord of the tenant. However, he is liable to the tenant on the obligation not to derogate
from grant. The reason is that the former owner of property B became bound not to derogate from his grant to the tenant
in respect of property B when he granted a lease of property A to the tenant, and the obligation not to derogate is one
which runs with the land. Whereas the covenant for quiet enjoyment focuses on the use by the tenant of the demised
premises, the obligation not to derogate from grant focuses on the use which the landlord makes of adjoining premises
retained by him. The doctrine, which applies to all grants not merely to leases, embodies the principle that a lessor may
not by his voluntary acts prejudice any rights which he has created. Having given a thing with one hand, he is not to
take away the means of enjoying it with the other4.
HR A[6885]
1 Palmer v Fletcher (1663) 1 Lev 122; Compton v Richards (1814) 1 Price 27; Caledonian Rly Co v Sprot 1856 2 Macq 449;
North-Eastern Rly Co v Elliott (1860) 1 John & H 145; London and North-Western Rly Co v Evans [1893] 1 Ch 16; Glamorganshire Canal
Navigation Co v Nixon's Navigation Co Ltd (1901) 85 LT 53; Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200, CA.
2 Johnston & Sons Ltd v Holland [1988] 1 EGLR 264, CA.
3 Southwark London Borough Council v Mills [1999] 4 All ER 449, per Lord Millett at 467.
4 Birmingham, Dudley and District Banking Co v Ross (1888) 38 Ch D 295, per Bowen LJ.
Page 1091
parties/B Derogation from grant/2 Principles
2 Principles
HR A[6886]
The principles to be applied are as follows1:
(a) A landlord, like any other grantor, cannot derogate from his grant by taking away with one hand
what he has given with the other2.
(b) In order to determine whether a specific act or omission constitutes a derogation from grant, it is
self-evidently necessary to establish the extent of the grant3.
(c) 'The exercise of determining the extent of the implied obligation not to derogate from grant
involves identifying what obligations, if any, on the part of the grantor, can fairly be regarded as
necessarily implicit, having regard to the particular purpose of the transaction when considered in the
light of the circumstances subsisting at the time when the transaction was entered into4'.
(d) There is a close connection, indeed a very substantial degree of overlap, between the obligation not
to derogate from grant, the covenant for quiet enjoyment, and a normal implied term in a contract5.
(e) The terms of the lease will inevitably impinge on the extent of the obligation not to derogate.
Express terms will obviously play a part, possibly a decisive part, in determining whether a particular act
or omission constitutes a derogation. An express term should, if possible, be construed as consistent with
the 'irreducible minimum' implicit in the grant itself. But a covenant relied on by the landlord, if
construed as ousting the doctrine in its entirety, is repugnant, and should itself be rejected in its entirety6.
(f) When considering a claim based on derogation from grant, one has to take into account not only the
terms of the lease, but also the surrounding circumstances at the date of the grant as known to the
parties7.
(g) One test which is often helpful where the act complained of is the landlord's act or omission on
adjoining land is whether the act or omission has caused the demised premises to become unfit or
substantially less fit than the purpose for which they were let8.
(h) That formulation, though helpful, may in many cases be too generous to the tenant. Permitting a
competing business to be run from a next door property is not, of itself, a derogation from grant9.
(i) The circumstances as they were at the date of the grant of the lease are very important. A claim will
fail if it is based on an alleged defect in the demised premises which was present as at the date of the
grant of the lease10.
(j) But, given that a lease is essentially prospective in operation, the central issue, where the complaint
is of activities on the neighbouring premises owned by the landlord, is not merely the use to which the
adjoining premises are put at the date of the grant of the tenancy, but also the use to which they may
reasonably be expected to be put in the future11.
(k) When assessing what the parties to a contract actually must have contemplated, one should focus
on facts known to both parties and statements and communications between them12.
HR A[6887]
Page 1092
1 These are taken from the judgment of Neuberger J in Platt v London Underground Ltd [2001] 2 EGLR 121, [2001] 20 EG 227 (CS).
2 Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200, per Younger LJ at 226; Molton Builders Ltd v City of Westminster (1975) 30
P&CR 182, per Lord Denning MR at 186.
3 Leech v Schweder (1874) 9 Ch App 463 per Mellish LJ at 467. In this connection any rights reserved to the landlord in the lease will be
important: Platt v London Underground Ltd [2001] 2 EGLR 121, [2001] 20 EG 227 (CS).
4 Per Sir Donald Nicholls VC in Johnson & Son Ltd v Holland [1988] 1 EGLR 264 at 268A.
5 Myers v Catterson (1889) 43 Ch D 470 at 481 per Bowen LJ: one should give effect to 'the obvious intention of the parties, so as to give
the transaction between them a minimum of efficacy and value which upon any view of the case it must have been their common intention
that it should have': Southwark London Borough Council v Mills [1999] 4 All ER 449 at 467F, per Lord Millett.
6 Petra Investments Ltd v Jeffery Rogers plc [2000] 3 EGLR 120, [2000] L & TR 451, per Hart J.
7 Chartered Trust plc v Davies [1997] 2 EGLR 83 at 87C, per Henry LJ.
8 Brown v Flower [1911] 1 Ch 219 at 225, per Parker J; Aldin v Latimer Clark Muirhead & Co [1894] 2 Ch 437.
9 Port v Griffiths [1938] 1 All ER 295. However, this proposition may be too wide where the premises in question are purpose-built or are
not just a separate and independent retail unit: Petra Investments Ltd vJeffrey Rogers plc [2000] 3 EGLR 120; Oceanic Village Ltd v
Shirayama Shokusan Co Ltd [1999] EGCS 83.
10 Southwark London Borough Council v Mills [1999] 4 All ER 449, 455-456 per Lord Hoffman and 467-468 per Lord Millett.
11 Southwark London Borough Council v Mills [1999] 4 All ER 449, Lord Millett at 468J and Lord Hoffman p 456C; Lyttelton Times Co
Ltd v Warners Ltd [1907] AC 476.
12 A fact which could only be known to one party could not, save in exceptional circumstances, be a legitimate part of the factual matrix.
A thought locked away in the mind of a party, or perhaps even of both parties, cannot normally be a factor when assessing the parties'
understanding: Frederick E Rose (London) Ltd v William H Pimm Junior & Co [1953] 2 QB 450.
Page 1093
parties/B Derogation from grant/3 Application
3 Application
HR A[6888]
The application of the maxim chiefly arises where premises have been demised for a particular purpose and the lessor
does some act which substantially interferes with the use of the premises for that purpose. Where premises had been let
for the purposes of timber storage it was held a derogation from his grant for the lessor to obstruct the flow of air
necessary for drying the timber by building on adjoining land. This case is an example of a situation where the covenant
for quiet enjoyment had not been broken and the lessee's only remedy was to allege derogation from grant1. Where the
lessor is the owner of property adjoining that leased, it means that unless the lessor reserves to himself in clear terms2
the right to interfere with the enjoyment of the property leased, he, by granting a lease, impliedly grants to the lessee the
right to use the property for any legal purpose and in any legal manner the lessee may think fit, though in doing so he
may diminish the value of adjoining property retained by the lessor; and the lessor impliedly undertakes not to use his
adjoining property in such manner as to prejudice the lessee in the full enjoyment of the premises leased to him3. But
for the court to give relief on this ground the interference must be substantial. The test has been said to be whether the
actions of the landlord render the demised premises unfit or substantially less fit for the purposes for which they were
demised. Such an effect is to be distinguished from acts which only interfere with the comfort of a tenant. In one case
the erection by the landlord of an external staircase outside the windows of a flat was held not to be a derogation from
grant as regards the tenant since the rooms let could still be used for residential purposes and the only interference was
with the comfort of the tenant4. Thus, where it is found that the tenant has only suffered an interference with his
amenities, there will be no breach5. But where a landlord was the owner of a shopping mall, with powers to control
nuisance caused by the conduct of his business by one tenant which resulted in damage to another tenant and failed to
exercise those powers, the omission to act was a derogation from grant6. Those claiming under the grantor by
subsequent conveyance or lease are under the same restriction7. Similar to the duty laid on the grantor not to derogate is
the duty in certain cases laid on the grantee. A lessee of a piece of land may not so act as to frustrate the purpose for
which, in the contemplation of both parties, an adjoining piece of land remaining in the hands of the lessor was intended
to be used8.
HR A[6889]
1 Aldin v Latimer Clark Muirhead & Co [1894] 2 Ch 437.
2 White v Harrow (1902) 86 LT 4.
3 Rigby v Bennett (1882) 21 Ch D 559; Mundy v Duke of Rutland (1883) 23 Ch D 81 at 96; Myers v Catterson (1889) 43 Ch D 470;
Mitchell v Cantrill (1887) 57 LJ Ch 72 at 57, per Lopes LJ; Newman v Real Estate Debenture Corpn Ltd and Flower Decorations Ltd [1940]
1 All ER 131.
4 Browne v Flower [1911] 1 Ch 219.
5 Kelly v Battershell [1949] 2 All ER 830, CA.

Page 1094
6 Chartered Trust plc v Davies [1997] 2 EGLR 83, CA.
7 Rigby v Bennett (1882) 21 Ch D 559; Cable v Bryant [1908] 1 Ch 259; Newman v Real Estate Debenture Corpn and Flower
Decorations Ltd [1940] 1 All ER 131.
8 Lyttelton Times Co Ltd v Warners Ltd [1907] AC 476; Pwllbach Colliery Co v Woodman [1915] AC 634; Cory v Davies [1923] 2 Ch
95; Molton Builders Ltd v City of Westminster London Borough Council (1975) 30 P & CR 182.
Page 1095
parties/B Derogation from grant/4 Acts or omissions constituting derogation from grant
4 Acts or omissions constituting derogation from grant
HR A[6890]
Examples of acts held to have constituted derogation from grant are as follows:
(a) use by the landlord of retained land adjoining the demised premises so as to interfere by reason of
vibration with the demised premises1;
(b) use of the retained land so as to interfere with buildings to be constructed on the demised
premises2;
(c) letting underground minerals with a right to let down the surface after letting the surface3;
(d) converting what ought to have been an outside wall into a party wall within the meaning of the
London Building Act 1894, so that the lessee was obliged to block up his windows in the wall4;
(e) use of the retained land for a purpose which interfered with the express purpose for which the
demised premises were taken, namely as drying sheds for timber5;
(f) building on retained land so as to interfere with the access of light to a house which is to be built on
adjoining land demised for the purpose of having a house built on it6;
(g) building on the retained land sufficiently close to the demised premises to render it illegal for the
tenant to continue to use them for the purpose of storing explosives7;
(h) building over the demised premises8;
(i) using land over which a lease of sporting rights had been granted for use by race horses (a use not
contemplated at the date of grant)9;
(j) deliberate obstruction of a hoarding by the erection of another hoarding intended to conceal it10;
(k) closing off the only, or the most substantial, means of access to the demised premises for
significant parts of the day11;
(l) (having regard to the terms and the background of the lease) the construction near to the demised
premises of new units intended to be used for a purpose which would compete with the permitted use of
the demised premises12;
(m) (probably) the construction within a retail shopping centre originally designed to attract 'locally
resident middle-aged women' of a large store focused at a different market, and let to a non-fashion
retailer13;
(n) (probably) the construction of a new building on a space forming part of the common parts of an
industrial park over which the tenant had a right of way, where the new building would have reduced the
area of the space by over a quarter, and would have reduced the diameter of a turning circle used by
delivery lorries by the same amount14.
An example of an omission to act constituting a derogation from grant was a failure by a landlord of a shopping mall to
exercise powers available to him to prevent one tenant from conducting his business in a way which causes such
nuisance to another as to result in the latter going out of business15.
HR A[6891]
Page 1096
1 Grosvenor Hotel Co v Hamilton [1894] 2 QB 836.
2 Rigby v Bennett (1882) 21 Ch D 559; Siddons v Short (1877) 2 CPD 572.
3 Markham v Paget [1908] 1 Ch 697; Jones v Consolidated Anthracite Collieries Ltd [1916] 1 KB 123.
4 Frederick Betts Ltd v Pickfords Ltd [1906] 2 Ch 87.
5 Aldin v Latimer Clark, Muirhead & Co [1894] 2 Ch 437. The opposite is likely to have been the case if the specific purpose was
unknown to the landlord at the date of the demise: Robinson v Kilvert (1889) 41 Ch D 88.
6 Pollard v Gare [1901] 1 Ch 834.
7 Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200, CA.
8 Lawson v Hartley-Brown (1995) 71 P & CR 242, CA.
9 Peech v Best [1931] 1 KB 1. Contrast Dick v Norton (1916) 85 LJ Ch 623.
10 Johnston & Sons Ltd v Holland [1988] 1 EGLR 264, CA.
11 Platt v London Underground Ltd [2001] 2 EGLR 121, [2001] 20 EG 227 (CS).
12 Oceanic Village Ltd v Shirayma Shokusan Co Ltd [1999] EGCS 83.
13 Petra Investments Ltd v Jeffrey Rogers plc [2000] 3 EGLR 120. This finding was obiter because it was held that the tenant had agreed
not to complain about the construction of the new unit in return for service charge concessions, and it was not implicit in the lease that
throughout the 25-year term the landlord would exercise its rights over unlet parts or its powers in other leases so as to maintain the original
mix of uses. The landlord was under no greater duty than to take account of the expectations of the existing lessees when exercising its rights
and powers. That might entail not doing or permitting something that, at the time it was contemplated, was reasonably foreseeable as
rendering a particular lease materially less fit for the commercial purpose for which it had been granted. It was not, however, so strict as to
entail a liability on the landlord for every adverse effect on that commercial purpose, whether foreseeable or not.
14 B & Q plc v Liverpool and Lancashire Properties Ltd [2001] 1 EGLR 92, 2001] 15 EG 138 (the claimant did not rely on the implied
obligation not to derogate from grant, but alleged nuisance and a breach of the covenant for quiet enjoyment. Having found that the proposal
would constitute a nuisance to the enjoyment by the tenant of his rights the Judge held that the claim based on the covenant for quiet
enjoyment added nothing. It is submitted that the same facts could equally well have founded a claim based on that covenant or on the
implied obligation not to derogate from grant.
15 Chartered Trust plc v Davies [1997] 2 EGLR 83, CA.

Page 1097
parties/B Derogation from grant/5 Acts not constituting derogation from grant
5 Acts not constituting derogation from grant
HR A[6892]-[6900]
The doctrine is limited by the condition of affairs existing when the lease is made, and as a man cannot by implication
grant that which he has not got, or grant easements over adjoining land which does not belong to him, the rule as to
derogation will not extend to property acquired by the grantor after the grant of the lease except in certain exceptional
circumstances1. A lessee (grantor) was held to be precluded from using latterly acquired property in such a way as to
amount to derogation where it was clearly motivated by spite. It had erected an advertisement hoarding on its land with
the specific intention of concealing the lessor's own hoarding from view. The court was clearly influenced by the
spiteful motive, but it is unclear how far this principle could be taken2. If the use of the adjoining land merely makes the
use of the demised premises more expensive3 there will not necessarily be a breach. Examples of acts held not to have
constituted derogation from grant are as follows:
(a) draining adjoining land even though the surface of the demised premises subsides in
consequence4;
(b) the erection of an external staircase outside the windows of a flat which interfered with the privacy
of the flat5;
(c) letting nearby premises to a competitor of the tenant6;
(d) use of retained premises for a purpose which was contemplated at the outset and which only
interferes with an especially sensitive process in the tenant's business7;
(e) mere interference with the tenant's amenities8;
(f) interfering with the rights of a sporting tenant but doing so by acts which accorded with ordinary
farming practice which could have been contemplated at the date of grant9;
(g) allowing the local planning authority to take enforcement proceedings against an unlawful use10.
HR A[6901]
1 Myers v Catterson (1889) 43 Ch D 470; Quicke v Chapman [1903] 1 Ch 659; Financial Times Ltd v Bell (1903) 19 TLR 433.
2 Johnston & Sons v Holland [1988] 1 EGLR 264, CA.
3 O'Cedar Ltd v Slough Trading Co [1927] 2 KB 123 (and see para HR A[6985]).
4 Popplewell v Hodkinson (1869) LR 4 Exch 248 (cf Jordeson v Sutton Southcoates and Drypool Gas Co [1899] 2 Ch 217).
5 Browne v Flower [1911] 1 Ch 219.
6 Port v Griffith [1938] 1 All ER 295; Clark's-Gamble of Canada v Grant Park Plaza Ltd (1967) 64 DLR (2d) 570 (Canadian SC);
Romulus Trading Co Ltd v Comet Properties Ltd [1996] 2 EGLR 70.
Page 1098
7 Robinson v Kilvert (1889) 41 Ch D 88.
8 Kelly v Battershell [1949] 2 All ER 830 CA.
9 Dick v Norton (1916) 85 LJ Ch 623. Contrast Peech v Best [1931] 1 KB 1.
10 Molton Builders Ltd v City of Westminster London Borough Council (1975) 30 P & CR 182.
Page 1099
parties/C Warranty of availability and fitness
C
Page 1100
parties/C Warranty of availability and fitness/1 Introduction
1 Introduction
HR A[6902]
Apart from the existence of an express term there is no covenant by the lessor that the demised premises are available or
fit for any particular purpose except that:
(a) there is an implied term in the letting of furnished premises that they are fit for human habitation at
the commencement of the tenancy; and
(b) there is a statutory implied term in certain lettings of houses at low rents that the premises are, and
will be kept by the landlord, fit for human habitation, although it is now of very limited practical
application.
Page 1101
parties/C Warranty of availability and fitness/2 Implied warranties generally
2 Implied warranties generally
HR A[6903]
At common law there is no implied warranty that the premises will be available for any purpose that the tenant may
have in view. Thus, there is no implied warranty on the part of a landlord that the premises are free from restrictive
covenants1 or that they may legally be used for any specific purposes even though let for such use2. Nor is there any
implied promise to do any act necessary to render the premises available for the purposes for which they were known to
be taken3. And there is, at common law, no implied warranty on the letting of an unfurnished house or land that as to its
physical condition it is or shall be reasonably fit for habitation, occupation or cultivation; nor is there any implied
contract that it is physically fit for the purposes for which it is let4; and this is so even where the premises are so
defective as to constitute a danger to the tenant and his family and the landlord has himself put them into that condition
and knows of the danger5. In a letting of a furnished house there is a common law warranty that it is fit for habitation at
the commencement of the tenancy6; and in the case of certain lettings at a low rent of houses whether furnished or
unfurnished there is implied by statute a warranty that it is at the commencement of the tenancy, and an undertaking that
it will be kept by the landlord throughout the tenancy, fit for human habitation7. These are the only two cases of implied
warranties as to availability of fitness for any purpose. In the case of a licence agreement, on the other hand, a court
might be prepared to imply into it a term that the premises are of sound construction and reasonably suitable for the
purpose required by the licensees8.
HR A[6904]
1 Jackson v Cobbin (1841) 8 M & W 790.
2 Edler v Auerbach [1950] 1 KB 359, [1949] 2 All ER 692, approved by the Court of Appeal in Hill v Harris [1965] 2 QB 601, [1965] 2
All ER 358. Hill v Harris [1965] 2 QB 601, [1965] 2 All ER 358 was applied in Stokes v Mixconcrete (Holdings) Ltd (1978) 36 P & CR 427
and in Molton Builders Ltd v City of Westminster London Borough Council (1975) 30 P & CR 182 (in which it was held that a tenant could
not pray in aid the doctrine of derogation from grant so as to enable him to do something which was unlawful whether or not it had been
unlawful when the letting had been made; it could not be a derogation from grant to allow the law to take its course in stopping something
that was unlawful.
3 Newby v Sharpe (1878) 8 Ch D 39. So where the landlord is not aware at the time of letting that the premises are intended to be used for
an exceptionally delicate trade, there is no implied promise on his part that he will not use his adjoining premises so as to interfere with such
trade: Robinson v Kilvert (1889) 41 Ch D 88.
4 As to unfurnished houses and flats, see Hart v Windsor (1844) 12 M & W 68; Bartram v Aldous (1886) 2 TLR 237; Lane v Cox [1897] 1
QB 415; Cruse v Mount [1933] Ch 278; Edler v Auerbach [1950] 1 KB 359 at 374, [1949] 2 All ER 692 at 699; Cheater v Cater [1918] 1
KB 247; Cavalier v Pope [1906] AC 248; Baxter v Camden London Borough Council (No 1) [1998] 2 EGLR 29, CA; Bottomley v Bannister
[1932] 1 KB 458 (dangerous hot water system); Davis v Foots [1940] 1 KB 116, [1939] 4 All ER 4, CA (escape of gas due to disconnection
of gas-fire by landlord); Duke of Westminster v Guild [1985] QB 688, [1984] 3 All ER 144, CA (blocked drain). In Duke of Westminster v
Guild [1985] QB 688, [1984] 3 All ER 144, CA, it was said that 'on occasions special facts may no doubt justify a departure from the general
rule' (per Slade LJ ([1984] 3 All ER 144 at 149). As to fitness of agricultural land for cultivation, see Division F. And generally see
Manchester Bonded Warehouse Co v Carr (1880) 5 CPD 507 (warehouse); Shirvell v Hackwood Estates Co Ltd [1938] 2 KB 577, [1938] 2
All ER 1 (dangerous tree overhanging demised premises). The intending lessee is presumed to make his own inquiries as to the condition of
Page 1102
the property and in the absence of special stipulation he takes it a it stands: Chappell v Gregory (1863) 34 Beav 250.
5 Ball v LCC [1949] 2 KB 159, [1949] 1 All ER 1056, CA; Auto Scooters (Newcastle) Ltd v Chambers [1966] EGD 57, CA.
6 In the sale or lease of a house in the course of erection there is an implied term that the house will be finished in a workmanlike manner:
Perry v Sharon Development Co Ltd [1937] 4 All ER 390; Miller v Cannon Hill Estates Ltd [1931] 2 KB 113; Lawrence v Cassel [1930] 2
KB 83; Hancock v B W Brazier (Anerley) Ltd [1966] 2 All ER 901, [1966] 1 WLR 1317.
7 See HR A[7380.217]ff.
8 See Wettern Electric Ltd v Welsh Development Agency [1983] QB 796, [1983] 2 All ER 629, where a term was implied in a licence that
a factory was fit for the purpose required by the licensees.
Page 1103
parties/C Warranty of availability and fitness/3 Statutory warranty and undertaking: certain lettings of houses at low
rents
3 Statutory warranty and undertaking: certain lettings of houses at low rents
HR A[6905]
In any contract made on or after 6 July 1957 for letting for human habitation a house1 at a rent2 not exceeding in
London £80, and elsewhere £52, there is, notwithstanding any stipulation to the contrary, implied a condition that the
house is, at the commencement of the tenancy, fit for human habitation. There is also implied an undertaking on the part
of the landlord that it will be kept by him fit for human habitation during the tenancy3. The effect of this provision is
that a duty is cast on the landlord throughout the tenancy to execute such repairs as are necessary to keep the premises
fit for human habitation. If there is a breach of this statutory provision the tenant can sue the landlord for damages as
well as abandon his tenancy4. The landlord's obligation under the statutory condition implied by the Landlord and
Tenant Act 1985, s 8(1) is restricted to cases where the house is capable of being rendered fit for human habitation at
reasonable cost5. It seems reasonably clear that a statutory tenant can rely on the implied undertaking6. The same
condition and undertaking is implied in a similar contract made on or after 31 July 1923 and before 6 July 1957 where
the rent does not exceed £40 in London and £26 elsewhere, and in a similar contract made before 31 July 1923 where
the rent does not exceed £40 in London, £26 in a borough or urban district which according to the last published census
before the letting had a population of 50,000 or more, and £16 elsewhere7.
HR A[6906]
1 This includes a part of a house (Landlord and Tenant Act 1985, s 8(6)(a)), and any yard, garden, outhouses and appurtenances belonging
thereto or usually enjoyed therewith (LTA1985, s 8(6)(b)).
2 Rent for this purpose means the actual contractual rent paid by the tenant to his landlord irrespective of the liability of either part to pay
rates: Rousou v Photi [1940] 2 KB 379, [1940] 2 All ER 528, CA.
4 Walker v Hobbs & Co (1889) 23 QBD 458, decided on the corresponding provision in the Housing of the Working Classes Act 1885. In
McCarrick v Liverpool Corpn [1947] AC 219, [1946] 2 All ER 646 the House of Lords held that notice to the landlord of want of repair was
a condition precedent of liability under this section.
5 Buswell v Goodwin [1971] 1 All ER 418, [1971] 1 WLR 92, CA (decided under the preceding statutory provisions, namely the Housing
Act 1957, s 6(2)).
6 Morgan v Liverpool Corpn [1927] 2 KB 131.
7 Landlord and Tenant Act 1985, s 8(3), (4).
HR A[6907]
Page 1104
In all cases the condition and undertaking are excluded where the house is let for a term of three years or more, not
determinable by either party within three years, upon the terms that the lessee shall put it into a condition fit for human
habitation1.
HR A[6908]
HR A[6909]
Where such a condition and undertaking are implied, the landlord1 or any person authorised by him in writing may, at
reasonable times of the day, and on giving 24 hours' notice in writing, enter2 for the purpose of viewing the state and
condition of the house. If the landlord desires the inspection to be carried out on his behalf by his agent he must
authorise that agent in writing. A general authority given in writing to a person to act generally on behalf of a landlord
would probably be deemed a sufficient authority within the meaning of this section. It is advisable, however, in giving
such general authority to have regard to the requirements of this section if the property is affected thereby and to include
a specific authority to carry out such inspections as may be deemed advisable for the purpose of this section.
HR A[6910]-[6920]
1 Under earlier legislation replaced by the Housing Act 1957, s 6 and now by the Landlord and Tenant Act 1985, s 8, it was held by a
Divisional Court that a house agent who lets a house is not the 'landlord' and is not therefore liable for a breach of the implied undertaking,
even where he declines to disclose the owner's name: Fosk v Trumble (15 January 1913, unreported). See also Bond v Busfield (1913) 48
LJCCR 54.
2 See Morgan v Liverpool Corpn [1927] 2 KB 131, per Atkin LJ. As to the enforcement of this right of entry, see Housing Act 1985, s 55.
Writing includes typewriting (see the Interpretation Act 1978, s 5, Sch 1).
HR A[6921]
A similar condition and undertaking is implied, notwithstanding any stipulation to the contrary, in the contract of
employment of a workman employed in agriculture, where the provision of a house for the employee forms part of his
remuneration, but this does not affect the liability to repair of any person other than the landlord or the enforcement of
such liability1.
HR A[6922]

Page 1105
parties/C Warranty of availability and fitness/4 Standard of fitness to be applied
4 Standard of fitness to be applied
HR A[6923]
In determining for the purposes of the implied condition and undertaking whether a house is unfit for human habitation,
regard is to be had to its condition in respect of the following matters:
(a) repair;
(b) stability;
(c) freedom from damp;
(d) internal arrangement;
(e) natural lighting;
(f) ventilation;
(g) water supply;
(h) drainage and sanitary conveniences; and
(i) facilities for preparation and cooking of food and for the disposal of waste water;
and the house is to be deemed to be unfit as aforesaid if, and only if, it is so far defective in one or more of the said
matters that it is not reasonably suitable for occupation in that condition1. Whether the house is so far defective in any
of the specified matters as not to be reasonably suitable for occupation is a question of fact.
HR A[6924]
HR A[6925]
The law in force prior to the enactment of the present standard only required that 'the place must be decently fit for a
human being to live in'1. The whole house need not be unfit for human habitation. The duty of the landlord is to keep
the house fit for human habitation, and the unfitness of one room, particularly in a small working-class house may be a
most material detraction from the enjoyment of the tenant2. The local authority has a statutory power to require repairs
and to execute repairs in case of default by the owners3.
HR A[6926]
1 Jones v Geen [1925] 1 KB 659 at 668, per Salter J; though it was held that if the state of repair is such that injury may result from
Page 1106
ordinary use the premises cannot be regarded as fit for human habitation: Summers v Salford Corpn [1943] AC 283, [1943] 1 All ER 68. The
following cases as to particular breaches or alleged breaches under the former law may still be of importance, although where there was held
to be no breach it is submitted that they might not necessarily be regarded as persuasive today: Stanton v Southwick [1920] 2 KB 642
(occasional incursions by rats--no breach); Chester v Powell, Powell v Chester (1885) 52 LT 722 (vermin, defective drains, scarlet
fever--breach); Smith v Marrable (1843) 11 M & W 5 (vermin); Campbell v Lord Wenlock (1866) 4 F & F 716 (vermin); Summers v Salford
Corpn [1943] AC 283, [1943] 1 All ER 68 (broken sash cord--breach); Daly v Elstree RDC [1948] 2 All ER 13, CA (hot water system out of
order but means of heating water in kettles). It was held that the undertaking as to fitness for human habitation did not impose on the lessor
of part of a house an obligation to keep a common flight of stairs in repair: Dunster v Hollis [1918] 2 KB 795.
2 Summers v Salford Corpn [1943] AC 283, [1943] 1 All ER 68.
3 Housing Act 1985, ss 189, 190 and 193.

