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Avonridge Property Co Ltd v London Diocesan Fund [2005] UKHL 70

There was nothing in the Landlord and Tenant (Covenants) Act 1995 to suggest that the statute was intended to exclude the parties’ ability to limit their liability under their covenants from the outset in whatever way they agreed.

13 January 2006

X appealed against the dismissal of its appeal against a finding in favour of Y, sub-lessees, that the Landlord and Tenant (Covenants) Act 1995 rendered a clause in the lease void. X had acquired by assignment a lease of shop units. X granted subleases of six of the shops to Y who paid substantial premiums for those subleases. The rent payable under each sublease was a peppercorn. Each sublease contained in clause 6 a landlord’s covenant for payment of the rent reserved by the head lease. The words of clause 6 began “the landlord covenants with the tenant as follows (but not, in the case of X only, so as to be liable after the landlord has disposed of its interest in the property)”. X subsequently assigned the head lease to a third party who disappeared, leaving the rent due under the head lease unpaid. Y were granted relief from forfeiture, but had to pay the rent arrears under the head lease and take new leases of their shops for a higher rent. Y brought successful proceedin...

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