Creating Leasehold Deed of Covenants (UK)

Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

Creating a leasehold deed of covenant is a vital step for both the landlord and tenant in any leasehold arrangement. Without it, the parties may not be adequately protected and may find themselves subject to costly disputes. The Genie AI team, who provide free deed of covenant templates, understands the importance of such documents, and why they matter.

A deed of covenant outlines the rights and responsibilities of both parties – that is, what obligations are expected from each side. The tenant must pay their rent on time; the landlord needs to maintain the property properly; other terms and conditions must be observed – all these points will be outlined in this document. In doing so, it provides an understanding between both parties which can prevent issues from arising later on down the line.

The document also protects both landlord and tenant alike. Tenants cannot be asked to pay more than their agreed rent; landlords are not liable for damages caused by tenants beyond their control; both sides have reasonable expectations that can work towards a satisfactory outcome.

In addition to protecting interests, a deed of covenant helps ensure that any leasehold arrangement is successful through fair and equitable terms for all involved. This creates a positive environment between everyone in question - one which is conducive to mutual benefit without fear or dispute over unclear terms or conditions.

Overall, creating a leasehold deed of covenants is key in laying out rights and responsibilities between landlord and tenant while also providing adequate protection for all involved. To learn more about how you can draft your own high-quality legal document with no need for legal consultation or fees using our template library today then read on below!

Definitions

Leasehold: A contractual agreement between a landlord and a tenant that allows the tenant to use a property for a set period of time in exchange for regular payments.

Covenant: A legally binding agreement between two or more parties, usually a landlord and a tenant, in which each party agrees to certain obligations.

Positive Covenant: A type of covenant that requires the tenant to do something, such as maintain the property or pay rent.

Negative Covenant: A type of covenant that requires the tenant not to do something, such as make changes to the property or make excessive noise.

Restrictive Covenant: A type of covenant that limits the tenant’s use of the property, such as not allowing the tenant to sublet the property or use it for certain purposes.

Notarize: The act of having a document officially certified as true and authentic by a notary public.

Contents

1. Definitions of key terminology associated with leaseholds, such as “leasehold”, “covenant”, and “deed of covenant”.
2. An overview of the process of creating a leasehold deed of covenant in the UK
3. Identify the relevant parties
4. Establish the document structure
5. Complete the legal formalities
6. The importance of the deed of covenant for landlords, tenants, and investors.
7. The legal requirements for creating a leasehold deed of covenant in the UK
8. Check the jurisdiction
9. Follow the relevant legislation
10. A step-by-step guide for creating a leasehold deed of covenant in the UK
11. Research the current laws
12. Prepare the document
13. Have the relevant parties sign the document
14. Notarize the document
15. File the document with the appropriate authorities
16. An explanation of the different types of covenants that can be included in a leasehold deed of covenant
17. Positive covenant
18. Negative covenant
19. Restrictive covenant
20. An overview of the role of a solicitor in creating a leasehold deed of covenant in the UK
21. Research the current laws
22. Draft the document
23. Provide legal advice
24. Ensure the document is legally binding
25. The importance of having a properly drafted leasehold deed of covenant.
26. Tips for ensuring the deed of covenant is legally binding
27. Use plain language
28. Follow a standard format
29. Have the document checked by a solicitor
30. Advice on how to make changes or amendments to a leasehold deed of covenant
31. Consult the parties involved
32. Draft a new document
33. Have the relevant parties sign the document
34. Notarize the document
35. File the document with the appropriate authorities

Get started

Definitions of key terminology associated with leaseholds, such as “leasehold”, “covenant”, and “deed of covenant”.

• Research and understand the definitions of key terminology associated with leaseholds, such as “leasehold”, “covenant”, and “deed of covenant”.
• Take notes on the definitions and key details of each term to help understand them better.
• Once you’re confident in your understanding of the terms, check off this step and move on to the next.

An overview of the process of creating a leasehold deed of covenant in the UK

• Understand the legal requirements of creating a leasehold deed of covenant as per UK law
• Obtain the necessary information from the parties involved, such as the leaseholder, lessor, and any other relevant third parties
• Draft the deed of covenant document and ensure that all necessary information and terms are included
• Have the document reviewed and approved by all relevant parties
• Have the document signed and dated by the necessary parties
• File the document with the relevant governing body, such as the Land Registry
• Check off this step and move on to the next step - identifying the relevant parties.