Page 1107
parties/C Warranty of availability and fitness/5 Express warranties
5 Express warranties
HR A[6927]
A warranty, at or before the making of a lease, that a house is in a fit state for habitation, whether as regards repair or
drainage, may be given as an express contract, or may be implied from a representation as to the state of the house. A
representation by the lessor will cease to be a mere representation, and will constitute a warranty if it is intended to be
the basis of the contractual relation between the parties1. Hence, if the intending tenant declines to take the lease unless
the landlord gives an assurance that the drains are in order, and the landlord gives this assurance in consideration of his
taking the lease, the landlord is bound by the warranty2. The warranty is both a warranty and a condition; hence a
breach gives the tenant a claim for damages, and also entitles him to repudiate the lease within a reasonable time. The
right to repudiate is not lost because the representation has become a term of the lease or because the lease has been
executed3. Such a warranty is collateral to the lease, and it is no objection that it is not contained in the lease, or was
made orally, unless the lease also deals with the same matter, in which case the contract contained in the lease cannot be
varied by an oral agreement4.
HR A[6928]-[7007]
1 De Lassalle v Guildford [1901] 2 KB 215 at 222, CA; Heilbut, Symons & Co v Buckleton [1913] AC 30; Best v Edwards (1895) 60 JP 9.
Statements as to the conditions of the house were held to be mere representations in Kennard v Ashman (1894) 10 TLR 213, and Green v
Symons (1897) 13 TLR 301, CA; and see Terrene Ltd v Nelson [1937] 3 All ER 739, where the difficulty of proving a warranty is clearly
stated. But in Otto v Bolton and Norris [1936] 2 KB 46, [1936] 1 All ER 960, an assurance that a house was well built was held in the
circumstances to amount to a warranty. De Lassalle v Guildford [1901] 2 KB 215 at 222, CA was applied in Brikom Investments Ltd v Carr
[1979] QB 467, [1979] 2 All ER 753, in which the landlord was held to its earlier promise that roof repairs would be carried out free of
charge. The case was also decided on the basis of a waiver by the landlord of its right to claim the cost of repairs under the lease.
2 De Lassalle v Guildford [1901] 2 KB 215, CA; and see Otto v Bolton and Norris [1936] 2 KB 46, [1936] 1 All ER 960.
3 Bunn v Harrison (1886) 3 TLR 146, CA. Prior to 1967 the right to repudiate may have been lost if the misrepresentation became a term
of the contract (Pennsylvania Shipping Co v Compagnie Nationale de Navigation (1936) 155 LT 294), and was lost if the contract was
executed (Seddon v North Eastern Salt Co Ltd [1905] 1 Ch 326). Both these rules have been abrogated as regards misrepresentations made
after the 22 April 1967 by the Misrepresentation Act 1967, s 1.
4 De Lassalle v Guildford [1901] 2 KB 215. Previously, it had been considered that the tenant could not sue on the warranty unless it was
contained in the lease: Burtsal v Bianchi (1891) 65 LT 678 at 679; Longman v Blount (1896) 12 TLR 520. The collateral contract must
precede the lease, otherwise it can form no part of the consideration for taking the lease: Bristol Tramways etc Carriage Co Ltd v Fiat
Motors Ltd [1910] 2 KB 831 at 838, CA.
Page 1108
parties/D Restrictions on use of premises
D
Page 1109
parties/D Restrictions on use of premises/1 Covenants restrictive of use: introduction
1 Covenants restrictive of use: introduction
HR A[7008]
It is very rare for a lease to contain no express restrictions on user, and in certain types of commercial property,
especially shops in shopping centres, it is common for the tenant to covenant positively to use the demised premises for
a particular trade. Such covenants touch and concern the land and so run with the land. The reason for such covenants
from the landlord's viewpoint is usually to preserve the value of the reversion or the reversion on adjoining property
owned by him. The covenant may be designed to protect neighbouring occupiers from annoyance, or simply to confine
the use of business premises to certain trades or to prevent them being used as a dwelling house, or to require that a
house shall be used only as a private dwelling house, or only for residential or professional purposes. But apart from any
express restriction the tenant may not be prevented from using the premises for any purpose for which the premises may
be used under the general law, notwithstanding that it is different from the purpose originally contemplated1, provided
there is no fraud on the lessor in taking the lease in an unrestricted form2. Restrictive covenants are often against
carrying on particular trades without the licence of the lessor. Affirmative evidence of such a licence must be given by
the tenant, but a licence may be presumed from long acquiescence3. A landlord may covenant not to let other premises
for any specified purposes4. A beer tie agreement requiring the tenant to purchase beer only from his landlord, or from
another source nominated by the landlord, has been held to be anti-competitive and in breach of Article 81 of the EC
Treaty. The tenant was entitled to damages resulting from the failure and subsequent closure of his business. Article 85
prevented the tenant from being precluded by English law from recovering damages merely because the contract was
illegal5.
HR A[7009]
1 Grand Canal Co v M'Namee (1891) 29 LR Ir 131, (Ir CA).
2 Bonnett v Sadler (1808) 14 Ves 526.
3 Toleman v Portbury (1870) LR 5 QB 288; Re Summerson Downie v Summerson [1900] 1 Ch 112n; and see Tritton v Bankart (1887) 56
LT 306.
4 See eg Rother v Colchester Corpn [1969] 2 All ER 600, [1969] 1 WLR 720 in which it was held that such a covenant could not be
enlarged into one not to permit other premises to be used for the specified purposes. A merger of the freehold and leasehold interests may
operate to destroy the right to enforce the restrictive covenant. It will do so against a purchaser of the lessor's interest in the other property
bound by the restriction even though that purchaser took with notice of the restriction: Golden Lion Hotel (Hunstanton) Ltd v Carter [1965]
3 All ER 506, [1965] 1 WLR 1189.
5 Crehan (Bernard) v Inntreprenneur Pub Co (CPC) [2004] EWCA Civ 637.

Page 1110
parties/D Restrictions on use of premises/2 Letting scheme
2 Letting scheme
[7009.1]
It is possible in an appropriate case for covenants in leases restrictive of use to be enforceable directly as between the
adjoining lessees without the need for action by the landlord. Such covenants will be enforceable where the
circumstances are such as to bring into play the doctrine of a 'letting scheme' or 'local law'. This doctrine is a familiar
one in the context of restrictive covenants relating to freehold land, but can also be applied to leases1.
[7009.2]
1 See the discussion at para HR A[2263] above. The doctrine was applied to business leases in
Williams v Kiley (t/a CK Supermarkets Ltd) [2002] EWCA 1645, [2003] 04 LS Gaz R 32, [2002] NLJR
1809 referring: Re Spike and Rocca Group Ltd (1980) 107 DLR (3d) 62; Scharf v Mac's Milk Ltd (1965)
51 DLR (2d) 565 (not concerned with leases); Russo v Field & Menat Construction (1970) 12 DLR (3d)
665.
Page 1111
parties/D Restrictions on use of premises/3 Construction of covenants restrictive of use
3 Construction of covenants restrictive of use
HR A[7010]-[7020]
In construing such covenants it is legitimate to take the nature of the premises into consideration1. It is not legitimate to
take into account the past history of the premises or what was contained in, but struck out from, the draft lease2. The
rule of construction of contracts known as the contra proferentem rule may be used so as to construe covenants
restrictive of user against the landlord and thus in support of a less restrictive construction3. Such covenants do not
infringe the rules against perpetuities4, and are not void as being in restraint of trade5. Unless there is something in the
wording of the covenant clearly to indicate otherwise, the assignee of the reversion will be able to enforce a solus
agreement6. A covenant to carry on a particular trade is valid7. But a covenant not to carry on any trade other than a
particular trade does not imply a covenant to carry on that trade8. Even a covenant expressed so as to require the
premises to be used only for a specified purpose may not positively require that use to be made9. A covenant for
residence on the premises by the tenant is valid10. Such a covenant may be satisfied by the residence of several tenants
and is binding upon a tenant who is a trustee; but where the tenant is a trustee the covenant is not satisfied by the
residence of a beneficiary under the trust11. A user covenant may restrict the user of premises to the offices of a
particular individual or company12. The courts generally decline to allow the provisions of a clause allowing
assignment impliedly to revoke or modify the provisions of a strict user clause13.
HR A[7021]
1 City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129, [1958] 2 All ER 733, and see R v Brighton and Area Rent Tribunal,
ex p Slaughter [1954] 1 QB 446, [1954] 1 All ER 423; Levermore v Jobey [1956] 2 All ER 362, [1956] 1 WLR 697.
2 City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129, [1958] 2 All ER 733, but a landlord cannot enforce a covenant
restricting uses against a tenant who has entered into the lease on the faith of a promise that it will not be enforced against him personally:
City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129, [1958] 2 All ER 733.
3 Skillion plc v Keltec Industrial Research Ltd [1992] 1 EGLR 123: cf Amax International Ltd v Custodian Holdings Ltd [1986] 2 EGLR
111 at 112, where it is said that the contra proferentem rule requires covenants in leases to be construed against the covenantor.
4 London and South Western Rly Co v Gomm (1882) 20 Ch D 562; Mackenzie v Childers (1889) 43 Ch D 265.
5 Esso Petroleum Harper's Garage v Stourport Ltd [1968] AC 269, [1967] 1 All ER 699; Foley v Classique Coaches Ltd [1934] 2 KB 1;
Robinson v Golden Chips (Wholesale) Ltd [1971] NZLR 257. The distinction appears to be between purchasers or lessees of land, who do
not derogate from any rights they previously had, and persons who accept restraints on their own land, eg as a term under a mortgage, who
do subject themselves to fresh restrictions on their prior rights. The doctrine of restraint of trade applies to the latter even though the
restriction relates to a use of land. The distinction was reiterated in Alec Lobb (Garages) Ltd v Total Oil GB Ltd [1985] 1 All ER 303, [1985]
1 WLR 173, CA. A lease is capable of being an agreement within the meaning of the Fair Trading Act 1973, s 107 but it will only fall within
the ambit of the Act where there is some trading nexus between landlord and tenant: Re Ravenseft Properties Ltd's Application [1978] QB
52, sub nom Ravenseft Properties Ltd v Director General of Fair Trading [1977] 1 All ER 47.
6 This is because the effect of s 141 of the Law of Property Act 1925 is to pass the benefit to a successor landlord (in any event, LPA
Page 1112
1925, s 78 would apply to make good any omission): Caerns Motor Services Ltd v Texaco Ltd [1995] 1 All ER 247, [1994] 1 WLR 1249.
7 Wadham v Postmaster-General (1871) LR 6 QB 644.
8 Doe d Marquis of Bute v Guest (1846) 15 M & W 160; Croft v Lumley (1858) 6 HL Cas 672.
9 See paras HR A[7044]-[7045].
10 Doe d Lockwood v Clarke (1807) 8 East 185; Tatem v Chaplin (1793) 2 Hy Bl 133.
11 Re Lower Onibury Farm [1955] 2 All ER 409.
12 See Law Land Co Ltd v Consumers' Association Ltd [1980] 2 EGLR 109, 255 Estates Gazette 617, CA and cases therein cited.
13 See eg Wilson v Fynn [1948] 2 All ER 40; Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751; Packaging Centre Ltd v
Poland Street Estate Ltd (1961) 178 Estates Gazette 189; Killick v Second Covent Garden Property Co Ltd [1973] 2 All ER 337, [1973] 1
WLR 658.
Page 1113
parties/D Restrictions on use of premises/4 Other restrictions on use
4 Other restrictions on use
HR A[7022]
Apart from express covenant, a tenant may use the demised premises for any purposes which is not unlawful1. But apart
from express contract, there are many other sources of restriction upon the use to which a property may be put. The
lawful uses may be circumscribed by statute2. General restrictions on the use of property are now imposed by the Town
and Country Planning Act 1990, and the development plans made thereunder. Offensive uses may be prohibited under
the law of nuisance if tortious3. Speaking generally, the occupier of premises is liable for all nuisances which exist upon
them during the period of his occupancy4. But there is no basis for implying a covenant that premises shall not be used
for an immoral purpose5. Under an open contract for a lease of property described as 'business premises', the tenant is
entitled to a lease under which he can carry on any business, subject only to the restrictions imposed by the general law
of the land6. Where both parties entered into a tenancy agreement on the basis that the premises would be used as a
club, and knowing that planning permission, which the tenant was to apply for, was necessary, the tenancy agreement
was not illegal nor was it made illegal by the refusal of planning permission7. Also any use involving structural
alterations might be restrained on the ground of waste, provided it is substantial and injurious8.
HR A[7023]
1 Yelloly v Morley (1910) 27 TLR 20, Gas Light and Coke Co v Turner (1840) 6 Bing NC 324.
2 Eg where an improvement grant is made in respect of a dwelling under the Housing Act 1985, Pt XV, a condition may be imposed that it
shall not be used otherwise than as a dwelling for a specified period.
3 A man must not make such use of his property as unreasonably and unnecessarily to cause inconvenience to his neighbour: Brian CJ in
Anon (1480) YBEd 20th edn IV, 10, pl 10; Aldred's Case (1610) 9 Co Rep 57b; Holt CJ in Tenant v Goldwin (1704) 2 Ld Raym 1089,
Bankes LJ in Murgrove v Pandelis [1919] 2 KB 43.
4 See eg Pretty v Bickmore (1873) LR 8 CP 401, where it was held that a tenant of a dwelling house is responsible if it so falls into
disrepair as to be a source of danger to the adjoining highway. In Broder v Saillard (1876) 2 Ch D 692, the tenant was held liable for a
continuing nuisance to the adjoining house caused by the percolation of water through an artificial mound of earth which existed on the
demised premises at the commencement of the tenancy.
5 Burfort Financial Investments Ltd v Chotard [1976] 2 EGLR 53. A covenant not to use otherwise than for business purposes premises
which under Defence Regulations, now expired, could not be used for business purposes without the consent of the local authority was held
not to be ex facie illegal because: (a) it did not impose any obligation to use the premises at all; and (b) the parties might have intended to
obtain the consent of the local authority to user other than residential before the tenant went into occupation: Edler v Auerbach [1950] 1 KB
359, [1949] 2 All ER 692.
6 Davis and Cavey (1888) 40 Ch D 601.
7 Best v Glenville [1960] 3 All ER 478 [1960 1 WLR 1198, CA.

Page 1114
8 Doherty v Allman (1878) 3 App Cas 709; see also Balls Bros Ltd v Sinclair [1931] 2 Ch 325; Woolworth & Co Ltd v Lambert [1937] Ch
37, [1936] 2 All ER 1523; Lambert v F W Woolworth & Co Ltd (No 2) [1938] Ch 883, [1938] 2 All ER 664.
Page 1115
parties/D Restrictions on use of premises/5 Consequences of contracts being void for illegal or immoral purposes
5 Consequences of contracts being void for illegal or immoral purposes
HR A[7024]
Where at the time of the letting the premises are to the landlord's knowledge intended to be used for an immoral
purpose, the lease is wholly unenforceable, and the landlord cannot recover the rent nor sue upon the lessee's
covenants1. The same is true where the use was for an illegal purpose, it being prohibited by statute2. If the rent is
payable immediately, and the intended use is not prohibited until subsequently, the rent continues to be payable3.
Where the lease was made in such a form that the lessor was enabled to deceive the rating authority as to the true value
of the premises, it was held that the lessor could not recover the rent4. If the landlord intends that the tenant, acting as
his innocent instrument, should break the law by using the premises for a purpose which the landlord knows to be
illegal, but the tenant does not, the landlord will remain unable to enforce the agreement notwithstanding that his
intention is frustrated by the legalisation of the user in question5. And although the landlord is not at first aware of the
improper use, if he has the power of terminating the tenancy and omits to do so after this use has come to his
knowledge, he cannot thereafter enforce the lessee's obligations6. Similarly, an agreement to let premises is not
enforceable if they are to be used for any other unlawful purpose7. By granting liberty to use the premises for certain
purposes the landlord does not warrant that it will continue to be legal so to use them8. The rule may be regarded as a
part of the wider principle that there is no implied warranty by the lessor that premises are fit (either physically or
legally) for the purposes for which they are let. Where premises are let for the purposes of a business which can be
conducted in a legal manner, the landlord is entitled to assume that it will not be conducted in an illegal manner9.
Where the lease gives no power of re-entry for breach of covenant not to use the premises for an illegal purpose and the
landlord has evicted the tenant, an injunction will not be granted to the tenant if he has used the premises for an illegal
purpose10. The fact that a contract was illegal in English law did not prevent a tenant from recovering damages where
the lease imposed on him a beer tie that was in breach of Article 81 of the EC Treaty11.
HR A[7025]
1 Girardy v Richardson (1793) 1 Esp 13; Crisp v Churchill (1794) cited 1 Bos & P at 340 (action for damages for use and occupation);
Appleton v Campbell (1826) 2 C & P 347 (action for board and lodging) where the landlord or his agent were aware at the date of the letting
that the premises were to be used for the purposes of prostitution; Smith v White (1866) LR 1 Eq 626 (lessee knowing of the intended
assignee's intentions to use the premises as a brothel, was held unable to recover under a covenant of indemnity the amount paid by him to
his lessor for dilapidations); cf Burfort Financial Investments Ltd v Chotard [1976] 2 EGLR 53 (landlord not knowing of intended immoral
user). It has now been held that living together ostensibly as man and wife is not an immoral use: Heglibiston Establishment v Heyman
(1977) 36 P & CR 351, CA, in which Upfill v Wright [1911] 1 KB 506 was not followed.
2 Gas Light and Coke Co v Turner (1840) 6 Bing NC 324, Ex Ch; and see Flight v Clarke (1844) 13 M & W 155.
3 Gibbons v Chambers (1885) Cab & El 577.
4 Alexander v Rayson [1936] 1 KB 169.
5 Edler v Auerbach [1950] 1 KB 359, [1949] 2 All ER 692.

Page 1116
6 Jennings v Throgmorton (1825) Ry & M 251 (weekly tenancy). If the lease contains a covenant against illegal user, and the lessee is
about to break it, the lessor should apply for an injunction, and not himself attempt to exclude the lessee from the premises: Lilley v Bennett
(1888) 5 TLR 156.
7 Cowan v Milbourn (1867) LR 2 Exch 230 (where the prospective landlord was held entitled to refuse to complete when he discovered
that the prospective tenant intended to use the premises for delivering blasphemous lectures).
8 Newby v Sharpe (1878) 8 Ch D 39, CA; Hill v Harris [1965] 2 QB 601, [1965] 2 All ER 358, CA, applied in Stokes v Mixconcrete
(Holdings) Ltd (1978) 36 P & CR 427.
9 Streatham Cinema v John McLauchlan Ltd [1933] 2 KB 331 (premises let for use as a 'tote club'). As to the effect on the validity of a
lease of a false representation by the lessee of his intention to carry on a lawful trade, see Feret v Hill (1854) 15 CB 207; cf Brash v Munro
and Hall (1903) 5 F 1102.
10 Litvinoff v Kent (1918) 34 TLR 298.
11 Crehan v Inntreprenneur Pub Co CPC [2004] EWCA Civ 637, 148 Sol Jo LB 662.
Page 1117
parties/D Restrictions on use of premises/6 Conviction of tenant
6 Conviction of tenant
HR A[7026]
Where the tenant of any premises has been convicted of knowingly permitting the premises to be used as a brothel, the
landlord is entitled to require him to assign the lease under which the premises are held by him to some other person
approved by the landlord, whose approval must not be unreasonably withheld1. It appears that it is for the tenant to find
the assignee since the approval of the landlord is necessary. It does not seem that under this section the tenant, even if
he finds an assignee of irreproachable character, can insist on a landlord who has not given notice under this section
consenting to an assignment. Possibly, the failure of the landlord to consent to such an assignment might be used in
argument in an application for forfeiture of the lease, but the recent decisions show that the court is extremely reluctant
to give relief in such cases. If the convicted person does not within three months thereafter assign the lease, the landlord
is entitled to determine the lease, and the court which has convicted the tenant has power to make a summary order for
possession2.
HR A[7027]
1 Sexual Offences Act 1956, s 35(2), Sch 1.
2 SOA 1956, s 35(2), Sch 1, paras 2 and 3.
HR A[7028]
If the landlord, after notice of the conviction, fails to exercise his right to compel an assignment or the delivery up of
possession of the premises, and during the subsistence of the lease the offence is repeated, the landlord will be deemed
to have knowingly aided and abetted in its commission, unless he can show that he has taken all reasonable steps in his
power to prevent the recurrence of the offence1; and if, after the first conviction, he determines the lease and then grants
a fresh lease or enters into another contract of tenancy to, with, or for the benefit of the convicted person, without
inserting in the lease all reasonable provisions for preventing a repetition of the offence, he will be deemed to have
failed to exercise his statutory rights to determine the lease, and consequently to have aided and abetted in the
commission of the subsequent offence2.
HR A[7029]
1 Sexual Offences Act 1956, s 35(3)(a).
2 SOA 1956, s 35(3)(b).

Page 1118
parties/D Restrictions on use of premises/7 Remedies for breach
7 Remedies for breach
HR A[7030]-[7040]
A covenant restrictive of use (if not avoided by statute1) will be enforced by injunction (so long as it is not too vague to
be enforced)2. In order to obtain an injunction the reversioner must show that damage has been done to the reversion3.
Alternatively, a breach may be compensated by damages. The measure of damages is probably confined to that
appropriate at common law, that is compensation to the landlord for any loss actually suffered4. If there is a right of
re-entry, a forfeiture may result5. Where business premises are let with a covenant against user as a private residence,
breach of the covenant constitutes a continuing breach6. Moreover, if land is let for a specified purpose, its use for other
purposes will be restrained by injunction7, and a restriction may otherwise be implied from a positive stipulation8.
HR A[7041]
1 Eg the Leasehold Reform, Housing and Urban Development Act 1993, s 89 (avoidance of provisions preventing occupation of leasehold
property by persons with mental disorders).
2 Murray v Dunn [1907] AC 283 (covenant not to erect 'any building of an unseemly description').
3 Johnstone v Hall (1856) 2 K & J 414.
4 Surrey County Council v Bredero Homes Ltd [1993] 3 All ER 705, [1993] 1 WLR 1361. It is doubtful whether the wider measure
propounded by Brightman J in Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 2 All ER 321, [1974] 1 WLR 798, applicable to
damages awarded in equity in lieu of an injunction, can be appropriate.
5 The lessor is entitled to an injunction, notwithstanding that he has a power of re-entry for forfeiture: Barret v Blagrave (1800) 5 Ves
555.
6 Cooper v Henderson (1982) 5 HLR 1, 263 Estates Gazette 592, CA; Doe d Ambler v Woodbridge (1829) 9 B & C 376 at 378.
7 Kehoe v Marquess of Lansdowne [1893] AC 451; Ramuz v Leigh-on-Sea Conservative and Unionist Club (1915) 31 TLR 174. Where
the lessee has sublet, the injunction, if granted, will not extend to restrain the sublessee unless he is a party to the action: Metropolitan
District Rly Co v Earl's Court Ltd (1911) 55 Sol Jo 807.
8 Abbey v Gutteres (1911) 55 Sol Jo 364.

Page 1119
parties/D Restrictions on use of premises/8 Consent to change of use
8 Consent to change of use
(a) General
HR A[7042]
In any lease whenever made any covenant against alteration of user of the demised premises, without the licence or
consent of the lessor is, if the alteration does not involve any structural alteration of the premises1, deemed,
notwithstanding any express provision to the contrary, to be subject to a proviso that no fine or sum of money in the
nature of a fine, whether by way of increase of rent or otherwise, is to be payable for or in respect of such licence or
consent2. This proviso does not preclude the right of the landlord to require payment of a reasonable sum in respect of
any damage to or diminution in the value of the premises or any neighbouring premises belonging to him and of any
legal or other expenses incurred in connection with such licence or consent. Where a dispute as to the reasonableness of
any such sum has been determined by a court of competent jurisdiction, the landlord is bound to grant the licence or
consent on payment of the sum so determined to be reasonable3. The subsection does not apply to mining leases or
leases of agricultural holdings4. Any agreement as to payment of a sum for such consent is rendered unenforceable, but
it seems that, if the sum is actually paid, it may be irrecoverable5. Unlike the preceding statutory provisions dealing
with covenants restricting alienation and the making of improvements, this subsection does not imply into leases
containing a covenant against change of user without consent a proviso that such consent shall not be unreasonably
withheld6.
HR A[7043]
1 Barclays Bank plc v Daejan Investments (Grove Hall) Ltd [1995] 1 EGLR 68, [1995] 18 EG 117.
3 LTA 1927, s 19(3).
4 LTA 1927, s 19(4).
5 Comber v Fleet Electrics Ltd [1955] 2 All ER 161.
6 Guardian Assurance Co Ltd v Gants Hill Holdings Ltd [1983] 2 EGLR 36, 267 Estates Gazette 678.
(b) Unreasonable withholding of consent to a change of use
HR A[7043.1]
Page 1120
Where there is a covenant not to change the use of the demised property or any part thereof, or not to make a specified
use thereof without the licence or consent of the landlord, with a proviso that such consent is not to be unreasonably
withheld the county court has jurisdiction to make a declaration that consent has been unreasonably withheld, whatever
the net annual value for rating of the demised property, this being without prejudice to the jurisdiction of the High
Court1.
HR A[7043.2]
1 Landlord and Tenant Act 1954, s 53 at HR B[675].
HR A[7043.3]
The majority of cases dealing with the unreasonable holding of consent by a landlord are concerned with covenants
against assignment or sub-letting, and a smaller number relate to covenants against making alterations or improvements.
The principles derived from those cases are set out and discussed elsewhere in this work1. There are a few cases dealing
specifically with the withholding of consent to a change of use. Interestingly, in each of the reported cases, the landlord
was a local authority. The approach of the court is the same and the decisions unsurprising2. In one there was a
qualified covenant restricting use to that of a travel and employment bureau and theatre ticket agency and the tenant
wished to change the use on assignment to a building society. The landlord refused to consent to a the change because it
wished to procure a retail use, thus enhancing the value of adjoining premises3. To procure a change of use to use as a
shop in order to maximise the rents of adjoining premises was to seek a collateral advantage not contemplated by the
lease and was unreasonable On the other hand, it was reasonable for the landlord to refuse consent to a change of use of
shop premises used as a restaurant from retail to self-service snack restaurant with gaming machines and amusement
with prizes machines. Although the landlord as local planning authority had granted planning permission to the change
of use, qua landlord it reasonably feared that if implemented the change would attract an undesirable element to the area
and lead to vandalism and disorder, would undermine the economic fabric of the trading street and could cause
respectable middle-aged shoppers to shun it4.
HR A[7043.4]
1 See HR A[2565] (alienation) and HR A[7380.164] (alterations).
2 For a case on its own facts, pre-dating the decision of the Court of Appeal in International Drilling Fluids Ltd v Louisville Invesments
(Uxbridge) Ltd [1986] Ch 513, [1986] 1 EGLR 39, see Berenyi v Watford Borough Council [1980] 2 EGLR 38, CA.
3 Anglia Building Society v Sheffield City Council [1983] 1 EGLR 57, 266 Estates Gazette 311, CA.
4 Tollbench Ltd v Plymouth City Council (1988) 56 P & CR 194, [1988] 1 EGLR 79, CA. This decision post-dated and endorsed the
principles of International Drilling Fluids Ltd v Louisville Invesments (Uxbridge) Ltd (see fn 2).
HR A[7043.5]
Where a building lease required the demised premises to be used only as and for a squash club and for no other purpose
Page 1121
except with the consent of the landlord, not to be unreasonably withheld, the landlord had not acted unreasonably in
refusing consent to a change of use that was sought at the same time as consent to an assignment and for alterations.
The proposal was to close three of the six squash courts and to create a leisure-type swimming pool. The landlord
consented to the alterations and the assignment but refused to consent to the change of use because it would (i) compete
with their own business of operating leisure premises next door, where they had an adjoining swimming-pool complex;
and (ii) generate traffic that would, inter alia, discourage potential customers of the landlord's facilities1. The landlord
was entitled to take into account considerations relating to adjoining property of its own and the possible competition
between its own and the tenant's businesses. There was insufficiently clear evidence to invoke the proposition that,
exceptionally, the landlord was obliged to have regard to the disproportionately adverse consequences for the tenant of a
refusal and not merely to have regard to his own interests in considering whether or not to consent.
HR A[7043.6]
1 Sportoffer Ltd v Erewash Borough Council [1999] 3 EGLR 136.

