Pendulum arbitration
See flip-flop arbitration.

Premium
The price an actual or prospective lessee pays to a lessor, usually in return for the rent being reduced to below what otherwise would be payable. Or a sum paid at the outset for the purchase of a lease. (See also reverse premium.)

Prime covenant
The best quality of investment, represented by prime property.

Prime location
The most desirable or sought after location.

Prime property
A term used to define property of particular interest to investors. Broadly, prime property is likely to be a modern or recently refurbished building, finished to a high specification, well situated in a commercially strong geographical location and let to a good tenant.

Privity of contract
The principle in English common law that landlord and tenant continue to have obligations under the lease despite subsequent assignment. Privity of contract was abolished for new leases coming into force from 1 January 1996. Leases entered into before then are still subject to privity, but landlords wishing to sue previous tenants still bound by privity have to serve notice within six months of rent or service charges becoming due. The current legislation enables landlords in certain circumstances to require the outgoing tenant to guarantee the performance of the incoming tenant, until there is a further assignment.