4.3 Lease Termination Flashcards
What may be payable on surrender
Premium from one party to another
What must be included in A2S if contracting out of ‘54 Act
Confirmation that procedure carried out
Why might L delay notification to T that has not validly exercised break clause
Delay until too late to exercise if want T to stay
If new T coming in + OT surrendering, how can you link the two
A4L conditional on surrender + A2S simultaneously exchanged w/ A4L
Two ways of expressly surrendering
Deed or TR1
How do you impliedly surrender
Handing in keys + vacating
Three ways for lease to terminate otherwise than by expiry of fixed term/service of notice under ‘54 Act
Forfeiture, surrender and break clause
What should payor ask for if has to pay VAT on surrender premium
VAT invoice, copy of option and HMRC receipt
Why will L want 4(1)(b) LP(MP)A to apply to surrender
T covenants no subsisting breaches, so if any breaches, L has right of action for T breaching
Who can usually exercise break clause
Either party
When will leasehold title have to be closed after surrender
If lease reg, i.e. over 7 years
What should L do if T has not validly exercised break clause
Contact T to explain lease not terminated and continue to comply w/ covenants
Overpay rent break clause
M&S v BNP
When will issues with SoT arise in surrender
If using A2S and CT’s lease is protected by ‘54 Act
Case on conditions of break clause
Mannai v Eagle Star
What is the effect if A2S + CT protected by ‘54 Act + simple/statutory declaration not done
A2S is void (38A(4)) as unlawful attempt to exclude the Act
What case shows that you have to expressly provide for ability to recover overpayment of rent on exercise of break clause
M&S v BNP
Three post-completion formalities after deed of surrender executed
Close leasehold title, apportion rental payments and recover shortfall/refund overpayments of SC
Issue with L delaying notification that T has not validly exercised break clause
If challenged, court unlikely to look favourably on it
When might VAT be chargeable on surrender premium
If ‘supplying’ party (receiving the premium) has opted to tax
What liabilities will L want discharged on surrender
Only future
Mannai v Eagle Star key
Break clause
Can T surrender w/o L’s consent?
No
What case shows that minor errors in exercising break clause that would not mislead reasonable person will not render notice invalid
Mannai
If CT covered by ‘54 Act but using A2S, what is the procedure
Same as for A4L - statutory/simple declaration (14 days) before entering into A2S
M&S v BNP key
Overpay rent break clause
If lease is protected by ‘54 Act, when will lease naturally terminate
By service of a notice under the Act
Two ways of surrendering
Expressly or impliedly
If lease if not protect by ‘54 Act, when will it naturally terminate
Expiry of fixed term
When will payor have to pay VAT on surrender premium
If surrender documentation states as much
