Chapter 16 Problem questions and answer guidance

Leaseholds

Question

Your firm is acting for Eric Chung who is proposing to take the grant of a new lease at a price of £200,000 of a flat in Newcastle-Under-Lyme for a term of one hundred and twenty five years from the first of January this year with an annual rent of £50.00 increasing to £75.00 after fifty years. You have received a draft lease for approval, containing inter alia the following clauses: -

“2. The Lessee hereby covenants with the Lessor as follows: -

  • a) Alienation

Not to assign transfer underlet charge mortgage or part with or share the possession of or grant licence over the demised premises or any part thereof.

  • b) Alterations

Not to make any alterations or additions to the demised premises”.

Your Index Map Search result shows that the freehold is registered under Title No. NSH 196670.

  • i) Consider and explain any amendments you would make to these clauses in order to protect your client.
  • ii) What are the essential actions you will need to take following completion in order to perfect the lease?
  • iii) Explain whether or not you will be entitled to investigate the lessor's freehold title. If the title is not investigated what are the risks to which the lessee is thereby subjected?

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