This is just a promise made in a contract under seal. In other words, it covers an agreement involving promises in writing, signed, sealed and delivered requiring no consideration before it becomes binding on the parties to it. Covenant may be positive or negative. Positive covenant involves an agreement where the covenanter will either use money or labour in fulfilling it while negative or restrictive covenant involves the covenantor (covenant maker) forbidding himself from doing something on the land for example. Convenantee is the person to whom a promise is made.
Covenant is synonymous to negotiation of suitable lease term. It is often related to tenant selection as in order to attract the right tenant, some concession in the terms may be necessary. The terms in the covenant may also be modified in favour of a tenant seeking a lease renewal or to foster a tenant’s goodwill.
The main terms which are subject to negotiation are the amount of the rent, the extent of the lessee’s repair liability and the length of the term. The interest of the Landlord and Tenant with regard to the amount of rent may not be simply a question of negotiation of the largest figure that one is prepared to pay and the lowest the other can accept. Again, the repair liability agreed will depend on the circumstances of the parties. The process of agreeing lease terms or covenants can be protracted and often heated. It is however vital as a function of management control, as the terms once agreed set the bounds within which the Landlord and Tenant partnership must operate. From the management point of view, the chief feature of lease term is the ease with which they may be enforced.
