3.2 Development Issues Flashcards
What will L likely opt to use in A4L to ensure T completes on time, or A4L terminates if fails to do so
Notice to complete procedure - making time of the essence
Why allow for long-stop date for delays
If issue does not resolve itself, parties should be able to walk away
If defect in L’s retained premises, who is liable and who will pay
L liable, but will recover through service charge
If defect inside T’s premises, who is liable and under what
T under repairing Os
Who drafts A4L
L’s S
What method is commonly used for Completion Statement
Surveyor’s method
Why disregard T’s works at RR
Artificially inflates hypothetical lease - only benefits L
If T carried out works but L requires reinstatement under A4L, what should you ensure it says
Such as L may reasonably require
If T in strong position, what could you negotiate for in terms of T’s A’s defect notice
Require L’s A to act reasonably in considering DN, and take reasonable action necessary to temedy
Why should you try to ensure T keeps control if L does depart from plans
Ensures premises remain appropriate for occupation + delay is not excessive
Kilmartin v Safeway said what
‘Usable’ area is for sensible purpose in connection w/ proposed occupation - included entrance ramp but not fire exits or lift
What kind of notice for A4L is more vulnerable
Unilateral
Two things to check for A4L + lease, prior to completion
Prepare engrossments + annexures, and ensure both sides have signed
When do CWs become important
When DLP runs out
What is the nature of A4L and what does that mean - personal or tied to land?
Personal, so T cannot require L to grant to 3rd, and L’s Os cannot be enforced against successor L
T’s payment obligations if supply of services to L
T accounts to HMRC for VAT on inducement
If L is to carry out works, how to deal w/ T’s supervision?
Surveyors to enter at 3 points - sufficiently complete for occupation, practical completion + final completion. Can also state ‘at reasonable times’ w/ no limit. T to give reasonable written notice.
Provisions for T to carry out works in A4L are the same as in what doc, done after completion as part of property management
Licence to Alter
Why deal w/ delay provisions through force majeure + LADs if L to carry out work
Some issues not within L’s control so no damages, but should pay damages if within control.
What are the four ‘Quarter Days’
25 March, 24 June, 29 September, 25 December
If land is multi-let, who keeps the CDM Regs folder
L
Who must be joined to A4L or not bound to give guarantee on completion
Guarantor
Why ensure that T can supervise L’s works?
Constant supervision of work ensures keeping w/ agreement + verified by agent of T (rather than of L)
Why should premises be measured by independent party
To avoid disputes
What will L want to get if has to pay VAT on inducement given to T
VAT invoice
What is the procedure under 38(1) LTA if 14 day gap before T bound
Warning notice served on T (+ G) + T (+G) signs simple declaration
When is Completion Statement prepared
After exchange of A4L, prior to completion.
Two differences between agreed and unilateral notices
Agreed is public (unless Exempt Info), and requires consent of proprietor
When is A4L negotiated
W/ lease
What is the surveyor’s method
Take yearly rent (separating out each charge in ‘Rents’), add any VAT, divide by 365, then times by number of days to next QD
What should measuring provision state if parties cannot resolve their differences
Explicitly set out independent party to go to
Is there a tolerance level under Kilmartin/6th edition RICS
No - below or above the limits = no tenancy, or capped rent
Round to how many decimal places for each stage in surveyor’s method
Two
Why deal w/ measuring provisions through 6th edition RICS
Certainty
In what two circumstances will L want to terminate A4L
If T insolvent, or if T fails to complete on agreed date
How to avoid A4L being public on LR
EX1 + EX1A for Exempt Info
How to define ‘Access Date’ when T to carry out works
Architect to verify stage when T can enter - Premises completed to reasonable satisfaction of architect
Two possible definitions for ‘Term’ in A4L
From lease being granted, or when T occupies
In surveyor’s method, when do you count from and to
Include completion but exclude next QD
What can be obtained to avoid T being liable for construction defects
CWs from whole Professional Team + architect
If L is to carry out works, how to define standard of construction
Good and workmanlike manner, w/ good quality materials or such other materials as are substantially similar
What is T granted to carry out works before lease completed
Mere licence w/o ability to trade
If T is required to reinstate, what should you ensure regarding RR
Provision is considered at RR
What two things could be explicitly stated to help w/ measuring under Kilmartin + 6th edition RICS
State use contemplated + ‘Internal Area’
How can you reg A4L at LR - for reg and unreg
C(iv) if unregistered, or notice if reg
Why must A4L be registered
Gives interest in land
Why should L insure premises after CoPC
In case anything happens prior to T entering into occupation - unlikely to be T’s fault if before this point
How does T become only client under CDM Regs
Make declaration to H&S Executive
Why make sure reinstatement clause considered at RR
Absence of reinstatement clause makes hypothetical lease more attractive
What obligations will T have to neighbours if carrying out works
Not to cause nuisance, and to tidy up premises
By when should T get CWs from Professional Team + architect
Before practical completion
When is A4L exchanged
Before lease
Why define standard of construction
T ensures good end product, and L ensures not subject to high and costly burden
Why would you want to define ‘Works’ if L carrying out works
Ensure clarity over L’s Os
Who insures works if T to carry out works
T
Two kinds of notice for registered land
Agreed and unilateral
Why ensure that architect acts reasonably when determining if T can enter to carry out works
To ensure other deadlines are not triggered too early, e.g. when to complete works by, and when to start trading
Insurance provision under A4L if L to carry out works
BC to insure until CpOC, and L insures until completion, and after continues to insure but collects from T
Form for unilateral notice for A4L
UN1
For VAT inducements, does it matter if T/L have opted to tax
No
Why is an agreed notice not private
Have to provide evidence, which means the A4L is then not private
Four reasons why A4L may be used
Financing, anchor T, possible alterations or for conditionality
When will L have to pay VAT on inducement given to T
If lease requires L to pay ‘plus VAT’
Why not oblige L to use ‘high’ quality materials?
