Covenants in leases: Covenants are terms of a lease. Like in a normal contract, terms may be express, implied at law or by statute. Express or implied: Covenants can be set out in a lease itself or incorporated by reference (eg to a standard terms document recorded in the land registry). Covenants can be implied by the common law by virtue of the lessor lessee relationship Covenants can be implied by statute. Contract: Subject to contract law principles re essential terms and repudiation. Usual covenants implied at law on lessors . These covenants are implied in all leases. · Imposed on lessor · Quiet enjoyment · Non derogation from grant . Permit lessee to remove its chattel after termination. Convenant- quiet enjoyment: Implied by nature of relationship but normally expressed in a lease. Subject to any reservations (such as a right to enter and effect repairs), the lessor or those claiming under the lessor (eg the lessors other tenants in the building) will not Examples of breach: Turning off services (electricity, telephone etc) Physically preventing access to premises Excessive noise beyond usual incidents of type of building Wrongful eviction Intimidation, threats or abuse. Does not need to be direct physical interference South wark v Baxter. Does not apply to existing interreferences. If known to both parties, the nature of the business for which leased premises is grants 'forms the framework of the analysis' as to whether conveant is breached. Byrnes v Jokona [2002] FCA 41 [61] But note: ‘It is an interference with a property right (possession or the grant and not interreference with the business activity that is the legal foundation of the right to complain about the breach of the covenant': Byrnes v Jokona Also see city of Subiaco v Heytesbury Property Pty Ltd (2001) 24 WAR 146. Non degrogation from grant: Subject to any reservations, the lessor must not act (or permit others to act_ so as to make the presmies materially less fit for the permitted use.
Implied to give business efficacy to lease - the use of the property by the lessee would be very difficult or impossible without implication of this term: Karaggianis v Malltown Pty Ltd (1979). Examples: Aldin v Latimer Clark, Muirhead & Co [1894] Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] Karaggianis v Malltown Pty Ltd (1979) Lesee leased cafeteria on 6th floor. At commencement, 4 lifts in service plus 2 escalators. After 1 year, lift service reduced and escalators limited to 2nd floor. Leasing nearby premises to the lesee's competitors is not a breach. Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] Multi tenanted building. Leasee 1 sold canvas goods and lessee 2 did woodwork (timber staircases) Lesee 1 complained to lessor that canvas goods damaged by sawdust blown into premises so Lesee 1 unable to carry on business. Covenant was breached in the case -> not to derogate the lease. > buy leasing the property to the timber company. See pages 10-12. Quiet enjoyment vs non derogation: