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Lease Defaults

Volume 205: debated on Tuesday 3 March 1992

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To ask the Attorney-General what steps are being taken to review and protect the position of those who sell commercial or private leases on property from liability if the purchaser of the lease defaults; and if he will make a statement.

In 1988 the Law Commission published its report," Landlord and Tenant Law: Privity of Contract and Estate", Law Com No. 174. It recommended that all the obligations created by leases should bind the parties who for the time being are interested in the land and that those parties should cease to have any liability when they part with those interests, except in cases in which it is objectively reasonable that their liability continue. It is envisaged that in many cases a landlord consenting to an assignment by a tenant of his interest will be able to impose a condition that the tenant guarantees the performance of the lease covenants by his successor, but only until any subsequent assignment. The Lord Chancellor is actively considering the report's recommendations and hopes to be able to make an announcement about them in the near future.