Leasehold Covenants

• Pages: 571-623

LEASEHOLD COVENANTS

Landlord and tenant relationship is governed by terms agreed on by the

parties. But they may not expressly advert to, and provide express terms

to govern, all the issues which may arise in their relationship. The lease

may therefore not embody all the terms necessary for the operation of the

relationship between the parties to the relationship. It may even be silent

on the type of tenancy sought to be created. It was seen in the previous

chapter that in such cases the court will determine the form of tenancy

which best fits the agreement between the parties. Similarly, the courts

enforce certain covenants between parties to a lease even when the lease is

silent as to these terms.

The rights and duties of parties to landlord and tenant relationship can

be subsumed under the following four heads:

(1) “usual covenants”;

(2) implied terms;

(3) statutory implied terms; and

(4) express terms.

The first two items, “usual covenants” and “implied terms”, will be dis-

cussed as listed. The last two, statutory implied terms and express terms,

which have the effect in most cases of overriding the first two, will be

organised under the first two as and when they affect them.

“USUAL COVENANTS”

The significance of “usual covenants” arises where prior to the execution

of a formal lease the parties commit themselves to the transaction by

entering into an agreement that the premises shall be demised by a lease to

be executed by the parties. Such a process will give rise to the implication

that the lease when executed will embody “the usual covenants”. The

executed lease need not contain the “usual covenants”. It is implied if the

lease was preceded by a contract that the lease would be entered into.1

Thus, at the instance of a party to a contract for a lease, the court can order

1Propert v. Parker (1832) 3 My. & K. 280, 281; Morrall v. Krause [1994] E.G.C.S. 177, 40

E.R.107.

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the lease, which is eventually executed, to be rectified for the inclusion of

the usual covenants, if they are not contained in it.

The terms of “usual covenants”

On the part of the landlord, covenant for quiet enjoyment is implied in a

lease which gives rise to the enforcement of “the usual covenants”

On the part of the tenant, the following covenants will be enforced

under such circumstances when the lease is preceded by a contract for it:

(a) covenant to pay rent (subject to a proviso for forfeiture in the event of

non-payment of rent2), tenant’s rates and taxes;

(b) covenant to repair;

(c) covenant to permit the landlord to gain access to inspect and ascertain

the status of repair of the premises.

IMPLIED COVENANTS

On the part of the landlord, the courts would enforce covenant

(a) for quiet enjoyment,

(b) not to derogate from the grant,

(c) that the premises (if furnished) are fit for human habitation.

Covenant for quiet enjoyment

An undertaking for quiet enjoyment by the landlord is implied in any

landlord and tenant relationship, whether the lease is written or oral.3This

has been accepted as “the only view consistent with common sense”.4A

landlord is obliged to put the lessee or tenant into possession of the leased

property, and ensure that during the term the tenant is free from adverse

claims. The tenant’s enjoyment of the property should not be disturbed by

the landlord or any person who derives title from the landlord.

2Hodgkinson v. Crowe (1875) 10 Ch. App. 662. The landlord’s right of forfeiture does not

affect the breach of other covenants.

3“As soon as the relationship of landlord and tenant exists, and is established, it will

import into the tenancy a covenant for quiet enjoyment of the premises let. This covenant

extends to all the acts of the lessor or landlord as well as to the lawful acts of those

claiming under him”: Jagroop v. Khan (July 18, 1990, High Court, Trinidad and To bago)

No. 1041 of 1985. Saul and Saul v. Small [1963] L.R.B.G. 200, 203.

4Markham v. Paget [1908] 1 Ch.697, 716. See (1968) 11 J.L.R. 102, 105.

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The covenant for quiet enjoyment on the part of the landlord is con-

sidered “as an ordinary incident of a tenancy ...it is of the very essence of

the tenancy”.5It gives expression to the basic right of a tenant to exclusive

possession, and in fact, was originally regarded as a covenant to secure

title or possession.6This original conception has been extended, and now

applies even where there is no issue relating to title to land nor possession

of the land. Any substantial or physical interference with the tenant’s

ordinary and lawful enjoyment of the property would be a breach of the

landlord’s covenant for quiet enjoyment.7

As stated by North J., “It is a covenant for freedom from disturbance

by adverse claimants to the property”8; it does not refer to the absence

of noise – i.e., to “quiet” enjoyment in the acoustic sense of the word.9

The word “enjoy”, in this context, refers to the exercise and use of the right

and having the full benefit of it, rather than to deriving pleasure from it.10

The concept therefore means there should not be any interference which

would affect the tenant’s ability to use the land in lawful and ordinary

way.

The covenant is breached where, for example, the landlord in the

exercise of his right to work minerals under the demised premises causes

the land to subside.11 In Kenny v. Preen12 the landlord after serving the

tenant with notice to quit, threatened, both by letters to the tenant and by

shouting at her and banging on her door, to take physical action to evict the

tenant and remove her belongings from the demised premises. The tenant

sued the landlord in the county court for damages for breach of covenant

for quiet enjoyment, and an injunction. The landlord appealed against the

judgment of the County Court in favour of the tenant.

In dismissing the appeal, the Court of Appeal did reject, however, the

view of the County Court that there is no breach of covenant for quiet

enjoyment where a landlord asserts that the tenant’s title, her right to

possession of the premises, has been determined, even if he makes such

assertion frequently, emphatically and rudely or even if he threatens court

proceedings for possession.

5Kanizaj v. Brace [1954] N.Z.L.R. 283, 284, per Gresson J.

6Southwark LBC v. Mills [1999] 3 W.L.R. 939, 957.

7Ibid.

8Hudson v. Cripps [1896] 1 Ch. 265, 268.

9“So in Jenkins v. Jackson (1888) 40 Ch. D. 71 at 74, Kekewich J felt obliged to point out that

the word ‘quietly’ in the covenant does not mean undisturbed by noise. When a man is

quietly in possession it has nothing whatever to do with noise ...‘Peaceably and quietly’

means without interference – without interruption of the possession.”, Southwark L.B.C.

v. Mills, supra, at p. 945, per Lord Hoffman.

10 In Kenny v. Preen [1963] 1 Q.B. 499, 511, per Pearson L.J.

11 Markham v. Paget [1908] 1 Ch. 697.

12 [1962] 3 All E.R. 814.

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