Too burdensome + costly
What is the procedure under 38(1) LTA if LESS than 14 day gap before T bound
Warning notice served on T (+ G) + T (+G) signs statutory declaration
Why will L want to terminate if T becomes insolvent
Covenant strength is vital
Why is T only granted a mere licence prior to completion of lease to carry out works
To ensure not granted tenancy at will through early possession
If L is to carry out works, how to deal with delay
No compensation if force majeure, but LADs if within control. Both subject to long-stop date.
How to deal w/ measuring the premises for occupation of T if L to carry out works
Lower + upper limit cap depending on size, to be measured by independent party
Why should you define standard of construction if T to carry out works
L ensures good end product + T ensures not subject to high (and costly) burden - works do not need to be perfectly completed
What to do if T’s works extend beyond ‘Demise’
Extend lease covenants to alterations outside
Why should T be able to enter to supervise L’s works more than once?
There is more than one phase, so able to enter at least once per phase
What inducements might L offer to T to take premises
Rent-free period or contribution to T’s work
What supply of services might T make to L on taking lease
E.g. marketing as anchor tenant, or carrying out works on behalf of L
Why should T have Os to neighbours when carrying out works
To protect the rest of the land and its occupiers
If L carrying out works, how to deal with T wanting L to depart from plans
L to agree to reasonable requests of T, but subject to T paying costs + extending long-stop date
What must applicant show for Exempt Info app to be successful
Prejudicial to commercial interests for A4L to be public
What should L ensure if under A4L/lease L is obliged to pay LADs for delay within L’s control
Ensure LADs also in BC
What is it usual to provide for in A4L if T to carry out works w/ regard to CDM Regs
T only client, appoints Principal Designer, and keeps folder if land is SINGLE LET
Why does the A4L being a personal contract mean value of reversionary interest is not affected
Successor to L cannot be tied to L’s Os in A4L
When is the surveyor’s method relevant?
If gap between completion and next QD - to work out rent
What does the principal designer do
Advises until end of construction
Use what edition for measuring premises
6th edition of RICS code
What case does 6th edition of RICS Code codify
Kilmartin v Safeway
What has to be supplied w/ AN1 for agreed notice
Evidence (A4L)
When will there be no supply from T to L for VAT purposes - what entity might T be
Exempt - bank/BS
When might T have to pay VAT to HMRC for taking lease
If L is paying T an inducement
If A4L being used, by when must contracting out procedure be done
Before A4L exchanged - A4L = bound to enter
Standard of construction if T to carry out works
Good and workmanlike manner, good quality materials or such other substantially similar materials
A4L is what kind of contract
Estate contract
If L is to carry out works, how should you deal w/ L’s ability to depart from plans
L can make minor reasonable variations, or T can require L to seek its approval/veto/T can terminate if can’t agree (acting reasonably)
Who considers if T’s works are completed, and how must they act
Architect - must act reasonably, determining if completed to its satisfaction in all material respects
Is there VAT payable if there is no supply for the inducement given to T
No
When is SDLT payable by
Within 14 days of the ‘effective date’ which = ‘substantial performance’
What key term in A4L is it important to define
‘Term’
Why might T have to pay VAT to HMRC for taking lease
If supply of services from T to L
Why might L want to be able to make minor variations to plans
To comply w/ PP
If L is to carry out works, how should you define works
Attach spec/plans (+ check BC is the same). Define PP if relevant
When might there be SDLT implications when using A4L
May be ‘substantial performance’ from entering to e.g. fit out, so payable within 14 days
What is it normal to provide for in terms of L considering T’s A’s defect notice
Only to pay ‘due regard’
‘usable’ = sensible purpose
Kilmartin v Safeway
What common annexure is there to A4L
Agreed form rent deposit deed if deposit to be paid
Who might also have to sign A4L/lease
Guarantor
What will T have to pay VAT on if inducement = rent-free period, and supply was marketing their presence
VAT on value fo rent-free period
What obligation should T NOT have to neighbours when carrying out works
Not to cause annoyance - too subjective
Kilmartin key
‘usable’ = sensible purpose
What kind of notice for A4L does not require registered proprietor’s consent nor evidence
Unilateral
Under what provision of what statute is security of tenure procedure
38(1) LTA ‘54
What to ensure about RR if T to carry out works
Works disregarded at RR
App for agreed notice
AN1
When is a Principal Designer required
30+ workers for 20+ days, or 500+ working person days
What 3 stages should T’s A be able to enter to supervise?
Sufficiently complete to occupy, practical completion and final completion
