What does the term "breach of covenant" mean?

The term "breach of covenant" refers specifically to the situation where one party fails to comply with the terms set forth in a lease agreement. In leasehold contexts, covenants are conditions or promises within the lease that both the landlord and tenant are expected to uphold. When a breach occurs, it could mean that either the landlord or the tenant has not fulfilled their obligations, such as failing to pay rent, not maintaining the property, or not abiding by any other agreed terms.

Understanding this term is critical in leasehold management because it can lead to disputes, legal actions, or the potential for the lease to be terminated. It highlights the importance of both parties being aware of their responsibilities under the lease and the implications of not adhering to those terms.