Page 1122
parties/D Restrictions on use of premises/9 Positive covenants
9 Positive covenants
HR A[7044]
A covenant restrictive of use may be combined with a positive covenant expressly requiring the demised premises to be
used for the specified use. Such covenants must be distinguished from those which are nothing more than a prohibition
on uses other than those specified and which are not broken if the premises are not used at all. The words 'but will use'
following a restriction on the user permitted will not necessarily create a positive obligation to use the premises in a
particular manner; as a matter of construction the words may not comprise an express obligation to use but simply
emphasise the negative directed against the forbidden uses1. Covenants to use premises for the carrying on of a
supermarket2 or to use offices during specified hours for a particular business3 have been held to impose positive
obligations. Even though a positive obligation as to user may be imposed in the lease, this does not mean that premises
have to be so used between lettings or during the course of works of improvement4. Furthermore, a positive covenant
that the tenant will 'use...the demised premises...as and for [certain] trades' did not apply to the residential part of the
premises5.
HR A[7045]
1 Montross Associated Investments SA v Moussaieff [1990] 2 EGLR 61 (though this point was left open when the decision was affirmed
by the Court of Appeal [1992] 1 EGLR 55); Tea Trade Properties Ltd v CIN Properties Ltd [1990] 1 EGLR 155 is an example of the point
arising in the context of a rent review.
2 Basildon Development Corpn v Mactro Ltd [1986] 1 EGLR 137, CA. In this case there was a positive covenant to use the premises as in
effect a 'food supermarket' and a negative covenant inter alia prohibiting the sale of goods 'not usually sold or dealt with by any other trade
or business of the like nature'.
3 Creery v Summersell & Flowerdew & Co [1949] Ch 751.
4 Westminster City Council v Duke of Westminster [1991] 4 All ER 136 at 147. In this case there was a positive obligation on the council
that certain demised premises should be 'kept and used only...as dwellings for the working classes...'.
5 Levermore v Jobey [1956] 2 All ER 362, [1956] 1 WLR 697.
HR A[7046]
It is common for a tenant to give a positive covenant that he will keep the demised premises open for trading. Such a
covenant is of particular importance where a shop is an anchor unit, playing a key role in a shopping centre. Substantial
damages may be awarded for a breach of such a covenant1, but the court will almost never grant a mandatory injunction
requiring the tenant to keep open for trading2.
Page 1123
HR A[7047]
1 Costain Property Developments Ltd v Finlay & Co Ltd (1988) 57 P & CR 345, [1989] 1 EGLR 237: Transworld Land Co Ltd v J
Sainsbury plc [1990] 2 EGLR 255.
2 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, [1997] 3 All ER 297 HL reversing the Court of Appeal
at [1996] 1 EGLR 71, CA; Braddon Towers Ltd v International Stores Ltd [1987] 1 EGLR 209; Woolworth (F W) plc v Charlwood Alliance
Properties Ltd [1987] 1 EGLR 53. Compare with Bristol and West Building Society v Marks & Spencer plc [1991] 2 EGLR 57, in which it
had been said that a mandatory interlocutory injunction sought to enfore regulations relating to a shopping centre, should not be granted
unless the court has a high degree of conviction that the plaintiff is likely to succeed on the merits of the trial and Posner v Scott-Lewis
[1987] Ch 25, [1986] 3 All ER 513 in which the court (on motion) ordered specific performance of a covenant by a landlord of a block of
flats to employ a resident porter, whose duties were defined iin the lease.
Page 1124
parties/D Restrictions on use of premises/10 Construction of particular restrictions
10 Construction of particular restrictions
(a) Nuisance
HR A[7048]
Leases commonly contain a covenant against causing a 'nuisance' to the lessor or to adjoining occupiers. The expression
'adjoining' has been variously interpreted in different contexts. Premises may be adjoining though separated from the
demised premises by a narrow strip of land1. Yet it has been held that they must be next door to or physically adjoining
the demised premises2; but the expression 'adjoining shops' was also held to extend to all the six shops in a terrace3;
and it has also been held that the phrase 'adjoining premises' in the context of a covenant against nuisance or annoyance
was not confined to premises in physical contact with the demised premises4. A covenant against causing nuisance is
perhaps only broken by a nuisance in the technical sense5. The following are examples of cases where nuisance has not
been proved:
(a) the establishment of an elementary school6;

(b) running a fried fish shop7;
(c) the exhibition of advertisements in a business neighbourhood8 (although such exhibition may in
certain circumstances amount to a breach of a covenant not to carry on any offensive trade or calling9).
On the other hand, the use of a room over business or professional offices for a fencing academy was held to be a
nuisance10.
HR A[7049]
1 Foster v Lyons & Co [1927] 1 Ch 219.
2 Vale & Sons v Moorgate Street and Broad Street Buildings and Albert Baker & Co Ltd (1899) 80 LT 487; Derby Motor Cab Co v
Crompton and Evans' Union Bank (1913) 57 Sol Jo 701.
3 Cave v Horsell [1912] 3 KB 533, CA.
4 Norton v Charles Deane Productions Ltd [1970] EGD 268. In any event, Haynes v King [1893] 3 Ch 439 was relied upon to support the
proposition that premises on the opposite side of the street could be adjoining.
5 Harrison v Good (1871) LR 11 Eq 338 (although this restriction of the word was doubted in Tod-Heatly v Benham (1888) 40 Ch D 80,
CA). As to the technical meaning of 'nuisance', see Walter v Selfe (1851) 4 De G & Sm 315 at 322.
6 Harrison v Good (1871) LR 11 Eq 338.

Page 1125
7 Errington v Birt (1911) 105 LT 373 (although it was held sufficient to cause annoyance, and so a breach of covenant).
8 Our Boys' Clothing Co v Holborn Viaduct Land Co Ltd (1896) 12 TLR 344 (although the display of advertisements is now regulated by
the Town and Country Planning Act 1990, ss 220-222 and the Town and Country Planning (Control of Advertisements) Regulations 1989).
9 Nussey v Provincial Bill Posting Co and Eddison [1909] 1 Ch 734, CA.
10 Jenkins v Jackson (1888) 40 Ch D 71.
(b) Annoyance
HR A[7050]-[7060]
Where the covenant is against any act which may lead to 'annoyance, nuisance, or damage', it is wider, and is broken by
anything which disturbs the reasonable peace of mind of an adjoining occupier. The establishment of a hospital for
outdoor patients is a breach if sensible people feel a reasonable apprehension of risk of infection and interference with
the pleasurable enjoyment of their houses for ordinary purposes. It need not amount to physical detriment to comfort,
nor need the adjoining occupier be a tenant of the same lessor1. But the conduct of a properly equipped and well
managed hospital is not per se a noisy, noisome, or offensive business2. To sublet parts of the premises to various
tenants may amount to a breach of a covenant not to do anything which might in the judgment of the landlord be or
grow to his injury or annoyance or that of their tenants or occupiers3. But allowing a pipe to burst in cold weather was
held not to be an annoyance4. A landlord may obtain an interlocutory injunction where the annoyance is to other tenants
of his as there is an interference with his business of letting premises5.
HR A[7061]
1 Tod-Heatly v Benham (1888) 40 Ch D 80 at 98, 99, CA; Macher v Foundling Hospital (1813) 1 Ves & B 188; Errington v Birt (1911)
105 LT 373 (fried fish business); Bramwell v Lacy (1879) 10 Ch D 691.
2 Frost v King Edward VII Welsh National Memorial Association for the Prevention, Treatment and Abolition of Tubercolosis [1918] 2
Ch 180 (where it was held that there was no risk of infection or danger to neighbours).
3 Barton v Keeble [1928] Ch 517; Day v Waldron (1919) 88 LJKB 937 (conversion into flats to the injury of the landlord). As to
'annoyance', see also Wood v Cooper [1894] 3 Ch 671 (erection of a large screen), and Seaward v Paterson (1896) 12 TLR 525 (boxing
exhibitions).
4 C B Printers Ltd v P and C Manufacturing Co Ltd [1967] EGD 569.
5 Hampstead and Suburban Properties Ltd v Diomedous [1969] 1 Ch 248, [1968] 3 All ER 545.
(c) Not to use for trade or business
HR A[7062]
Page 1126
A covenant not to carry on any 'trade' refers only to a business conducted by buying and selling1. A covenant against
carrying on a particular trade may be restricted to the covenantor personally notwithstanding it is entered into in
consideration of a periodical payment to him and his executors2. The word 'business' extends the covenant to all cases
where work, involving the recourse of numerous persons to the premises, is done for payment, for instance:
(a) the business of a school3;

(b) a hospital for poor persons who pay according to their means4;
(c) the taking of lodgers or paying guests5;
(d) the subletting of premises in apartments6;
(e) the use of premises for advertising7;
(f) teaching music8;
(g) the use of premises as licensed premises9;
(h) a jobbing builder who keeps materials in his garden10.
A tennis club carried on by a society registered under the Industrial and Provident Societies Act 1893 has been held to
be a business within the meaning of the Landlord and Tenant Act 1954, s 23(2)11. But a business may be conducted
even without payment where the result is in effect the same as if a charge were made. Thus, a 'home' where working
girls are boarded without a payment is in effect the business of a lodging-house12. The making of profit is not essential
to constitute a business; nor, on the other hand, does payment necessarily constitute one13. A covenant against affixing
any outward mark of business is broken by exhibiting the name of a firm carrying on business on the premises14. A
right to maintain signs advertising the tenant's business can be included within 'the appurtenances' demised to the tenant,
notwithstanding the existence of a covenant against exhibiting an advertisement or sign15. Apparently conversion of a
private dwelling house into a shop may be effected by user without structural alteration16. A sale by auction is
allowable in a shop if not specially prohibited17.
HR A[7063]
1 Doe d Wetherell v Bird (1834) 2 Ad & El 161 (a private lunatic asylum is no breach).
2 Cooke v Colcraft (1773) 2 Wm Bl 856.
3 Doe d Bish v Keeling (1813) 1 M & S 95 at 99; Kemp v Sober (1851) 1 Sim NS 517; Wickenden v Webster (1856) 6 E & B 387;
Johnstone v Hall (1856) 2 K & J 414; German v Chapman (1877) 7 Ch D 271, CA; Hobson v Tulloch [1898] 1 Ch 424 Wauton v Coppard
[1899] 1 Ch 92.
4 Bramwell v Lacy (1879) 10 Ch D 691.
5 Thorn v Madden [1925] Ch 847; Tendler v Sproule [1947] 1 All ER 193, CA.
6 Barton v Reed [1932] 1 Ch 362.
7 To let the ends of a house for bill-posting has been held to be a breach of a covenant not to permit trade to be carried on on the premises
(Tubbs v Esser (1909) 26 TLR 145), and such use of premises has been held to constitute a breach of covenant not to carry on any other than
a specified trade (Head v Stuart (1907) 24 TLR 104), and may amount to a breach of covenant not to assign or part with possession. See the
Town and Country Planning Act 1990, ss 220-222 and the Town and Country Planning (Control of Advertisements) Regulations 1989, SI
1989/670.
Page 1127
8 Tritton v Bankart (1887) 56 LT 306; Lawrence v South County Freeholds Ltd [1939] Ch 656, [1939] 2 All ER 503.
10 Westripp v Baldock [1939] 1 All ER 279 CA.
11 Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513, [1957] 3 All ER 563, CA, see HR B[434].
12 Rolls v Miller (1884) 27 Ch D 71 at 88, CA, where Lindley LJ observed that the word 'business' embraced 'almost anything which is an
occupation, as distinguished from a pleasure--anything which is an occupation or a duty which requires attention is a business'. This dictum
was applied by the House of Lords in Town Investments Ltd v Department of the Environment [1978] AC 359, [1977] 1 All ER 813 (a case
concerned with the Counter-Inflation (Business Rents) Order 1972, SI 1972/1850) and by the Court of Appeal in Florent v Horez (1983) 48
P & CR 166, 268 Estates Gazette 807, CA (where a covenant against business user was held to have been breached where meetings of a
Turkish Cypriot organisation were held at the tenant's flat and the organisation's mail was sent there).
13 Rolls v Miller (1884) 27 Ch D 71; Portman v Home Hospitals Association (1879) 27 Ch D 81n.
14 Evans v Davis (1878) 10 Ch D 747; Wilkinson v Rogers (1863) 12 WR 119.
15 William Hill (Southern) Ltd v Cabras Ltd [1987] 1 EGLR 37, CA.
16 Wilkinson v Rogers (1864) 2 De GJ & Sm 62, but see Milch v Coburn (1911) 55 Sol Jo 441, CA.
17 Keith v Reid (1870) LR 2 Sc & Div 39, HL.
(d) Noisome dangerous and offensive trades
HR A[7064]
A covenant against carrying on a noisome or offensive trade or business is not broken by carrying on a dangerous trade
which is neither noisome not offensive1. The carrying on of a dangerous trade which will result in the insurance
premium being increased will in certain circumstances be restrained2; and an injunction will be granted where the lessee
sublets for such a trade in breach of covenant2. Whether a particular business is prohibited by the covenant will depend
to some extent on whether it was carried on upon the premises at the time of the demise3. Whether a particular use
constitutes a breach of covenant will depend on the words of the covenant and the particular facts of the case, but the
following are examples from reported cases. Lime-burning is a noisome business4; so is a fried fish business5. The
carrying on of mock auctions may be offensive6; so may a private hospital7; but not a well conducted and properly
managed hospital for tuberculosis8. A boys' school may be within the words 'injurious, offensive, or disagreeable noise
or nuisance'9; but not the mere use of blinds for a business purpose so as to be inconvenient to others10. A public house
is not within a covenant not to do anything to the damage, annoyance, or disturbance of the lessor or his tenants, nor is
the opening of a public house a breach of covenant against trades that may be offensive or lead to annoyance11. A
restriction on carrying on the trade of a public house is good in law and capable of running with the land12.
HR A[7065]
Page 1128
1 Hickman v Issacs (1861) 4 LT 285.
2 Teape v Douse (1905) 92 LT 319; Chapman v Mason and Liniline Co (1910) 103 LT 390.
3 Gutteridge v Munyard (1834) 7 C & P 129.
4 Wiltshire v Cosslett (1889) 5 TLR 410.
5 Duke of Devonshire v Brookshaw (1899) 81 LT 83; cf Errington v Birt (1911) 105 LT 373, where such a shop was held not to be a
nuisance, but an annoyance, see paras HR A[7050]-[7060].
7 Earl of Pembroke v Warren [1896] 1 IR 76 at 104, CA.
8 Frost v King Edward VII Welsh National Memorial Association for the Prevention, Treatment and Abolition of Tubercolosis [1918] 2
Ch 180.
9 Wauton v Coppard [1899] 1 Ch 92.
10 Gresham Life Assurance Society v Ranger (1899) 15 TLR 454, CA, though the erection of a trellis screen may be an annoyance: Wood
v Cooper [1894] 3 Ch 671.
11 Jones v Thorne (1823) 1 B & C 715.
12 Earl of Zetland v Hislop (1882) 7 App Cas 427. As to enforcing an agreement for an underlease when the intended user may prove to
be a violation of a covenant in the head lease against noxious businesses, see Reeves v Greenwich Tanning Co (1864) 2 Hem & M 54; Teape
v Douse (1905) 92 LT 319. As to the exhibition of advertisements, see para HR A[7063], n 7.
(e) Covenants for use as a private dwelling house
HR A[7066]
Any user of the premises for trade or business purposes is a breach of a covenant to use them solely as a private
dwelling house1. A covenant to build a house as a private dwelling house requires also that it shall be kept as such2.
There was no breach of a covenant that premises should be used only for the sole occupation and use of the tenant and
the family of the tenant where a cowshed at the property was converted into a cottage and occupied by a couple
performing services for the lessee and his wife3. The exhibition of a blind bearing a trade name4, the addition of a
studio5, the conversion of the premises into flats6, their use as a school7, or as a charitable institution8, the subletting of
part whether as apartments9 or otherwise, even if the subtenant is bound to use the part sublet as a private residence10,
the carrying on of a guest house11, and the taking of lodgers or paying guests12, and the grant of occupational licences
in return for payments13 will in general constitute breaches of the covenant.
HR A[7067]
Page 1129
1 German v Chapman (1877) 7 Ch D 271, CA, Hobson v Tulloch [1898] 1 Ch 424.
2 Bray v Fogarty (1870) 4 IR Eq 544.
3 Wrotham Park Settled Estates v Naylor [1991] 1 EGLR 274 (a family was held to include 'the body of persons who live in one house or
under one head including parents, children, servants etc').
4 Wilkinson v Rogers (1863) 12 WR 119.
5 Patman v Harland (1881) 17 Ch D 353.
6 Day v Waldron (1919) 88 LJKB 937.
7 Wickenden v Webster (1856) 6 E & B 387; German v Chapman (1877) 7 Ch D 271, CA.
8 Rolls v Miller (1884) 27 Ch D 71.
9 Rogers v Hosegood [1900] 2 Ch 388; Barton v Reed [1932] 1 Ch 362; Morrissey v Hirst [1966] EGD 586.
10 Dobbs v Linford [1953] 1 QB 48, [1952] 2 All ER 827, CA. It was suggested in that case and in Downie v Turner [1951] 2 KB 112,
[1951] 1 All ER 416, CA, that where there is a covenant not to use for any purpose other than as a private dwelling house followed by a
covenant not to sublet the whole, the two covenants must be construed together and as the first covenant prevents the subletting of a part the
result is that a part cannot be sublet even though the subtenant is using and is bound to use the part as a private dwelling house. Where,
however, the second covenant is not to sublet a part without consent, it may well be that the second covenant qualifies the first and there may
be a right to sublet with consent. In Morrissey v Hirst [1968] EGD 586 Ashworth J said that a correct reading of the above two cases did not
lead to the conclusion that a single subletting of a part of the premises to one person was a breach of a covenant to use solely as a dwelling
house.
11 Chatsworth Estates Co v Fewell [1931] 1 Ch 224.
12 Thorn v Madden [1925] Ch 847; Tendler v Sproule [1947] 1 All ER 193, CA (but see n 9).
13 Falgor Commercial SA v Alsabahia Inc (1985) 18 HLR 123, [1986] 1 EGLR 41, CA, where the demised premises were equipped and
furnished by the lessee and cleaned by employees, and the user was held not to be residential but rather in the business of providing serviced
accommodation.
HR A[7068]
Where the covenant was to use 'for the purpose of a private residence in the occupation of one household only', it was
held that the mere taking in of one paying guest who shares the family life as far as possible would not be regarded by a
reasonable man as a breach of the covenant. The way in which those who are sharing the accommodation under the
same roof do or do not live as one family is a relevant circumstance and also the size and layout of the premises. The
covenant has to be interpreted as if entered into by two reasonable people familiar with the premises and their location.
Nothing in the covenant here in question precluded a true sharing between a tenant and a friend or friends. But when a
person comes in answer to an advertisement and there is no real sharing of meals and of the general social life to a
degree that she lived as a member of the family, then there is a breach of the covenant1. Where a covenant to use as a
private dwelling house is followed by another against subletting of a part without consent, the tenant may with consent
sublet a part restricted to use as a private dwelling house2, but where the second covenant is against subletting the
whole house, then only the use of the whole as private residence is allowed and subletting of a part is a breach3. In the
absence of an express covenant preventing it4, the sale by auction of furniture belonging to the occupier will not involve
Page 1130
a breach5.
HR A[7069]
1 Segal Securities Ltd v Thoseby [1963] 1 QB 887, [1963] 1 All ER 500, applied by the Court of Appeal in Heglibiston Establishment v
Heyman (1977) 36 P & CR 351.
2 Downie v Turner [1951] 2 KB 112, [1951] 1 All ER 416.
3 Dobbs v Linford [1953] 1 QB 48, [1952] 2 All ER 827, CA. See para HR A[7067], nn 10, 11.
4 Toleman v Portbury (1872) LR 7 QB 344, Ex Ch.
5 Reeves v Cattell (1876) 24 WR 485.
HR A[7070]-[7080]
An agreement relating to a lease of property including a dwelling which would otherwise have the effect of restricting
or prohibiting the occupation of the dwelling by a person with a mental disorder, or restricting or prohibiting the
provision of accommodation within the dwelling for such a person, is void by statute1. The measure of damages for
breach of a covenant as to use as a dwelling will depend upon whether reinstatement as a single dwelling house is
immediately possible2, or must necessarily be delayed3.
HR A[7081]
1 Leasehold Reform, Housing and Urban Development Act 1993, s 89 at para HR A[20936].
2 Eyre v Rea [1947] KB 567, [1947] 1 All ER 415.
3 Duke of Westminster v Swinton [1948] 1 KB 524, [1948] 1 All ER 248.
(f) Public house or tavern etc
HR A[7082]
A covenant against the use of premises as a 'public house, tavern or beershop', is broken by the sale under an off-licence
of beer not to be drunk on the premises1. A sale to members of a members' club for consumption on the premises is not
a breach of a covenant against the sale of liquors2. The sale of some wines, spirits, lager and bitter in cans from a video
shop where the lease prohibited 'use as a public house beer shop' was a breach of covenant3. A covenant against
carrying on the trade of an innkeeper, publican, or seller by retail of wine, spirits, or beer, is broken by the sale of these
liquors by a grocer in the course of his trade4, or by the lessee of a theatre5. A covenant not to carry on the trade of a
Page 1131
vintner is not restricted to the sale of wine to be consumed on the premises6. But a covenant against a 'public house or
beershop', where the premises are used as a private hotel, and no beer is sold, does not prevent the supply of wines and
spirits to visitors only7; and a covenant against the business of alehouse keeper, beer-house keeper, tavern keeper, or
licensed victualler does not prevent the carrying on of a restaurant with a restaurant licence8.
HR A[7083]
1 Bishop of St Albans v Battersby (1878) 3 QBD 359; London and Suburban Land and Building Co v Field (1881) 16 Ch D 645, CA;
Nicoll v Fenning (1881) 19 Ch D 258. On the other hand, a covenant not to use as 'a beerhouse' is not broken by the sale under licence of
beer to be consumed off the premises; Bishop of St Albans v Battersby (1878) 3 QBD 359; London and North Western Rly Co v Garnett
(1869) LR 9 Eq 26; Holt & Co v Collyer (1881) 16 Ch D 718; and as to 'public house', see Pease v Coats (1866) LR 2 Eq 688.
2 Ranken v Hunt (1894) 10 R 249; see also Graff v Evans (1882) 51 LJMC 25; Newall v Hemingway (1888) 58 LJMC 46; Trebanog
Working Men's Club and Institute Ltd v Macdonald [1940] 1 KB 576, [1940] 1 All ER 454.
3 Sood v Barker [1991] 1 EGLR 87, [1991] 23 EG 112, CA.
4 Feilden v Slater (1869) LR 7 Eq 523.
5 Buckle v Fredericks (1890) 44 Ch D 244, CA; but the circumstances may not be such as to call for an injunction (Jones v Bone (1870)
LR 9 Eq 674, as explained in Buckle v Fredericks (1890) 44 Ch D 244 at 248).
6 Wells v Attenborough (1871) 24 LT 312.
7 Duke of Devonshire v Simmons (1894) 11 TLR 52.
8 Lorden v Brooke-Hitching [1927] 2 KB 237.
(g) Permitting and suffering
HR A[7084]
When the covenant is against permitting or suffering the premises to be used for certain purposes, and the underlessee
has sublet the premises, the lessee will be guilty of a breach of covenant if he either gives leave to the underlessee to
commit the breach or abstains from taking reasonable steps to prevent the breach by the underlessee where it is within
his power to prevent it1. Lessees who wilfully shut their eyes to the use of premises as a brothel were held to have
suffered such user2. One cannot permit something over which one has no control3. It would seem that the word 'suffer'
is wider in meaning than the word 'permit'4. Where the acts complained of have been done by an employee of the tenant
it does not follow that the tenant himself (whether an individual or a corporation) does the acts5. If the covenant is an
absolute covenant that the prohibited act shall not be done, the tenant will be liable if the proscribed act occurs, and it
will be no defence that he did not permit or suffer it to happen6. A covenant not to permit premises to be used for a
particular purpose will usually be construed so as to prohibit the covenantor himself from making that use of the
premises7.
Page 1132
HR A[7085]
1 Berton v Alliance Economic Investment Co [1922] 1 KB 742, CA; Atkin v Rose [1923] 1 Ch 522; Barton v Reed [1932] 1 Ch 362;
Toleman v Portbury (1870) LR 5 QB 288, Ex Ch; Toleman v Portbury (1872) LR QB 344, Ex Ch (discussed in Atkin v Rose [1923] 1 Ch
522); Prothero v Bell (1906) 22 TLR 370; Tritton v Bankart (1887) 56 LT 306 (where the underlease expressly authorised a breach).
2 Borthwick-Norton v Romney Warwick Estates Ltd [1950] 1 All ER 798, CA. In Norton v Charles Deane Productions Ltd [1970] EGD
268, Swanwick J applied observations of Atkin LJ in Berton v Alliance Economic Investment Co [1922] 1 KB 742 on the meaning of 'permit
or suffer'. Swanwick J condensed what Atkin LJ said into the statement that an act which a party could have, but had not, prevented was
'permitted' by that party if he could reasonably have foreseen that the act might be done. Berton v Alliance Economic Investment Co [1922] 1
KB 742 was recently applied in Commercial General Administration Ltd v Thomsett (1979) 250 Estates Gazette 547.
3 Tophams Ltd v Earl of Sefton [1967] 1 AC 50, [1966] 1 All ER 1039, HL.
4 Barton v Reed [1932] 1 Ch 362 at 375, per Luxmoore J.
5 Norton v Charles Deane Productions Ltd [1970] EGD 268. Quaere, however, whether when the tenant is a company and the offending
acts have been done by eg the managing director the company has not itself committed the acts. See the general observations on the liability
of a company in criminal law for the acts of its employees in Tesco Supermarkets Ltd v Nattrass [1972] AC 153, [1971] 2 All ER 127, HL.
6 Prothero v Bell (1906) 22 TLR 370. As to evidence of the lessor's consent to user in violation of the restriction, see Toleman v Portbury
(1870) LR 5 QB 288, Ex Ch.
7 Oceanic Village Ltd v United Attractions Ltd [2000] Ch 234, [2000] 1 All ER 975. In this case the covenant was given by the landlord in
a lease granted to A. The landlord let another part of its land to a different tenant, B, on terms that permitted it to use those premises for a
competing trade. The covenant given by the landlord to A could not be enforced by A directly against B in reliance on the Landlord and
Tenant (Covenants) Act 1995, s 3(5).
(h) Subsidiary, incidental and similar uses
HR A[7086]
Questions sometimes arise as to whether a use by a tenant involves a breach of a restrictive covenant where the use
involves an activity which if it were the only or predominant use would certainly be a breach of covenant, but where
that activity is subsidiary to or ancillary to the principle use. A covenant against the exercise of a particular trade forbids
the carrying on of any part of such trade1; and the trade cannot be carried on as an accessory to the tenant's main
business, though for the convenience of customers2. But the covenant is not broken where the tenant, who carries on a
business of a different class, merely sells, as incidental to his own business, some articles which are sold in the
prohibited business3. Some examples follow.
(a) Sale of cigarettes at the cash desk of a restaurant was held not to be a use of the premises for the
business of the sale of tobacco, cigars and cigarettes4. Contrast this with the case where the sale of
tobacco and confectionery by a tenant whose lease forbade him from using the premises except as a
grocery and general store, and expressly prohibited use as a tobacconist and confectioner, was held to be
a breach of covenants on the facts. The sale of some tobacco and confectionery was permissible, but not
where it was sufficient in scale to amount to a distinct trade or business5.
(b) Covenant not to permit premises to be used for the business of bread and confectionery was held
Page 1133
not to be broken by letting to grocers who sold bread and confectionery6.

