SQE1 sample questions

Question 50

A business lease dated 15 July 1989 was granted to a company (‘the Tenant’). It commenced on 24 June 1989 for a term of 50 years.

The Tenant is in the process of assigning the residue of the term of the lease to another company (‘the Assignee’).

The lease provides that assignment of the lease can only occur with the landlord’s consent (not to be unreasonably delayed). The Tenant has applied to the current landlord (‘the Landlord’) for consent to assign the lease and the Landlord has indicated its consent in principle subject to the completion of a licence to assign.

The Landlord’s solicitor is drafting the licence to assign. She is drafting the covenant to govern future liability under any tenant covenants in the lease.

Which one of the following possible covenants should the Landlord’s solicitor include in the draft licence to assign?

A. The Tenant covenants with the Landlord to provide the Landlord with an authorised guarantee agreement (in an agreed form) on the assignment.

B. The Tenant covenants with the Landlord that the Assignee will perform the covenants in the lease during the remainder of the term of the lease.

C. The Tenant covenants with the Landlord that the Assignee will perform the covenants in the lease until the next valid assignment of the lease made with the Landlord’s consent.

D. The Assignee covenants with the Landlord to perform the covenants in the lease during the remainder of the term of the lease.

E. The Assignee covenants with the Landlord to perform the covenants in the lease until the next valid assignment of the lease made with the Landlord’s consent.