Identify the relevant parties

• Identify the landlord and the tenant(s)
• Confirm whether or not the landlord is acting through an agent
• Confirm the full names, addresses, and contact details of all relevant parties
• Once all details have been collected, you have completed this step and can move on to establishing the document structure.

Establish the document structure

• Identify the roles of the parties in the leasehold deed of covenants (lessor, lessee, guarantor, etc.)
• Define the leasehold covenants - the agreed-upon rights and obligations of the parties
• Identify any restrictions on the use of the property
• Include a full legal description of the property
• Define the term of the lease
• Specify the rent amount and payment terms
• Include provisions for the parties’ rights to renew and/or terminate the lease
• Include any additional provisions for the parties’ rights and responsibilities

You’ll know you can check off this step and move on to the next one when you have established the document structure of the leasehold deed of covenants and have included all of the relevant information.

Complete the legal formalities

• Have both parties sign the document in front of a witness.
• Make sure both parties are registered in the Land Registry.
• Have the document sealed with wax or other approved sealant.
• Have the document registered at the Land Registry.
• Ensure the document is filed in the Land Registry for future reference.

When these steps have been completed, you will have successfully completed the legal formalities for creating a leasehold deed of covenants in the UK.

The importance of the deed of covenant for landlords, tenants, and investors.

• Understand why landlords, tenants, and investors need a deed of covenant
• Be aware of the rights and responsibilities of each party that come with the deed of covenant agreement
• Comprehend the risks associated with not having a deed of covenant in place
• Recognize how a deed of covenant can protect the interests of all parties involved
• Once you have a clear understanding of the importance of a deed of covenant, you can move on to the next step: The legal requirements for creating a leasehold deed of covenant in the UK.

The legal requirements for creating a leasehold deed of covenant in the UK

• Identify the parties to the deed: the landlord and the tenant
• Draft the deed of covenant based on the particular regulations of the jurisdiction in which the property is located, including the date of commencement, duration, and any other details
• Make sure the deed of covenant is legally binding and complies with the particular regulations of the jurisdiction
• Have the parties to the deed sign and date the deed of covenant

When you’ve completed the above steps, you can move on to the next step of checking the jurisdiction.

Check the jurisdiction

• Determine if you are in England, Wales, Scotland, or Northern Ireland.
• Consider the laws that each jurisdiction has in place for creating a leasehold deed of covenant.
• Ensure that all relevant legislation is adhered to, based on the jurisdiction you are in.
• Check off this step when you are certain that you are aware of the applicable laws in your jurisdiction.

Follow the relevant legislation

• Check the relevant legislation for creating a leasehold deed of covenant in the UK, such as the Landlord and Tenant Act 1985 and the Leasehold Reform Act 1967.
• Research any applicable local legislation and regulations.
• Make sure you are aware of any restrictions or requirements that apply to your specific situation.
• Once you are confident that you have the correct legislation, you can check this step off your list and move on to the next step.

A step-by-step guide for creating a leasehold deed of covenant in the UK

• Read the relevant legislation pertaining to leasehold deeds of covenant in the UK.
• Make sure you are aware of any changes in the law that may affect your deed of covenant.
• Research any potential restrictions on the use of the property or any other restrictions that may be imposed on the tenant.
• Determine the date on which the leasehold deed of covenant will take effect.
• Consider the rights and responsibilities of both parties and ensure these are clearly outlined in the deed of covenant.
• Draft the deed of covenant.
• Have the deed of covenant signed by all parties involved.
• Keep a copy of the signed deed of covenant for reference.

Once all the above steps are complete, you can check this off your list and move on to the next step.

Research the current laws

• Read up on the relevant laws and regulations related to leasehold deeds of covenant in the UK
• Understand the tenant and landlord obligations and rights, and any other related legal requirements
• Research case law, relevant legislation and relevant precedent documents to ensure all necessary clauses and provisions are included in the document
• Once you have a comprehensive understanding of the relevant laws, you can move on to the next step in the guide.

