The Running of Covenants in Equitable Leases and Equitable Assignments of Legal Leases

Editorial Committee of the Cambridge Law Journal

The Running of Covenants in Equitable Leases and Equitable Assignments of Legal LeasesAuthor(s): R. J. SmithSource: The Cambridge Law Journal, Vol. 37, No. 1 (Apr., 1978), pp. 98-121Published by: Cambridge University Press on behalf of Editorial Committee of the Cambridge LawJournalStable URL: http://www.jstor.org/stable/4506063 .

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C.L.J. The Running of Covenants 121

Equitable Assignments of Legal Leases

(i) The general principle still appears to be that the assignee is not

liable on the covenants, even if in possession. (ii) The assignee may be estopped from denying that he has a

legal assignment, especially if he has taken possession under a licence

for a legal assignment. It is unlikely that a contract can be implied between lessor and assignee.

(iii) If there is a breach of covenant, forfeiture of the lease may ensue. Further, it is possible after Tito v. Waddell {No. 2) that the

assignee who is or has been in possession must accept liability on the

covenants incurred whilst in possession. (iv) The assignee is bound by any proprietary interests in the

land created by the lease.

(v) The assignee is entitled to the benefit of the covenants and

may enforce them against an assignee of the reversion.

These conclusions reflect the complex and confused state of the

law at present. Although Boyer v. Warbey is difficult to support in

the light of earlier decisions, one cannot help but think that it offers

a much simpler and better answer in the context of equitable leases,

although one must admit that it lessens the sanctions for failure to

comply with the statutory requirement of a deed. It was uncharac-

teristic Of equity not to follow the rules of law on the running of

covenants when equitable leases were recognised and it is time that

this error is remedied. For all its difficulties, then, Boyer v. Warbey is to be welcomed. One can also urge that an equitable assignee of a

legal lease should be unable to shelter behind the informality of his

assignment in order to gain immunity from an action by the lessor.

In this area, however, the authorities are stronger and more

numerous; it is unlikely that the lead given by Boyer v. Warbey will

be sufficient to change the law.



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The Running of Covenants in Equitable Leases and Equitable Assignments of Legal Leases