(c) The ancillary sale of freezer cabinets at a supermarket was held not to be a breach of covenant
relating to user for supermarket and allied purposes7.
(d) The sale of electrical goods and some items usually sold in chemists' shops was held not to be a
breach of covenants to use the demised premises as in effect a 'food supermarket'8.
(e) A Covenant to use the premises for the business of high class retailers of jewellery did not preclude
the tenant from using the premises for the purposes of storage and administration in respect of a high
class jeweller close by. The business of a high class retailer did not begin and end at the point of sale to
the customer. It necessarily included the storage of stock used in the business, the processing of
paperwork and meetings and negotiations with suppliers. Premises used for those necessary purposes
were used 'for' the business of high class retailers within the covenant9.
(f) A covenant to use as business offices only was not broken by the acts of sleeping on the premises at
night or having meals there by day since these acts alone do not amount to user as a dwelling house10.
(g) A covenant to use for showrooms, workrooms and offices only, coupled with a restriction covering
a wide area of trades, meant that the property was to be used for trade purposes only, and then only for
certain trades, and use of the property as a dwelling house was a clear breach of covenant11.
Where the covenant is not to carry on a business similar to the specified business of another person, it is broken if the
businesses are sufficiently alike to compete12.
HR A[7087]
1 Doe d Gaskell v Spry (1818) 1 B & Ald 617 at 618; Doe d Davis v Elsam (1828) Mood & M 189 at 191, per Lord Tenterden CJ;
Errington v Birt (1911) 105 LT 373; Derby Motor Cab Co v Crompton and Evans' Union Bank (1915) 31 TLR 185; LSG Ltd v T B
Lawrence Ltd (1925) 42 TLR 85, CA; Wills v Adams (1908) 25 TLR 85; Wartski v Meaker (1914) 110 LT 473; Wadham v Postmaster
General (1871) LR 6 QB 644.
2 Fitz v Iles [1893] 1 Ch 77, CA; distinguished in Property Developments (Commercial) v Fugaccia (1971) 221 Estates Gazette 964.
3 Stuart v Diplock (1889) 43 Ch D 343, CA; Lumley v Metropolitan Rly Co (1876) 34 LT 774; H E Randall Ltd v Summers 1919 SC 396.
4 A Lewis & Co (Westminster) Ltd v Bell Property Trust Ltd [1940] Ch 345, [1940] 1 All ER 570.
5 Williams v Kiley (t/a CKSupermarkets Ltd) [2002] EWCA Civ 1645; [2003] 06 EG 147.
6 Labone v Litherland UDC [1956] 2 All ER 215, [1956] 1 WLR 522.
7 Calabar (Woolwich) Ltd v Tesco Stores Ltd (1977) 245, Estates Gazette 479, CA.
8 Basildon Development Corpn v Mactro Ltd [1986] 1 EGLR 137, CA.
9 Montross Associated Investments SA v Moussaieff [1992] 1 EGLR 55, [1992] 05 EG 160, CA; affg [1990] 2 EGLR 61.
10 Macmillan & Co Ltd v Rees [1946] 1 All ER 675. Such a covenant is really a negative covenant (ie a covenant not to use otherwise
than for business purposes). Therefore, where reg 68CA of the Defence (General) Regulations 1939, SR & O 1939/927 (now expired), which
restricted the right to use housing accommodation for business purposes, applied there was no ex facie illegality as the tenant need not use
the premises at all: Edler v Auerbach [1950] 1 KB 359, [1949] 2 All ER 692.
Page 1134
11 City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129, [1958] 2 All ER 733.
12 Drew v Guy [1894] 3 Ch 25, CA.

Page 1135
parties/D Restrictions on use of premises/11 Particular trades and businesses classified
11 Particular trades and businesses classified
HR A[7088]
The following cases will aid in the construction of the more common covenants:
'Butcher' Doe d Gaskell v Spry (1818) 1 B & Ald 617; Hartshorn v Angliss [1951] 1 TLR 1043 (sale of
poultry held not to be a breach).
'Beer shop' Sood v Barker [1991] 1 EGLR 87, [1991] 23 EG 112, CA.
'Coffee-house' Fitz v Iles [1893] 1 Ch 77. See also Property Development (Commercial) v Fugaccia
(1971) 221 Estates Gazette 964.
'Confectioner' Lumley v Metropolitan Rly Co (1876) 34 LT 774; Labone v Litherland UDC [1956] 2 All
ER 215, [1956] 1 WLR 522.
'Draper' Wills v Adams (1908) 25 TLR 85.
'Fishmonger' Errington v Birt (1911) 105 LT 373.
'Garage with car sales and vehicle repairs' Atwal v Courts Garages [1989] 1 EGLR 63, [1989] 07 EG 78,
CA.
'Grocers provisions, wine spirit and beer merchants' St Marylebone Property Co Ltd v Tesco Stores Ltd
[1988] 2 EGLR 40, [1988] 27 EG 72.
'Grocery and general stores' Williams v Kiley (t/a CK Supermarkets Ltd) [2002] EWCA Civ 1645, [2003]
04 LS Gaz R 32, [2003] NLJR 1809.
'Hairdresser and Beauty Salon' Russo v Field and Menat Construction Ltd (1970) 12 DLR (3d) 665 (Ont
CA).
'Hosier' Wartski v Meaker (1914) 110 LT 473.
'Hotel', 'Restaurant' Drew v Guy [1894] 3 Ch 25.
'Ladies' Outfitter' Stuart v Diplock (1889) 43 Ch D 343.
'Motor Garage' Derby Motor Cab Co v Crompton and Evans' Union Bank Ltd (1915) 31 TLR 185.
'Nursery furniture and goods' Stevenage Development Corpn v Baby Carriages and Toys (Stevenage) Ltd
[1968] EGD 401 (sale of baby clothes a breach of covenant).
'Offices' Randell v Block (1893) 38 Sol Jo 141.
'Post Office' Wadham v Postmaster General (1871) LR 6 QB 644; Frampton v Gillison [1927] 1 Ch 196.
'Private club' Seward v Paterson (1896) 12 TLR 525.
'Propaganda purposes' Litvinoff v Kent (1918) 34 TLR 298.
'Retailer' Montross Associated Investments SA v Moussaieff [1992] 1 EGLR 55, CA; affg [1990] 2 EGLR
61.
'Sale by auction' Toleman v Portbury (1872) LR 7 QB 344.
'Shop' and 'Warehouses' London and Suburban Land and Building Co v Field (1881) 16 Ch D 645;
Haynes v Ford [1911] 2 Ch 237 at 248; Deeble v Robinson [1954] 1 QB 77, [1953] 2 All ER 1348 (milk
roundsman's shed used for storage of spare bottles and refrigerator not a shop). Almond v Heathfield
Laundry (Birmingham) Ltd, Cushing v Webber [1960] 3 All ER 700, [1960] 1 WLR 1339 (a rating case
where it was held that a laundry to which customers uninvited resorted for leaving and collecting their
washing did not make any part of laundry a retail shop).
'Tobacconist' A Lewis & Co (Westminster) Ltd v Bell Property Trust Ltd [1940] Ch 345, [1940] 1 All ER
Page 1136
570.
'Workshop' Meredith v Wilson (1893) 69 LT 336.
Page 1137
parties/E Release, modifications and discharge of restrictive covenants
E
Page 1138
parties/E Release, modifications and discharge of restrictive covenants/1 Introduction
1 Introduction
HR A[7089]
A restrictive covenant in a lease may be released expressly or as an implication from long acquiescence in its breach. In
certain circumstances such a covenant may also be modified or discharged by the Lands Tribunal under the Law of
Property Act 1925, s 84, or by the County Court under the Housing Act 1985, s 610.
Page 1139
parties/E Release, modifications and discharge of restrictive covenants/2 Express release of restrictive covenants
2 Express release of restrictive covenants
HR A[7090]-[7100]
The lessor may expressly release by deed the covenant either in its entirety, or in part so as to allow the carrying on of a
particular trade1. This is most commonly done by a deed of variation, which will usually substitute a new covenant
restrictive of use for the existing covenant. Releasing a covenant may expose a landlord to proceedings by other
covenantors. Where a number of houses were held under identical leases containing a covenant against user otherwise
than as a private dwelling house without the consent in writing of the lessor having been first obtained, another lessee
could not prevent the landlord from authorising another lessee to use his premises for other purposes2. Where, however,
a letting scheme has been constituted and the leases contain absolute covenants against user otherwise than for
residential purposes it would seem that the landlord would be derogating from his grant to the other lessees if he
permitted one lessee to use the premises demised to him for business purposes3.
HR A[7101]
1 Macher v Foundling Hospital (1813) 1 Ves & B 188.
2 Pearce v Maryon-Wilson [1935] Ch 188. See also Boxbusher Properties Ltd v Graham (1976) 240 Estates Gazette 463.
3 Newman v Real Estate Debenture Corpn Ltd and Flower Decorations Ltd [1940] 1 All ER 131. This case held that there could be a
scheme in respect of self-contained flats in one house; but in Kelly v Battershell [1949] 2 All ER 830, the Court of Appeal refused to imply
such a scheme where the house was not so converted and the covenants in the subleases were for the purpose of protecting the sublessor
against a covenant in the head lease. It was further suggested that there must be covenants or regulations creating a scheme to be applied for
the benefit of all the separate parts rather than one or even two covenants which in themselves hardly form a scheme. In this case the lower
part was used as part of a hotel, and it was held that the consequent interference with the tenant's convenience, amenity or privacy was not
such as to frustrate the use of the upper part as a private residence.
Page 1140
parties/E Release, modifications and discharge of restrictive covenants/3 Release implied from acquiescence
3 Release implied from acquiescence
HR A[7102]
In the absence of a deed release may be inferred from conduct or from acquiescence in a breach. This is a species of
estoppel. The circumstances must be such as to make it inequitable for the lessor to assert the absence of a deed1. It is
important to distinguish between waiver of a right of action (such as a right to damages or for forfeiture) for past
breaches, and acquiescence or implied release which releases the covenant in the future2. The same conduct may be
relied upon as raising either implication, but a longer period of conduct is necessary to support an implied release3. The
lessor does not waive the benefit of the covenant merely by permitting other premises held under a similar lease to be
used for the prohibited purpose4. But if by his acts he leads a reasonable person justifiably to conclude that the
covenants are no longer enforced, the landlord will not be permitted to enforce the covenant5. If the lessor is aware of a
continuing breach and acquiesces in it for a long period - where, for instance, with full knowledge, he receives rent - it
will be presumed that he has either released the covenant or granted a licence for the user. But the authorities show that
such a presumption will only arise if there has been acquiescence for a long period6. There can be no acquiescence
without knowledge of the breach on the part of the lessor7. Where the covenants are only binding on the tenant in
equity, the tenant may avoid their burden if he can show that an action to enforce them is unmeritorious and not bona
fide. If he can show that such a complete change in the character of the neighbourhood has taken place as to render the
covenants valueless, or if he can show that the landlord's acts or omissions caused such changes, and were such as to
justify a reasonable person in believing that the covenants were no longer enforceable, he will avoid liability8.
HR A[7103]
1 Bray v Fogarty (1870) 18 WR 1151; London, Chatham and Dover Rly Co v Bull (1882) 47 LT 413; Gibbon v Payne (1907) 23 TLR
250, CA.
2 It may be that there is some intermediate stage between the two doctrines of acquiescence and waiver. In Chelsea Estates Ltd v Kadri
[1970] EGD 425 a covenant to use premises as a private dwelling house only had been broken by sublettings of four separate parts, the
breach having been continued for some 50 years. Goff J held that on these facts the landlord's forfeiture action could not succeed. The
decision cannot be justified on the ground of waiver since the breach was of a continuing nature; yet Goff J said that the covenant was not
wholly destroyed and it might serve to prohibit some future multiple user. Possibly, therefore, a long breach may lead to an inference of
acquiescence to breaches of that particular kind leaving the user clause to bite on breaches of a different kind.
3 This passage of the text was impliedly approved, without elaboration by the House of Lords in Banning v Wright [1972] 1 WLR 972 at
989.
4 Kemp v Sober (1851) 1 Sim NS 517; Meredith v Wilson (1893) 69 LT 336.
5 Chatsworth Estates Co v Fewell [1931] 1 Ch 224.
6 Gibson v Doeg (1857) 2 H & N 615 (20 years); Re Summerson, Downie v Summerson [1900] 1 Ch 112n (30 years); Hepworth v Pickles
[1900] 1 Ch 108 (24 years); Craig v Greer [1899] 1 IR 258, CA. In Wolfe v Hogan [1949] 2 KB 194, [1949] 1 All ER 570, and City and
Westminster Properties (1934) Ltd v Mudd [1959] Ch 129, [1958] 2 All ER 733, CA, acceptance of rent for shorter periods with knowledge
Page 1141
of the breach was held to amount to a waiver of past breaches only and not to a release of the covenant.
7 Ashcombe v Mitchell (1895) 12 TLR 17, CA. A covenant personally to inhabit the farmhouse is not waived by allowing one only of two
joint tenants (in this case trustees) to inhabit, since the landlord's conduct is not wholly inconsistent with the continued existence of the
covenant: Lloyds Bank Ltd v Jones [1955] 2 QB 298, [1955] 2 All ER 409, CA.
8 Chatsworth Estates Co v Fewell [1931] 1 Ch 224. It has been said that the changes must be the result of the acts and omissions of the
person entitled to enforce the covenants (White v Bijou Mansions Ltd [1937] Ch 610 at 626, [1937] 3 All ER 269 at 278); but the better view
seems to be that in Sobey v Sainsbury [1913] 2 Ch 513 at 529, 530; Chatsworth Estates Co v Fewell [1931] 1 Ch 224, and applied in the
Court of Appeal in Westripp v Baldock [1939] 1 All ER 279 (where it was held that a neighbourhood was still mainly residential and had not
suffered such a change as would release a covenant, which prohibited the use of a house for trade or manufacture.
Page 1142
parties/E Release, modifications and discharge of restrictive covenants/4 Discharge or modification of restrictive
covenants by the Lands Tribunal
4 Discharge or modification of restrictive covenants by the Lands Tribunal
HR A[7104]
In certain cases the Lands Tribunal is given power by the Law of Property Act 1925, s 84 to discharge or modify
restrictive covenants in freehold conveyances and leases1. A full treatment of this subject is beyond the scope of this
work, but the main principles relating to leases are discussed. Where a restrictive covenant affects a lease granted for
term of more than 40 years, of which 25 years have expired, it may be discharged or modified on proof of one or more
of a number of different grounds2. There is jurisdiction to modify or discharge the restriction even when the person
seeking the discharge is the original covenantor3. Discharge or modification may be ordered on the ground that the
restriction is obsolete (in the sense that their original purpose can no longer be served4). Such an order may also be
made on the ground that the continued existence of the restrictive covenant would impede some reasonable user of the
land for public or private purposes or, as the case may be, would unless modified so impede such user5. In this case
discharge or modification of a restrictive covenant by reference to its impeding some reasonable user of the land is
authorised where the Lands Tribunal is satisfied that the restriction, in impeding that user either does not secure to
persons entitled to the benefit of it any practical benefits of substantial value or advantage to them, or is contrary to the
public interest, and that money will be an adequate compensation for the loss or disadvantage (if any) which any such
person will suffer from the discharge or modification6. In determining whether a restriction ought to be modified or
discharged the tribunal must take into account the development plan and any declared or ascertainable pattern for the
grant or refusal of planning permissions in relevant areas as well as the period at which and the context in which the
restriction was created or imposed and any other material circumstances7. Discharge or modification may also be
ordered on the ground that all persons of full age and capacity entitled to the benefit of the restriction have agreed to the
discharge or modification8; or that the discharge or modification will not injure the persons so entitled9. The burden is
on the applicant to prove facts bringing the matter within one of the alternative cases in which jurisdiction to modify
covenants is given10. Where a restriction is discharged or modified the tribunal may direct that the applicant pay to any
person entitled to the benefit of the restriction such sum by way of consideration as the tribunal may think it just to
award under one but not both of two heads. These are: either a sum to make up for any loss or disadvantage suffered by
that person in consequence of the discharge or modification; or a sum to make up for any effect which the restriction
had, at the time when it was imposed, in reducing the consideration then received for the land affected by it11. The
tribunal may also, when modifying a restriction, add such further provisions restricting the user of or the building on the
land affected as appears to the tribunal to be reasonable in view of the relaxation of the existing provisions, and as may
be accepted by the applicant12. If an action is brought to enforce a restrictive covenant, the person against whom the
proceedings are taken may apply to the court for an order giving leave to apply to the Lands Tribunal for the
modification or discharge of the covenant, and for staying the proceedings in the meantime13. The making of the order
is in the discretion of the court, but where the application therefor is made promptly it will normally be acceded to,
unless on the evidence it is plain that an application to the proper authority would have scant hope of success14. No
such relief will be given in proceedings for possession of premises under a power of re-entry for breach of such a
covenant, for such proceedings are not proceedings by action to enforce the covenant15.
HR A[7105]
Page 1143
1 Jurisdiction to authorise the modification or discharge is conferred on the Lands Tribunal by the Lands Tribunal Act 1949, s 1(4). As to
procedure, see Pt V of the Lands Tribunal Rules 1975, SI 1975/299 as amended by SI 1977/1820 and SI 1981/105, 600. Costs are in the
discretion of the Lands Tribunal (Lands Tribunal Act 1949, s 3(5)). An appeal by way of case stated lies from the Lands Tribunal to the
Court of Appeal on a question of law only: LTA 1949, s 3(4). There are provisions whereby the hearing before the Lands Tribunal may be
suspended to enable the court to give an opinion on whether or not any freehold land is or would be affected by a restriction, or on the nature
and extent of a restriction and whether it is or would be enforceable: Law of Property Act 1925, s 84(2), (3)(a), as amended by the Law of
Property Act 1969.
2 Law of Property Act 1925, s 84(12) at para HR A[20112], as amended by the Landlord and Tenant Act 1954, s 52 at HR B[681]. LPA
1925, s 84(12) does not apply to mining leases. The 25 years must have expired from the date of the lease not from any earlier date
mentioned in the lease as the date from which the term is to run: Earl Cadogan v Guinness [1936] Ch 515, [1936] 2 All ER 29.
3 Ridley v Taylor [1965] 2 All ER 51, [1965] 1 WLR 611. The fact may be one to be weighed in the balance in deciding whether the
discretion to modify or discharge should be exercised, as would the fact that the restriction has been reaffirmed within 25 years of the
application.
4 Law of Property Act 1925, s 84(1)(a); Re Truman, Hanbury, Buxton & Co Ltd's Application [1956] 1 QB 261, [1955] 3 All ER 559. As
to the discretion of the tribunal and the matters which it is legitimate for them to take into account, see Driscoll v Church Comrs for England
[1957] 1 QB 330, [1956] 3 All ER 802, CA.
5 Law of Property Act 1925, s 84(1)(aa).
6 LPA 1925, s 84(1A). In Gilbert v Spoor [1983] Ch 27, [1982] 2 All ER 576, CA it was held that 'benefit' meant 'any' practical benefits
and was not confined to benefits which ran with the land. Accordingly, the Court of Appeal was prepared to decide that a landscape view,
not visible from the benefited land itself but visible from land close by, was capable of being a 'practical benefit'. See also Re Henderson's
Conveyance [1940] Ch 835, [1940] 4 All ER 1.
7 Law of Property Act 1925, s 84(1B).
8 LPA 1925, s 84(1)(b).
9 LPA 1925, s 84(1)(c).
10 Re Ghey and Galton's Application [1957] 2 QB 650, [1957] 3 All ER 164, CA.
11 LPA 1925, s 84(1).
12 LPA 1925, s 84(1C), and the tribunal may refuse to modify a restriction without some such addition.
13 LPA 1925, s 84(9); Feilden v Byrne [1926] Ch 620; Angell v Burn (1933) 77 Sol Jo 337.
14 Richardson v Jackson [1954] 1 All ER 437, [1954] 1 WLR 447. In Holdom v Kidd [1991] 1 EGLR 57, [1991] 02 EG 163, the Court of
Appeal refused to discharge an interlocutory injunction granted to enforce a restriction in the use of land to agricultural purposes. Gipsies
were being accommodated on hardstandings on the land, and the owners wished to present their case for planning permission and for
discharge or modification of the covenant with the advantageous ground of present occupation. The judge was entitled to reject this; it did
not prevent the appellants from going through the planning and Lands Tribunal procedures if so advised.
15 Iveagh v Harris [1929] 2 Ch 142.

Page 1144
parties/E Release, modifications and discharge of restrictive covenants/5 Variation of covenants to permit conversion of
houses into multiple dwellings
5 Variation of covenants to permit conversion of houses into multiple dwellings
HR A[7106]
Where it is proved to the satisfaction of the county court on the application of a local authority or any person interested
in a house that, owing to the changes in the character of the neighbourhood in which the house is situate, it cannot be let
as a single tenement but could readily be let for occupation if converted into two or more tenements, or that planning
permission has been granted for the use of the house as converted into two or more separate dwelling houses instead of
as a single dwelling house, and that in either case the lease or any restrictive covenant prevents such conversion, the
court, after giving those interested an opportunity of being heard, may vary the lease or covenant so as to permit such
conversion upon such conditions and terms as may be just1. The conversion contemplated by the section need not
necessarily involve structural alteration2. But this provision does not permit two adjoining houses to be divided
horizontally into separate flats3.
HR A[7107]
1 Housing Act 1985, s 610. As to the construction of the expression 'changes in the character of the neighbourhood', see Alliance
Economic Investment Co v Berton (1923) 92 LJKB 750, 87 JP 85.
2 Stack v Church Comrs for England [1952] 1 All ER 1352, CA.
3 Josephine Trust Ltd v Champagne [1963] 2 QB 160, [1962] 3 All ER 136.

Page 1145
parties/F Supervision by local authorities of use of residential buildings
F
Page 1146
parties/F Supervision by local authorities of use of residential buildings/1 Introduction
1 Introduction
HR A[7108]
A number of statutory provisions give powers to local authorities to intervene in the use occupation and management of
buildings let or used for residential purposes with a view to securing basic standards of hygiene and amenity for the
occupiers. These include powers to deal with overcrowding, powers to impose a code of management, and to require the
execution of works. It is beyond the scope of this work to deal with these provisions at length here, and they are
discussed in outline only.
Page 1147
parties/F Supervision by local authorities of use of residential buildings/2 General provisions against overcrowding
2 General provisions against overcrowding
HR A[7109]
The use of a dwelling house for the accommodation of such a number of persons as to cause it to be overcrowded is
prohibited by the Housing Act 1985, Pt X. If it comes to the knowledge of a landlord that there is overcrowding, a duty
is placed upon him to inform the local authority 1. For the purposes of that Act a house is deemed to be overcrowded if
two persons being 10 years old or more, of opposite sexes, and not being husband and wife must sleep in the same room
or if in relation to the number and floor space of the rooms the number of persons sleeping in the house exceeds the
permitted number2. An occupier or landlord who permits overcrowding is, subject to certain conditions, guilty of an
offence and liable to a fine on conviction3, but the local authority may grant the occupier, or an intending occupier, a
licence to use the house temporarily for the accommodation of persons in excess of the permitted number4. A summary
of the provisions of HA 1985, ss 324-331 and a statement of the permitted number of persons in relation to the house
must be contained in the rent-book5. So long as a dwelling house is overcrowded in such circumstances as to render the
occupier guilty of an offence nothing in the Rent Act 1977 prevents the landlord from obtaining possession6. If it
appears, in respect of a house which is occupied by persons who do not form a single household that an excessive
number of persons is being accommodated on the premises having regard to the number of rooms available, the local
authority may serve on the occupier or the person having the control and management thereof or on both a notice stating
the maximum number of persons by whom any room may be occupied for sleeping accommodation at any one time, or
that in their opinion the premises are unsuitable to be occupied as they are. Such a notice may, in relation to any room,
prescribe special maxima applicable in any case where some or all of the persons occupying the room are under a
specified age. Anyone permitting occupation other than as prescribed by the notice after it has come into effect is guilty
of an offence7.
HR A[7110]-[7120]
1 Housing Act 1985, s 333.
2 HA 1985, ss 324-326.
3 HA 1985, s 327.
4 HA 1985.
5 HA 1985, s 332.
6 Rent Act 1977, s 101; Zbytniewski v Broughton [1956] 2 QB 673, [1956] 3 All ER 348, CA, where it was held that the material date for
deciding whether the premises are overcrowded is the date when the matter comes before the court. See Division C.
7 Housing Act 1985, ss 358-364. These sections deal specifically with overcrowding. Appeal against such a notice can be made under HA
1985, s 362.
Page 1148
parties/F Supervision by local authorities of use of residential buildings/3 Directions to prevent or reduce overcrowding
3 Directions to prevent or reduce overcrowding
HR A[7121]
The local authority may for preventing or remedying overcrowding give a direction stating the highest number of
persons who should live in the house in its existing condition and the occupier must then limit the number of persons
living in the house to that number1. Notice of intention to make such a direction must be served on the owner of the
house2 not less than seven days before giving the direction and such notice must be posted in an accessible position in
the house3. Opportunity must be given to persons served to make representation against the direction4. The local
authority may make a further direction prescribing a smaller number of residents5. After service of the notice of
intention to make the direction, a copy of the direction itself must be similarly served within seven days of its making.
The issue of such a direction makes it unlawful for the occupier to permit more persons than the specified number to
take up residence in the house, or, if that number is exceeded, to allow anyone to enter into residence when a person
leaves until the number is reduced so far as necessary to comply with the direction. In fixing the number the local
authority may have regard not only to the existing condition of the premises but also to its condition when a notice
under HA 1985, s 352 has been complied with6. If necessary works are carried out, the direction may be withdrawn and
an owner may appeal to the county court if the authority refuse such withdrawal7. The local authority may from time to
time require a statement of particulars of the occupation of the house8. These provisions are exercisable whether or not
a notice to execute works has been served and without prejudice to the powers under HA 1985, s 3589.
HR A[7122]
1 Housing Act 1985, s 354(1). Any such direction when made may refer to the whole or part of a house: ss 354(2), 355(1). As to a
direction relating to overcrowding in the future, see Allen v Khan [1968] 1 QB 609, [1967] 3 All ER 1082.
2 As to who is 'owner', see Housing Act 1985, s 398. The notice must also be served on every person who is to the knowledge of the
authority a lessee of the house.
3 HA 1985, s 354(3).
4 HA 1985.
5 HA 1985, s 354(5).
6 HA 1985, s 354(6).
7 HA 1985, s 357(1).
8 HA 1985, s 356(1).
9 As to HA 1985, s 358: see para HR A[7109].

