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prop > 8. Grant + contents of lease > Flashcards

8. Grant + contents of lease Flashcards

1
Q

What to check in LL’s official copies?

A

See how restrictive/flexible the lease is

How broad is the user clause?

What about the repair clause?

What is the alteration clause?

Assumptions + disregards

Lease dictates extent to which you can freely use the properly

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2
Q

report on title (compared to report on title for freehold)

A

SAME (reports on enquiries and searches and title)

BUT ALSO, 2 key differences:

ONE - agreement for lease (discusses key terms)

TWO - summary of leasehold obligations

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3
Q

three elements of repair in a commercial lease

A

ONE - repair
TWO - replace
THREE - decorate

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4
Q

consider repair obligations in conjunction with…

A
  1. definition of ‘premises’
  2. LL’s repair obligations and service charge provisions
  3. insurance provisions
  4. alterations provisions
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5
Q

LL’s objective for repair clauses

A

CLEAR RENT - so ensure T pays/reimburses L for running costs

CAPITAL VALUE TO RISE - so make sure T is under obligation to maintain premises adequately

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6
Q

T’s objective for repair clauses

A

REPAIR ONLY OCCUPIED AREAS - so make sure “Premises” defined to only include areas T anticipates to repair

AVOID LARGE EXPENDITURE - so ensure LL acts reasonably in repair and management of the rest of the building

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7
Q

Recommendation 7

A

Code for REPAIR
- recommends ‘maintain’ (so T only obliged to give premises back at the end of the lease in same condition)

(LL still prefer ‘keep’ because it means ‘put and keep’)

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8
Q

AMENDING REPAIR CLAUSES:

Meaning of ‘repair’

A

LL: ‘keep’ / ‘put and keep’

T: ‘maintain’ or ‘no obligation to put premises in a better state of repair than evidenced by the schedule of condition annexed to the lease’

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9
Q

AMENDING REPAIR CLAUSES:

Standard of repair

A

LL: ‘renew’, ‘replace and rebuild’

T: ‘fair wear and tear’

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10
Q

AMENDING REPAIR CLAUSES:

fixtures and fittings

A

T: ONLY if ‘beyond economic repair’ and ‘substantially similar’

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11
Q

AMENDING REPAIR CLAUSES:

Damage by insured risk

A

T:
- not liable to repair damage caused by ‘insured risk’

  • reinstatement clause (and shortfall deal with too)

LL:
- agree BUT exception where insurers will not pay out because of an act or omission of T

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12
Q

AMENDING REPAIR CLAUSES:

Latent and inherent defects

A

T: exclude from its repairing liability and any obligation arising from an inherent defect

+ requires LL to assume responsibility

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13
Q

AMENDING REPAIR CLAUSES:

Decoration

A

LL: T decorate interior every 5 years and exterior every 3 years (if lease of a whole)

T: no veto over colours used and if every 2 years = not acceptable (amend)

T: NOT REQUIRED TO REDECORATE IN LAST YEAR OF TERM if redecorated within the previous 12 months

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14
Q

AMENDING REPAIR CLAUSES:

Reasonably

A

T: ‘acting reasonably’, and costs should be ‘reasonable and proper’

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15
Q

AMENDING REPAIR CLAUSES:

Covenant to ‘yield up’ in repair

A

LL: if T does not ensure premises is in adequate repair at end of term, serve schedule of dilapidations on T and draft yield up clause so T has to yield up to satisfaction of LL

T: make sure LL’s surveyor acts ‘reasonably’

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16
Q

Recommendation 9

A

INSSURANCE

policy terms should be fair and reasonable and represent good value for money

17
Q

common in commercial leases for insurance to be…

A

LL to insure the whole building and

LL to recover a proportion of the cost from each T

T will want insurance to be effective with reputable insurer and ask to see a copy of insurance policy prior to grant of lease (to check insurance is good)

18
Q

definition of ‘insured risk’

A

LL and T will want a comprehensive list of risks that will be insured against (and LL will want sweep up clause at the end - other risks as LL may from time to time reasonably consider necessary)

typical insured risk:

  • fire
  • flood
  • riot
  • storm
  • burst pipes
  • earthquake

(controversial = flooding and terrorism)

