Internal Memorandum on Suitability of Precedent Lease and Amendments Required
To: Supervisor Solicitor
From: Legal Advisor
Subject: Draft Lease
Date: 16th June 2017.
Re: Lease Draft Legal Issues and Comments
The main objective of writing this memorandum you as the company solicitor is to provide legal comments concerning the draft lease of the business as discussed in two workshop tasks and preparatory task.
Lease Code of 2007
Dear, solicitor the lease code of 2009 outlines the relationship between the tenant and landlord as far as issues relating to the leasing of business premises are concerned. Solicitor, one of the important clauses of the Lease Code 2007 is about rent. Solicitor, first this clause talks about rent deposits, whereby, the landlord is supposed to state the amount of rent deposit to be paid by a tenant and the period of payment, plus the accruing interest, using fair rate (Crosby and Hughes, 2009). It indicates that tenant is supposed to be safeguarded against landlord insolvency or default. Also, solicitor, the clause state about rent review; this should be stated clearly by the landlord in the agreement according to the lease code of 2007. A close look at the lease draft, solicitor, indicates that it is compliant with issue of rental deposits as they are clearly stated, and can be used by the landlord to make any repairs to damages caused by the tenant (Crosby and Hughes, 2009). However, solicitor I think, the issue of rent renewal does not comply with the lease code of 2007 as it does not provide alternative means through which the tenant can continue doing business without interruption, if the tenant does not agree with the rent increment. Solicitor, I believe there should be changes made to the rent renewal clause to be compliant with law as it current stands it is illegal. The changes should provide detail about alternatives that the tenant have concerning issues of rent renewal in case he or she does not agree with rent increment. The clause seems only to protect the interests of the landlord, but ignores the interests of the tenant, therefore it should be changed to reflect the interests of both landlord and tenant as far as issue of rent renewal is concerned.
Dear solicitor, when it comes to the repair clause, it states that tenant repair obligations should only be limited to the lease term and the premises condition at the time of lease. Also, unless clearly stated otherwise, the tenant are supposed to give back the premise at the expiry of the lease within the similar condition the acquired it during the lease grant. The tenant has an obligation of keeping the building in good condition and repair, meaning that the premises should be in the same condition that it was given by the landlord during the lease grant period. The lease draft is not complaint with the lease code when it comes to the issue of repairs, whereby, the landlord give the tenant more repairs than required by the lease code of 2007. The tenant is only supposed to keep the premise in good condition and repair, but does not mean to keep replacing different facilities and appliances found in the premise. Therefore, the draft in this case violates the lease code law of 2007. Solicitor, I think there is need to introduce change on the repair clause as provided in the lease draft. The change should be introduced on issues of the tenant being required to make changes to the premise facilities and appliances, this condition is illegal. The tenant should only be required to keep the property in good shape, as long as it is in the same condition that it was given by the landlord. However, requiring the tenant to make changes to some appliances after a certain period of time is not legal. Therefore, as the solicitor I think you need to introduce changes in the lease draft; the change should indicate that the tenant is only obligated to make repairs to the premise appliances and facilities as long as they are not in the same condition as during the period when the premise was granted to the tenant at the beginning of the lease period.
Solicitor, the clause on the future assignment of property by the tenant indicates that it should be done without the permission of the landlord. The draft lease is in compliance with this clause, as clearly states that the tenant cannot lease the property to another tenant with making a written application of the landlord for approval. The main objective of the clause is to ensure that the property is leased to another tenant by the current tenant in line with the landlord condition regarding the use of the premise.
Wording of the Tenants Repairing Covenant
Solicitor, the lease agreement draft has a problem when it comes to the wording of the clause related to tenant repairs. The words requiring the tenant to make repairs on the appliances on an annual basis is wrong. The wording is illegal as it does not follow the principle of maintaining a premise in good condition and repair (Dupuis, 2007). This principle states that the tenant is only supposed to ensure that the premise is in the same condition as when it was given by the landlord at the start of the lease agreement unless otherwise stated in the Head Terms of the lease covenant. Therefore, the amendment that needs to be introduced on the covenant wording, is supposed to show that the tenant is only required to make repairs to the appliances and other things in the facility on annual basis; if they are not in reasonable condition compared to when they were issued by the landlord at the start of the lease agreement.
Solicitor, as far as the assignment clause is concerned, the only change that can be introduced is relating to the need of the tenant making an application to the landlord concerning renting the premise to another tenant who is going the same business. The tenant should not make any application as it should be assumed that the new tenant will be complying with the same terms and conditions of the agreement as stated in the lease agreement with the occupying tenant.
Solicitor, I think that the Epharesse's position as the tenant can be protected by ensuring that he is given an opportunity to state in writing one month to the expiry of the lease agreement where as a tenant he wants to continue using the premise of not. According to Manuel (2009), the lease law requires a landlord to renew the contract of the lease with tenant on request. Therefore, the landlord cannot give the property to another tenant as long as the current tenant is in need of the property. Thus, Epharesse's can be protected by making sure that the covenant states that at the expiry of the lease period, he will be at liberty of renewing the lease agreement or not and should do so in writing.