Page 1149
parties/F Supervision by local authorities of use of residential buildings/4 Management code for houses let in multiple
occupation
4 Management code for houses let in multiple occupation
HR A[7123]
The Secretary of State may, with a view to providing a code for the management of houses in multiple occupation, by
regulations make provision for ensuring that the person managing a house in multiple occupation observes proper
standards of management1. The regulations may require the person managing the house to do work to the means of
water supply and drainage, means of escape from fire (and fire precautions equipment) kitchens, bathrooms and water
closets in common use, sinks and wash-basins in common use, common staircases, corridors and passage ways, and
outbuildings, yards and gardens in common use; and to make satisfactory arrangements for the disposal of refuse and
litter from the house, and to ensure fire escapes are kept unobstructed2. The person managing a house3 is only liable to
perform the requirements of the regulations to the extent that he has power or is otherwise liable to take the necessary
steps to perform them4. Regulations so made may make different provision for different types of house; impose duties
on those with an estate or interest in the house to supply information to the local housing authority; impose duties on
persons who live in the house for ensuring that the person managing the house can effectively carry out the duties
imposed on him by the regulations; authorise the local authority to obtain information as to the number of individuals or
households accommodated in the house; and contain such other incidental and supplementary provisions as may appear
expodient5. It is an offence knowingly or without reasonable excuse to fail to comply with such regulations6.
HR A[7124]-[7126]
1 Housing Act 1985, s 369(1). The current regulations are the Housing (Management of Houses in Multiple Occupation) Regulations
1990, SI 1990/830.
2 HA 1985, s 369(2) (as amended by the Local Government and Housing Act 1989).
3 HA 1985, s 369(2A) (added by the Local Government and Housing Act 1989).
4 For the definition of a 'person managing' a house see HA 1985, s 398. The definition may be replaced or varied by regulations made
under s 369: see s 369(4).
5 HA 1985, s 369(3).
6 HA 1985, s 369(5) as amended by the Housing Act 1996, s 78(b).

Page 1150
parties/F Supervision by local authorities of use of residential buildings/5 Power to require execution of works
5 Power to require execution of works
HR A[7127]
If a house subject to the regulations is defective in consequence of neglect to comply with the regulations during a
period wholly or partly within the period when the regulations applied to the house, the local authority may serve a
notice requiring the execution of works necessary to make good such neglect1. Such notice may be served by
addressing it to the manager and delivering it to some person on the premises2. The manager is the owner or lessee of
the house or the person who directly or through an agent or trustee receives the rent or other payments from persons
who are tenants of parts of the house or who are lodgers and where those rents or payments are received through another
person as his agent or trustee, that other person. A minimum period of 21 days must be allowed for the execution of the
works and the period may be extended3. The local authority must inform every owner or lessee or mortgagee of the
premises, of whom it has knowledge, of the service of the notice4. Appeal may be made to the magistrates' court within
21 days of the service of the notice or such longer period as the local authority in writing allow upon any of the
following grounds:
(a) that the works are not necessary;

(b) defect or error in the notice;
(c) unreasonable refusal to approve alternative works or that the works required are unreasonable in
extent;
(d) the date specified for the commencement of the works is not reasonable; or
(e) insufficient time allowed for execution of the works; or
(f) some person other than the appellant is responsible for the state of affairs or will derive benefit
therefrom or ought to contribute to the cost5.
Where error or defect in the notice is alleged it must be material6. Where ground (e) is the basis of appeal, the appellant
must serve a copy of the notice on every person named7. The court may order the other person to make payment to the
appellant, or, if the authority has executed the work, to the local authority. The local authority may also require the
execution of works having regard to the number of persons occupying the premises8 and withdraw that notice on the
number of occupiers being reduced9. In the event of a notice being served in the case of a building which is not a house
but comprises at least two separate dwellings, two or more of which: (a) are occupied by persons who do not form a
single household; or (b) do not have a sanitary convenience, and personal washing facilities accessible only to those
living in the dwelling; the matters to be considered are: (i) natural and artificial lighting; (ii) ventilation; (iii) water
supply; (iv) personal washing facilities; (v) drainage and sanitary conveniences; (vi) facilities for storage, preparation
and cooking of food, and for the disposal of waste water; and (vii) installations for space heating or for the use of space
heating appliances. The notice can be served on the person having control of the house (that is, the person who receives
the rack rent of the house, whether on his own account or as agent or trustee for any other person, or would so receive it
if the house was let at a rack rent10). The notice may specify the works necessary if the number of persons or
households were smaller than that on the premises at the time of the notice11. An appeal can be made on the ground
that the number specified is unreasonably low12. Similarly, notice may be served for the provision of means of escape
from fire13. If the local authority is not also the fire authority it must consult with the fire authority14. Wilful failure to
comply with such a notice renders the person served liable to penalties15. An obligation to execute works in pursuance
of a notice served under s 352 (execution of works to render premises fit for number of applicants), s 366 (execution of
Page 1151
works to provide means of escape from fire), and s 372 (execution of works to remedy neglect of management),
continues, notwithstanding that the period specified in the notice (with any extension permitted by the authority) or the
period specified in relation to an appeal by HA 1985, s 375(2) has expired16.
HR A[7128]
1 Housing Act 1985, s 372(1), (5).
2 HA 1985, s 372(2).
3 HA 1985, s 372(3). Extension of the period is by written permission of the local authority.
4 HA 1985, s 372(4).
5 HA 1985, s 373(1), (2) as amended by the Local Government and Housing Act 1989, s 165(1)(c) and see the similar right under s 353 in
respect of appeals under s 352.
6 HA 1985, s 373(3).
7 HA 1985, s 373(4).
8 HA 1985, s 352(1), (3).
9 HA 1985, s 352(5). The number of occupiers must be so reduced as to make the work unnecessary and the reduction secured by a
direction under HA 1985, s 354(1). The withdrawal is without prejudice to the issue of a further notice.
10 Rack rent means a rent not less than two-thirds of the full net annual value of the house: HA 1985, s 398(5)). The expression 'personal
washing facilities' in what is now HA 1985, s 352(1) may justify the local authority in requiring a piped supply of hot water: McPhail v
Islington London Borough Council [1970] 2 QB 197, [1970] 1 All ER 1004, CA.
11 HA 1985, s 352(2).
12 HA 1985, s 353(1), (2).
13 HA 1985, s 365(1).
14 HA 1985, s 365(3).
15 HA 1985, s 376(1); and a person who fails to comply with such an obligation after being convicted under s 376(1) is guilty of a further
offence under s 376(2).
16 HA 1985, s 376(2).
Page 1152
parties/F Supervision by local authorities of use of residential buildings/6 Carrying out of works by local authority
6 Carrying out of works by local authority
HR A[7129]
Upon failure of the party served with the notice referred to above, to carry out the works, the local authority may
themselves execute the work1. The authority cannot proceed to execute the work until the expiration of the time
prescribed for their execution by the owner or if an appeal is made and pursued, within such period as the court which
determines the appeal fixes, or if an appeal is made and withdrawn the later of 21 days after withdrawn and the expiry
of the period specified in the notice2. Furthermore, if before the expiry of the period in which the owner must do the
work it appears to the authority that reasonable steps are not being taken to do the work, the authority may execute it3.
The expense of so doing with interest may be recovered by action4, and until recovered, is a charge on the house or
other building to which the notice relates and on all estates and interests in it5. The charge does not take effect until 21
days after the demand becomes operative6. The local authority have the powers for recovery of such expenses and
interest as if there was a mortgage by deed, having powers of sale and leasing, of accepting surrenders and appointing a
receiver7. The court may make an order on any person profiting by the execution of such works for payment of a sum of
money8. The local authority must satisfy the county court that the expenses have not been and are unlikely to be
recovered and that a person is profiting by the execution of the works by obtaining rents or profits which would not
have been obtainable if the number of persons living in the house were limited to that appropriate to the state of the
house before the works were executed.
HR A[7130]-[7140]
1 Housing Act 1985, s 375(1).
2 HA 1985, s 375(2).
3 HA 1985, s 375(3).
4 HA 1985, s 375(4), Sch10.
5 HA 1985, s 375(4), Sch10, para 7(1)-(4). On the date of serving a demand for such expenses, a copy must be served on every person
who, to the knowledge of the local authority, is an owner, lessee, or mortgagee of the house or building. Within 21 days any person may
appeal to the county court against the demand and on such appeal no point shall be taken which could have been taken on appeal against the
relevant notice (see Housing Act 1985, s 375(4), Sch 10, paras 3, 6.
6 HA 1985, s 375(4), Sch 10, paras 3(3), 7(2).
7 HA 1985, s 375(4), Sch 10, para 7(3). The power of appointing a receiver is exercisable at any time after the expiration of one month
from the date of the service of a demand for the expenses charged on the premises.
8 HA 1985, s 375(4), Sch 10, para 8.

Page 1153
parties/F Supervision by local authorities of use of residential buildings/7 Control orders
7 Control orders
HR A[7141]
A local authority may make control orders which enable them to take over the management of houses in multiple
occupation1. It is not within the scope of this work to discuss control orders at length but the general effect is that the
authority have the same rights in respect of the house as if they had an estate or interest in it2. The authority then have a
duty to maintain proper standards of management3.
HR A[7142]
1 Housing Act 1985, ss 379-394. For the definition of multiple occupation, see s 345 of the 1985 Act.
2 HA 1985, s 381.
3 HA 1985, s 385.
Page 1154
parties/F Supervision by local authorities of use of residential buildings/8 Registers of houses in multiple occupation
8 Registers of houses in multiple occupation
HR A[7143]
A local housing authority may make a registration scheme authorising the authority to compile and maintain a register
for their district of houses in multiple occupation1. The scheme imposes a duty on such persons as may be specified to
register a house to which the scheme applies and to renew the registration as and when required by the scheme2.
Provision is also made for the preparation by the Secretary of State of mode 1 registration schemes3. A registration
scheme may contain control provisions to prevent multiple occupation of a house unless the house is registered and the
number of households or persons occupying it does not exceed the number registered for it4.
HR A[7144]
1 Housing Act 1985, s 346(1) substituted by the Housing Act 1996 (in relation to registration as schemes coming into force after 1 March
1997). In addition to the provisions authorised by HA 1985, s 346(1), the scheme may, by virtue of HA 1985, s 34, contain provisions for
preventing multiple occupation of a house beyond a limited extent unless the house is registered under the scheme and the number of
occupying households or persons does not exceed the number registered for the house. An existing scheme may be amended to include these
additional provisions.
2 HA 1985, s 346A, which provides for the contents of a registration scheme.
3 HA 1995, s 346B.
4 HA 1985, s 347.
Page 1155
parties/F Supervision by local authorities of use of residential buildings/9 Statutory nuisance
9 Statutory nuisance
HR A[7145]
Local authorities are given powers under the Environmental Protection Act 1990 to require the abatement of statutory
nuisances in residential premises where the premises are in such a state as to be prejudicial to health or a nuisance.
These powers might avail tenants where the matter complained of could not be characterised as a breach of the covenant
for quiet enjoyment or a derogation from grant. However, the tendency of the courts is to give these provisions a
restrictive interpretation1. The fact that the tenant is suffering ill health because of the transmission of noise from
neighbouring premises where the construction of the building is inadequately sound proofed does not necessarily mean
that the state of the premises is prejudicial to health. In such a case, it is the noise not the state of the premises which is
the cause of the ill health.
HR A[7146]
1 Birmingham City Council v Oakley [2001] 1 AC 617; R v Bristol CC ex parte Evererett (1999) 31 HLR 1102; R (on the application of
Vella) v Lambeth London Borough Council [2005] EWHC 2473 (Admin), [2005] 47 EG 114 (CS).
Page 1156
parties/G Rates and taxes
G
Page 1157
parties/G Rates and taxes/1 Introduction
1 Introduction
HR A[7147]
Subject to limited statutory exceptions, general rates are payable by the tenant as the occupier of the land. Certain other
charges are payable by the landlord or the tenant as provided by the statute imposing the charge. Usually, express
contractual provisions are made in a lease that one or other party shall bear ultimate financial responsibility for rates and
taxes.
Page 1158
parties/G Rates and taxes/2 Liability of property for taxes
2 Liability of property for taxes
HR A[7148]
Rates, taxes, and other burdens on land and buildings imposed by public authority are either taxes imposed directly by
Parliament, or rates and charges imposed by local authorities acting under statutory powers.
HR A[7149]
Domestic rating was abolished with effect from 1 April 19901 and replaced by a new form of charge known as the
community charge or 'poll tax'. This was not a property tax, but levied against the individual. The community charge
was replaced by the council tax2 with effect from 1 April 19933. This is a property tax4 and assessment is based on the
capital value of the building5. There are a number of discounts on and exemptions from the council tax6. A single
person living in a chargeable dwelling or with a person disregarded for the purposes of discount will receive a discount
of 25%. A discount of 50% is allowable where there are no residents of the dwelling or where all the residents are
disregarded for the purposes of the discount7. Liability for rates has been retained on non-domestic property.
HR A[7150]-[7160]
1 Local Government Finance Act 1988, s 1.
2 Local Government Finance Act 1992, s 1.
3 LGFA 1992, s 100.
4 LGFA 1992, s 6. The council tax is paid by the occupier of the chargeable dwelling who has the superior interest in it. The owner of the
dwelling is only liable if there is no one resident in the building (but see further n 7), or if under s 8 of the Act, a statutory instrument makes
him so. If two or more people share an interest in a chargeable dwelling then they are jointly and severally liable. A spouse if resident in the
dwelling is jointly and severally liable even if he or she would otherwise not have been liable.
5 LGFA 1992, s 5. There are eight different valuation bands. The billing authority must keep a valuation list: see LGFA 1992, ss 22, 23.
6 LGFA 1992, s 11.
7 Persons who are disregarded include students, persons in detention, and the severely mentally impaired: LGFA 1992, Sch 1.
HR A[7161]
There are certain other charges which may be levied against land1. A drainage rate may be levied against agricultural
Page 1159
land2. Charges may be imposed by local authorities for the abatement of nuisances3 and some local charges still exist4.
HR A[7162]
1 Though many no longer obtain. Land tax was abolished by the Finance Act 1963. Highway rates and lighting rates were merged into the
general rates and are now payable out of moneys raised from the rates and council tax. Redemption annuities were abolished by s 56 of the
Finance Act 1977.
2 Land Drainage Act 1991, s 40.
3 Environmental Protection Act 1990.
4 See eg the Metropolis Management Act 1855, s 239, which allows a London borough to levy a charge for the upkeep of enclosed
gardens and squares.
Page 1160
parties/G Rates and taxes/3 Determination of liability by agreement
3 Determination of liability by agreement
HR A[7163]
In certain cases the landlord is debarred by statute from shifting to the tenant a burden which the legislature has imposed
upon him. Where a burden is imposed by statute on the landlord 'notwithstanding any agreement to the contrary', these
words include agreements made after the passing of the statute1, although words of a statute may themselves show that
the statute only applies to agreements existing at the date of the Act and not to agreements made after that date2. But in
general, where a tax or other liability is prima facie to be borne by one party, it is competent for the parties to agree that
it shall be borne by the other3. However, an agreement by the tenant to pay outgoings will not extend to rates or taxes of
a new kind imposed by virtue of subsequent legislation, unless it is expressly provided that it shall include both present
and future outgoings4. In order that the tenant may be relieved from liability to pay outgoings of a new kind they must
be really novel (as for example, a window tax imposed now would be), and not merely the successors of rates and taxes
imposed at the date when the tenancy commenced assessed on a different basis or collected by means of different
machinery5. An exemption from all taxes, rates, and assessments whatsoever has been held to include taxes whether in
existence at the time of the grant or not6.
HR A[7164]
1 Wooler v North Eastern Breweries [1910] 1 KB 247, where the dictum of Parke B to the contrary in Re Knight, Gwynne v Knight (1848)
1 Exch 802, was not accepted. The War Damage Act 1943, s 59 (now repealed) provided that any agreement, whether made before or after
an instalment of contribution became due, whereby a tenant holding a proprietary interest (WDA 1943, s 123) gave up his right to indemnity
by his landlord, should be void; and WDA 1943, s 114, relieved a tenant under a short tenancy (WDA 1943, s 123) against any liabilities for
instalments of contributions or premiums on polices issued under WDA 1943 which would otherwise have fallen upon him by reason of an
agreement to pay outgoings, whether entered into before or after the passing of the Act.
2 R v Comrs of Customs and Excise [1982] AC 402.
3 Eg liabilities arising under the Metropolitan Management Act 1855; Land Drainage Act 1991; non-domestic rates.
4 Mile End Old Town Vestry v Whitby (1898) 78 LT 80.
5 Smith v Smith [1939] 4 All ER 312.
6 Pole-Carew v Craddock [1920] 3 KB 109, CA, following Associated Newspapers Ltd v London Corpn [1916] 2 AC 429 which
overruled Sion College v London Corpn [1901] 1 KB 617, CA; cf Halifax City v Nova Scotia Car Works Ltd [1914] AC 992, PC, where it
was held that the phrase 'total exemption from taxation' covered liability for contributions for the construction of sewers.
Page 1161
parties/G Rates and taxes/4 Construction of tenant's covenant to pay rates, taxes and assessments
4 Construction of tenant's covenant to pay rates, taxes and assessments
HR A[7165]
The lessee usually covenants to pay all rates, taxes and assessments payable in respect of the demised premises during
the term; and in cases of long leases, and sometimes also in short tenancies, the covenant is often extended so as to
include liabilities which are described by one or more of the words 'duties', 'outgoings', 'impositions', 'burdens', or
'charges'; and it is also often expressed so as to include such liabilities 'now or hereafter' imposed, and whether they are
imposed 'on the demised premises or on the landlord or tenant in respect thereof'1. Such a covenant is not subject to an
implied term that the lessor himself pays2 or, in the case of a sublessor, is liable to pay the rates3. Ordinarily, the tenant
will be liable to bear all expenses which are of a regularly recurring nature and which are incident to the occupation of
the premises4; while the landlord will be liable for expenses which are incurred for the permanent improvement of the
premises. But even then, in the latter case, tenancies for longer terms may impose a share, depending on the length of
the tenancy, on the tenant. A covenant will not be construed so as to throw the expense of permanent improvement on
the tenant unless there are words clearly requiring such a result. In each case, however, the construction of the covenant
depends on the words used, and upon any other provisions in the lease which may properly be regarded as assisting the
construction. The case law on liabilities imposed under older statutes should be read being mindful of the statutory
intervention in this area. Legislation which compels owners or occupiers to undertake statutory improvements on
property often contain provisions that enable magistrates' or county courts to apportion the expense incurred thereby
between landlord and tenant5. It has been held that where a statute empowers a county court to apportion expenses as it
thinks just and equitable, then the effect of this is to exclude the jurisdiction of the High Court, and the landlord may not
sue on a covenant by the lessee to pay all charges and outgoings which may be charged or imposed on the lessor in
respect of the premises6. A covenant to pay 'rates, taxes and assessments' does not refer only to sums payable by the
landlord, but includes all rates then imposed on the lessee in respect of his occupation, and all future rates which might
be imposed on the land itself, and if the lessee omits to pay the rates this is a breach of the covenant7.
HR A[7166]-[7168]
1 Thompson v Lapworth (1868) LR 3 CP 149 at 157; Wilkinson v Collyer (1884) 13 QBD 1. Inhabited house duty was held to amount to
an assessment charged upon the premises and to be covered by a covenant to pay all assessments charged on the premises: Eastwood v
McNab [1914] 2 KB 361. This is one of the covenants under which the tenant remains liable if, after the expiration of the term, he retains
possession by virtue of the Landlord and Tenant Act 1954, ss 6 and 10 at HR E[284] and HR E[304] respectively.
2 Francis v Squire [1940] 1 All ER 45 and see para HR A[7176].
3 W H Read & Co v Walter (1931) 48 TLR 15.
4 A covenant to pay main drainage and sewer rates did not include drainage expenses incurred under the Metropolis Management Act
1855 (repealed except for ss 239 and 240) and Metropolis Management Amendment Act 1862 (repealed).
5 Eg the Public Health Act 1936, s 290; the Clean Air Act 1956, s 12(2) (now repealed); the Fire Precautions Act 1971, s 28; the Building
Act 1984, s 102; the Environmental Protection Act 1990, s 81(4) (and see the Acts referred to in para HR A[7129]).
Page 1162
6 See Horner v Franklin [1905] 1 KB 479, CA; Stuckey v Hooke [1906] 2 KB 20, CA; Monk v Arnold [1902] 1 KB 761. Compare the
wider discretion given to the county court, in eg the Fire Precautions Act 1971, s 28 with the narrower discretion given to the magistrates in
the Public Health Act 1936, s 290(5).
7 Hurst v Hurst (1849) 4 Exch 571. It seems that demand by the collector is not necessary to constitute a breach of the covenant; the
publication of the rate creates the obligation to pay it: Hooper v Woolmer (1850) 10 CB 370; Davis v Burrell and Lane (1851) 10 CB 821 at
826.
Page 1163
parties/G Rates and taxes/5 Construction by reference to circumstances
5 Construction by reference to circumstances
HR A[7169]
The word 'impositions' and other similar words, referred to below, will not be construed so widely as to include quite
new obligations which cannot reasonably be supposed to have been within the contemplation of the parties1
(obligations, that is, which are quite outside the relation of landlord and tenant, such as an obligation to pull down
premises and rebuild them in conformity with the building line): rather they will be construed as including impositions
first imposed after the date of the covenant which, though assessed on a different basis, are essentially similar to former
impositions2. The effect of the covenant may be restricted by other provisions of the lease which specifically throw
upon the landlord expenses which it would otherwise include. Thus, an agreement by the landlord to do outside repairs
may relieve a tenant who has agreed to pay 'impositions' from liability for the expenses of the abatement of a nuisance
arising from outside drains3; and similarly a covenant by a lessee to pay a fair share of statutory charges will relieve
him from liability to pay the whole under a covenant to pay outgoings4. But the fact that the lessee has not covenanted
to repair5, or has entered into a restricted covenant to repair6, will not necessarily relieve him from liability under his
covenant to pay outgoings; nor will his liability under such a covenant be restricted because in the reddendum the rent is
reserved clear of all 'rates, taxes, and deductions', without mention of outgoings7; and the full effect will be given to a
covenant expressed in the usual general terms in a three years' agreement, or in respect of a yearly tenancy created by a
tenant holding over8, notwithstanding the shortness of the tenancy9. On the other hand, where the covenant is to pay
'rates, taxes, and assessments', a further covenant by the lessee to make and repair drains will not render him liable for
drainage expenses under the Public Health Act 193610.
HR A[7170]-[7180]
1 Foulger v Arding [1902] 1 KB 700 at 707, 711, CA.
3 Henman v Berliner [1918] 2 KB 236 (where the landlord's compliance with a covenant by him to put the premises in repair was held to
be a condition precedent to the lessee's liability to pay outgoings in respect of repairs); Howe v Botwood [1913] 2 KB 387 (landlord held
liable under his covenant to do outside repairs for outside drainage expenses).
4 Arding v Economic Printing and Publishing Co Ltd (1898) 79 LT 622, CA (expenses of fire-escape appliances under the Factory and
Workshop Act 1891, s 7 which became Factories Act 1961, s 48, now repealed and replaced by the Fire Precautions Act 1971). This Act has
been amended by regulations and more particularly by the Fire Precautions Act 1971 (Modifications) Regulations 1976, SI 1976/2007.
Under FPA 1971, s 28 the county court has power to modify agreements and leases and to apportion the expenses as between landlords and
tenants of fire precaution works.
5 Foulger v Arding [1902] 1 KB 700.
6 Re Bettingham, Melhado v Woodcock (1892) 9 TLR 48; Re Warriner, Brayshaw v Ninnis [1903] 2 Ch 367; cf Smith v Robinson [1893] 2
QB 53.
Page 1164
7 Gardner v Furness Rly Co (1883) 47 JP 232.
8 Lowther v Clifford [1927] 1 KB 130, CA. Formerly, it was thought that where the outgoings were excessive having regard to the yearly
value of the premises, they were not included in such a covenant by a tenant (Valpy v St Leonard's Wharf Co Ltd (1903) 67 JP 402), and that
a covenant to pay all the outgoings was inconsistent with the terms of a yearly tenancy created by holding over (Harris v Hickman [1904] 1
KB 13); but these two cases were overruled by Lowther v Clifford [1927] 1 KB 130, following Foulger v Arding [1902] 1 KB 700, and
Stockdale v Ascherberg [1904] 1 KB 447. See also Smith v Smith [1939] 4 All ER 312.
9 Batchelor v Bigger (1889) 60 LT 416; Stockdale v Ascherberg [1903] 1 KB 873; affd [1904] 1 KB 447, CA; Re Warriner, Brayshaw v
Ninnis [1903] 2 Ch 367.
10 See Lyon v Greenhow (1892) 8 TLR 457.

Page 1165
parties/G Rates and taxes/6 Construction of particular words and phrases
6 Construction of particular words and phrases
HR A[7181]
Covenants in leases commonly use the expressions 'taxes', 'rates', 'duties', 'outgoings', 'impositions' and 'charges' and
related expressions. These have been the subject of judicial consideration on a number of occasions and examples are
cited below. In all of these cases, however, whether the covenant is in the restricted form - 'rates, taxes, and assessments'
- or whether it is extended by the use of one of more of the words 'duties', 'outgoings', 'impositions', 'burdens', or
'charges', if it defines these as existing 'in respect of the demised premises', this is enough to determine the scope of the
covenant; and it is immaterial whether the words 'or on the landlord or tenant in respect thereof' are also inserted1.
HR A[7182]
1 For the restricted form, see Wilkinson v Collyer (1884) 13 QBD 1; Home and Colonial Stores v Todd (1891) 63 LT 829 ('in respect of
the premises'); Baylis v Jiggens [1898] 2 QB 315; Lyon v Greenhow (1892) 8 TLR 457; Lumby v Faupel (1903) 51 WR 522; affd (1904) 90
LT 140, CA ('on the landlord or tenant in respect thereof'). As to the wider form, the words 'in respect of the premises' alone occurred in
Brett v Rogers [1897] 1 QB 525; Antil v Godwin (1899) 15 TLR 462; Farlow v Stevenson [1900] 1 Ch 128, CA; Stockdale v Ascherberg
[1904] 1 KB 447, CA; and in Re Warriner, Brayshaw v Ninnis [1903] 2 Ch 367, it was expressly decided that the words 'imposed on the
landlord or tenant' were not necessary to give the wider meaning to the covenant: see Foulger v Arding [1902] 1 KB 700 at 708, CA;
Greaves v Whitmarsh, Watson & Co Ltd [1906] 2 KB 340. Hill v Edward (1885) Cab & El 481, contra, is overruled.
Page 1166
parties/G Rates and taxes/7 Tax
7 Tax
HR A[7183]
The word 'tax' in its widest sense includes all money raised by taxation. As a rule, it denotes parliamentary taxes1. But
in an appropriate context it may include not only taxes levied directly by Parliament, usually for the benefit of the whole
kingdom, but also rates and other charges levied by local authorities under statutory powers2. Yet the context of the
agreement may also show that the word only refers to local as opposed to parliamentary taxes3. Where rent is to be paid
free from all taxes, the effect is to relieve the lessor of all burdens which can be legally thrown on the lessee4. A
contract by the landlord to pay rates is a contract of indemnity, and may render him liable for damages for
imprisonment resulting from his default5, or for damages resulting from a distress, even though illegal, suffered by the
tenant6.
HR A[7184]
1 Count Arran v Crisp (1694) 12 Mod Rep 54; Amfield v White (1825) Ry & M 246; see Hopwood v Barefoot (1709) 11 Mod Rep 237;
Bedfordshire Union v Bedford Comrs (1852) 7 Exch 777 at 779; Brewster v Kidgell (1698) Carth 438 (land tax); Manning v Lunn (1845) 2
Car & Kir 13; Governors of Christ's Hospital v Harrild (1841) 2 Man & G 707); but a county or municipal or other rate (Bedfordshire Union
v Bedford Comrs; Palmer v Earith (1845) 14 M & W 428), or a rate levied under statute on persons liable for the repair of a bridge (Baker v
Greenhill (1842) 3 QB 148) is not a parliamentary tax. A covenant by the lessee to pay all parliamentary taxes and assessments will include
a rentcharge representing redeemed land tax: Governors of Christ's Hospital v Harrild (1841) 2 Man & G 707; cf Murray v Parker (1854)
19 Beav 305.
2 Mitchell v Fordham (1827) 6 B & C 274 at 277.
3 Edinburgh Corpn v Lord Advocate 1923 SC 112. Thus, 'parochial taxes' include poor rates (R v Toms (1780) 1 Doug KB 401); and other
rates raised out of poor rates (R v Aylesbury with Walton Inhabitants (1846) 9 QB 261); but though 'taxes' by itself may include poor rates
(Mitchell v Fordham (1827) 6 B & C 274 at 277), yet poor rates are not included in a covenant by the lessor to pay 'all taxes on the land
demised,' since the poor rate is not a tax on the land, but a personal charge on the occupier in respect of the land: Theed v Starkey (1724) 8
Mod Rep 314; Rowls v Gells (1776) 2 Cowp 451 at 452.
4 Giles v Hooper (1690) Carth 135; Parish v Sleeman (1860) 1 De GF & J 326 (rent payable 'free of all outgoings').
5 Atkins v Hutton (1909) 103 LT 514, CA.
6 Isaacs v Arlidge (1917) 87 LJKB 347.

