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ACP > 5.2: Commercial Lease: RR > Flashcards

5.2: Commercial Lease: RR Flashcards

1
Q

How to change any assumption that T is in possession/occupation

A

Replace w/ ref to vacant possession

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2
Q

What happens to RR memorandum once signed by both parties

A

Annexed to the lease

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3
Q

How to divide costs of RR between parties

A

Each party to pay their own costs of RR

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4
Q

Why is it unfair to assume that T has not carried out work that has diminished value

A

Some works are required by statute and still diminish value

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5
Q

Why is it unfair to assume that premises are fully fitted out and ready for immediate occupation

A

No costs are involved, so attractive to T - T would usually ask for rent-free period

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6
Q

What does Code recommend for RR

A

Upwards and downwards

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7
Q

What are the two general rules on assumptions at RR, if acting for T

A

Resist any assumptions that are less restrictive than under actual lease, and ensure hypothetical lease includes similar RR provisions

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8
Q

Why is it unfair to assume that T has had benefit of any and all concessions

A

Surveyor would go straight to rent after concessionary period, which is usually higher for L to recoup losses

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9
Q

How to change assumption that all covenants have been complied with

A

Only T’s covenants have been complied with

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10
Q

How to change assumption that T has benefit of PP/other consents

A

Remove completely

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11
Q

Why is it unfair to assume all covenants have been complied w/

A

Allows L to benefit from any potential breach

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12
Q

What does T pay once valuation completed

A

Pays arrears + interest

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13
Q

When is time of the essence for RR

A

Only when EXPRESSLY included

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14
Q

How to change a disregard of alienation restrictions

A

Remove completely

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15
Q

Why is it unfair to disregard RR provisions entirely

A

Higher rent for no RR as certainty for T

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16
Q

What is the most common type of RR

A

Open market

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17
Q

How is open market RR done

A

Periodically re-valuing rent using comparable + hypothetical lease

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18
Q

What kind of rent should surveyor NOT be required to consider in RR clause

A

Best rent

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19
Q

How to change a disregard of only any alterations voluntarily carried out by T

A

Ensure covers works by predecessors and works in pursuance of statute or BEFORE term

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20
Q

How to change an assumption that T has had benefit of any and all concessions

A

Restrict to concession for fitting out purposes only

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21
Q

Why should you assume that any damage caused by an Insured Risk has been fully restored

A

Insurance monies will be available and L should have O under lease to use monies to fix damage

22
Q

What is the usual pattern for RR

A

5-year patterns

23
Q

What happens to T’s payments pending valuation

A

T pays old rent

24
Q

Why restrict an assumption that T has had benefit of any and all concessions to for fitting out purposes only

A

Rent-free fitting out period is usually offered, but assuming all concessions already given would mean can’t consider L inducing T w/ lower rent

25
Q

Why is it unfair to only disregard alterations voluntarily carried out by T

A

Also want to exclude those carried out in pursuance of statute, as can be very costly

26
Q

Why is it unfair to NOT disregard T’s goodwill at RR

A

Comes from T’s own effort so makes lease more attractive

27
Q

If lease is subject to SDLT and RR after five five years, what happens

A

Only payable if abnormal increase - >20% of rent charged to SDLT

28
Q

How to change an assumption that premises are fully fitted out and ready for immediate occupation

A

Remove completely

29
Q

What is signed once RR completed and agreed

A

RR memorandum

30
Q

What additional provision should you include when disregarded T’s occupation, goodwill or fitting out

A

Occupation, goodwill or fitting out of any permitted occupier or UT

31
Q

Should L be able to require RR to be determined by arbitrator instead of surveyor?

A

No

32
Q

Why is it unfair to assume T can recover VAT charged/not disadvantaged by election to waive VAT exemption

A

Some Ts cannot recover VAT, so in reality VAT makes lease less attractive - wouldn’t be reflected in RR

33
Q

How to change an assumption that T can recover VAT charged

A

Remove completely

34
Q

Why is it unfair to NOT disregard T’s occupation at RR

A

T likely prepared to pay higher rent to stay in occupation

35
Q

How to change assumption that T has not carried out works that have diminished value

A

State ‘unless required by statute’

36
Q

Why is it unfair to assume any damage has been fully restored

A

Damage may not be + L benefits from potential breach

37
Q

What three things is it unfair NOT to disregard at RR

A

T’s occupation, goodwill and fitting out of premises

38
Q

How to change an assumption that any damage has been fully restored

A

Damage by Insured Risk to means of access/services enjoyed

39
Q

Why is unfair to assume T’s occupation of the premises at RR

A

No hypothetical T would make reasonable offer for occupied premises + sitting T would pay more

40
Q

Should L be able to serve notice requiring earlier RR?

A

No

41
Q

What is the frequency of RR called

A

Patterns

42
Q

Why is it unfair to disregard alienation restrictions in actual lease at RR

A

Lack of restrictions makes lease very attractive + does not reflect reality

43
Q

Why is it unfair to disregard reinstatement Os in actual lease

A

Onerous provision which T is required to comply w/

44
Q

Why is it unfair to NOT disregard T’s fitting out of the premises at RR

A

Increase in value is totally attributable to T’s efforts

45
Q

Why should surveyor NOT consider ‘best’ rent

A

Takes account of special bidders with particular interest.

46
Q

If lease is subject to SDLTand RR during first five years, what happens

A

Calculate NPV for whole term and then use higher rent for SDLT

47
Q

How to change a disregard of RR provisions

A

Remove completely.

48
Q

How to change a disregard of reinstatement Os

A

Remove completely

49
Q

What to do if L will not agree to change so that assumed that only T’s covenants have been complied with

A

State ‘all covenants complied w/’ but w/ caveat - ‘provided L not in persistent/material breach’ of covenants

50
Q

Why is it unfair to assume that T has benefit of PP/other consents

A

Makes lease much more attractive as PP valuable, whilst not reflecting actual state of lease

51
Q

What interest should T NOT pay once valuation complete and why

A

Default Interest Rate - not due to T’s default, so only pay at standard

52
Q

When are there absolutely no SDLT implications at RR

A

If lease subject to stamp duty

ACP (12 decks)

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