4.1 Property Management: Docs during lease lifetime Flashcards
Why no burden to use high quality materials in LtA
Too high a burden
If T has opted to tax so UT has to pay VAT on premium for UL, what should UT ask for
Option + acknowledgment from HMRC + VAT invoice
If T is paying VAT on top of L’s costs under a licence, what should T get
Valid VAT invoice
When does licence not need to be registered
One-off consent +/or lease not registered
When is there no need for LtA to state assignee will observe and perform covenants and why
For new leases, as implied by statute - 3(1)(b) LTCA ‘95
What happens upon assignment of new lease under statute, and per what
T released from covenants - 5(2) LTCA
What section states 5 LT(C)A will not release CT from covenants if unlawful assignment (e.g. w/o consent)
11
Aubergine v Lakewood
Agreement ‘in principle’
If UT is being charged a premium, what are the two potential tax consequences
Paying VAT on premium and SDLT
If UT is paying a premium for UL, what should you check first
If HT is allowed to charge UT a premium under lease
Why is it unfair for any licence to expire on X date, w/o ability to get extension
Would happen automatically without considering the circumstances
Under CDM Regs, when will LtA say that L is to keep H&S file
If multi-let
How should you cap T paying L for L’s costs in granting licence
Reasonable and proper costs up to £X
In LtA, what O regarding T’s neighbours is reasonable, and what is not
O not to cause a nuisance/damage, but avoid O not to annoy or inconvenience - too subjective
What should you ensure LtA states, if acting for T, regarding costs
Limit paying L’s costs of consent to specific sum + VAT + reasonable disbursements, or reasonable and proper costs
What two things can L make as a condition of his consent for an alteration under 19(2) LTA
Recover expenses + make reinstatement a condition
Under LtA, should there be an O on T to carry out works? Why/why not?
No - would mean works not voluntary, so considered on RR
What section provides that benefit and burden of all T + L covenants pass on assignment
3(1)(b) LT(C)A
Why should T avoid paying L’s costs immediately
Too onerous and prescriptive
Why should T/UT/A resist paying VAT on L’s costs if capable of recovery
Shouldn’t be able to claim off (U)T/A just bc simpler than claiming from HMRC
How to stop parties agreeing to extend licence becoming agreement to agree?
State must be agreed within reasonable time
When is a DoV required for LtCU
If change of use not specifically envisaged in the lease
What is the usual covenant in a lease for structural alterations
Absolute
For T to claim compensation for improvements, what must T do under Part 1 LTA
Serve notice of intention to carry out works on L + obtain certificate from L/court once completed
What provision allows T to claim compensation upon termination for any improvements made
Part 1 LTA
Lambert v Woolworth ratio
‘Improvement’ per T
When should UL be contracted out of security of tenure
If lease also contracted out
Why should L avoid giving agreement in principle
May = full consent
Why should reinstatement be considered at RR
Would push rent up if disregarded
What two LA consents may be required for alterations
BR + possible PP
What two covenants are usually obtained for LtCU
T to obtain all necessary consents, and to pay for any increase in insurance premium
What will happen if UL is not contracted out of SoT
Implied surrender
If there is a qualified covenant for alterations under lease, what provision will be relevant
19(2) LTA
Should there be O to comply w/ insurers’ recommendations under LtA? Why/why not?
Can be prohibitively expensive, and not required
Why is it too high a demand for T to do things immediately under LtA
May be completely unreasonable
When should T pay L’s costs for licence
Within 7 days of written demand
Why might mortgagee need to consent to alterations by UT
States so in lease - T has to continue to comply, and UT will have covenanted to comply in LtUL
Why for LtA should T not need to get L’s approval for all Consents
Onerous
If proposed works by T are major, what might L insist on
CWs from T’s construction team
For what kind of alienation is it necessary to state that incoming T will observe and perform covenants
Underlease
For what improvements does Part 1 LTA not apply
if improvement is as a result of a statutory O (2(1)(b) LTA)
If lease states need consent for alterations and UT wishes to carry out alterations, what happens
Need LtA between HT, UT, and HL
Why might UL state L needs to consent to app for PP made by or on behalf of UT
Likely required by lease + LtU will state UT to comply w/ T’s Os
If UT wishes to make changes to UL, consent of who required?
Both its L and head L
As T is released from covenants under a new lease per 5(2) LTCA, what should lease state
T only bound ‘until released by virtue of LTCA’
Why does L ensure that assignee also signs LtA
Gives privity of contract between L and assignee
‘Improvement’ per T
Lambert v Woolworth
What provision changes an absolute covenant to a fully qualified covenant
Para 3 Schedule 21 EA
Under LtA, what right should L have to enter
Reasonable times on reasonable written notice
Why will LtU state T not to allow UT to possess before UL completed
Will give UT SoT, so L would have to remove using 30(1) grounds
Why is SP unlikely to enforce keep open clause in lease
Inequitable, too much supervision etc.
