BERMUDA Law and Practice Contributed by: E Scott Swainson, Katrina Dickson and Erik Gotfredsen, Wakefield Quin Limited
Many leases impose a positive obligation on the landlord to act reasonably when considering a request to assign. Subletting Leases typically preclude subletting of a whole property (without landlord consent and/or at less than the passing rent), and often preclude sub - letting of part entirely. Conditions The landlord should not seek a collateral advan - tage 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 aris - ing therefrom. The landlord may require direct covenants from the intended assignee, which are generally secured in the assignment 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 peri - ods 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 registra - tion of the freehold reversion, it should note ten- ancies as “overriding interests” on its own title report. Many tenancies are evident on inspection, and purchasers may also be bound by actual notice. Where a landlord sells with a sitting tenant, they disclose this in the sales agreement and assign any security deposit on closing. A lease auto - matically binds the new landlord, without the A landlord may take a tenant to court to seek an order for termination and possession, follow - ing breach or lease expiry. A right of forfeiture is converted to a right to seek termination via the courts. No “self help” is allowed, even if the lease has expired. It takes approximately four months to secure an order for possession. The court may allow the tenant a period to vacate (on average two months, if the property is residential in nature). Once the grace period has expired, the court- appointed bailiff will physically evict the former tenant. 6.22 Termination by a Third Party Protection on Termination A lease may be terminated by a superior landlord or lender (who did not consent to the creation thereof) on taking enforcement action. Where the freeholder approved the sublease, sub-lessees have statutory protection during the court pro - cess for termination but may have to step into the shoes of the head tenant (accepting a ten - ancy of whole at the same rent or remedying breaches) in order to avoid eviction on termina - tion of the head lease. need for a new contract. 6.21 Forced Eviction
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