Prepare the document

• Gather all relevant documents, such as the lease, the title register, and any relevant contracts
• Identify the leaseholder and the freeholder
• Check the title register for any existing covenants and restrictions
• Draft the deed of covenant and make sure it is compliant with the current laws
• Have the deed checked by a lawyer or a surveyor to ensure it is legally compliant
• Once the deed is ready, have both the leaseholder and the freeholder sign it
• Check off this step and move on to have the document signed by the relevant parties.

Have the relevant parties sign the document

• Make sure each party has read and understood the document before signing
• Have each party sign the document in the presence of a witness
• Ensure the witness signs the document
• Check that each signature is legally binding
• When all parties have signed the document, you can check this off your list and move onto the next step.

Notarize the document

• Have all relevant parties present at the notary to sign the Leasehold Deed of Covenants.
• Have the notary witness the signing of the document.
• Have the notary sign the document with their seal.
• Pay the notary fee for their services.
• Once the document has been properly notarized and signed, you will have completed this step and can move on to filing the document with the appropriate authorities.

File the document with the appropriate authorities

• Locate the applicable authority who will be responsible for registering the leasehold deed of covenants.
• Prepare a copy of the leasehold deed of covenants and the applicable filing fee for submission to the relevant authority.
• Submit the leasehold deed of covenants and filing fee to the appropriate authority.
• Obtain confirmation from the authority that the deed of covenants has been registered.
• You can check this step off your list when you have received confirmation from the authority that the leasehold deed of covenants has been registered.

An explanation of the different types of covenants that can be included in a leasehold deed of covenant

• Positive covenants require the lessee to do something, such as maintain the property in good condition, pay any service charges, or comply with any rules and regulations.
• Negative covenants forbid the lessee from doing something, such as not carrying out any alterations or modifications to the property without the prior consent of the landlord.
• Restrictive covenants limit the lessee’s rights, such as not being allowed to use the property for certain purposes or not allowing the property to be used for any commercial activities.
• Derogatory covenants are clauses that attempt to limit the lessee’s ability to transfer or assign the leasehold.

When you have identified the types of covenants that you want to include in the leasehold deed of covenant, you can then move on to the next step of drafting the document.

Positive covenant

• Draft a document that includes a clause stipulating all of the positive covenants that the tenant must abide by
• Ensure that the positive covenants are reasonable and specific, and do not violate any existing laws or regulations
• List the positive covenants in a clear and concise manner
• Include a clause that stipulates the tenant must comply with all of the positive covenants while they are in possession of the property
• Once the document is completed and signed by both parties, check off this step and move on to Negative Covenant.

Negative covenant

• Research any relevant negative covenants and consider the terms of the lease.
• Draft a deed of covenant that contains any necessary negative covenants and attach it to the lease.
• Ensure that all necessary parties involved in the lease are signatories to the deed of covenant.
• Confirm that the covenant is correctly registered at the Land Registry.
• You know you can check this off your list and move on to the next step when the deed of covenant has been signed, dated, and registered with the Land Registry.

Restrictive covenant

• Research the requirements for a restrictive covenant in the particular leasehold property.
• Contact the local authority for any other restrictions that are applicable to the property.
• Draft the restrictive covenant, taking into account all the relevant requirements and limitations.
• Consult with the relevant leaseholders/ tenants to ensure that the restrictive covenant is understood and agreed upon.
• Check the covenant against the local authority’s guidelines to ensure it meets all requirements.
• Include the restrictive covenant in the leasehold deed of covenants.

Once you have completed the above steps, you can move on to the next step - the role of a solicitor in creating a leasehold deed of covenant in the UK.

An overview of the role of a solicitor in creating a leasehold deed of covenant in the UK

• Understand the purpose of a leasehold deed of covenant. This document is a legally binding agreement between a landlord and their tenant to set out the rights and responsibilities of both parties.
• Research the applicable laws. This includes researching current tenancy laws as well as any local laws or regulations that may apply to the specific property.
• Consult with the tenant or landlord. Make sure to understand the terms and conditions of the agreement, as well as any special provisions that may need to be included.
• Draft the deed of covenant. This should include all the necessary information such as the parties involved, the property in question, the term of the leasehold, the rent, and all other relevant information.
• Have the deed of covenant reviewed by a solicitor. This is to make sure that the document is legally binding and covers all the necessary provisions.
• Have the deed of covenant signed by both parties. This officially binds the parties to the agreement.
• File the deed of covenant with the appropriate governmental agency. This is done to ensure that the deed of covenant is legally binding.

Research the current laws

• Read through the relevant sections of the Leasehold Reform, Housing and Urban Development Act 1993
• Read through the relevant sections of the Landlord and Tenant Act 1985
• Read through the relevant sections of the Landlord and Tenant Act 1987
• Read through the relevant sections of the Commonhold and Leasehold Reform Act 2002
• Read through the relevant sections of the Landlord and Tenant Act 1954
• Check for any relevant case law and judicial decisions
• Check for any relevant government policy or guidance
• When you feel you are familiar with the legal framework for creating leasehold deeds of covenant in the UK, you can move on to the next step.

Draft the document

• Draft a Leasehold Deed of Covenants document that includes the necessary provisions as mandated by UK law
• Include the tenant’s name, the property address, the term of the lease, a description of the property and the agreed upon terms of the lease
• Ensure that all necessary parties have signed and dated the document
• When you have finished drafting the document and all parties have signed, keep a copy of the document on file
• You will know that you have completed this step when you have a signed and dated Leasehold Deed of Covenants document in your possession.

Provide legal advice

• Obtain legal advice from a solicitor who is experienced in drafting this type of document
• Ask the solicitor to review the document to ensure it meets the requirements of applicable laws and regulations
• Make any changes suggested by the solicitor to ensure the document is legally binding
• Make sure you are clear on any potential risks associated with the document
• Ensure the solicitor is satisfied that the document is compliant and legally binding before signing off
• Once the solicitor is satisfied, you can check this step off your list and move on to the next.

Ensure the document is legally binding

• Obtain written advice from a solicitor on the terms of the deed of covenant and its validity
• Ensure the deed of covenant includes the relevant sections, such as the clauses, schedules and recitals
• Make sure the deed of covenant is in a proper format, so that it is legally binding
• Check that all parties to the deed of covenant have signed it
• Register the deed of covenant at the Land Registry
• Once all of the steps have been completed, the deed of covenant is legally binding and can be used as the basis for any future disputes.

The importance of having a properly drafted leasehold deed of covenant.

• Understand the purpose of a leasehold deed of covenant and why it is important to have one in place
• Identify the parties involved in the deed of covenant
• Outline the obligations of both the tenant and the landlord
• Take into account any specific law or custom that is applicable to the leasehold deed of covenant
• Make sure that the terms of the leasehold deed of covenant are clear, precise and unambiguous
• Check that all the information provided in the deed of covenant is accurate

Once you have completed the above steps, you can be confident that you have taken the necessary steps to ensure that you have a properly drafted leasehold deed of covenant in place.

Tips for ensuring the deed of covenant is legally binding

• Check the names, addresses, and information of the parties involved are correct.
• Make sure the dates are correct.
• Confirm the payment amounts, conditions, and dates are accurate.
• Ensure that all parties understand and agree to all the covenants included in the deed.
• Ensure that the deed has been signed and witnessed by all parties.

Once you’ve checked all of the above, you can be sure that the deed of covenant is legally binding.

Use plain language

• Keep the language in the deed of covenant simple and easy to understand, in order to avoid any confusion or misinterpretation
• Use clear, concise language and avoid any legal jargon or complicated terms
• Where appropriate, explain terms in the document and use synonyms to replace legal terminology
• When complete, read through the document to ensure that all language is plain and clear to all parties

Check this step off your list when you are confident that the deed of covenant has been written in plain, understandable language that all parties can comprehend.

Follow a standard format

• Familiarize yourself with the basic format of a leasehold deed of covenants.
• Use a template or example deed of covenants as a guide to structure your document.
• In the document, include the name of the parties, the address of the property, the term of the lease, the rent, and other covenants or agreements.
• Once you have the basic format of the deed in place, you can then add in any specific covenants or agreements that the parties have agreed to.
• When you are happy with the format and content of the deed, you will have successfully completed this step and can move on to the next.

Have the document checked by a solicitor

• Contact a solicitor to review the document for any potential legal issues
• Ask your solicitor to provide written advice on any changes or amendments needed to the document
• Check the document against the advice provided by the solicitor
• Make the necessary changes and amendments to the document
• Once the document is checked and amended, have it signed and witnessed by the appropriate parties
• Upon completion, you can move on to the next step in the guide: Advice on how to make changes or amendments to a leasehold deed of covenant.

