Lease on Life Lawyers for Landcorp ( 'LC ')
Assignment - Must LC recognise the option?
Upon the valid transfer and settlement regarding title to the reversionary interests to the land, all rights and obligations are assigned to LC. Covenants already entered into by the previous owner OT, will be deemed to have been made on behalf of the successors of the title. With case authority asserting that LC will be subject to all covenants that touch and concern the land, and that options to renew a lease are considered to be covenants relevant to land, it can be established here that LC is entitled to enforce rent payments, and is required to recognise the option to renew covenanted between OT and Tom.
A…show more content… Accordingly, Tom 's valid exercise as agreed on the covenants requires for Tom to not be in breach of any covenant at the time of his exercise. The relevant questions are;
(1) Was a timely written notice given?
(2) Was Tom in breach when exercising the option?
(3) Was Tom in breach with regards to advanced monthly payments?
Tom 's expression of unequivocal intention to renew on 30 April via writing, one month earlier than the notification requirement of 2 months can be considered satisfactory and timely under Covenant 4. However, the other two requirements of the agreement with regards to a rental payment at the commencement of each month, and by extension the not being in breach at the time of option; were not fulfilled on the facts. Based on the above breaches at this point, LC would have valid grounds to refuse the renewal option at common law. It must be noted however, that sections in the PLA, in such circumstances stipulate a requirement for lessors, when intending to rely on specific breaches in an agreement to refuse a tenant 's option to renew; to provide the tenant with a notice regarding the breach, specifically indicating which covenants were breached, the lessor 's intention on reliance of the breaches, and outlining the effect of the breaches on the availability of options, within 14 days of the