To find the annual rent corresponding to any given sum paid for a lease, divide the sum by the number of years pur chase in the table against the term of the lease, and under the rate of interest in tended to be made of the purchase money; the quotient will be the annual rent re quired.
Example. A person is asked 1250/. for a lease of 30 years, what annual rent is equivalent thereto, allowing the purchaser to make 6 per cent. interest of his money ? Divide 1250/. by 13,765, the years pur chase in the table, under 6 per cent, in terest, and the answer is 90/. 16s. 2d.
It frequently happens that a tenant is desirous of having the term of his lease renewed before the old lease expires ; and if the estate has increased in value since it has been in his possession, it is com mon, in such cases, for the landlord to de mand either an increase of the rent, or a gross sum called a fine, to be paid down in one immediate payment for such re newal. In ninny leases, particularly those held of colleges and other public bodies, it is covenanted, that renewals shall be granted at the end of a certain number of years, on payment of a fine to be then agreed upon between the parties ; the an nual rent of the estate continuing the same. This fine is often a subject of dis pute, arising principally from a difference of opinion respecting the improved annual value of the estate, or respecting the rate of interest, which each party is endea. vouring to make of his money. The for mer, in some cases, is liable to uncertain ty ; but, if the latter is once agreed upon, the value ofthe fine, which ought to be giv en renewing a lease of any yearly rent, can, in all cases, be exactly determined.
It is well known, that when a lease is intended to be renewed, such lease is sur rendered or delivered up, and a new lease of the estate is granted for a term of years, which includes both the unexpired term of the old lease, and the additional tern. proposed to be renewed. Now the value which ought to be given for the grant of such additional term, will evidently be be equal to the difference between the value of the lease for the whole term, ani. the value of the unexpired part thereof. of which the tenant is in actual possession . thus, if a person holds an unexpired term of twenty years in a lease, and is desirous of having ten years more added to it, or of having a new lease granted for the term of thirty years ; the fine, or gross sum, which he ought to pay for such re • newal, will be equal to the difference be tween the value of a lease for the whole term of thirty years, and the value of a lease for the unexpired twenty years ; this will be easily found from the preceding table.
Example. What fine ought to be given to the landlord for adding seven years more to a lease, of which 14 years are un expired; allowing the tenant 6 per cent. interest for his money ? The whole term for which the new lease is to be granted is 21 years, and the value of a lease for this term, is by the table under 6 per cent. interest 11,764; the value of a lease for fourteen years is found in the same co lumn to be 9,295, and this subtracted from the former sum leaves 2,469 for the number of years purchase which ought to be given for the fine required. lf, there.
fbre, the improved rent of the estate, or the present value beyond the rent paya ble under the lease, is 501. per annum, this improved rent, multiplied by 2,469, will give 1231. 9s. for the amount of the fine required.
Leases are sometimes granted for a term of years certain, but subject to de termine before that period, if a particular life or lives should fail within the term ; and the term of such leases being usually greater than the probable duration of the lives, the estate may be considered as wholly depending on the continuance of the life or lives nominated.
Life estates are of various kinds ; some depend on a single life, of which kind may be considered church-livings, tenan cies by courtesy, in dower, &c. ; others are granted for two lives, such asjoint tenancies, and joint-tenancies with bene fit of survivorship, the former signifying such estates as terminate on the death of either of the parties, and the latter signi fying such as terminate on the death of both the parties ; other estates are grant ed for three lives, which, like the last, may be divided into such as depend on the joint continuance of all the lives, and such as depend on the longest of all the lives ; the former signifying such as ter minate on the death of any one of the par ties, and the latter such as terminate on the death of the longest liver of the three lives. When estates are held on two or three lives, and one of the lives, nominat ed in the lease, happens to drop, or be come extinct, the tenant is often desirous of replacing such life, or of putting in a new life, in orderthat the estate may con tinue to be held on the same number of lives in being, and thereby his interest in the same be prolonged. In such cases it is customary, if the estate has improved in value since the original grant of the lease, for the landlord to demand a fine, or sum of money, proportionate to such improved value, and to the age of the person intended to be put to it, or added to those already in possession ; the annual rent of the estate continuing the same. It is evidently the interest of the tenant, in this case, to add one of the best lives he can find, that is, a life which has the greatest expectation of living, according to the best tables of mortality, and such a life will be about the age of eight or ten years. However, it will sometimes hap pen that he may wish to put in a life not exactly of this age, but as it is his interest to put in as good a life as possible, few persons will be disposed to put in one above the age of twenty. The following table will, therefore, comprehend the cases of this kind which most commonly occur, from which the sums to be paid for renewing with a life of any other age may be nearly determined.
The years purchase in the table, multi plied by the improved annual value of the estate beyond the rent payable under the lease, gives the fine to be paid for putting in the new life.