What could L do if T allows UT to possess before UL completed, if LtUL states T was not to
L can sue both T and UT for breach of the LtUL
What is the usual covenant in a lease for IDPs
Usually no need to get consent of L
Can you contract out of Part 1 LTA?
Not technically, but possible by lease stating reinstate or T has not invoked procedure
What provision allows L to charge reasonable expenses to T if covenant to get consent for A/UL upgraded to FQC
19(1)(a) LTA
Why should you always check lease provisions when working out why various provisions have been included in licence, and if necessary
T has to continue to comply w/ lease provisions, and UL/A will have promised to comply w/ lease provisions in licence
What premium for UL is too small for SDLT to be payable
£5k
Agreement ‘in principle’
Aubergine v Lakewood
When should T/UT/A resist paying VAT on L’s costs
If the VAT is recoverable from HMRC
What provision permits any LtA to be subject to reinstatement
19(2) LTA
If lease is contracted out of security of tenure, what will L want to see for UL
Evidence of procedure carried out to contract out UL
For LtA, if subject to L approval of ‘Consents’, what should you ensure
May want to limit ‘Consents’ to PP only, and ensure L’s approval will not be unreasonably withheld or delayed
If a licence is to expire as parties did not agree to extend, what should happen to the licence
All clauses EXCEPT those relating to costs should determine
For T’s Os under LtA to e.g. make good damage caused, change from ‘immediately’ to what?
Do as soon as reasonably practicable/within X days of written demand
What quality materials should LtA require T to use, and to what standard to carry out work
Only good quality, and to reasonable satisfaction of L
What is the consideration regarding L’s title for alterations
Consent may be needed from PWB of any restrictive covenants
When will L grant a licence to T - why
Formal assent to make changes to the lease
When editing LtA, when should you define ‘L’s premises’
If unit is part of Centre
19(2) LTA permits L to make what condition of T
L to make condition of LtA that T reinstate + can charge T for reasonable costs + any diminution in value/damage caused
What is the likely enforcement of a ‘keep open’ clause requiring T to keep trading
Damages only
How does L in effect contract out of Part 1 LTA
LtA states T has not involved procedure and/or requires reinstatement.
What may T have to do if new lease, upon assignment
Give guarantee - 16 LTCA
What does LtA usually state about its time period
Expires if not completed within X time
When does a licence need to be registered
If Deed of Variation to vary the lease + lease registered
What two covenants are usually included in LtA + LtUL
Assignee/UL to observe + perform covenants, and T not to allow assignee/UL to possess until A/UL completed
When should any licence expire
Reasonable time within which Works are to start, OR UL/A to be agreed, e.g. 3 - 6 months, w/ ability to apply for extension
Why limit L’s right to enter, but still allow
L shouldn’t interrupt business, but will want to supervise
What case said giving agreement in principle may = full consent
Aubergine v Lakewood
What must T’s improvements be for compensation under Part 1 LTA (x4)
Add letting value to premises, be reasonable, suitable, and not diminish value of any other property belonging to same L (3(1) LTA ‘27)
Must DoV and LtCU be distinct?
No - can incorporate as long as LtCU is executed as a deed
What provision is relevant if absolute covenant against alterations under lease
Equality Act - para 3 Schedule 21
What should LtA state about reinstatement
Only if L reasonably requests, and consider provision at RR
What is the effect of 5(2) LTCA
T under new lease released from covenants upon assignment
3(1)(b) LTCA ‘95 has what effect
Assignee is automatically bound to observe and perform covenants if new lease
Who are the parties to a LtUL
L + T + UT
What is the usual covenant in a lease for non-structural alterations
(F)QC
What section means it is technically unnecessary to provide that assignee will observe + perform covenants
3(1)(b) LTCA
How to work out what is an ‘improvement’ under 19(2) LTA
Through the eyes of the T - Lambert v Woolworth
2(1)(b) LTA ‘27 states what
Part 1 LTA does not apply if improvement as a result of a statutory O
How is a licence usually given - C or deed
Deed
If DoV used for LtCU what must happen for it to be valid - other than execution as deed
Reg at LR as changing lease
19(2) LTA has the effect of what
Upgrades QC to FQC if the alteration is an ‘improvement’
What provision states that reasonable adjustments must be made for disabled members of the public
Ch.15 Part 20 s.20 Equality Act
Why should LtA state T not to allow assignee to possess until A completed
Ensures A enters into possession on terms approved by L
When will UT have to pay VAT on top of any premium for UL
If underlease states so
Who is required to pay VAT on premium for underlease and when?
T is required to if they have opted to tax, as this converts it from an exempt supply to a standard rated
