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Consultation Paper on the General Law of the Landlord and Tenant

Consultation Paper on the General Law of the Landlord and Tenant

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Chapter 11 Insurance18.73 The Commissi<strong>on</strong> recommends that <strong>the</strong> protecti<strong>on</strong> c<strong>on</strong>ferred<strong>on</strong> certain lessees by secti<strong>on</strong> 30 <strong>of</strong> <strong>the</strong> <strong>L<strong>and</strong>lord</strong> <strong>and</strong> <strong>Tenant</strong> (GroundRents) Act 1967, c<strong>on</strong>cerning freedom to seek insurance cover, shouldbe extended to all tenants. [Paragraph 11.02]18.74 The Commissi<strong>on</strong> recommends that a covenant or agreementexcepting an obligati<strong>on</strong> to do repairs relating to “insured risks” shouldstill exclude <strong>the</strong> tenant’s right <strong>of</strong> surrender under secti<strong>on</strong> 40 <strong>of</strong>Deasy’s Act. [Paragraph 11.04]18.75 The Commissi<strong>on</strong> recommends that <strong>the</strong> tenants comingwithin secti<strong>on</strong> 40 <strong>of</strong> Deasy’s Act should be entitled to require thatinsurance proceeds be used to reinstate <strong>the</strong> premises, as an alternativeto surrender. If no insurance proceeds are available, or if <strong>the</strong> premisescannot be reinstated, <strong>the</strong> tenant should still have <strong>the</strong> right <strong>of</strong>surrender, but in <strong>the</strong> latter case, <strong>the</strong> l<strong>and</strong>lord should be entitled to anyinsurance proceeds which are available. [Paragraph 11.07]18.76 The Commissi<strong>on</strong> c<strong>on</strong>siders that <strong>the</strong> following matters wouldbe appropriate for inclusi<strong>on</strong> in a set <strong>of</strong> statutory “default” provisi<strong>on</strong>sappropriate for all tenancies:(i) Liability for insuring <strong>the</strong> building or buildings, <strong>and</strong> anyl<strong>and</strong>lord’s fixtures, to be <strong>on</strong> <strong>the</strong> l<strong>and</strong>lord;(ii) Liability for insuring <strong>the</strong> c<strong>on</strong>tents, including tenant’sfixtures, to be <strong>on</strong> <strong>the</strong> tenant;(iii) Insurance for buildings to be for full reinstatement cost,plus an inflati<strong>on</strong>ary element where <strong>the</strong> l<strong>and</strong>lord arranges,but <strong>the</strong> tenant pays for it; <strong>the</strong> tenant to be entitled toexplanati<strong>on</strong> <strong>of</strong> how cover <strong>and</strong> costs are calculated <strong>and</strong>, ifc<strong>on</strong>sidered necessary, to insist up<strong>on</strong> increase in cover;(iv) Where <strong>the</strong>re is a deficiency in insurance proceeds tocover <strong>the</strong> risk supposed to be covered, party underobligati<strong>on</strong> to arrange insurance to make up deficiency;(v) <strong>Tenant</strong> to be liable for increases in premiums relating tohazardous activities <strong>on</strong>ly if resp<strong>on</strong>sible for those activities;(vi) <strong>Tenant</strong> to be under an obligati<strong>on</strong> not to do or permitanything to be d<strong>on</strong>e <strong>on</strong> <strong>the</strong> demised premises which might202

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