Breach of Covenant meaning

This Checklist, although not exhaustive, sets out the key steps and issues to consider when acting for a landlord in relation to a tenant’s application for a licence to underlet the demised premises. Does the lease permit underletting? First, review the relevant provisions in the lease to confirm whether the tenant may underlet the demised premises and, if permitted, the conditions and terms that would apply. Where there is an absolute covenant against underletting (ie a total ban), the landlord is under no duty to consent or to entertain the application, although they might choose to accommodate the tenant’s request. Take instructions on that basis; ensure the landlord understands that consenting to an otherwise prohibited act could breach obligations in other leases requiring enforcement of the covenant, and proceed as advised as necessary. If instead the lease has a qualified covenant (ie no underletting without the landlord’s consent), the landlord must handle the application as the lease stipulates and in line with section 1 of...

Flowchart This Flowchart outlines the prerequisites that need to be met to prove a fraudulent trading claim...

This Flowchart This diagram outlines the criteria that need to be met for the court to determine a transaction amounts to a preference and award relief...

In this issue: Key developments and horizon scanning Leasing property Property management Statutory compliance Investigating title Transferring property Additional property updates this week Daily and weekly news alerts Trackers Key developments and horizon scanning Further comment on general election manifestos The Royal Institution of Chartered Surveyors has issued commentary and analysis on the general election manifestos of multiple parties — Conservative, Liberal Democrat, Labour, Green and Reform — with particular attention to housing and planning. In parallel, the British Property Federation has published its take on the Labour Party’s manifesto, following earlier remarks on the Liberal Democrat and Conservative platforms. See: LNB News 18/06/2024 25, LNB News 14/06/2024 33 and LNB News 19/06/2024 14. Source: UK General Election 2024: What it means for housing, Land and Rural Manifesto overview, BPF comments on the Labour Party manifesto and Labour Manifesto - BPF Analysis. Leasing property Forfeiture—breach notification covenant The Tropical Zoo Ltd...

Alaska Airlines Inc v Virgin Aviation TM Ltd and another company [2025] EWHC 2505 (Comm) What are the practical implications of this case? The principal outcomes of Mr Justice Foxton’s analysis can be stated as follows: Where an unjust enrichment claim founded on failure of basis is invoked to stop payment of a contractual amount, the correct characterisation is that this engages the defence of circuity of action (para [49]). In that scenario, circuity of action does not mean the debt is never due; rather, it supplies a defence to liability. A broadly drafted no set off clause captures such a defence, so summary judgment can be granted (para [52]). To reach those conclusions, Foxton J reviewed a range of authorities in which no set off provisions were relied upon (see especially para [47]), and he also considered and clarified other decisions relevant to the underlying issues of principle. Accordingly, a debtor cannot avoid a summary determination merely by pointing to...

In this issue: Key developments and horizon scanning Repairing obligations and dilapidations Residential tenancies Service charges Rent and rates Disputes and remedies Neighbour disputes Enfranchisement and right to manage Contractual issues Easements and covenants Property disputes in Scotland Additional Property Disputes updates LexTalk® Property Disputes: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Key developments and horizon scanning The Renters’ Rights Act 2025—SDLT The Renters’ Rights Act 2025 is intended to bring in tenant-favourable reforms, yet recent reporting has stressed that the roll-out of assured periodic tenancies may result in SDLT becoming payable on rent for some tenants in the years ahead. While these SDLT provisions are long-standing, general awareness remains limited. Andrew Kerr and Ella Perrett of Burges Salmon assess the position. See News Analysis: The Renters’ Rights Act 2025–SDLT. Repairing obligations and dilapidations ...

Interim ‘springboard’ injunctions This Practice Note examines the character and reach of interim ‘springboard’ injunctions, deployed to stop a transgressor securing an unfair competitive advantage arising from unlawful conduct. It addresses the particular circumstances in which an employer may seek a springboard injunction to curb the actions of a former employee, the evidential requirements that must be met to obtain the order, and the means by which protection is delivered in practice. It also considers how the length and breadth of the injunction can be confined and tailored. On occasion, an employer will pursue an injunction to shield themselves from the conduct of a former employee who, before employment ended, breached a post-termination restriction (restrictive covenant) or misused the employer’s confidential information and, by that misuse, gained an unfair competitive advantage over their former employer. An interim order intended to neutralise any unfair competitive advantage that might be obtained through misuse of an employer’s confidential information, breach of contract, or the commission of a tort, is commonly called...

This Practice Note looks at: the principal features of loan to value (LTV) covenants in secured lending transactions possible issues with calling an event of default arising from a LTV covenant breach potential challenges to an event of default based on a LTV covenant breach remedying a LTV covenant breach the impact of the economy on LTV covenant breaches LTV covenants are a vital element of risk management in secured lending. An LTV covenant is a common financial covenant that requires the outstanding principal of a loan, expressed as a percentage of the value of the security charged in favour of a lender, to stay below a specified threshold for the life of the loan. This gives lenders a means to monitor and protect the strength of their security over time. For borrowers, grasping and negotiating these covenants is key to achieving favourable loan terms and steering clear of the pitfalls that can arise from a breach. Although a...

