No. IX. LEASE by MORTGAGEE and MORTGAGOR (2). THIS INDENTURE, made the day of, BETWEEN BY MORTGAGEE AND MORTGAGOR. part. and mortgagor lessee. Covenants by lessee. lessors for A. B., of, &c. (in whom the legal estate in the hereditaments Parties. hereinafter demised is vested by way of mortgage) (mortgagee), of the first part, C. D., of, &c. (being the person entitled to the equity of redemption of the said hereditaments) (mortgagor), of the second part, and E. F., of, &c. (lessee), of the third part, WITNESSETH, that in consideration, &c., the said A. B. Witnessing (hereinafter called "the lessor ") at the request of the said C. D., hereby demises, and the said C. D. hereby demises and Mortgagee confirms unto the said E. F. (hereinafter called "the lessee"), demise to ALL, &c. (parcels-Habendum to lessee, for twenty-one years, at a yearly rent, as in Precedent No. VI. suprà, p. 54): AND THE lessee hereby covenants with the lessor in manner following, that is to say: That, &c. (covenants by lessee, and proviso for re-entry, as in Precedent No. VI., verbatim): AND THE lessor, Covenants by and also the said C. D., as to their own respective acts and deeds, quiet enjoybut not further or otherwise, do hereby respectively covenant with the lessee that he paying the rent hereby reserved, and observing and performing the lessee's covenants herein before contained, shall and may peaceably and quietly possess and enjoy the said premises during the said term without any eviction or disturbance by the said covenanting persons respectively, or any person lawfully or equitably claiming from or under them respectively: PROVIDED ALWAYS, and it is hereby Proviso that until notice, agreed and declared, that the lessee shall pay the rent hereby rent may be reserved unto the said C. D. or other the person for the time paid to mortbeing entitled to the equity of redemption of the said premises, mortgagor until the lessor shall by a notice in writing require the payment rights and powers of of the said rent to himself, and until such notice the said C. D. fessor. or other the person entitled as aforesaid shall have the like (2) It is assumed in the above Precedent that the mortgage was made before the 1st January, 1882, or that the leasing power conferred by the Conveyancing Act, 1881, s. 18, on the mortgagor is negatived by the mortgage deed. VOL. II. F ment by gagor and may exercise BY MORTGAGEE AND MORTGAGOR. remedy by distress for recovery of arrears of the said rent as No. X. BY MORTGAGOR UNDER POWER. Parties. Recital of mortgage deed. Witnessing part. A lease by mortgagor under the statutory power, omitting all reference to the mortgage, is validsemble. LEASE by a MORTGAGOR under a POWER created by the MORTGAGE DEed (a). THIS INDENTURE, made the day of BETWEEN C. D., of, &c. (mortgagor), of the first part, A. B., of, &c. (mortgagee), of the second part, and E. F., of, &c. (lessee), of the third part. WHEREAS under an indenture, &c. (date and parties), the hereditaments hereinafter described are vested in the said A. B. by way of mortgage, and the said C. D., who is entitled to the equity of redemption of the said hereditaments and is in possession thereof, has power under the said indenture to lease the same in manner hereinafter expressed. NOW THIS INDENTURE WITNESSETH, that in consideration, &c., the (a) In this Precedent the mortgagee is made a party, the lessee's covenants being entered into with him as the person entitled to the legal reversion, but it is not intended that he shall execute the deed. A mortgagor would in most cases prefer not to disclose the mortgage, and to frame the lease as if he were absolute owner. Whether a lease so framed would be binding on the mortgagee, if made under a power created by the mortgage deed, and requiring in express terms that the rent shall be reserved to, and the covenants entered into with, the mortgagee, is doubtful. See Yellowly . Gower, 11 Exch. 274; 24 L. J. Exch. 289. But as regards leases made under the power conferred on a mortgagor in possession by the Conveyancing Act, 1881, it is apprehended that the omission of all reference to the mortgage would not affect the validity of the lease. The right to grant leases is thereby annexed and made incident to the office and estate of the mortgagor, and as the Act does not state that the rent and benefit of the lessee's covenants shall be reserved in terms to the morts rtgagee, there seems no reason why a condition to this effect should be implied. Moreover, it is conceived that a reservation of rent, &c. to the mortgagor would, under the operation of sect. 10 of the Act, enure to the benefit of the mortgagee should he subsequently take possession and give notice to the lessee to pay the rent to him. A lease by a mortgagor under the statutory power will therefore be in the same form as if he were absolute owner, and no separate precedent for such a lease is necessary. BY demises unto Covenants by lessees, said C. D. in exercise of the power vested in him for this purpose by the said indenture, and of all other powers (if any) UNDER POWER. him hereunto enabling, hereby appoints and demises unto the Mortgagor said E. F. ALL, &c. (parcels-Habendum to lessee for term, and appoints and reservation of rent, suprà, p. 54). AND the said E. F. hereby lessee. covenants with the said A. B., and also by way of separate covenant with the said C. D., in manner following, that is to say: THAT he the said E. F., his executors, administrators, and assigns (all of whom are hereinafter included in the expression "the lessee"), will pay to the person for the time being entitled to the reversion expectant on this lease (hereinafter called "the reversioner") the rent, &c. (covenant to pay rent and taxes, suprà, p. 54): AND ALSO that the lessee will, &c. (covenants to repair and other lessee's covenants, and proviso for re-entry, as in Precedent No. VI., suprà, pp. 54 to 56, substituting "the reversioner" for "the lessor"): AND the said C. D. hereby covenants, &c. and by lessor. (covenant for quiet enjoyment, suprà, p. 56), without any lawful interruption from or by the said C. D., or from or by the said A. B., or any person rightfully claiming from or under either of them: PROVIDED ALWAYS, &c. (proviso