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 of principles 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.