Jennifer Slade

The Parties

Habendum and Reddendum

The Parcels clause

The Landlord Check title▪ Bell v General Accident

The Tenant Parents and subsidiaries▪ Widget Ltd▪ Widget (Holdings) Ltd▪ Widget (UK) Ltd ▪ Widget plc

The Guarantor/Surety Note: short-term security for L

– a rent deposit Consider for▪Newly incorporated company▪ Subsidiary▪ Foreign company

Drafting▪ If L “gives time” in binding way, G will be

released – so “g/tee to apply notwithstanding any time or indulgence granted by L to T… nor any neglect in enforcing the payment of rent and other covenants”

▪ Variations to lease discharge G – if material and unless overridden in the lease or consented to by G

▪ [ NB for former tenants - s18 LT(C)A 1995/Friends Provident – G not liable for increased amounts resulting from variation to lease that L could have refused (e.g. user widened increasing rent at review)]

▪ T/G should argue for express provision re: variations

▪ Disclaimer – see Hindcastle

▪ Statutory continuation – liability of G does not continue during holding over under LTA 1954, unless provided for in lease.

▪ L will want T’s covenant to provide replacement G – e.g. if G becomes insolvent

▪ Assignment issues

▪ Providing G may be condition of assignment▪ G may want to be able to call for an assignment if T

defaults▪ In old lease G of OT may be on the hook for the term▪ In new lease, if T assigns and enters into an AGA,

what is the position for the G of T – still on the hook?

▪ Advice to guarantor on drafting

Demise and Rent Term

Certainty Rent Commencement Date, Term

Commencement Date, Date of Grant

SDLT implications▪ When does a lease start for SDLT?

(note effect of 5-year rent review rules)

Break clauses Rationale for L and T Time of the essence – note possible influence of

coincident rent review Notice procedure – note interaction for L’s break

with LTA 1954 for tenancies within the Act Mannai v Eagle Star▪ Notice referred to 12 January instead of 13

January Conditional on compliance with covenants▪ T must comply strictly – so T to try to negotiate

out conditions? (use of “reasonable”/”material” can create uncertainty)

Lease of whole/external demiseLease of part/internal demise Plans – note HMLR guidanceBoundaries and eggshellsRights and reservations