8/13/2019 Commercial Leases (Property and Trusts)

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Commercial Leases (Property and Trusts)

A majority of commercial property (shops, offices, and industrial units) is rented

property. Leasehold commercial property is therefore very important to the UK

economy and to legal practice. This course will provide an understanding of the legal

relationship of landlord and tenant in the context of the letting of commercial property.It will encourage students to think about the lease as a contractual arrangement, a

proprietary estate and as a regulated instrument, and what the appropriate way is to

regulate the division of interest between landlord and tenant. It should appeal to

students who have enjoyed contract law, but also builds on aspects of the land law

course.

For tenants, flexibility is important. If the business is successful, and its location

important, it will want to stay put, even after the lease ends. If the business grows or

shrinks it may need to be able to get out of the lease, by selling it or surrendering it.

For many landlords, the lease is an investment and they will focus on the lease as a

tool for guaranteed, low risk, but rising income. Both parties will want a property that is

well maintained, but who should pay for this? The course will look at how leases

balance these interests through the contract, but also at when the government has

stepped in to regulate.

There are three main stages in the leasehold relationship: entering into the lease,

management issues, and ending the relationship. The major influence upon the legal

relationship of landlord and tenant is the lease contract negotiated between the parties.

The course will therefore look at how leases are distinguishable from other occupancy

relationships, and the main terms that appear in leases. In doing so, it will consider the

range of factors that influence the content of the lease, such as the type and location of

property, the relative negotiating strength of the parties, and wider economic and social

policies. The course will also explore how leases provide for management of the

property during the lease: allocating responsibility and liability for repair, how the

property can be used, reviewing the rent, and servicing the property. As estates, leases

can be sold or assigned: the course will look at the ability of landlords to control the

disposition of leasehold interests, and the impact that this has upon the enforcement of

the leasehold covenants between both the original landlord and tenant, and between

the current landlord and tenant. It will also look at rights that the tenant has to renew

the lease at the end of the term. Leases usually contain forfeiture provisions, enabling

the landlord to end the lease early in the event of tenant default and the course will

look at how this right has been regulated by common law and statute.

Exploring the legal relationship will, therefore, involve looking at the application ofprinciples of land law and contract law that law students will already have encountered

(such as the distinction between leases and licences, and principles of contractual

interpretation) as well as the law (both statutory and common law) specific to

commercial leases.