When virtual becomes real
Dollar
When virtual becomes real - 2005 - Estates Gazette (0540) 8 October 2005, 176-178(3) .
Tenants' alienation covenants have grown in sophistication in recent times to prevent tenants not complying with the covenant by holding premises on trust for a third party, assigning the beneficial interest but not the legal interest in the lease. Considers the frequent use of virtual assignments in property outsourcing arrangements. Tenants, rather than assigning leases to those providing the outsourcing services or the investors and taking a formal sublease back, enter into virtual assignments with service providers/ investors to occupy the demised properties in return for a fee to the service providers/investors. Looks at case law relating to virtual assignments. Concludes that there is little point in using a virtual assignment as a device to avoid compliance with the alienation covenant since the disposal of the beneficial interest will necessarily fall foul of any properly worded alienation covenant.
LANDLORD AND TENANT ACT 1927 S19
CUSTOMS AND EXCISE COMMISSIONERS V JOHN LEWIS PROPERTIES PLC
CUSTOMS AND EXCISE COMMISSIONERS V ABBEY NATIONAL PLC
SCRIBES WEST LTD V RELSA ANSTALT
When virtual becomes real - 2005 - Estates Gazette (0540) 8 October 2005, 176-178(3) .
Tenants' alienation covenants have grown in sophistication in recent times to prevent tenants not complying with the covenant by holding premises on trust for a third party, assigning the beneficial interest but not the legal interest in the lease. Considers the frequent use of virtual assignments in property outsourcing arrangements. Tenants, rather than assigning leases to those providing the outsourcing services or the investors and taking a formal sublease back, enter into virtual assignments with service providers/ investors to occupy the demised properties in return for a fee to the service providers/investors. Looks at case law relating to virtual assignments. Concludes that there is little point in using a virtual assignment as a device to avoid compliance with the alienation covenant since the disposal of the beneficial interest will necessarily fall foul of any properly worded alienation covenant.
LANDLORD AND TENANT ACT 1927 S19
CUSTOMS AND EXCISE COMMISSIONERS V JOHN LEWIS PROPERTIES PLC
CUSTOMS AND EXCISE COMMISSIONERS V ABBEY NATIONAL PLC
SCRIBES WEST LTD V RELSA ANSTALT