The Practical Lawyer

The Dilapidations Protocol has been revised and, importantly, is now incorporated as part of the CPR (as from 1 January).

If T abandons the premises, and L claims rent arrears, can T argue that L should have mitigated his loss (eg by immediately re-letting)?

It has been confirmed by the CA that if T1 assigns to T2, then T1's guarantor (G) can validly enter into a sub-guarantee of T1's AGA. Such a sub-guarantee of T1's AGA will be valid.

We keep returning to the CA decision in Victoria Street [2011] because it is so fundamental when considering lease guarantees. There are three important rules that emerge:

A rent review clause will usually contain a provision saying that any improvements carried out by T are to be disregarded.

If a tenancy has LTA 1954 protection, L can oppose the grant of a renewal lease to T under ground (g) - that L intends to occupy the premises for his own purposes.

If L is owed sums under a lease, he normally has a number of remedies available to him. As such, he is in a markedly better position than any other unsecured creditor. L can:

At the end of the lease, T will have to comply with obligations as to repair and decoration. It is also important to consider the reinstatement obligations.

The PLC Property Resource recently had an interesting question about the enforcement of lease covenants. Suppose L has let part of the premises to T. L then assigns the freehold to L2, and then L2 grants a reversionary lease of the premises occupied by T to X. Who can enforce the lease obligations?

There are difficult insurance issues when dealing with fit-out works to be carried out by T (usually under an agreement for lease, or a licence to carry out alterations). In practice, those insurance obligations are often ignored - but there are problems to be faced.