This is an extract of our Alienation Leases Model Answer document, which we sell as part of our Property Law and Practice Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.
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Alienation?Clause 4 Tenant's Covenants - Tenant covenants to observe Tenant's Covenant Clause 4.10 Alienation Clause 4.10.1(i) - Absolute clause prohibiting MM from assigning, charging or parting with possession only part of the premises. Clauses
4.10.1(ii) and 4.10.1(iii) respectively, prohibit share possession or occupation as well as underletting a part of or the whole premises unless permitted under 4.10. The provision regarding assignment will be seen as not unreasonable on the Landlords part as this provision has been agreed between the landlord and MM and it is a new commercial lease (s19(1)(A) Landlord and Tenant Act 1927)Clause 4.10.7 - notwithstanding clause 4.10.1 (Mini Mee can't part with possession of the whole premises or allow someone to share the premises or any part of it (apart from a permitted assignment of the whole) Mini Mee can share occupation with a Group Company (1.1 "Definitions" defines Group Company). If this does happen, no new landlord/tenant relationship should be created. Absolute prohibition, but don't need Landlord's consent for approved parting with possession.Clause 4.10.2 - Mini Mee can't assign or charge the whole premises without getting written consent from the landlord (not to be unreasonably withheld - fully qualified covenant). Tenant must satisfy the circumstances in Clause 4.10.2(i) (Financial Standing of the assignee) as well as the conditions in Clause 4.10.2(ii) (SEE the LIST ON THE LEASE AND LIST THEM) to get permission to assign. These circumstances and conditions will be seen as not unreasonable on the Landlords part s19(1)(A) of the LT Act 1927. This does not mean that this will hold up in court, but it will help the Landlord's case. Clause 4.10.2(ii) o
Clause 4.10.2(ii)(b) Mini Mee as the assignor must enter into an Authorised Guarantee Agreement (AGA) to act as a guarantee for the assignee. This will mean if the assignee breaches any of its covenants, the Landlord will be able to recover from Mini Mee, who will then be able to recover from the assignee. Under the Third Schedule (Guarantee) clause 1.2, the Guarantor is required to guarantee that the assignor (Mini Mee) performs its duty's under the AGA. This will mean if the assignee breaches any of its covenants, the Landlord will be able to recover from the guarantors only if they failed to gurantee that the Assignor (Mini Mee) failed to honour his covenant under Clause 4.10.2(ii)(b) (Guarantor will then be able to recover from the assignee)
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