BERMUDA Law and Practice Contributed by: E. Scott Swainson, Andrew Morgan and Erik Gotfredsen, Wakefield Quin Limited
tractual right to renew. The same is true of the majority of residential leases. Residential tenants of rent controlled tenancies (see 6.15 Specific Regulations ) enjoy security of tenure after expiry, and the landlord needs a statutory ground to determine. Grounds include own occupation, reno - vation and tenant breaches during the term. Some rent-controlled tenancies are excluded from the secu - rity of tenure provisions (eg, a unit in the landlord’s own home and service tenancies). Enfranchisement There is no statutory right to enfranchise (ie, buy the freeholder’s interest). An option to purchase may be negotiated in the lease. Holding Over Where a tenant continues to occupy the premises with landlord consent or acquiescence after the termina - tion of the lease, the tenant will be deemed to be a tenant holding over on a periodic tenancy (generally from month to month, where rent is paid monthly) and otherwise on the same conditions as the expired lease. Where a tenant continues to occupy without landlord consent after expiry, the landlord may recover “mesne profits” equating to loss of income and losses arising from the failure to yield up in breach of the lease. Self-Help Where a tenant refused to vacate, a court order for possession is required in all cases, both commercial and residential; the landlord cannot simply change the locks. 6.18 Right to Assign a Leasehold Interest Assignment Typically, leases may only be assigned with the express consent of the landlord. If there is an absolute prohibition on dealings, the landlord may withhold consent without reason. If there is a qualified prohibition, the landlord may withhold consent for cause.
Many leases impose a positive obligation on the land - lord to act reasonably when considering a request to assign. Subletting Leases typically preclude subletting of a whole prop - erty (without landlord consent and/or at less than the passing rent) and often preclude subletting of part entirely. Conditions The landlord should not seek a collateral advantage as a condition of granting consent (where he or she is under an express or implied duty to act reasonably) but may request any costs arising therefrom. The land - lord may require direct covenants from the intended assignee, which are generally secured in the assign - ment deed. The outgoing tenant is only released from its obligation under the lease (privity of contract) if the assignment includes a release. Releases are typically given on dealings with long leases but may be refused unless the lease contemplates such a release. 6.19 Right to Terminate a Lease Insolvency events and failure to pay rent and observe covenants typically entitle the landlord to terminate the lease (subject to any cure periods contained in a lease or allowed by statute). The Landlord and Tenant Act converts the right to forfeit a lease to a right to seek a court order for termination, and requires that the tenant is given advance notice and a reasonable period to cure. 6.20 Registration Requirements Leases granted for a term in excess of 21 years are subject to compulsory first registration at the LTRO, with standard registration fees applicable. In addition, if the landlord seeks first registration of the freehold reversion, it should note tenancies as “over - riding interests” on its own title report. Many tenancies are evident on inspection, and pur - chasers may also be bound by actual notice. Where a landlord sells with a sitting tenant, they dis - close this in the sales agreement and assign any secu -
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