Page 1167
parties/G Rates and taxes/8 Rates
8 Rates
HR A[7185]
Under an agreement for letting at a specified yearly rent, 'including all rates and taxes', the tenant was held under the old
General Rate Act 1967 to be entitled to deduct from his rent the whole of the general rate paid by him1. Where the
landlord covenants to pay rates in respect of the ground demised, and buildings are subsequently erected, so that the
subject matter of assessment is changed, and the assessment increased, the landlord is only liable to pay rates in respect
of the ground, and not the part attributable to the buildings2. Where, however, the lessor's covenant extends to all rates
and taxes at the date of the lease, or subsequently, payable in respect of the premises, and the assessment is afterwards
increased without any change in the premises, the lessor is liable for the increased rates3.
HR A[7186]
1 Barcroft v Welland (1883) 12 LR Ir 35, and, similarly, where a net rent is to be paid: Bennett v Womack (1828) 7 B & C 627 at 629;
Bradbury v Wright (1781) 2 Doug KB 624.
2 Watson v Home (1827) 7 B & C 285. Similarly, where the lessor covenants to pay all taxes now chargeable on the demised premises,
and the lessee covenants to pay all fresh taxes hereafter charged, the lessee pays fresh taxes, and also any increment in the old taxes which is
occasioned by the improved value of the premises: Watson v Atkins (1820) 3 B & Ald 647; Graham v Wade (1812) 16 East 29.
3 Salaman v Holford [1909] 2 Ch 602, CA.

Page 1168
parties/G Rates and taxes/9 Duties
9 Duties
HR A[7187]
If the covenant on the part of the lessee to pay rates and taxes includes any of the words 'duties', 'outgoings',
'impositions' or 'burdens', the effect is to carry the lessee's liability beyond annual assessments, and may make him liable
to pay all sums of money payable in respect of the demised premises under the Acts referred to in para HR A[7165] and
similar statutes, notwithstanding that they are expenses of permanent improvements. Thus, the word 'duties' has been
held to bind a lessee to pay paving1 and drainage2 expenses incurred by the lessor under the Metropolis Management
Acts 1855 and 1862, and the Public Health (London) Act 1936 (now repealed) respectively, expenses incurred in
abating a nuisance under the Public Health Act 1936, whether the landlord does the work or the local authority does it
on his default3, or under the Public Health (London) Act 1936 (now repealed)4. The effect of the word 'duties' is not
restricted because they are referred to as 'payable' in respect of the premises5.
HR A[7188]
1 Thompson v Lapworth (1868) LR 3 CP 149; Payne v Burridge (1844) 12 M & W 727 as to similar expenses under a local Act.
2 Farlow v Stevenson [1900] 1 Ch 128, CA; see Sweet v Seager (1857) 2 CBNS 119.
3 Budd v Marshall (1880) 5 CPD 481, CA; Villenex Co v Courtney Hotel Ltd (1969) 20 P & CR 575 (fire escape works under the
Building Act 1984, s 72).
4 Brett v Rogers [1897] 1 QB 525.
5 Clayton v Smith (1895) 11 TLR 374.

Page 1169
parties/G Rates and taxes/10 Outgoings
10 Outgoings
HR A[7189]
The word 'outgoings' is as wide as 'duties'1. It included land tax (now abolished)2; the liquor licence duties3; and
drainage rates4; (but not the costs of statutory drainage works executed by the lessee under a mining lease5); and
applied equally to charges incurred by direct and indirect assessment6. It binds the lessee to pay paving expenses under
the Metropolis Management Acts 1855 and 18627, the Private Street Works Act 18928, the Public Health Act 18759,
drainage expenses and the expenses of remedying sanitary defects under the Public Health Act 193610. The refund
which a sublessor was bound to make to a sublessee under the Local Government Act 1929, in respect of premises
occupied by the sublessee which were derated, could not be regarded as an outgoing, and was not recoverable as such
from the head lessor under a covenant by him to pay all outgoings11.
HR A[7190]-[7200]
1 Aldridge v Ferne (1886) 17 QBD 212. It is 'a very large word indeed': Smith v Smith [1939] 4 All ER 312 at 315, per Hallett J.
2 Parish v Sleeman (1860) 1 De GF & J 326.
3 Ie payable under the provisions of the Customs and Excise Acts replacing those formerly contained in the Finance (1900-10) Act 1910:
Wauer v Hoare & Co (1910) 27 TLR 16.
5 Dalton Main Collieries Ltd v Rossington Main Colliery C and Amalgamated Denaby Collieries Ltd [1940] 4 All ER 384.
6 Crosse v Raw (1874) LR 9 Exch 209; see per Bramwell B ((1874) LR 9 Exch 209 at 212).
7 Aldridge v Ferne (1886) 17 QBD 212; Batchelor v Bigger (1889) 60 LT 416; and similarly as to paving expenses under a local Act:
Gardner v Furness Rly Co (1883) 47 JP 232.
8 Lowther v Clifford [1927] 1 KB 130, CA. The Private Street Works Act 1892 was replaced by the Highways Act 1959, ss 174-188 and
liability now arises under the Highways Act 1980.
9 Weld v Clayton-le-Moors UDC (1902) 86 LT 584; Greaves v Whitmarsh, Watson & Co Ltd [1906] 2 KB 340. A rate levied under the
Public Health Act 1875, s 229, and Rating and Valuation Act 1925, s 3, to meet special expenses incurred in respect of sewerage and sewage
disposal was held not to be a charge on the land, but an outgoing: Calder's Yeast Co Ltd v Stockdale [1928] Ch 340, CA. The Public Health
Act 1875 was replaced by the Highways Act 1959, ss 189-191, and liability now arises under the Highways Act 1980.
10 See Crosse v Raw (1874) LR 9 Exch 209, decided under the Sanitary Act 1855, s 10, repealed and replaced by the Public Health Act
1936, s 39.
Page 1170
11 Dependable Upholstery Ltd v Brasted [1932] 1 KB 291, CA. The relevant provision of the Local Government Act 1929 (s 73) was
repealed by the Rating and Valuation Act 1961.
Page 1171
parties/G Rates and taxes/11 Impositions
11 Impositions
HR A[7201]
No distinction can be drawn in this connection between a 'duty' and an 'imposition'. A 'duty imposed' means a sum of
money payable in respect of a duty imposed, and 'imposition' has a similar meaning1. Hence, a covenant by the lessee to
pay 'impositions' bound him to pay expenses incurred by the landlord in complying with an order to abate a nuisance or
remedy drainage defects under the Public Health (London) Act 19362. Formerly, it was held that a covenant to pay
'impositions payable in respect of the demised premises' only included money imposed by way of direct assessment, and
did not include moneys recoverable by way of indirect assessment, that is, where the local authority does the work on
the owner's default3. But the older cases were overruled4. The word 'burdens' is equivalent to 'impositions'.
HR A[7202]
1 Foulger v Arding [1902] 1 KB 700 at 710, CA.
2 Public Health (London) Act 1936, Sch 5, para 7 (now repealed); see Smith v Robinson [1893] 2 QB 53; Foulger v Arding [1902] 1 KB
700; Re Warriner, Brayshaw v Ninnis [1903] 2 Ch 367.
3 Tidswell v Whitworth (1867) LR 2 CP 326; Rawlins v Briggs (1878) 3 CPD 368.
4 Greaves v Whitmarsh, Walton & Co Ltd [1906] 2 KB 340.

Page 1172
parties/G Rates and taxes/12 Charges
12 Charges
HR A[7203]
The word 'charges' has the same effect as 'impositions'1; but where the covenant binds the lessee to pay impositions
'charged upon the premises', he is not liable unless a charge is actually created in relation to expenses incurred after the
commencement of the term2. In the case of paving expenses under the Public Health Act 18753, and the Private Street
Works Act 1892, a charge on the premises was created as soon as the work was completed; the charge was not deferred
until the expenses of the local authority had been apportioned. Further, the charge must be created after the
commencement of the tenancy, since the covenant only contemplates subsequent burdens. Consequently, if the work
has been completed before this date, the lessee is not liable, notwithstanding that the apportionment is made
afterwards4. To make the covenant apply where there is no charge on the premises the words should be 'charged on the
demised premises or on the landlord or tenant in respect thereof'. The covenant will then include paving expenses under
the Metropolis Management Acts 1855 and 18625, which, though not a charge on the premises, become a charge on the
owner upon apportionment. Thus, if the apportionment precedes the execution of the works, the lessee may be liable
although the works are not executed until after the determination of the tenancy6. But the effect of the words 'imposed
upon the demised premises or on the occupier in respect thereof' will not throw upon the lessee the expense of paying a
new street assessed upon the demised premises, since this was imposed on the owner, and not on the premises nor on
the occupier7.
HR A[7204]
1 George v Coates (1903) 88 LT 48, CA; cf Smith v Robinson [1893] 2 QB 53. It included tithe rentcharge: Lockwood v Wilson (1874) 43
LJCP 179. Tithe rentcharge is now extinguished. Tithe redemption annuity was 'charged in respect of the land' (Tithe Act 1936, s 3(1)) and
recoverable from the owner (TA 1936, s 16(1)), who in the case of a lease exceeding 14 years at less than rack rent was the lessee; see s 17.
Where no apportionment had been made the owner of a part of the land charged could be called upon to pay the whole annuity: Tithe
Redemption Commission v Brown [1948] 2 KB 9, [1948] 1 All ER 752. There was no specific prohibition against reimbursement as between
landlord and tenant. Tithe redemption annuities were compulsorily redeemable where there was a change of owner in consideration of
money or money's worth: Finance Act 1962, s 32. In case of a lease exceeding 14 years at less than the rack rent, the lessee was the 'owner'
for such purposes. They were also compulsorily redeemable where the annual payment did not exceed £3: Finance Act 1958, s 38.
Redemptive annuities were abolished by the Finance Act 1977.
2 Bird v Elwes (1868) LR 3 Exch 225; Hartley v Hudson (1879) 4 CPD 367.
3 Public Health Act 1875, s 150; Public Health Act 1936, s 291, replacing PHA 1875, s 257; Re Allen and Driscoll's Contract [1904] 2 Ch
226, CA. As to making up private streets, see now the Highways Act 1980, ss 203-237.
4 Surtees v Woodhouse [1903] 1 KB 396, CA; Lumby v Faupel (1904) 90 LT 140, CA.
5 Metropolis Management Act 1855, s 105; Metropolis Management Amendment Act 1862, s 77; see Smith v Robinson [1893] 2 QB 53.
6 Wix v Ruston [1890] 1 QB 474.

Page 1173
7 Allum v Dickinson (1882) 9 QBD 632, CA.

Page 1174
parties/H Premiums
H
Page 1175
parties/H Premiums/1 Introduction
1 Introduction
HR A[7205]
Receipt of a premium may be chargeable to income or corporation tax under the Income and Corporation Taxes Act
1988 or to capital gains tax under the Taxation of Chargeable Gains Act 1992. The text which follows is not intended to
be a detailed exposition of this subject but to identify some points which commonly arise.
Page 1176
parties/H Premiums/2 Treatment of premiums as rent
2 Treatment of premiums as rent
HR A[7206]
In a lease for a term which does not exceed fifty years1 any premium2 is for the purposes of income tax treated as rent
to which the landlord becomes entitled when the lease is granted in addition to any actual rent reserved by the lease3.
The amount of the assessment to tax is not the actual amount of the premium but that amount reduced by one fiftieth of
that amount for each year of the lease less one year4. In ascertaining the duration of the lease for these purposes, if any
of the terms of the lease (whether relating to forfeiture or any other matter) or any other circumstances render it unlikely
that the lease will continue beyond a date falling before the expiry of the term of the lease, and if the premium was not
substantially greater than it would have been had the term been one expiring on that date, the lease shall not be treated
as having been granted for a term longer than one ending on that date. In assessing the value of the premium it shall be
assumed that the parties, whatever their relationship, act as they would act if they were at arm's length, and where
benefits were conferred other than the granting of vacant possession and beneficial occupation or the right to receive
rent at a reasonable commercial rate or payments were made which would not be expected to be made by the parties
acting at arm's length if no other benefits had been so conferred, it shall be assumed, unless it can be shown that the
benefits were not conferred or the payments made for the purpose of securing a tax advantage, that the benefits would
not have been conferred nor the payments made had the lease been for a term ending on the earlier date5.
HR A[7207]
1 Income and Corporation Taxes Act 1988, s 34.
2 Premium includes any like sum whether payable to the immediate or a superior landlord or a person connected with either of them:
ICTA 1988, s 24; and any sum other than rent paid on or in connection with the granting of a tenancy except in so far as other sufficient
consideration for the payment can be shown to have been given: ICTA 1988, s 24(2). See also para HR A[7208], as to improvements.
3 Lease includes an agreement for a lease and any tenancy, but does not include a mortgage or heritable security and 'lessee', 'lessor' and
'letting' are construed accordingly: ICTA 1988, s 24(1). The terms 'lessor' and 'lessee' include their successors in title. ICTA 1988 in fact
often uses the terms 'landlord' and 'tenant' and no doubt these terms include a successor in title.
4 ICTA 1988, s 34(1). Thus, to take an extreme case on a lease for 50 years reserving a premium of £50 the assessment is for £50 less one
fiftieth thereof for 49 years (ie one year less than the term) which is £50 less £49 and amounts to £1. Another example: on a lease of 20 years
reserving a premium of £500 the assessment is £500 less 19 times one fiftieth of £500 or £10 and the assessment is £310.
5 ICTA 1988, s 38.

Page 1177
parties/H Premiums/3 Improvements
3 Improvements
HR A[7208]
If the tenant is under an obligation to carry out work on the premises, the lease is deemed to be at a premium equal to
the amount by which the value of the landlord's estate or interest is thereby increased immediately after the
commencement of the lease1. This does not apply where the cost would, for tax purposes, be deductible from rent if the
landlord and not the tenant had been obliged to carry out the work2.
HR A[7209]
1 Income and Corporation Taxes Act 1988, s 34(2).
2 ICTA 1988, s 34(3).

Page 1178
parties/H Premiums/4 Other matters construed as premiums
4 Other matters construed as premiums
HR A[7210]-[7220]
Where, under the terms subject to which the lease is granted, any sum is payable in lieu of rent or a part of the rent or
any sum is payable as consideration for a surrender of the lease, the same is treated as a premium and in addition to any
other premium1. Where the sum is payable in lieu of rent, the duration of the lease is treated as not including any period
other than that in respect of which the sum is payable2, and the tax liability arises only at the time when the sum is
payable3. Similarly, where, as a consideration for the variation or waiver of any of the terms of a lease a sum becomes
payable by the tenant otherwise than by way of rent, the sum is chargeable to tax as a premium4. In this case the
duration of the lease does not include any part of the term prior to the waiver or after the waiver ceases to have effect,
and the liability to tax arises when the contract to waive or vary is entered into5. If these payments are made to a person
other than the landlord or a person connected with him6 that other person is to be charged and not the landlord7.
HR A[7221]
2 ICTA 1988, s 34(4)(a).
3 ICTA 1988, s 34(4)(b).
4 ICTA 1988, s 34(5), and see Banning v Wright [1972] 2 All ER 987, [1972] 1 WLR 972, HL.
5 ICTA 1988, s 34(5)(a), (b).
6 For 'person connected', see ICTA 1988, s 839.
7 ICTA 1988, s 34(6).

Page 1179
parties/H Premiums/5 Premium payable by instalments
5 Premium payable by instalments
HR A[7222]
Where the premium is payable to a person by instalments, the tax chargeable by reference to that amount may, if that
person satisfies the Board that he would otherwise suffer undue hardship, be paid at his option by such instalments as
the Board may allow over a period not exceeding eight years and ending not later than the time at which the last of the
instalments is payable1.
HR A[7223]

Page 1180
parties/H Premiums/6 Lease granted at undervalue
6 Lease granted at undervalue
HR A[7224]
Where a lease for 50 years or less has been granted at an undervalue then on the assignment for a consideration greater
than the original premium (if any) for which it was granted, or, where the lease has been previously assigned, exceeding
the consideration for which it was last assigned, the amount of the excess or part of it shall be charged to tax as a
premium. In deciding whether the lease was granted at an undervalue regard must be had to values prevailing at the time
of the grant, and whether, on the assumption that the negotiations for the lease were at arm's length, the landlord could
have required a premium or a greater premium for the grant1.
HR A[7225]
1 Income and Corporation Taxes Act 1988, s 35.

Page 1181
parties/H Premiums/7 Sale with right of pre-emption
7 Sale with right of pre-emption
HR A[7226]
Where land is sold subject to a term that it shall be, or maybe required to be, reconveyed at a future date to the vendor or
a person connected with him, or to terms providing for the grant of a lease out of it to the vendor or a person connected
with him, a charge to tax is made on the vendor. The amount charged to tax is any amount by which the price at which
the property is sold exceeds that at which it is to be reconveyed. If the earliest date at which it is to be reconveyed is a
date two years or more after the sale, he is to be charged on that excess reduced by one fiftieth for each complete year
(other than the first) of the period between the sale and the reconveyance2. Where under the terms of the sale the date of
the reconveyance is not fixed and the price on reconveyance varies with date, the lowest possible price under the terms
of sale is to be taken3. Within six years after the reconveyance, the vendor may claim repayment of any amount
assessed to tax which exceeds the amount which would have been so assessed if the date of the actual reconveyance had
been treated for tax purposes as the date fixed by the terms of the sale4. Where the terms of the sale provide for the
grant of a lease directly or indirectly out of the estate or interest to the vendor or a person connected with him, tax is
charged as if the grant of the lease were a reconveyance of the estate or interest at a price equal to the sum of the amount
of the premium (if any) for the lease and the value at the date of the sale of the right to receive a conveyance of the
reversion immediately after the lease begins to run (but not if the lease is granted and begins to run within one month
after the sale)5.
HR A[7227]
2 ICTA 1988.
3 ICTA 1988, s 36(2)(a).
4 ICTA 1988, s 36(2)(b).
5 ICTA 1988, s 36(3), (4).

Page 1182
parties/H Premiums/8 Capital gains
8 Capital gains
HR A[7228]
It is now provided generally that capital gains tax is chargeable in accordance with the Taxation of Chargeable Gains
Act 1992 in respect of capital gains which accrue to a person on the disposal of an asset1. When the payment of a
premium is required under a lease of land, or otherwise under the terms subject to which a lease of land is granted, there
is a part disposal of the freehold or other asset out of which the lease is granted2. The chargeable gain for the purposes
of capital gains tax is then the amount arrived at by an apportionment under the provisions of the Act3. Likewise, sums
paid on surrender or waiver of the terms of a lease are treated as part disposal of an asset, and so may be chargeable to
tax4.
HR A[7229]
1 Taxation of Chargeable Gains Act 1992, s 1(1). For a full treatment of capital gains tax and its implications on premiums see Simon's
Taxes Pt C6.
2 TCGA 1992, Sch 8, para 2(1). By para 10(2) of this Schedule a premium includes any like sum, whether payable to the intermediate or
superior landlord; and for the purposes of the Schedule any sums (other than rent) paid on or in connection with the granting of a tenancy
shall be presumed to have been paid by way of premium except in so far as other sufficient consideration for the payment is shown to have
been given.
3 TCGA 1992, Ch III.
4 TCGA 1992, Sch 8, para 3.

Page 1183
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 9 Rights and liabilities of the parties/I
Statutory conditions
I
Page 1184
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 9 Rights and liabilities of the parties/I
Statutory conditions/1 Houses sold by public sector landlords
1 Houses sold by public sector landlords
(a) Conditions imposed on exercise of right to buy
HR A[7230]-[7240]
Where a secure tenant exercises the right to buy his dwelling house under ss 118 and 122 of the Housing Act 1985, and
obtains a conveyance of the freehold or a grant of a long lease, certain conditions may be imposed by the
landlord-vendor in certain circumstances. There is by virtue of this Act no limitation on the amount of any rent that may
be charged by a purchaser-landlord of his own tenant.
HR A[7241]
In every case where a dwelling house is 'sold' at a discount, a conveyance of the freehold or grant of a long lease shall
contain a covenant binding on the purchaser and his successors in title to pay the vendor on demand a sum equal to the
discount made on sale, but reduced by one third for each complete year after conveyance or grant and before disposal by
the purchaser to a successor in title1. Thus, the covenant becomes spent after three years. 'Disposal' (for these purposes)
includes the grant of a lease or sublease (other than a mortgage term) for 21 years or more at less than a rack rent, or the
grant of an option enabling the grantee to call for such a lease or sublease2. It makes no difference that the disposal
relates only to part of the dwelling house3. However, transmission on death or in pursuance of an order under the
Matrimonial Causes Act 1973, s 24 is not a disposal for these purposes4. The liability thus created is to be a charge to
take effect as if created by deed expressed to be by way of legal mortgage, having priority immediately after certain
types of legal charge securing the original purchase price5.
HR A[7242]
1 Housing Act 1985, s 155 as amended. For s 155 and notes thereto see HR D[1133].
2 HA 1985, ss 159, 160, 163.
3 HA 1985, s 159.
4 HA 1985, s 160.
5 HA 1985, s 156.
HR A[7243]
Page 1185
Where the dwelling house is situated in a National Park, a designated area of outstanding natural beauty, or a designated
rural area, the conveyance or grant to the original purchaser may contain a covenant limiting the freedom of the
purchaser and his successor in title to dispose of the property1. 'Disposal' (for these purposes) means the same as
explained under para HR A[7241]2. Prima facie the purchaser or successor in title may not dispose of the property
without the original vendor's consent, such consent not to be withheld where the disposal is to be to person satisfying
certain conditions connecting him with the area in question, either for work or residence purposes3. This limitation lasts
until such time as the original vendor notifies the original purchaser or his successors in title that it no longer applies4.
HR A[7244]
1 Housing Act 1985, s 157 at HR D[1154].
2 HA 1985, s 159.
3 HA 1985, s 157(2), (3).
4 HA 1985, s 157(2).
HR A[7245]
However, the landlord-vendor, where the dwelling house is situated as in para HR A[7244], may, with the consent of
the Secretary of State (or the Housing Corporation if the landlord-vendor is a housing association) replace the limitation
in para HR A[7244] with a pre-emption clause. During period of ten years from the original sale the original purchaser
or his successors in title must, before making a disposal (for these purposes defined as before), offer to reconvey the
freehold or surrender the lease to the original vendor for a sum either agreed between the parties or fixed by the district
valuer. If the original vendor refuses the offer or fails to accept it within one month, the proposed disposal may
proceed1. The Secretary of State, or Housing Corporation, as the case may be, has, however, power to consent to the
application of the limitation subject to conditions, which obviously may vary the terms of the pre-emption clause2.
HR A[7246]
1 Housing Act 1985, s 157(4) at HR D[1154].
2 HA 1985, s 157(4).
(b) Conditions imposed on sale under Housing Act 1985 of land held for housing purposes
HR A[7247]
Where there is a sale by a local authority under the Housing Act 1985, s 32 of land held for housing purposes, broadly
similar conditions may be imposed, and some others besides:
Page 1186
(a) Where the dwelling house is sold at a discount, a repayment obligation similar in its terms to that
mentioned in para HR A[7241] must be imposed, unless the ministerial consent to the sale and the
discount thereon otherwise provides1.
(b) Where the dwelling house is situated in a National Park, a designated area of outstanding natural
beauty, or a designated rural area, the conveyance or grant may (if the authority wishes) contain a
covenant similar in terms to that mentioned in para HR A[7243]2. Such a covenant may not be imposed,
however, if a covenant has been imposed either reserving to the authority a right of pre-emption (see para
HR A[7245]), or precluding the purchaser-grantee of a lease from assigning the lease or granting any
sublease (see sub-para (d))2.
(c) With ministerial consent, but not otherwise, the authority may reserve a right of pre-emption, so
precluding the purchaser from letting the house (for whatever term) without notifying the authority and
offering the proposed lease to it. If the authority refuses to take the lease or fails to accept the offer
within one month the transaction may proceed3.
(d) With ministerial consent, but not otherwise, the authority may impose a condition precluding a
grantee of a lease from the authority from assigning the lease or granting any sublease3.
(e) With ministerial consent, but not otherwise, the authority may impose a condition limiting the
premium or price obtainable on a further disposal of the dwelling house by the purchaser4.
(f) Covenants and conditions not falling under any of sub-paras (c), (d) and (e) may be imposed by the
authority as it thinks fit, without the necessity of ministerial consent5. This freedom is, however,
qualified by any conditions attached to the ministerial consent generally required for the sale: the
minister may consent to the sale subject to such conditions as he sees fit to impose6.
HR A[7248]
1 Housing Act 1985, s 35 at HR D[513].
2 HA 1985, s 37.
3 HA 1985, s 33(2), (3).
4 HA 1985, s 33(2)(a).
5 HA 1985, s 33(1). Quaere whether this permits the authority to impose a condition as to the rent obtainable on a letting or subletting by
the purchaser.
6 HA 1985, ss 33(1), (2), 34(3), (4).

