The Court of Appeal decision in the case of Lankester & Son Ltd v Robert David Rennie and Anne Rennie reaffirms that tenants must ensure they follow all the appropriate legal lease formalities when assigning a lease. This ensures the effective assignment of the lease and releases the outgoing tenant from its obligations under the lease.
In this case, the signed but undated transfer regarding the lease assignment was not delivered in the legal sense. On the case’s particular facts, there was no estoppel or implied surrender of the lease. Therefore, the lease remained vested in the tenant, who remained liable under the lease covenants. In this case, the original tenant vacated the premises and allowed the new tenant into occupation without a formal assignment. The new tenant paid rent to the landlord for some time and then sought to vacate. The landlord asserted on the one hand, that the new tenant was liable for the rent but, on the other hand, argued that the lease had not been properly assigned and the original tenant was liable for the rent.
The Court of Appeal held that there had been no transfer of legal title, as registration had not been effected and that the original tenant remained the tenant under the lease.
This case affirms the warning to outgoing tenants to ensure the completion of all legal lease formalities before allowing the assignee into an occupation. Following this course will avoid nasty shocks in the future. Landlords also need to be careful not to inadvertently find themselves estopped from denying an assignment has occurred.
Contact John Gillette if you have any queries on whether you’ve fulfilled your lease formalities.
Note: This article is not legal advice; it provides information of general interest about current legal issues.