Under Lease - Definition - Law Dictionary Home Dictionary Definition under-lease

Definition :

Under-lease, a grant by a lessee to another, called under-lessee, or under-tenant, or sub-lessee, or sub-tenant, of a part of his whole interest under the original lease, reserving to himself a reversion; it differs from an assignment, which conveys the lessee's whole interest, and passes to the assignee the right and liability to sue and be sued upon the covenants in the original lease.

An under-lease for the whole term of the original lease amounts to an assignment, Beardman v. Wilson, (1868) LR 4 CP 57.

Between the original lessor and an under-tenant there is neither privity of estate nor privity of contract, so that these parties cannot take advantage, the one against the other, of the covenants, either in law or in deed, which exist between the original lessor and lessee [Holford v. Hatch (1779) 1 Dougl 183; Johnson v. Wild, (1890) 44 Ch D 146]; but the lessor can distrain on the sub-lessee or take advantage of a condition of forfeiture, G.W. Ry. v. Smith, (1876) 2 Ch D 253. By s. 4 of the Conveyancing Act, 1892, replaced by the (English) Law of Property Act, 1925, s. 146 (4), as amended by the L.P. (Amendment) Act, 1929 (19 Geo. 5, c. 9), a sub-lessee can obtain relief from the forfeiture of the superior lease. But the terms upon which the relief will be granted are in the absolute discretion of the Court, and in certain cases the rent may be raised. See Ewart v. Fryer, (1910) 1 Ch 499, and FORFEITURE. A surrender by the lessee cannot prejudice the estate of the under-lessee, G.W. Ry. v. Smith.

Mortgages of leaseholds, where the covenants are onerous, are almost invariably made by sub-demise, so as to avoid bringing the mortgagee into direct relation with the lessor and so rendering him liable to be sued on the covenants; but the mortgagee may often be in fact compelled to perform them in order to save his security from forfeiture under the proviso for re-entry in the lease. As to realization, foreclosure, and retention by mortgagees under the Statute of Limitations, see s. 89 of the Law of Property Act, 1925, as amended by the (English) L.P. (Amendment) Act, 1926, Sch.

For purposes of the Law of Property Act, 1925, the term 'lease' includes an under-lease unless the context otherwise requires; s. 205. To describe an under-lease as a lease in contracts and conditions of sale is generally a misdescription [Re Beyfus and Masters' Contract, (1888) 39 Ch D 110]. Consult Elph. Introd. To Conv.