Page 1187
Hill and Redman's Law of Landlord and Tenant/Division A General Law/Chapter 9 Rights and liabilities of the parties/J
Duties to and rights against third parties
J
Page 1188
Duties to and rights against third parties/1 General
1 General
HR A[7249]
In their capacities as landlord and tenant the parties to a lease may find that they owe particular duties to or have
particular rights against third parties such as trespassers, employees, visitors or users of the public highway. These may
arise at common law or under statute.
Page 1189
Duties to and rights against third parties/2 Common law
2 Common law
(a) Action by tenant for trespass or nuisance
HR A[7250]-[7260]
By virtue of his entitlement to possession under his lease the lessee (and not the landlord) will be able to maintain an
action in trespass against an intruder during the term of the lease1. The lessee will also be able to maintain an action in
the tort of nuisance in accordance with ordinary principles against anyone who interferes unlawfully with his enjoyment
of the demised premises.
HR A[7261]
1 This was accepted, although not argued, in McDougalls Catering Foods Ltd v BSE Trading Ltd [1997] 2 EGLR 65.
(b) The landlord's right to prevent damage to the reversion
HR A[7262]
Because for the duration of the lease he has granted the right to possession to his tenant the landlord will not ordinarily
be able to maintain an action in trespass against a third party unlawfully in occupation of the land1. But there are
circumstances in which the landlord will be able to bring an action in the tort of nuisance against a third party. In order
to sue in nuisance he must prove that his reversionary interest will suffer damage by reason of the tort alleged, in that
the damage will persist when the lease ends or a right which he has will be prejudiced permanently. No action may be
maintained unless the damage alleged is substantial and likely to be of permanent effect unless restrained2. Examples
are damage resulting from smoke or fumes3, causing serious damage to the property by vibrating machinery4, the
construction of a building which infringes established rights of light5, or a right of way6, flooding7, or dampness
percolating from an artificial mound8.
HR A[7263]
1 See paras HR A[7250]-[7260].
2 Jones v Llanrwst UDC [1911] 1 Ch 393; cf White v London General Omnibus Co (1914) 58 Sol Jo 339 (impermanent nuisance from
noise or smells) and Jackson v Pesked (1813) 1 M & S 234.
Page 1190
3 Walter v Selfe (1851) 4 De G & Sm 315.
4 Shelfer v City of London Electric Lighting Co, Meux's Brewery Co v City of London Electric Lighting Co Ltd [1895] 1 Ch 287.
5 Jesser v Gifford (1767) 4 Burr 2141; Wilson v Townend (1860) 1 Drew & Sm 324; Metropolitan Association v Petch (1858) 5 CBNS
504; Shadwell v Hutchinson (1829) 3 C & P 615 (followed where the nuisance continued, by a second action (1831) 4 C & P 333); Cooper v
Crabtree (1882) 20 Ch D 589.
6 Bower v Hill (1835) 1 Scott 526; Bell v Midland Railway Co (1861) 10 CBNS 287; Kidgill v Moor (1850) 9 CB 364.
7 Bedingfield v Onslow (1685) 3 Lev 209; Jones v Llanrwst UDC [1911] 1 Ch 393.
8 Broder v Saillard (1876) 2 Ch D 692.
HR A[7264]
But if the infringement is transient and likely to be of a nuisance only to the tenant and not ultimately damaging to the
reversion, for example, the creation of noise or smells, or a temporary obstruction of a right of way, the landlord may
not sue1.
HR A[7265]
1 White v London General Omnibus Co (1914) 58 Sol Jo 339; Jones v Chappell (1875) 20 Eq 539; Cooper v Crabtree (1882) 20 Ch D
589; Mumford v Oxford, Worcester and Wolverhampton Rly Co Ltd (1856) 1 H & N 34; Baxter v Taylor (1832) 5 B & Ad 72; Damper v
Bassett [1901] 2 Ch 350; Bower v Hill (1835) 1 Scott 526; Rust v Victoria Graving Dock Co and London and St Katharine Dock Co (1887)
36 Ch D 113; Hopwood v Schofield (1837) 2 Mood & R 34.
Page 1191
Duties to and rights against third parties/3 Liabilities to third parties
3 Liabilities to third parties
HR A[7266]
Either, or both, of the landlord and the tenant may be liable as occupiers of the land to third parties. This liability
usually arises in connection with the state of the repair of the demised premises and is considered elsewhere in the
discussion of repairing obligations. The liability may arise at common law in nuisance or under the rule in Rylands v
Fletcher1.
HR A[7267]
1 Rylands v Fletcher (1866) LR 1 Exch 265.
HR A[7268]
More commonly, however, the liability to third parties is now governed by statute. Liability to visitors and those
lawfully on the property is placed on the occupier by the Occupiers Liability Act 1957, and to trespassers under the
Occupiers Liability Act 1984. Liability to third parties for the state of repair or condition of the demised premises may
fall on the landlord under the Defective Premises Act 1972.
HR A[7269]-[7280]
A number of statutes also impose on owners or occupiers of certain types of property obligations to safeguard or
promote the health safety comfort and convenience of employees who use the property. These include the Factories Act
1961, the Offices, Shops and Railway Premises Act 1963, the Health and Safety at Work etc Act 1974 and the Fire
Precautions Act 1971. Where the property in question is let these duties will fall principally on the tenant. But where the
landlord retains property such as common parts which are used in connection with parts of a building to which the Acts
apply he or other owners of other parts may themselves come under a duty to perform the statutory obligations. Under
FA 1961, OSRPA 1963 and FPA 1971, the county courts have jurisdiction both to modify leases if their terms prevent
the execution of works necessary to comply with the statutory obligations, to apportion between the owners of different
interests in the building the cost of effecting alterations to achieve compliance1.
HR A[7281]
1 Factories Act 1961, ss 169, 170; Offices Shops and Railway Premises Act 1963, s 73; Fire Precautions Act 1971 s 28 and see para HR
A[7208] (improvements).
Page 1192
parties/K Unfair terms in tenancy agreements
K
Page 1193
parties/K Unfair terms in tenancy agreements/1 Introduction
1 Introduction
HR A[7282]
On 1 October 1999 the Unfair Terms in Consumer Contracts Regulations 1999 came into force1. They implement the
EU Directive on Unfair Terms in Consumer Contracts2. The Regulations apply in relation to unfair terms in contracts
concluded between a 'consumer' and a 'seller or a supplier'3. The Office of Fair Trading has issued guidance on the
assumption that, in general, landlords can be considered 'suppliers' and private tenants 'consumers' for the purposes of
the Regulations4. It has now been held that the 1999 Regulations do apply to contracts for the transfer of an interest in
land (including the grant of a tenancy); that they do apply to public authorities such as a housing authority; and that (in
the context of residential lettings) a local authority is a 'seller' or 'supplier' and a tenant is a 'consumer'5.
HR A[7283]
1 SI 1999/2083, pursuant to the European Communities Act 1972, s 2. The Unfair Terms in Consumer Contracts Regulations 1994 were
revoked.
2 Directive 93/13/EEC. It applies to all contracts concluded after 31 December 1994.
3 Regulation 4.
4 See the discussion of the OFT Guidance in relation to potentially unfair terms in assured and assured shorthold tenancies produced in
November 2001 at para HR A[7310] below.
5 R (Khatun) v London Borough of Newham [2003] EWHC 2326 (Admin), [2004] 08 EG 136.
HR A[7283.1]
What follows is a brief summary of the features that may be most relevant in the context of the relationship of landlord
and tenant.
Page 1194
parties/K Unfair terms in tenancy agreements/2 'Consumers' and 'sellers and suppliers'
2 'Consumers' and 'sellers and suppliers'
HR A[7284]
The Regulations define a 'consumer' as any natural person who, in contracts covered by the Regulations, is acting for
purposes which are outside his trade, business or profession1. The Regulations define the expression 'seller or supplier'
as meaning any natural or legal person who, in contracts covered by the Regulations, is acting for purposes relating to
his trade, business or profession, whether publicly owned or privately owned2.
HR A[7285]
1 Regulation 3(1).
2 Regulation 3(1).
Page 1195
parties/K Unfair terms in tenancy agreements/3 Unfair terms
3 Unfair terms
HR A[7286]
The Regulations assume that as between supplier and consumer there is an obligation to act in good faith1. A
contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of
good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the
detriment of the consumer. A term shall always be regarded as not having been individually negotiated where it has
been drafted in advance and the consumer has therefore not been able to influence the substance of the term.
Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, the
Regulations shall apply to the rest of the contract if an overall assessment of it indicates that it is a pre-formulated
standard contract. It shall be for any seller or supplier who claims that a term was individually negotiated to show that it
was2.
HR A[7287]
1 The requirement of good faith was considered by the House of Lords in Director General of Fair Trading v First National Bank [2001]
UKHL 52 [2002] 1 AC 481. Lord Bingham of Cornhill stated:
'The requirement of good faith in this context is one of fair and open dealing. Openness requires
that the terms should be expressed fully, clearly and legibly, containing no concealed pitfalls or
traps. Appropriate prominence should be given to terms which might operate disadvantageously
to the customer. Fair dealing requires that the supplier should not, whether deliberately or
unconsciously, take advantage of the consumer's necessity, indigence, lack of experience,
unfamiliarity with the subject matter of the contract, weak bargaining position or any other factor
listed in or analogous to those listed in Schedule 2 of the Regulations. Good faith in this context
is not an artificial or technical concept ... It looks to good standards of commercial morality and
practice. Regulation 5(1) lays down a composite test covering both the making and the substance
of the contract, and must be applied bearing clearly in mind the objectives which the Regulations
are designed to promote'.
2 Regulation 5. Schedule 2 contains an indicative and non-exhaustive list of the terms which may be
regarded as unfair.
Page 1196
parties/K Unfair terms in tenancy agreements/4 Assessment of unfair terms
4 Assessment of unfair terms
HR A[7288]
The unfairness of the contractual term is to be assessed, taking into account the nature of the goods or services for
which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances
attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is
dependent1. Provided that it is in plain intelligible language, the assessment of fairness of the term shall not relate to the
definition of the main subject matter of the contract, or to the adequacy of the price or remuneration, as against the
goods or services supplied in exchange2.
HR A[7289]
1 Regulation 6(1).
2 Regulation 6(2).
Page 1197
parties/K Unfair terms in tenancy agreements/5 Written contracts
5 Written contracts
HR A[7290]-[7300]
A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language. If there is
any doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall
prevail1.
HR A[7301]
1 Regulation 7. The presumption that a term will be interpreted most favourably to the consumer does not apply where an injunction is
sought to prevent the continued use of unfair terms under reg 12.
Page 1198
parties/K Unfair terms in tenancy agreements/6 Effect of unfair term
6 Effect of unfair term
HR A[7302]
The effect of an unfair term in a contract concluded with a consumer by a seller or supplier is that it is not binding on
the consumer; but otherwise the contract shall continue to bind the parties if it is capable of continuing in existence
without the unfair term1.
HR A[7303]
1 Regulation 8.
Page 1199
parties/K Unfair terms in tenancy agreements/7 Terms which may be regarded as unfair
7 Terms which may be regarded as unfair
HR A[7304]
Schedule 2 to the Regulations contains an indicative and non-exhaustive list of terms which may be regarded as unfair.
A number may apply to the relationship of landlord and tenant. For example: (1) a term which has the object or effect of
inappropriately excluding or limiting the legal rights of the consumer vis-a-vis the seller or supplier or another party in
the event of total or partial non-performance or inadequate performance by the seller or supplier of any of the
contractual obligations, including the option of offsetting a debt owed to the seller or supplier against any claim which
the consumer may have against him1; (2) a term making an agreement binding on the consumer whereas provision of
services by the seller or supplier is subject to a condition whose realisation depends on his own will alone2; (3) terms
authorising the seller or supplier to dissolve the contract on a discretionary basis where the same facility is not granted
to the consumer, and terms enabling the seller or supplier to terminate a contract of indeterminate duration without
reasonable notice except where there are serious grounds for doing so3.
HR A[7305]
1 Schedule 2, para 1(b). Commercial leases now commonly exclude the tenant's right to set-off against the obligation to pay rent.
2 Schedule 2, para 1(c). This may be found in a service charge provision.
3 Schedule 2, para 1(f), (g). This may be relevant in the context of a right to forfeit or to determine a lease by notice.
Page 1200
parties/K Unfair terms in tenancy agreements/8 Powers of the director and qualifying bodies
8 Powers of the director and qualifying bodies
HR A[7306]
The director and qualifying bodies are given specific powers to obtain documents and information1.
HR A[7307]
1 Regulation 13.
Page 1201
parties/K Unfair terms in tenancy agreements/9 Injunctions
9 Injunctions
HR A[7308]
To prevent continued use of unfair terms the Director of the Office of Fair Trading and (in certain cases) any 'qualifying
body' may apply for an injunction against any person appearing to the Director or that body to be using, or
recommending use of, an unfair term drawn up for general use in contracts concluded with consumers1.
HR A[7309]
1 Regulation 12. The term 'qualifying body' is defined in reg 3(1) and Sch 1.
Page 1202
parties/K Unfair terms in tenancy agreements/10 OFT guidance on unfair terms in tenancy agreements
10 OFT guidance on unfair terms in tenancy agreements
HR A[7310]
In November 2001 the Office of Fair Trading published guidance on unfair terms in tenancy agreements dealing
specifically with what the OFT believed to be potentially unfair terms in assured and assured shorthold tenancy
agreements. It was aimed at those who use or supply standard tenancy agreements and at housing advisers. The
guidance makes it clear that it represents the OFT's considered views and the basis on which it is likely to take
enforcement action, accepting that it is ultimately for the courts to decide whether any term is unfair. It assumes that in
general landlords can be considered 'suppliers' and private tenants 'consumers' for the purposes of the Regulations1. It is
regarded as clear that the Regulations apply to tenancy agreements2.
HR A[7311]
1 OFT 356, Part I: Introduction.
2 OFT 356, Part I: para vii.
HR A[7312]
The guidance analyses potentially unfair terms in Schedule 2 of the Regulations in 17 groups1. These deal with, among
other things: exclusion and limitation clauses and terms excluding the right of setoff2; penal provisions which require a
tenant to pay all of the landlord's costs and expenses, which might lead to 'double counting', and to pay legal costs on an
'indemnity' basis3; provisions as to termination which may operate unfairly or which might suggest to the tenant that his
rights are more limited than they in fact are4; provisions which entitle the landlord to increase the rent arbitrarily
without reference to clear and objective criteria or an independent valuer (especially without any corresponding right on
the part of the tenant to terminate the lease)5.
HR A[7313]
1 Part III.
2 Part III, groups 1 and 2.
3 Part III, group 5. In particular, a requirement to pay unreasonable interest on arrears of rent, for instance at a rate substantially above the
clearing banks' base rates, is likely to be regarded as an unfair penalty; or an obligation to pay all of the landlord's costs in proceedings,
whatever the outcome.
Page 1203
4 Part III, group 6.
5 Part III, group 12.

Page 1204
parties/K Unfair terms in tenancy agreements/11 Other potentially unfair terms
11 Other potentially unfair terms
HR A[7314]
The guidance also considers other terms not specifically referred to in Schedule 2 to the Regulations that are commonly
found in leases, but which might operate in an unfair way1. By way of example only, the OFT considers that in
fixed-term tenancies an absolute ban on both assignment and subletting may be considered unfair2; and the guidance
gives as further examples of potentially unreasonable prohibitions in residential lettings prohibitions against keeping
inflammable materials (where that prohibition is too widely drawn); against moving furniture; against having guests
overnight; and against having pets3. If the landlord's right to object is qualified by reference to consent not be
unreasonably withheld the provisions may not be unfair.
HR A[7315]-[7320]
1 Part IV.
2 Part IV, group 18(d).
3 Part IV, group 18(h).

Page 1205
parties/L Discrimination on grounds of disability
L
Page 1206
parties/L Discrimination on grounds of disability/1 Introduction
1 Introduction
HR A[7321]
The Disability Discrimination Act 1995 (DDA 1995) (which has been significantly amended by the Disability
Discrimination Act 2005 (DDA 2005)) which makes it unlawful to discriminate against disabled persons in connection
with employment, the provision of goods, facilities and services or the disposal or management of premises. The duties
are wide ranging and some will have an impact on premises held under leases. In particular, Part III of the 1995 Act
includes provisions dealing with discrimination in relation to premises1. The statutory provisions are lengthy and so
their effect will only be summarised here. The provisions of the 1995 Act have been brought into force piecemeal by
numerous statutory instruments2.
HR A[7322]
1 For these purposes, 'premises' includes land of any description: DDA 1995, s 68(1).
2 DDA 1995, s 70(3). See 7(1) Halsbury's Statutes (4th edn) (2008 reissue) p 553 for the commencement orders that have been made. See
p 968 for the commencement orders that have been made under s 20(5) of the DDA 2005.
Page 1207
parties/L Discrimination on grounds of disability/2 Disability
2 Disability
HR A[7323]
For the purposes of the DDA 1995, a person has a 'disability' if he has a physical or mental impairment which has a
substantial and long-term adverse effect on his ability to carry out normal day-to-day activities; and a 'disabled person'
means a person who has a disability1.
HR A[7324]
1 DDA 1995, s 1 and Sch 1, and the Discrimination (Meaning of Disability) Regulations 1996, SI 1996/1455; Disability Discrimination
(Blind and Partially Sighted Persons) Regulations 2003, SI 2003/712.
Page 1208
parties/L Discrimination on grounds of disability/3 Discrimination
3 Discrimination
HR A[7325]
Discrimination is widely defined1. A person discriminates against a disabled person if:
(a) for a reason which relates to the disabled person's disability, he treats him less favourably than he
treats or would treat others to whom that reason does not or would not apply; and
(b) he cannot show that the treatment in question is justified.
Treatment can only be justified if in that person's opinion one or more of a number of conditions are satisfied and it is
reasonable, in all the circumstances, for him to hold that opinion2. The conditions that have to be satisfied are set out in
the DDA 19953.
(a) The correct comparator
It has now been settled in the House of Lords that in deciding whether there has been discrimination the comparator is a
person in the same position in all respects as the disabled person alleging that he has been the victim of discrimination
but who does not suffer from the disability in question4. In Lewisham London Borough Council v Malcolm [2008]
UKHL 43 the tenant suffered from schizophrenia (although the landlord was unaware of this). He had been granted a
secure tenancy which prohibited subletting. In breach of this covenant he sublet and moved elsewhere. The result was
that he lost his secure status and the tenancy could not thereafter become a secure tenancy again. The landlord had a
mandatory, not a discretionary entitlement to possession. The Court of Appeal had held that the appropriate comparator
for the purpose of deciding whether the landlord had unlawfully discriminated was a tenant who had not sublet and
gone to live elsewhere. This approach was rejected by the House of Lords: the appropriate comparator was a person
without a mental disability who had sublet and gone to live elsewhere. The House of Lords emphasised that this did not
mean that in a case where the ground for possession was discretionary only the disability of the tenant would be
immaterial5.
In doing so the House of Lords approved the approach of an earlier decision of the Court of Appeal in Williams v
Richmond Court (Swansea) Ltd [2006] EWCA Civ 1719. In that case a Alandlord was held not to have discriminated
against a disabled tenant of a third floor flat in refusing her request to allow the installation of a stair lift in the common
parts, even though she had been assessed as needing one. The landlord denied that it had based its refusal on her
disability. Rather, its grounds for refusing were based on aesthetics, the cost of repair, the inconvenience to other
tenants and the effects of the noise on the health of one of the other residents. The landlord said that for these reasons it
would have refused a request made by anyone for the installation of a stair lift. It had, therefore, not treated the disabled
tenant differently from anyone else who might make a similar request6. The DDA 1995 did not impose a positive duty
on managers of premises to make adjustments, or to agree to tenants making adjustments, to common parts of premises
so as to make them more suitable for disabled people. In deciding whether there had been discrimination for the
purposes of s 24(1)(a) of the DDA 1995 it was necessary to take a two-stage approach. The first stage was to identify
the act or omission alleged to constitute discrimination; the second was to see how the alleged act or omission would
have been applied to relevant comparators. The relevant events in both Williams and Malcolm had occurred before the
Page 1209
coming into force of s 24A of the DDA 1995 which impose significant new duties on landlords which may require them
to treat a person with a disability more favourably than a person without that disability. The result in Williams would
not necessarily now be the same following the introduction of these new sections.
(b) Relevance of knowledge
The House of Lords also held in Malcolm that, given the fact that a breach of the statutory duty gave rise to a liability in
damages the alleged discriminator must have knowledge of the disability before a breach of duty could be said to have
arisen7.
(c) Connection between disability and reason for act alleged to be discriminatory
There can be no discrimination unless the mind of the alleged discriminator is affected, whether consciously or
unconsciously, by the disability of the complainant. In Malcolm the House of Lords agreed with the conclusion of the
Court of Appeal in Taylor v OCS Group Ltd8 (also an employment law case). The claimant was profoundly deaf. He
had been dismissed for the violation of the confidentiality of a colleague's computer files. His disability had nothing to
do with the reason for his dismissal. The Court of Appeal had there rejected the argument that it was necessary to show
that the disability had been present in the employer's mind in order to establish a disability-related reason for the
allegedly discriminatory act (in that case the dismissal of the claimant from his employment). Smith LJ had emphasised
that there cannot be discrimination unless the alleged discriminator treats the claimant differently for a reason present to
his mind that was related to the disability. If there was more than one reason it would suffice to establish discrimination
if the disability-related reason had a significant influence on the decision of the alleged discriminator. It would also
suffice if the disability-related reason for the different treatment was present subconsciously in the mind of the alleged
discriminator.
This is consistent with earlier authority in the Court of Appeal relating to premises. It was held that wWhere premises
are let under a lease, if the tenant is disabled and the landlord is seeking possession for reasons relating to the disability,
the landlord must believe that it is justified in taking the action on one of the grounds in s 24 of the DDA 1995, and that
the justification must be objectively reasonable. The landlord will be judged by reference to the facts known to it at the
time and its opinion cannot be justified by reference to subsequent events. However, even if the landlord did form a
reasonable opinion on the facts known to it at the time, the court may still refuse to make an order for possession if it
considers it right not to do so in the light of changed circumstances, or other relevant factors, that could not reasonably
have been known to the landlord at the time when it took the step that is alleged to be discriminatory9.
HR A[7326]-[7328]
1 DDA 1995, s 24 as significantly amended by the DDA 2005, s 13 by the addition of ss 24A-L and K-M.
2 DDA 1995, s 24. Regulations have been made dealing with the circumstances in which it is or is not reasonable for a person to hold that
opinion: Disability Discrimination (Premises) Regulations 2006, SI 2006/887, as amended for the purposes of commonholds (s 22A) by SI
2007/1898.
3 Section 24(3) as amended by the Disability Discrimination Act 2005.
4 Lewisham London Borough Council v Malcolm [2008] UKHL 43 reversing the Court of Appeal and disapproving its judgment in Clark
v TGD Ltd t/a Novacold (1998) 48 BMLR 1 and, to the extent that it followed it, in Manchester City Council v Romano; Manchester City
Page 1210
Council v Samari [2004] EWCA Civ 834, [2004] HLR 878, [2005] L & TR 13; but approving its judgment in S v Jaqueline Floyd (Equality
and Human Rights Commission intervening) [2008] EWCA Civ 201. Cf North Devon Homes Ltd v Brazier [2004] HLR 59.
5 See the speech of Lord Neuberger at [144] in Malcolm. The result in Romano was not disapproved.
6 Williams v Richmond Court (Swansea) Ltd [2006] EWCA Civ 1719, [2007] 09 EG 204, referred to with approval in Malcolm by Lord
Bingham ([12]), Lady Hale ([85]) and Lord Neuberger ([150]).
7 The decision in Hammersmith and Fulham London Borough Council v Farnsworth [2000] IRLR 691 (an employment case) to the effect
that the alleged discriminator's knowledge of a complainant's disability is irrelevant was, inferentially, disapproved: see per Lord Bingham at
17. To the extent that it was to the same effect, HJ Heinz v Kenrick [2000] ICR 491 (another employment case) was also inferentially
disapproved.
8 [2006] EWCA Civ 702, [2006] ICR 1602 (see in Malcolm Lord Bingham at [10], Lord Scott at [39] and Lady Hale at [87]).
9 Manchester City Council v Romano; Manchester City Council v Samari (see fn 4 above).
Page 1211
parties/L Discrimination on grounds of disability/4 Discrimination in relation to premises
4 Discrimination in relation to premises
(a) Disposal
HR A[7329]
It is unlawful for a person with a power to dispose1 of any premises to discriminate against a disabled person:
(a) in the terms on which he offers to dispose of those premises to the disabled person;
(b) by refusing to dispose of the premises to the disabled person; or
(c) in his treatment of the disabled person in relation to any list of persons in need of premises of that
description2.
Where the licence or consent of any person is required to the disposal of any premises comprised in a tenancy, it is also
unlawful for that person to discriminate against a disabled person by withholding his licence or consent for the disposal
of the premises to the disabled person3.
(b) Premises that are to let (the future)
Where the alleged discrimination consists in the terms upon which a person offers to dispose of premises to a disabled
person under s 22(1)(a) he may seek to justify it by reference to one of the conditions provided for by s 24(2). Where
the disposal involves a prospective letting by the controller of the premises to a disabled person the fact that the terms
are less favourable may be justified if they are less favourable in order to recover costs which, as a result of the disabled
person having a disability, are incurred in connection with the disposal of the premises and are not incurred in
connection with taking steps to avoid liability under s 24G(1)4.
The DDA 2005 introduces a web of new sections into the 1995 Act specifically related to let premises: ss 24A-H and
J-M5. Sections 24G-K deal with premises that are "to let" ie it looks to the future and to premises that are available for
letting but have not yet been let. Section 24G provides that where a person has premises to let and a disabled person is
considering taking a letting of them it is unlawful for a controller of the premises to discriminate against the disabled
person. Discrimination involves a failure to comply with a duty imposed by s 24J that cannot be justified under s 24K.
Section 24J applies where a controller of premises that are to let receives a request made by or on behalf of a relevant
disabled person6 which it is reasonable to regard as a request to take steps in order to provide an auxiliary aid or service.
The auxiliary aid or service must be one that would enable the relevant disabled person to become, or facilitate his
becoming, a person to whom the premises are let, but would be of little or no practical use to him if he were not
considering taking a letting of the premises7. The controller has a duty to take such steps as are reasonable in order to
provide the auxiliary aid or service. But it would never be reasonable for the controller to have to take steps consisting
of, or including, the removal or alteration of a physical feature8.
If the controller of premises that are to let has a practice, policy or procedure that has the effect of making it impossible
or unreasonably difficult for a relevant disabled person to become a tenant of them and if the controller receives a
request made by or on behalf of the disabled person that it is reasonable to regard as a request to change the practice,
Page 1212
policy or procedure, the controller must take all such steps as are reasonable in the circumstances to change it9.
A failure to comply with this duty can be justified if in his opinion a specified condition is satisfied and it is reasonable
for him to hold that opinion10. The conditions in which it can be necessary to refrain from complying with the duty are
those in which the health and safety of any person (including the disabled person concerned) would otherwise be
endangered, or because the disabled person is incapable of entering into an enforceable agreement or of giving informed
consent and for that reason the failure is reasonable11. Regulations may be made dealing with this duty12.
(c) Management
It is unlawful for a person managing any premises to discriminate against a disabled person occupying those
premises13:
(a) in the way he permits the disabled person to make use of any benefits or facilities14;
(b) by refusing or deliberately omitting to permit the disabled person to make use of any benefits or
facilities15; or
(c) by evicting the disabled person, or subjecting him to any other detriment16.
(d) Premises that have already been let (the past and present)
By contrast with ss 24G-K that deal with unlet premises that are to let, ss 24A-F deal with premises that have already
been let. Section 24A is a general provision making it unlawful for a controller17of let18 premises to discriminate
against a disabled person who is a tenant or in lawful occupation of tenanted premises. The general prohibition is then
qualified by reference to a series of duties imposed on a controller under ss 24C or 24D. Non-compliance with these
duties amounts to discrimination19. There is an exemption in the case of premises that are or at any time have been the
only or principal home of an individual who is a person by whom the premises are let, provided that since entering the
letting neither he nor any other joint owner has used the services of a professional managing agent for managing
them20.
Section 24C deals with the provision of auxiliary aids and services. It imposes a duty on the controller to provide an
auxiliary aid or service where a request is made by or on behalf of a person to whom premises are let, which it is
reasonable to regard as a request that he take steps to provide an auxiliary aid or service and one of two conditions is
satisfied. If they are satisfied, it is the duty of the controller to take reasonable steps to provide the auxiliary aid or
service. It is never reasonable for the controller to have to take steps consisting of, or including, the removal or
alteration of a physical feature21. The first condition is that the auxiliary aid or service would enable a relevant disabled
person to enjoy the premises or would facilitate that enjoyment but would be of little or no practical use to him if he
were not a tenant or occupier of the premises22. The second condition is that the auxiliary aid or service would enable a
relevant disabled person to make use of any benefit or facility which by reason of the letting he is entitled to use or
would facilitate his making use of it23. Each condition is subject to a proviso: that without the auxiliary aid or service
either it would be impossible or unreasonably difficult for the relevant disabled person to enjoy the premises (in the case
of the first condition); or that, without it, it would be impossible or unreasonably difficult for the relevant disabled
person to make use of any relevant benefit or facility (in the case of the second condition).
Section 24D deals with the changing of practices, policies, procedures or terms. A duty arises under this section where
the controller has a practice, policy or procedure that has the effect of making it impossible or unreasonably difficult for
a relevant disabled person to enjoy the premises or to make use of any benefit or facility which he is entitled to use
under the letting, or where there is a term of the letting that has that effect. Provided that certain conditions are satisfied
Page 1213
the controller comes under a duty to take such steps as are reasonable in all the circumstances to change the practice,
policy, procedure or term so that it no longer has that effect24. The conditions are that the practice, policy, procedure or
term would not have that effect if the relevant disabled person did not have a disability; that a request is made to the
controller by or on behalf of a disabled person to whom the premises are let; and that it is reasonable to regard the
request as a request to take steps to change the practice, policy, procedure or term25.
(e) Victimisation
Where a duty arises in relation to premises that are already let under ss 24C or 24D upon a controller of let premises by
reference to a person who is not the tenant but is a person lawfully in occupation of them under the letting, s 24F makes
it unlawful for the controller to discriminate against the tenant. This provision therefore outlaws discrimination against a
person (referred to as T) who may not necessarily be a disabled person himself but who has a disabled person living
with him in the let premises. A controller discriminates against T if it treats him less favourably than it treats persons
whose circumstances are not the same as T's and if its reason for doing so is because of costs incurred in connection
with taking steps to avoid its liability under s 24A(1) for failure to comply with that duty26. In other words, the
controller discriminates against T if it treats him less favourably in order to avoid the expenditure that it would have to
incur to prevent itself from breaching its statutory duty not to discriminate under s 24A. In making the requisite
comparison between T's circumstances and those of any other person two matters are to be disregarded: one is the fact
that the request was made that gave rise to the imposition of the duty; and the second is the disability of each person
who is disabled or has had a disability and who is a person who is the tenant or a lawful occupier under the letting27.
(f) Exemption from the premises provisions
Section 24M disapplies ss 22-24L in a number of specified circumstances in addition to those mentioned above. They
do not apply: (i) in relation to the provision of premises by a provider of services, where he provides the premises in
providing services to members of the public28; (ii) in relation to the provision of premises, in the course of a "Part 2
relationship"29, by the regulated party30 to the other party; (iii) in relation to the provision of premises to a student or
prospective student by a "responsible body" or by any authority discharging the functions of a local education
authority31; and (iv) to the activities of certain private clubs that are made unlawful elsewhere in the DDA 199532.
HR A[7330]-[7332]
1 The word 'dispose' includes granting a right to occupy the premises and, in relation to premises comprised in a tenancy, includes
assigning the tenancy and subletting or parting with possession of the premises or any part of them: DDA 1995, s 22(6).
2 DDA 1995, s 22(1). There is an exemption in the case of a person who owns an estate or interest in the premises and wholly occupies
them, but not where, for the purpose of disposing of the premises, he uses the services of an estate agent or publishes an advertisement or
causes an advertisement to be published. Section 22(2) and, for the meaning of 'estate agent' and 'advertisement', see s 22(6).
3 DDA 1995, s 22(4). This applies to tenancies created before as well as after the passing of the 1995 Act: s 22(5).
4 DDA 1995, s 24(3)(e) and (3A). A "controller" of let premises is a person by whom the premises are let or is a person who manages
them: s 24A(3).
5 DDA 1995, s 24L provides a general power to make regulations for the purposes of ss 24(3A) and (3B) and 24A-24K.
Page 1214
6 This means, in relation to premises that are to let, a particular disabled person who is considering taking a letting of the premises: DDA
1995, s 24G(6).
7 DDA 1995, s 24J(1).
8 DDA 1995, s 24J(2) and (5).
9 DDA 1995, s 24J(3),(4).
10 DDA 1995, s 24K(1),(2).11 DDA 1995, s 24K.
12 DDA 1995, s 24K(3). See the Disability Discrimination (Premises) Regulations 2006, SI 2006/887 as amended by SI 2007/1898.
13 DDA 1995, s 22(3). A person managing premises does not discriminate for these purposes unless, for a reason that relates to a disabled
person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply as
prescribed by s 24(1)(a). See Williams v Richmond Court (Swansea) Ltd [2006] EWCA Civ 1719, [2007] 09 EG 204. This approach has now
been upheld by the House of Lords in Lewisham London Borough Council v Malcolm [2008] UKHL 43 per Lord Bingham at [12], Lady
Hale at [85] and Lord Neuberger at [150]. See the discussion in HR A[7325] above.
14 DDA 1995, s 22(3)(a). In this case, it may be possible to satisfy the condition that the treatment is necessary in order for the disabled
person or the occupiers of other premises forming part of the building to make use of the benefit or facility: DDA 1995, s 24(3)(c).
15 DDA 1995, s 22(3)(b). In this case, it may be possible to satisfy the condition that the treatment is necessary in order for the occupiers
of other premises forming part of the building to make use of the benefit or facility: DDA 1995, s 24(3)(d).
16 DDA 1995, s 22(3)(c). This was the ground relied on in Lewisham London Borough Council v Malcolm [2008] UKHL 43. In this case,
it may be possible to justify the detrimental treatment to which a disabled person is subjected by reliance on the condition in s 24(3)(f). This
condition can only be relied on where: the detriment is not eviction; the premises are not let premises; the person managing them is a
controller of them; and the disabled person is a tenant of them or lawfully in occupation under a tenancy: s 24(3)(b). Because in Malcolm the
detriment was eviction, this ground for justification would not in any case have been available. In order for this ground to be available, the
detriment to which the disabled person is subjected must be in order to recover costs which (i) as a result of the disabled person having a
disability are incurred in connection with the management of the premises, and (ii) are not costs incurred in connection with taking steps to
avoid liability under s 24A(1) or s 24G(1). For the scope of s 24G(1) see para (b) of HR A[7329] above.
17 For the meaning of "controller" see fn 4 above.
18 "Let" includes a subletting and a contractual licence to occupy: DDA 1995, s 24A(4).
19 DDA 1995, s 24A(2).
20 DDA 1995, s 24B. There is also a power to exempt premises of a "prescribed description": s 24B(2); and also exempted are premises
that satisfy the small dwellings exemption in s 23(2): DDA 1995, s 24B(3).
21 DDA 1995, s 24C(2) and s 24E(1).
22 DDA, 1995, s 24C(3). A "relevant disabled person" is a particular disabled person who is a tenant or lawful occupier of the let
premises in question: s 24E(3).
23 DDA 1995, s 24C(4).
24 DDA 1995, s 24D(1),(3). In this case too, it is never reasonable for a controller of let premises to have to take steps consisting of or
including the removal or alteration of a physical feature: DDA 1995, s 24D(3) and s 24E(1). The terms of a letting of premises include the
Page 1215
terms of any agreement which relates to the letting of the premises: s 24E(4).
25 DDA 1995, s 24D(2).
26 DDA 1995, s 24F(2).
27 DDA 1995, s 24F(3).
28 DDA 1995, s 24M(1)(a). This exemption is subject to any prescribed exceptions. "Provider of services" and providing services have
the same meaning as in s 19: s 24M(2),(3).
29 ie in the employment field: DDA 1995, s 24M(1)(b) and (4).
30 In this context a party whose acts of discrimination or harassment are made unlawful by ss 4-15C.
31 DDA 1995, s 24M(1)(c) and Ch 1 or 2 of Part 4 and s 28F(1).
32 DDA 1995, s 24M(d), and s 21F (including anything that would be unlawful under s 21F but for the operation of any provision in or
made under the 1995 Act).
Page 1216
parties/L Discrimination on grounds of disability/5 Exemption for small dwellings
5 Exemption for small dwellings
HR A[7333]
There is a limited exemption from the prohibition against discrimination in relation to premises in the case of certain
occupiers of small dwellings. In order for the exemption to apply, the following conditions must be met:
(a) that the relevant occupier resides, and intends to continue to reside, on the premises;
(b) that the relevant occupiers share accommodation on the premises with persons who reside on the
premises and are not members of his household;
(c) the shared accommodation is not storage accommodation or a means of access; and
(d) the premises are small premises1.
For these purposes, premises are 'small premises' if:
(a) only the relevant occupier2 and members of his household reside in the accommodation occupied
by him;
(b) the premises comprise, in addition to the accommodation occupied by the relevant occupier,
residential accommodation for at least one other household;
(c) the residential accommodation for each other household is let, or available for letting, on a separate
tenancy or similar agreement; and
(d) there are not normally more than two such other households3.
HR A[7334]
1 DDA 1995, s 23.
2 A 'relevant occupier' is (where the alleged discrimination relates to the disposal of premises) the person with power to dispose of the
premises, or a near relative of his: DDA 1995, s 23(6)(a). The expression 'near relative' means a person's spouse, partner, parent, child,
grandparent, grandchild or brother or sister (whether of full or half blood or by affinity); and 'partner' means the other member of a couple
consisting of a man and a woman who are not married to each other but are living together as husband and wife: s 23(7). In addition, in a
case within s 22(4), where the alleged discrimination involves the withholding of licence or consent to the disposal of premises to a disabled
person, 'the relevant occupier' means the person whose licence or consent is required for the disposal of the premises or a near relative of his.
3 DDA 1995, s 23(3), (4). Premises will also be small premises if there is not normally residential accommodation on the premises for
more than six persons in addition to the relevant occupier and any members of his household: s 23(5).
Page 1217
parties/L Discrimination on grounds of disability/6 Enforcement, remedies and procedure
6 Enforcement, remedies and procedure
HR A[7335]-[7340]
A claim that a person has been discriminated against unlawfully under the DDA 1995, Pt III may be the subject of civil
proceedings in the same way as any other claim in tort; and damages in respect of unlawful discrimination may include
compensation for injury to feelings whether or not they include compensation under any other head1. This procedure is
not available in the case of a claim based on discrimination or harassment in relation to the provision of employment
services2; and a claim of that kind would have to be made by way of a complaint to an employment tribunal3. Even
where a claim can be made under Pt III, there are special procedural restrictions, including a requirement that, normally,
the proceedings in respect of a claim are commenced within six months of the act complained of4.
HR A[7341]
1 DDA 1995, s 25(1), (2). Proceedings in England and Wales may only be brought in a County Court, but the remedies available are those
that are available in the High Court: s 25(3), (5).
2 DDA 1995, s 25(7).
3 DDA 1995, s 25(8).
4 DDA 1995, s 25(6) and Sch 3, Pt II.