Advice on how to make changes or amendments to a leasehold deed of covenant

• Consult both the landlord and the tenant to ensure they are in agreement with any proposed changes or amendments to the leasehold deed of covenant.
• Take into account any legal advice that has been provided by a solicitor.
• Arrange for the document to be amended or re-drafted to incorporate any proposed changes.
• Have the revised document checked and approved by a solicitor.
• Once the document has been signed by the landlord and the tenant, the changes or amendments to the leasehold deed of covenant will be legally binding.

Once you have consulted both the landlord and the tenant, taken into consideration any legal advice that has been provided, arranged for the document to be amended or re-drafted, and had the revised document checked and approved by a solicitor, you will be able to check this off your list and move on to the next step.

Consult the parties involved

• Contact the parties whose rights will be affected by the amendment or change to the leasehold deed of covenant
• Notify all relevant parties and explain the changes or amendments that will be made
• Listen to any concerns or objections from the parties and make necessary changes if needed
• When all parties involved are in agreement, you can check this step off your list and move on to drafting a new document.

Draft a new document

• Gather all relevant information such as the parties involved, the leasehold property, the landlord and tenant information and the length of the lease
• Draft a document containing all of the necessary information and clauses, including the covenants and terms of the agreement
• Review the document to ensure it is accurate, complete and in accordance with applicable laws
• Have the document reviewed by legal counsel to ensure it complies with all applicable laws
• Make any necessary changes to the document based on the legal counsel’s review
• Once the document has been reviewed and the necessary changes have been made, it is ready for the parties to sign.

Have the relevant parties sign the document

• Have the parties that are signing the document read the document and sign in the presence of a witness
• Have the witness sign and print their name, address and occupation
• Ensure each party has a signed copy of the document
• Once each party has signed and witnessed the signing, you can check off this step from your list.

Notarize the document

• Contact a notary public to notarize the document.
• Notaries will typically charge a fee for their services.
• Once the document has been notarized, you will receive a notarized copy of the document.
• Once you have received the notarized copy, you can check this step off your list and move onto the next step.

File the document with the appropriate authorities

• Contact the local Land Registry office to file the deed of covenants.
• Provide the Land Registry office with the original copy of the document, as well as two photocopies.
• Pay the required filing fee as specified by the Land Registry.
• Receive confirmation that the deed of covenants has been successfully registered.
• Once the Land Registry has confirmed that the deed of covenants has been registered, you can check this off your list and move on to the next step.

FAQ

Q: What is the difference between a leasehold deed of covenant and a freehold deed of covenant?

Asked by John on April 24th 2022.
A: A leasehold deed of covenant is a legally binding document which sets out the terms and conditions of a lease between a tenant and a property owner. It also outlines the responsibilities of each party. A freehold deed of covenant is an agreement between two people or entities which allows one party to hold rights over a property without owning it outright. In the UK, these documents are usually used to grant long-term rights of access to certain parts of a property or land.

Q: Are there any restrictions on the types of covenants that can be included in my leasehold deed?

Asked by Scarlett on May 8th 2022.
A: Yes. The specific restrictions vary between jurisdictions, but in general, covenants must be reasonable and must not conflict with any existing laws or regulations. In the UK, covenants must be specific and must not be overly restrictive. For example, they cannot be used to restrict the tenant’s use of their property in an unreasonable way, nor can they be used to forbid something which is already prohibited by law.

Q: How long does it take to register a leasehold deed?

Asked by Jack on June 5th 2022.
A: The exact time frame may vary depending on the complexity of the document and the jurisdiction in which it is being registered. Generally speaking, registering a leasehold deed should take no more than three weeks in the UK, provided all necessary paperwork is completed correctly and promptly.

Q: What happens if either party breaches the terms of the leasehold deed?

Asked by Emma on July 12th 2022.
A: If either party breaches the terms of the leasehold deed, they may be liable for damages or other legal action which could include eviction or forfeiture of rent payments. It is therefore important that both parties are aware of their obligations under the agreement, and that any breaches are addressed as soon as possible to avoid further complications.

Q: Is there a standard form for creating a leasehold deed?

