JAMES AND OTHERS v. THE UNITED KINGDOM JUGDMENT 5 The distinction between the two types of lease is not clear-cut. For example, a "premium lease" may contain an obligation to carry out substantial repairs, alterations, additions or improvements to an existing property, and thus be analogous to a building lease. In any event, it is the almost invariable practice for the lease to contain a clause making the tenant responsible for all running repairs to the house during the currency of the lease and requiring him to yield up the property at the end of the lease in good repair. The tenant holding a property under a long lease may normally sell the lease to a third party, who then acquires the tenant’s rights and obligations under the lease for the remainder of its duration. In practice, leases are commonly bought and sold on the property market without the landlord playing any part in the transaction. A tenant may normally also grant an "under-lease" of the property. As a matter of law, however, whether there is a right to sell the lease or sublet depends on the terms of the particular lease. 13. The capital value of the landlord’s interest in a property let on a long lease arises from two sources: firstly, the rent payable under the lease and, secondly, the prospect of reversion of the property to him at the end of the lease. At the beginning of a very long lease the value of the reversion may be very little and the total market value of the landlord’s interest may therefore amount to little more than the capitalised value of the rent. The capital value of the tenant’s interest arises from his right to occupy the house under the lease, and the time for which that right will subsist is of critical importance in relation to its value. At the beginning of a very long lease, the value of the tenant’s interest may be more or less equivalent to a "freehold" interest if the rent payable is a nominal one. The lease, however, is a wasting asset. As a lease progresses, the value of the tenant’s interest in the property diminishes, whilst the value of the landlord’s interest increases. At the end of the lease, the tenant’s interest ceases to exist and the buildings, including improvements and repairs made, revert to the landlord without any compensation to the tenant. The sum of the values of the landlord’s and tenant’s respective interests is less than the freehold value of the property with vacant possession, since neither the landlord alone nor the tenant alone can offer a third party the freehold with such possession. If, however, the reversion is sold to the occupying tenant, who can then merge both interests into a simple freehold, its value is greater than the investment value to a third party purchasing the reversion subject to the existing lease. In free market transactions, it is usual for the vendor and the purchaser to share this additional value, known as the "merger value", in agreed proportions. 14. The long-leasehold system of tenure has been widely used in England and Wales, and in particular was associated with much urban development in the nineteenth century following the industrial revolution.