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Land Registration Act 2002

Implied indemnity covenants on transfers of pre-1996 leases

328.In relation to leases granted prior to 1996, a tenant who assigns a lease remains liable to the landlord on the covenants in that lease for its entire duration notwithstanding any assignment by him or her of that lease. Such “first tenant liability” has been abolished for leases granted after 1995 by the Landlord and Tenant (Covenants) Act 1995. However, leases granted prior to 1996 will continue in existence for many years. As regards such leases, section 24(1)(b) and (2) of the Land Registration Act 1925 made provision for implied indemnity covenants on the part of the transferee in favour of the transferor, and, in relation to a transfer of part, an implied indemnity covenant on the part of the transferor in favour of the transferee. Section 24(1)(b) and (2) of the Land Registration Act 1925 were repealed prospectively by the Landlord and Tenant (Covenants) Act 1995, but only in respect of “new tenancies” - in essence those granted after the Act was brought into force.

329.Paragraph 20 replicates in more comprehensible form the effect of section 24(1)(b) and (2) in relation to the assignment of leases which are not “new tenancies” for the purposes of the 1995 Act.

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