that rent shall be paid to mortgagor until notice, &c., suprà, p. 65, substituting “the reversioner" for "the lessor”). IN WITNESS, &c. No. XI. PROVISION in a LEASE or UNDERLEASE enabling the LESSEE THIS INDENTURE, &c. (Lease or underlease as in Precedent OPTION TO (b) According to the form here given, the giving of the notice by the In clause lessee to the lessor will constitute the relation of vendor and purchaser fire right of giving to between them, so as to entitle each party to specific performance of the purchase, contract for sale. Sometimes the clause is so worded as to make the payment of payment of the money a condition precedent to the right of purchase. money on the Thus, in Lord Ranelagh . Melton, 2 Dr. & Sm. 278, the lease provided day sometimes F 2 made a condi- OPTION TO LESSEE TO PURCHASE REVERSION. Power to lessee on to lessor to purchase reversion in fee simple, PROVIDED ALWAYS, and it is hereby agreed and declared, that if the lessee shall be desirous of purchasing the reversion in fee simple in the premises hereby demised [or the unexpired residue of the term of years granted in the said premises by the giving notice said indenture, dated, &c. (superior lease) subject to the rent and lessee's covenants reserved by and contained in the said indenture], at the price of £- and shall at any time before the- day of 18-, (c) give to the lessor, or leave for him, at his usual or last known place of abode in England or Wales, a notice in writing to that effect, then and in such case the person giving or leaving such notice shall be deemed the purchaser of the said reversion [or of the unexpired residue of the said term subject as aforesaid] at the price of £ or superior leasehold interest. as from the date of such notice subject to the following Time for com- conditions (namely): 1stly, THE purchase-money shall be pletion. paid and the purchase shall be completed on such one of the quarterly days hereby appointed for payment of rent as shall happen next after the expiration of three calendar months from the date of such notice, and if the said purchase shall not be completed on that day, the purchaser shall pay to the vendor interest on the said purchase-money after the rate of 5 per cent. per annum, computed from that day up to the actual completion of the purchase; 2ndly, THE purchaser shall pay all arrears of rent up to the day appointed for the completion of the purchase, including the quarter's rent due on that day; 3rdly, UPON payment of the purchase-money and all arrears of rent at the time aforesaid, the vendor shall execute a proper conveyance [or assignment] of the said premises to the purchaser, such conveyance [or assignment] to be prepared by and at the expense of the purchaser; 4thly, THE vendor shall, within one calendar Arrears of rent to be paid up to completion. Conveyance. Rule against perpetuities applies to option of purchase. that if the lessee should desire to purchase the fee simple, and should give three months' notice of such desire, and at the expiration of such notice should pay the purchase-money, then the lessor would convey the property to the lessee, and it was held that the money must be paid on the precise day on which the notice expired, and that until the condition was thus performed the relation of vendor and purchaser did not arise on either side. See also Weston v. Collins, 34 L. J. Ch. 353. (c) The day fixed must be within twenty-one years from the date of the lease, or within some life in being and twenty-one years afterwards, in order not to infringe the rule against perpetuities. The case of Birmingham Canal Compy. v. Cartwright, 11 Ch. D. 421, in which it was held that the rule against perpetuities did not apply to a provision of this kind, is overruled. London & S. W. Ry. Compy. v. Gomm, 20 Ch. D. 582. OPTION TO LESSEE TO PURCHASE REVERSION. commence. specified time. month from the date of such notice as aforesaid, deliver to the purchaser or his solicitor an abstract of the vendor's title to the said premises, such title to commence with an indenture, dated, &c.; 5thly, WITHIN fourteen days after the delivery of the Title when to abstract the purchaser shall state in writing, and send to the Requisitions to vendor's solicitor, all objections and requisitions (if any) in be sent within respect of the title, and all objections and requisitions not sent within that time shall be deemed to be waived, and if any objection or requisition shall be made which the vendor shall be unable or unwilling to remove or comply with, the vendor may, by a notice in writing, rescind the sale without payment of any compensation or costs whatsoever (d). IN WITNESS, &c. No. XII. AGREEMENT for a BUILDING LEASE for the erection of AGREEMENT ONE HOUSE for NINETY-NINE YEARS. FOR BUILDING 18-, Parties AN AGREEMENT, made the day of I. WHEN and so soon as the messuage or dwelling-house Agreement to mentioned in the third article of this agreement shall have grant lease. been erected and completed by the said C. D., the said A. B. will, by a good and sufficient lease, demise unto the said C. D. all that piece or parcel of land (describe it) and estate. Weeding Lawes to personal death, the purchase-money will go to his (the lessor's) personal representa- money to be If the option to purchase is exercised by the lessee after the lessor's Purchasetive as part of his personal estate, and not to the heir or devisee of the real paid by lessee v. Bennett, 1 Cox, 167; Townley v. Bedwell, 14 Ves. 591; electing to contrary to the lessor's intention, and it is therefore import int that he representative Weeding, 1 J. & H. 424. This is inconvenient, and generally purchase, goes be carried out if the option is exercised, but also for making the purchaseshould make proper provision by his will not only for enabling the sale to of lessor. money go to the persons who would otherwise have remained entitled to v. the reversion. devolves with with it, so that if the lessee dies intestate it is exercisable by the adminis- purchase The option to purchase is incident to the leasehold interest, and passes Option to trator with the consent of the next of kin, and not by the heir. and the Kensington Vestry, 24 Ch. D. 199. Re Adams leasehold interest. |