Are you are looking for commercial space for your business or just a place to call home? If so, you may notice that the effect of high sale prices across the corporate area of Kingston & St. Andrew may leave you no option but to rent instead of buying. Before you pay over the security deposit, or sign the Lease Agreement you skimmed through, there are a few important issues you should consider.
Covenants in a Lease Agreement
It goes without saying that having a written Lease Agreement is very important, and most landlords will present you with one. A well written Lease Agreement will clearly define the relationship between the Landlord and Tenant, usually with a list of obligations given for the benefit of the other party called "Covenants” and outlined separately for the Landlord and Tenant. There may also be covenants that are Mutually agreed.
A Lease Agreement can contain several expressed covenants and some which are implied, and the number largely depends on whether the leased premises is a commercial or residential property. Other factors which may determine the number and type of covenants are:
it is a short or long term lease;
The legal purpose the property is allowed to be used for ("intended under")
The location of the property
The features/ amenities of the building; and
Whether the document was prepared by the attorney or not.
A Landlord or his attorney usually prepares the Lease Agreement and will include expressed covenants for the Tenant that protects his interests as much as possible and are usually referred to as “Lessee’s Covenants”. Since the consequences for a breach of covenant includes potential termination of the lease, it is important to understand clearly what your obligations are as a tenant. The following covenants are some of the most important ones for Tenants and are present in most Lease Agreements.
The Covenant to Pay Rent
The covenant to pay rent "runs with the land", which means that even if it is not expressly stated, the obligation to pay rent continues until the lease expires.
You should ensure that the person you will be paying rent to is the person the legally entitled to the rent. If you unknowingly pay rent to an unauthorized person, you will still be liable to pay rent to the actual Landlord.
If the Lease Agreement is not drafted well and does not outline when rent is to be paid, it is payable at the end of each period for a periodic tenancy – for example, at the end of the month for a monthly tenancy and at the end of a year for a term if years. Generally, a fixed term lease for a term of years will outline a yearly rent that is payable in monthly instalments.
The Covenant Not to Commit Waste
- A tenant has an implied obligation to use the property in a tenant-like manner and a duty not to commit waste.
- Waste is any conduct or omission that causes lasting damage to the land or alters the nature of the land to the detriment of the "reversion" (the Landlord's right to the property after the lease expires) due to damage, destruction, addition, improvement, or neglect. A breach of this covenant may not only result in termination of the lease, but the Landlord can also to bring an action against you to pay damages.
The Covenant to Repair
- The is usually an expressed provision in the Lease Agreement for one of the parties to repair or for the responsibility to be apportioned between both parties, depending on the type or degree of repair.
- The definition of repair is to make good on any damage so as to leave the subject as far as possible as though it had not been damaged. It involves renewal of existing parts and may also require the replacement of worn out or damaged items with one that is new and closely comparable to the original.
- In most in short-term leases, the Landlord is responsible for general repair of the premises such as the roof, walls, floors, and fixtures whilst in long-term leases, it is the tenant. Lease Agreements for apartments or offices in larger buildings will usually require the Tenant to be responsible for the interior and the Landlord for the exterior.
- In a case where there is a covenant for the Tenant to repair, it will usually require you to keep the premises in good order and condition fair wear and tear excepted. And there may also be a requirement to permit the Landlord or his agents at all reasonable times to enter upon and inspect the premises and the state and condition it is in and carry out necessary repairs. A Tenant may however not be required make the repairs if the repairs will, (i) affect the whole or substantially the whole of the building (ii) make the building different in character from what was originally let (iii) if the repairs are for a significant portion of the existing building.
- If the covenant to repair is breached by the Tenant, the Landlord can bring an action for damages or specific performance. If the Landlord breaches the covenant the Tenant also has the remedy of damages or specific performance but may also carry out the repairs and seek to recover the costs from future rent.
There are several other important covenants in a Lease Agreement which each have their own nuances which may affect your interests. To ensure you are protected, you should seek advice from your Attorney on the implications of these covenants, the consequences if you breach them as well as your rights if the Landlord commits a breach.
Antwan Cotterell is an Associate at Myers, Fletcher & Gordon in the Property Department. He can be contacted via Antwan.Cotterell@mfg.com.jm or myersfletcher.com. This article is for informational purposes only and does not constitute legal advice.