19
Q

rent abatement/suspension in event of insured risk

A

T: wants rent suspension clause ‘if damage by an insured risk has caused the premises, or access to them, to be unfit for use’

T: wants this to apply to all sums reserved as rent (incl. service charge and insurance rent)

LL: ensure clause contains obligations on LL to insure for and recover cost from T for LOSS OF RENT for a certain amount of time

20
Q

reinstatement clause (insruance)

A

T: insist on a covenant by LL to reinstate and make up any shortfall in insurance monies out of its own monies if there is damage by Insured Risk

21
Q

right to terminate lease if reinstatment impossible after expiry of specified period

A

T may want a right to terminate the lease if reinstatement impossible after expiry of a specified period

LL - want this period to be as long as possible

T - want period to be no longer than duration of rent suspension

22
Q

EXAM Q: is rent still payable after damage caused by X?

A
  1. check insurance clause (has LL insured against X)
  2. check for rent abatement/suspension clause (when does it apply, what does it cover, how long for)
  3. T should obtain copy of insurance policy to ensure it observes the conditons
23
Q

EXAM Q: who is responsible for carrying out repairs (after damage caused by X)

A
  1. check repair clause (obligation on T to repair Premsies excludes disrepair caused by Insured Risk)
  2. Check definitions (what does Insured Risks cover)
  3. Check reinstatment clause (does L have to do it, when, who makes up shortfall)
  4. Check for termination clause
24
Q

FORFEITURE/RE-ENTRY

A

only available as remedy if LEASE EXPRESSLY reserves (not automatic)

Remedy brings lease to an end before its expiry date + removes T from premises

25
Q

S.146 NOTICE (before exercising right to forfeiture)

A

ONE – Set out breach

TWO – Require it to be remedied within a reasonable time (if capable of remedy – if alienation/use for immoral purpose, can’t remedy – if breach of repair, can remedy) – state if can or not in Q

THREE – claim compensation required

26
Q

NON-PAYMENT OF RENT: REMEDIES

A

Forfeiture (no s.146)

rent deposit

CRAR (for rent, vat, interest - only if at least 7 days rent is owed)

action in debt

27
Q

REPAIR: remedies

A

forfeiture (s.146 and special s.146 if granted with at least 7 years and at least 3 years left to run)

rent deposit

action for damages (still need s.146) - s.18 LTA cap

SP (rainbow estates v tokenhold) - unlikely

self-help (jervis v harris clause)

28
Q

ALL OTHER BREACHES: remedies

A

forfeiture (s.146 notice)

rent deposit

action for damages

SP (unlikely)

injunction

29
Q

LL covenants

A
  1. Quiet enjoyment – if T pays rent and complies with obligations, T enjoys without lawful interruption by L
  2. Reinstatement – reinstate premises if damaged
  3. Responsibility to insure
  4. Provide services and maintain the building – keep common parts lit, clean, tidy + repair obligations
  5. Provide vacant possession

if a right of way is required to access building, T will also need it too

30
Q

“Demise”

A

internal envelope

excludes:
- common parts
- structural and external parts

the extent of property T has a right to

31
Q

document for grant of a lease

A

contract: agreement for lease

completion document: lease itself

possible to go STRAIGHT to lease

32
Q

engrossment

A

LL signs original

T signs counterpart

33
Q

pre-completion search

A

if whole prop: OS1

if part prop: OS2

34
Q

SDLT for lease

A

calculated based on
LENGTH OF TERM
AMOUNT OF RENT
PREMIUMS paid

35
Q

registration

A

AFTER 13 October 2003:
register lease if more than 7 years

(prior to 13 Oct 2003 - 21 years)

36
Q

kinds of leasehold title avaliable

A

Absolute – best title

Good leasehold – LL’s title not deduced at time lease granted

Possessory – granted where T is in occupation but no paperwork exists

Qualified – no other title can be granted

LR then gives T a ‘title information document’ (T has its own Official Copies)

37
Q

structure of lease

A
  1. parties, date, definitions, interpretation provisions
  2. demise and rents
  3. T’s covenants
  4. L’s covenants
  5. Guarentor’s covenants
  6. Provisos, agreements, declarations
  7. rights granted
  8. rights expected and reserved
  9. other provisions
  10. execution clause

prop (12 decks)

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