This Practice Note examines the American Cyanamid test used by the courts to determine whether to grant temporary injunctive relief. It sets out the sources of the court’s authority and the principles that inform a judge’s discretion when considering an interim injunction application under those guidelines. For wider guidance on injunctive relief, including the distinction between interim and final, and between prohibitory and mandatory orders, see Practice Note: Injunctions—guiding principles. For interim remedies focused on preserving assets and/or evidence, see: Freezing injunctions—guiding principles Proprietary freezing injunctions Search and imaging orders—guiding principles Interim delivery up orders and preservation of property This content should also be read in conjunction with: Interim injunctions—on notice applications Interim injunctions—without notice applications Interim injunctions—drafting the order Guiding principles for interim injunctions The jurisdiction to grant interim injunctions arises from section 37(1) of the Senior Courts Act 1981 and CPR 25.1(1)(a), as outlined in Practice Note: Injunctions—guiding principles—The...

Deed of indemnity dated [ date ] Parties [ beneficiaries ] of [ addresses ] (Beneficiaries) [ trustees ] of [ addresses ] (Trustees) Background (A) The Trustees act as trustees of a trust dated [ date ] between [ parties ] (the Trust). (B) It is considered that [ detail breach of trust ] may amount to a breach of trust (the Breach of Trust), and the Beneficiaries agree to release and indemnify the Trustees against it. This Deed provides: The Beneficiaries, jointly and severally, covenant with the Trustees that they and their personal representatives will at all times keep the Trustees fully and effectively indemnified against all actions, proceedings, accounts, claims and demands arising in respect of the Breach of Trust. Executed as a deed by the parties on the date at the start of this deed. SIGNED AND DELIVERED AS A DEED by [ insert name ] in presence of: ...

I, [ name ], of [ address ], do solemnly and sincerely state that: [ I have worked for [ name of owner ] (‘the Owner’) for [ number ] years. During the past [ number ] years I have occupied the role of [ description ]. I am completely familiar with the matters addressed in this statutory declaration. OR I am [ a partner in OR employed by ] [ name of firm ], a practice of [ chartered ] surveyors which, since [ date ], has been continuously engaged by [ name of owner ] (‘the Owner’) to [ manage and act as agent OR collect the rents and other income and pay the outgoings OR [ other ] ] for the Owner in connection with the Property (as defined below). I have personally [ carried out AND/OR supervised ] that work since [ date ]. I am thoroughly acquainted with the matters addressed in this statutory declaration. ] The Owner is the [...

This Deed is made on [ insert day and month ] 20[ insert year ] Parties [ Insert name of Chargor ], being a company incorporated in England and Wales, with registered number [ insert company number ], and whose registered office is at [ insert address ] (the “ Chargor ”); and 1 [ Insert name of Security Agent ], acting as security agent and trustee for the Finance Parties pursuant to the terms and conditions set out in the [ Facilities Agreement OR Intercreditor Agreement OR Security Trust Deed ] (the “ Security Agent ”). Recitals: (A) The Finance Parties have consented to provide loan facilities subject to the terms and conditions set out in the Facilities Agreement (as defined below). (B) As a condition precedent to the loan facilities becoming available, the Chargor must execute this Deed for the purpose of granting security in favour of the Security Agent in relation to the Secured Obligations (as defined below)...

Damages After the lease ends, a landlord’s terminal dilapidations claim lies in damages. The recoverable sum is determined by common law rules for assessing loss arising from breach of the repairing covenant, but is curtailed by the statutory ceiling in section 18(1) of the Landlord and Tenant Act 1927 (LTA 1927). At common law, the benchmark for disrepair is the reasonable expenditure required to restore the premises to the condition they should have been in at the point of lease expiry. The claim for damages may, in addition, encompass foreseeable knock-on losses, including rent foregone during any period when the state of disrepair prevents the property being relet...

Rights when assignee’s lease forfeited because of a former leaseholder’s breach An assignee’s personal exposure for breaches committed before a lease is assigned is restricted, and a tenant will generally be responsible only where the lease contains an express covenant dealing with those breaches and allocating liability. Without such an express term, the landlord has no covenant to pursue against the assignee for defaults that were fully committed prior to the assignment of the lease. Forfeiture, by contrast, is a proprietary remedy rather than a personal one under the lease. It can be exercised by a landlord against a tenant for breach of covenant under that lease. See Practice Note: ....

Can the tenant claim its costs from the landlord? There is no general statutory right for a tenant to recover its costs from the landlord. Any ability to do so would depend on the wording of the lease, which must be reviewed to see whether it grants such an entitlement in this scenario. In practice, it would be unusual for a lease to contain a provision of this nature. It is also unclear on the information given in this Q&A whether the inspection was carried out solely by the tenant to determine if a breach had occurred, or whether it was arranged by the landlord, with the tenant required to attend to provide access to an unmanned site...