Page 1218
parties/L Discrimination on grounds of disability/7 Alterations to premises occupied under leases
7 Alterations to premises occupied under leases
HR A[7342]
In certain circumstances a lessee may make alterations to premises so as to enable him to discharge his obligations
under the DDA 1995, notwithstanding the terms of his lease1. These provisions apply to a provider of services (defined
as 'the occupier') where it occupies premises under a lease and, but for these provisions, would not be entitled to make a
particular alteration to the premises, and the alteration is one which the occupier proposes to make in order to comply
with a duty under s 21 of the Act (for which see HR A[7344]ff). Where these provisions apply, then except to the extent
to which it expressly so provides, the lease shall have effect as if it provided:
(a) for the occupier to be entitled to make the alteration with the written consent of the lessor;
(b) for the occupier to have to make a written application to the lessor for consent if he wishes to make
that alteration;
(c) if such an application is made, for the lessor not to withhold his consent unreasonably; and
(d) for the lessor to be entitled to make his consent subject to reasonable conditions2.
If the terms and conditions of a lease:
(a) impose conditions which are to apply if the occupier alters the premises; or
(b) entitle the lessor to impose conditions when consenting to the occupier's altering the premises;
the occupier is to be treated for the purposes of these provisions as not being entitled to make the alteration3. The
position, therefore, is that the statutory variation does not apply where there are contractual provisions to the same
effect, but that where necessary the minimum alteration to the terms of the lease is made in order to bring them in line
with the statutory scheme.
HR A[7343]
1 DDA 1995, s 27. The expression 'lease' here includes a tenancy, sub-lease or sub-tenancy or an agreement to create any of those
interests. There is power to prescribe by regulations what is meant by 'sub-lease' or 'sub-tenancy': ss 27(3) and 68(1).
2 DDA 1995, s 27(2).
3 DDA 1995, s 27(4). These provisions are supplemented by Pt II of Sch 4 (see further under HR A[7346] below and, in the case of
premises occupied under a sublease or subtenancy, the provisions have been modified by regulation: Disability Discrimination (Providers of
Services) (Adjustment of Premises) Regulations 2001, SI 2001/3253, reg 9 as amended by Disability Discrimination (Service Providers and
Public Authorities Carrying Out Functions) Regulations, SI 2005/2901, as also amended by SI 2007/1898.
Page 1219
parties/L Discrimination on grounds of disability/8 The section 21 duty
8 The section 21 duty
(a) The duty
HR A[7344]
Section 21 of the DDA 1995 imposes a duty on a provider of services who has a practice, policy or procedure which
makes it impossible or unreasonably difficult for disabled persons to make use of a service which he provides, or is
prepared to provide, to other members of the public. It is then his duty to take such steps as it is reasonable, in all the
circumstances of the case, for him to have to take in order to change that practice, policy or procedure so that it no
longer has that effect1. Where a physical feature (for example, one arising from the design or construction of a building,
or the approach or access to premises) makes it impossible or unreasonably difficult for disabled persons to make use of
such a service, it is the duty of the provider of that service to take such steps as it is reasonable, in all the circumstances
of the case, for him to have to take in order to:
(a) remove the feature;

(b) alter it so that it no longer has that effect;
(c) provide a reasonable means of avoiding the feature; or
(d) provide a reasonable alternative method of making the service in question available to disabled
persons2.
HR A[7345]
1 DDA 1995, s 21(1).
2 DDA 1995, s 21(2). Regulations have been made by the Disability Discrimination (Providers of Services) (Adjustment of Premises)
Regulations 2001, SI 2001/3253 as amended by Disability Discrimination (Service Providers and Public Authorities Carrying Out
Functions) Regulations, SI 2005/2901, as also amended by SI 2007/1898, and the Disability Discrimination (Services and Premises)
Regulations 1999, SI 1999/1191; Disability Discrimination (Transport Vehicles) Regulations 2005, SI 2005/3190.
(b) Failure to comply with the duty
HR A[7346]
If any question arises as to whether the occupier has failed to comply with the s 21 duty by failing to make a particular
alteration to premises, any constraint attributable to the fact that he occupies the premises under a lease is to be ignored
unless he has applied to the lessor in writing for consent to the making of the alteration. Further, if the occupier has
applied in writing to the lessor for consent to the alteration and that consent has either been refused or given subject to
one or more conditions, the occupier or the disabled person who has an interest in the proposed alteration to the
Page 1220
premises being made may refer the matter to the County Court. If the court determines that the lessor's refusal was
unreasonable or that the condition is or any of the conditions are unreasonable, it may make such declaration as it
considers appropriate or an order authorising the occupier to make the alteration specified in the order, and it may also
make an order requiring the occupier to comply with the conditions1. In any proceedings under s 25 of the DDA 1995
the lessor may be joined as a party2.
HR A[7347]
1 DDA 1995, Sch 4, Pt II, paras 5 and 6.
2 DDA 1995, Sch 4, Pt II, para 7. Where there is a sublease or subtenancy, the duty is modified by the Disability Discrimination
(Providers of Services) (Adjustment of Premises) Regulations 2001, SI 2001/3253, reg 9 as amended by Disability Discrimination (Service
Providers and Public Authorities Carrying Out Functions) Regulations, SI 2005/2901, as also amended by SI 2007/1898.
Page 1221
parties/L Discrimination on grounds of disability/9 Duty to make reasonable adjustments: alterations to premises
occupied under leases
9 Duty to make reasonable adjustments: alterations to premises occupied under leases
(a) Duty to make reasonable adjustments
HR A[7348]
A large number of people, institutions and organisations come under an express 'duty to make reasonable adjustments'
under the DDA 1995: employers (including employers of contract workers), office holders, occupational pension
schemes, partnerships, barristers, advocates, trade organisations, qualifications bodies, providers of practical work
experience, and others1. Where a person to whom a 'duty to make reasonable adjustments' applies ('the occupier')
occupies premises under a lease, and would not be entitled to make a particular alteration to premises, being an
alteration which the occupier proposes to make in order to comply with that duty, s 18A of the Act alters the effect of
the lease2. The consequences of the duty applying are elaborated3.
HR A[7349]
1 DDA 1995, ss 4A, 4B(5) or (6), 4E, 4H, 6B, 7B, 7D, 14, 14B, 14D, 16A(5) as referred to in s 18D(2).
2 DDA 1995, s 18A(1). (Originally s 16 but renumbered as s 18A by the Disability Discrimination Act 1995 (Amendment) Regulations
2003, SI 2003/1673.)
3 DDA 1995, s 18A(5) and Sch 4, Pt I.
(b) The section 18(A) modifications
HR A[7350]
Where there is a duty to make a reasonable adjustment, then except to the extent to which it expressly so provides, the
lease shall have effect as if it provided:
(a) for the occupier to be entitled to make the alteration with the written consent of the lessor;
(b) for the occupier to have to make a written application to the lessor for consent if he wishes to make
the alteration;
(c) if such an application is made, for the lessor not to withhold his consent unreasonably; and
(d) for the lessor to be entitled to make his consent subject to reasonable conditions1.
Page 1222
As in the case of a provider of services under s 27 of the DDA 1995, the statutory provisions override any terms and
conditions relating to alterations in the lease. If the terms and conditions of a lease either impose conditions which are to
apply if the occupier alters the premises, or entitle the lessor to impose conditions when consenting to the occupier's
altering the premises, the occupier is to be treated for these purposes as not being entitled to make the alteration2.
HR A[7351]
1 DDA 1995, s 18A(2). The expression 'lease' includes a tenancy, sublease, or subtenancy or an agreement to create such an interest: s
18A(3). The application of sub-s (3) is modified where the occupier is in occupation of premises under a subtenancy: Disability
Discrimination (Employment Field) (Leasehold Premises) Regulations 2004, SI 2004/153, reg 9.
2 DDA 1995, s 18A(4).
(c) Failure to obtain consent to alteration
HR A[7352]
If any question arises as to whether the occupier has failed to comply with any duty to make reasonable adjustments by
failing to make a particular alteration to the premises, any constraint attributable to the fact that he occupies the
premises under a lease is to be ignored unless he has applied to the lessor in writing for consent to the making of the
alteration1.
HR A[7353]
1 DDA 1995, s 18A(5) and Sch 4, Pt I, para 1.
(d) Joining lessors in proceedings
HR A[7354]
In any proceedings in a case to which s 18A of the DDA 1995 applies, the complainant or the occupier may ask the
tribunal hearing the complaint to direct that the lessor be joined as a party to the proceedings. The request must be
granted if it is made before the hearing of the complaint begins. The tribunal may refuse the request if it is made after
the hearing of the complaint begins, and the request may not be granted if it is made after the tribunal has determined
the complaint1. Where the lessor has been joined as a party, the tribunal may determine whether he refused consent to
the alterations or consented subject to one or more conditions and if so whether the refusal or any of the conditions was
unreasonable. If it so determines, it may make such declaration as it considers appropriate and may make an order
authorising the occupier to make the alteration specified in the order and also order the lessor to pay compensation to
the complainant. In addition, it can require the occupier to comply with the conditions specified in the order: effectively
an injunction2.
Page 1223
HR A[7355]-[7360]
1 DDA 1995, Sch 4, Pt I, para 2(2)-(4); Disability Discrimination (Employment Field) (Leasehold Premises) Regulations 2004, SI
2004/153.
2 DDA 1995, Sch 4, Pt I, para 2(5)-(9).
(e) What are reasonable adjustments?
HR A[7361]
In determining whether it is reasonable for a person to have to take a particular step in order to comply with the duty to
make reasonable adjustments, regard shall be had, in particular, to:
(a) the extent to which taking the step would prevent the effect in relation to which the duty is
imposed;
(b) the extent to which it is practicable for him to take the step;
(c) the financial and other costs which would be incurred by him in taking the step and the extent to
which it would disrupt any of his activities;
(d) the extent of his financial and other resources;
(e) the availability to him of financial or other assistance with respect to taking the step;
(f) the nature of his activities and the size of his undertaking;
(g) where the step would be taken in relation to a private household, the extent to which taking it
would:
(i) disrupt the household; or

(ii) disturb any person residing there1.
HR A[7362]
1 DDA 1995, s 18B(1).
(f) Examples of steps that may need to be taken
HR A[7363]
The DDA 1995 gives examples of steps that a person may need to take in relation to a disabled person in order to
comply with a duty to make reasonable adjustments:
Page 1224
(a) making adjustments to premises;

(b) allocating some of the disabled person's duties to another person;
(c) transferring him to fill an existing vacancy;
(d) altering his hours or work or training;
(e) assigning him to a different place of work or training;
(f) allowing him to be absent during working or training hours for rehabilitation, assessment or
treatment;
(g) giving, or arranging for, training or mentoring (whether for the disabled person or any other
person);
(h) acquiring or modifying equipment;
(i) modifying instructions or reference manuals;
(j) modifying procedures for testing or assessment;
(k) providing a reader or interpreter;
(l) providing supervision or other support1.
HR A[7364]
1 DDA 1995, s 18B(2).
(g) Steps required to obtain consent to the making of alterations to premises
HR A[7365]
For the purposes of a duty to make reasonable adjustments, where under any binding obligation a person is required to
obtain the consent of another person to any alteration of the premises occupied by him:
(a) it is always reasonable for him to have to take steps to obtain that consent (but this does not extend
to making an application to a court or tribunal); and
(b) it is never reasonable for him to have to make that alteration before that consent is obtained1.
HR A[7366]
1 DDA 1995, s 18B(3) and (4).
(h) Lessor withholding consent
HR A[7367]
Page 1225
For the purposes of the DDA 1995, s 18A and Sch 4, Pt I, a lessor is to be taken to have withheld his consent to an
alteration where he has received a written application by or on behalf of the occupier for consent to make the alteration
and has failed, within a period of 21 days beginning with the day on which he receives the application for consent (or
such longer period as is reasonable):
(a) to reply consenting to or refusing the application; or

(b) to reply consenting to the application subject to obtaining the consent of another person required
under a superior lease or pursuant to a binding obligation; and
(c) to seek that consent.
A lessor who fails to meet those requirements but who subsequently meets them (except as to time):
(a) shall be taken to have withheld his consent from the date of such failure; and
(b) shall be taken not to have withheld his consent from the time he met those requirements (except as
to time).
For these purposes, a lessor is to be treated as not having sought another person's consent unless he has applied in
writing to that person indicating:
(a) that the lessor's consent to the alteration has been applied for in order to comply with the duty to
make reasonable adjustments; and
(b) that he has given his consent conditionally upon obtaining the other person's consent1.
HR A[7368]
1 Disability Discrimination (Employment Field) (Leasehold Premises) Regulations 2004, SI 2004/153, reg 4.
(i) Lessor withholding consent unreasonably
HR A[7369]
A lessor is to be taken to have withheld his consent unreasonably in the following circumstances:
(a) where the lease provides that consent shall or will be given to an alteration of the kind in question
and the lessor withholds his consent to the alteration; and
(b) where the lease provides that consent shall or will be given to an alteration of the kind in question
if it is sought in a particular way, and it is sought in that way and the lessor withholds his consent to the
alteration;
(c) where the lessor is taken to have withheld his consent by virtue of reg 41.
Page 1226
HR A[7370]
(j) Lessor withholding consent reasonably
HR A[7371]
For these purposes a lessor is to be taken to have acted reasonably in withholding his consent where:
(a) there is a binding obligation requiring the consent of any person to the alteration;
(b) he has taken steps to seek that consent; and
(c) that consent has not been given or has been given subject to a condition making it reasonable for
him to withhold his consent.
A lessor is also taken to have acted reasonably in withholding his consent where:
(a) he is bound by an agreement which allows him to consent to the alteration in question subject to a
condition that he makes a payment; and
(b) that condition does not permit the lessor to make his own consent subject to a condition that the
occupier reimburse him the payment1.
HR A[7372]
(k) Lessor's consent subject to conditions
HR A[7373]
For these purposes, a condition subject to which a lessor has given his consent is to be taken to be reasonable if it is to
the following (or similar) effect:
(a) that the occupier must obtain any necessary planning permission and any other consent or
permission required by or under any enactment;
(b) that the occupier must submit any plans or specifications for the alteration to the lessor for
approval (provided that the condition binds the lessor not to withhold approval unreasonably) and that
Page 1227
the work is carried out in accordance with such plans or specifications;

(c) that the lessor must be permitted a reasonable opportunity to inspect the work when completed; and
(d) that the occupier must repay to the lessor the costs reasonably incurred in connection with the
giving of his consent.
Where it would be reasonable for the lessor to withhold consent, a condition that upon expiry of the lease the occupier
(or any assignee or successor) must reinstate any relevant part of the premises which is to be altered to its state before
the alteration was made is to be taken to be reasonable1.
HR A[7374]
(l) Sub-lease or sub-tenancy
HR A[7375]
These provisions are appropriately modified to adapt them to the case where an occupier occupies premises under a
sub-lease or sub-tenancy1.
HR A[7376]-[7380]
1 Disability Discrimination (Employment Field) (Leasehold Premises) Regulations 2004, SI 2004/153, regs 8, 9.

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Page 1

Chapter 1 The relationship of landlord and tenant

(a) The relation of landlord and tenant

1 See paras HR A[3]-[5].

3 See paras HR A[6]-[8].

4 See Law of Property Act 1925, s 1.

5 See paras HR A[49]-[63].

8 See further para HR A[549].

9 See further para HR A[242].

10 See further para HR A[24].

(b) Origin of leasehold tenure

(c) Development of status as a proprietary right

(d) Term of years absolute

1 Law of Property Act 1925, s 1.

3 LPA 1925, s 205(1)(xxvii).

(e) Requirement of definite or potentially definite time limit

(f) Reservation of rent

1 Ashburn Anstalt v Arnold [1989] Ch 1, [1988] 2 All ER 147, CA.

2 (19th edn, 1832) vol I, para 45b.

3 (1st edn, 1766) Book II, p 143.

4 City of London Corpn v Fell [1994] 1 AC 458, [1993] 4 All ER 968.

(a) Tenancy based on contract

1 As to which see paras HR A[49]-[62].

3 See paras HR A[202]-[207]FF.

(b) Distinction between contractual relationship and interest in land

1 See paras HR A[549]-[900].

1 This is considered in detail in para HR A[9401].

2 See para HR A[6880].

(c) Tenancy created by statute

(d) Other examples of creation by statute: copyhold

1 Law of Property Act 1922, s 133; LPA 1925, ss 149(6), 202.

(e) Other examples of creation by statute: mortgages

2 LPA 1925 s 86(2).

(a) Nature of attornment

1 Cornish v Searell (1828) 8 B & C 471 at 476, per Holroyd J.

2 See Doe d Wright v Smith (1838) 8 Ad & El 255 at 260.

3 Doe d Linsey v Edwards (1836) 5 Ad & El 95 at 106.

(b) Effect of attornment by tenant

1 Shep Touchstone, ch 13.

3 Cornish v Searell (1828) 8 B & C 471.

(c) Attornment and mortgages

2 The Bills of Sale Act 1878, s 6: see para HR A[82].

3 Mumford v Collier (1890) 25 QBD 279.

6 RSC Ord 88, r 2 of Sch 1 to the CPR 1998.

7 Rent Act 1965, s 35(5) and SI 1972/1161.

1 See eg Leasehold Reform Act 1967, s 1(2)(b).

(d) Attornment and Bills of Sale Acts

1 Bills of Sale Act 1878, s 6.

3 Re Willis, ex p Kennedy (1888) 21 QBD 384.

4 Under the Bills of Sale Act (1878) Amendment Act 1882, s 8.

5 Green v Marsh [1892] 2 QB 330, CA.

(e) Attornment and mortgages: nature of tenancy

6 Woolwich Equitable Building Society v Preston [1938] Ch 129.

9 Alliance Building Society v Pinwill [1958] Ch 788, [1958] 2 All ER 408.

12 Scobie v Collins [1895] 1 QB 375.

(a) Estoppel generally

(b) Application of estoppel to landlord and tenant

5 Co Litt 47b; Smith v Low (1739) 1 Atk 489.

(c) Tenancy by estoppel: examples

(d) Tenant estopped from denying landlord's title

(e) Position where landlord's title has ended

(f) Position if tenant evicted by title paramount

2 See para HR A[6806] on implied covenant for quiet enjoyment.