Asked by Mason on August 20th 2022.
A: Generally speaking, no; each leasehold deed will be different and tailored to the individual situation. However, there are certain elements which must be included in any valid leasehold deed, such as descriptions of both parties involved and details regarding rent payments or other monies owing.

Q: Do I need to register my leasehold deed with the Land Registry?

Asked by Isabella on September 28th 2022.
A: Yes; all valid leasehold deeds must be registered with the Land Registry before they can be enforced. This process typically takes up to three weeks and can be done online or in person at one of their offices across England and Wales. Once registered, your leasehold deed will become binding upon both parties and can be enforced should either party breach its terms or conditions.

Q: What happens if I don’t register my leasehold deed?

Asked by Noah on October 6th 2022.
A: If you do not register your leasehold deed with the Land Registry, then it may not be legally binding upon either party involved in the agreement. This means that either party could potentially breach its terms without legal consequences, so it is important that all valid documents are registered with them as soon as possible after being signed by both parties involved.

Q: Can I make changes to my leasehold deed after it has been registered?

Asked by Olivia on November 14th 2022.
A: Yes; once your leasehold deed has been registered with the Land Registry you can still make changes or amendments as long as both parties involved agree to them in writing and sign off on them before they are submitted for registration again. Additionally, it is important that any changes are consistent with existing laws and regulations so as to avoid any potential legal issues down the line.

Q: What other documents are required when registering a leasehold deed?

Asked by Ava on December 22nd 2022.
A: When registering your leasehold deed with the Land Registry you will also need to provide proof of identity for yourself and any other people involved in the agreement, along with copies of any relevant documents such as title deeds or tenancy agreements which may have been signed between you and your landlord prior to registering your leasehold deed. You may also need to provide other relevant information such as contact details or bank details depending on your particular situation or jurisdiction you are operating within.

Q: Are there any specific requirements regarding how a leasehold deed must be signed?

Asked by Liam on January 30th 2023.
A: Yes; all signatures must follow certain guidelines set out by law in order for them to be considered valid when registering your document with the Land Registry. Generally speaking, all signatures must be made in wet ink (no digital signatures) and witnessed by a third party who can vouch for their validity (usually someone unrelated to either party). All signatories must then countersign each other’s signature if there are more than two parties involved in the agreement before submitting for registration with the Land Registry for final approval.

Q: What happens if I need an amendment made after my document has been registered?

Asked by Sophia on February 8th 2023.
A: If you need to make an amendment after your document has been registered with the Land Registry then you will need to contact them directly in order to do so; however, this process may take some time depending on how complex your amendment is, so it is always best practice to ensure that all relevant details have been included at the time of registration so as to avoid potential delays further down the line if amendments become necessary at a later date.

Q: Is there anything else I should consider when creating my leasehold deed?

Asked by Emma on March 17th 2023.
A: Yes; it is important that you consider potential future changes or events which could affect either party’s obligations under the agreement - such as changes in laws or regulations - so that these can be taken into account when drafting your document initially rather than attempting to make amendments during registration later down the line (which could result in delays). Additionally, it is also important that all parties understand their rights and responsibilities under their agreement so that any disputes can hopefully be avoided altogether before they arise

Example dispute

Lawsuit referencing a deed of covenant:

• A plaintiff may raise a lawsuit referencing a deed of covenant if they are seeking to enforce the terms of the agreement or to collect damages for a breach of the agreement.
• A deed of covenant is a legally binding agreement between two or more parties that sets out the rights and obligations of each party. The deed is usually signed by both parties and witnessed by a third party.
• In order to win the lawsuit, the plaintiff must prove that the defendant breached the terms of the deed of covenant. The plaintiff must also show that they suffered damages as a result of the breach.
• The plaintiff can seek a court order enforcing the terms of the deed of covenant or to award damages for any losses caused by the breach. The plaintiff can also seek an injunction to prevent future breaches of the deed of covenant.
• The court may also order that the defendant pay the plaintiff’s legal costs and other costs related to the suit.
• Settlement of the case can be reached through negotiation between the parties or through mediation. If the parties cannot reach a settlement, the case will go to trial.
• If damages are awarded, they may be calculated based on the plaintiff’s actual losses, the defendant’s profits, or a combination of both.

Templates available (free to use)

Deed Of Covenant Flying Freehold
Deed Of Covenant Old Lease
Standard Deed Of Covenant For An Emtn Programme

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