9.2 Contents of a Lease: Alterations, Change of Use, Term and Rent Flashcards
What does the Code suggest exercising break clause for T should be dependent on
Paying rent, vacating and no underleases
What is payment of rent presumed to be - advance or arrears
Arrears
What are the usual Quarter Days on which rent is payable
25 March, 24 June, 29 September, 25 December
What case determines what is an ‘improvement’ for 19(2) LTA
Lambert v Woolworth
What is an alternative way to avoid implied surrender if want to vary premises of current lease
Grant new lease for additional premises
What is an alternative way to avoid implied surrender if want to vary term of current lease
Grant reversional lease
When is it unlikely T can exercise break clause
If conditional on repair, as will never be to L’s satisfaction
What happens if Deed of Variation affects premises or term
Implied surrender + new lease granted
Part of LTA applying to alterations
19(2) LTA
Does 19(2) apply to fully qualified covenants?
No
19(3) LTA does what
Prohibits L from demanding payment for consent unless change of structure
Who do you check w/ to know if BR needed
Surveyor
Two cases applicable to 19(2) LTA
Lambert v Woolworth and Iqbal
What case determines what is ‘unreasonable’ for 19(2) LTA
Iqbal
When is a reversionary lease unnecesary
If ‘54 Act applies, as can hold over
What is a fully qualified covenant
L’s consent not to be unreasonably withheld or delayed
What are the four L’s
Lease, Law, Landlord’s title and LA consents
‘54 Act consequence of implied surrender
Contracting out procedure no longer relevant unless done again
When do 19(2) and 19(3) LTA apply
Qualified covenant
What two things must Deed of Variation not affect
Premises or Term
What happens if lease variation goes beyond extent of demise
Implied surrender
What is consent for alterations/use likely to be subject to
Reinstatement, reimbursing expenses, compensation for diminution, obtaining LA consents and carry out works to good standard w/ good materials
What is a long lease
Granted for premium w/ only nominal grant
When is a Licence for Use applicable
If change envisaged in the lease
What happens for alterations if there is also a mortgagee?
Must also consent
What is a qualified covenant
T shall not do X w/o L’s consent
If landlord consents to a change of use or alteration, what are the two methods of landlord giving his consent
Licence for Alteration/Use, or Deed of Variation
What should be considered when giving consent for change of use, in terms of previous use
If additional to previous use
What is the legal doctrine of waste
T can carry out any works that do not devalue the property
When will a reversionary lease take effect
At end of current lease
Three consequences of implied surrender
SDLT, LR and ‘54 Act
What part of LTA applies to changes of use
19(3) LTA
What happens if grace period expires for rent w/o payment
Charge interest from due date
What will T want to ensure after Licence/Deed given for Change of Use/Alteration, in terms of rent
To be disregarded on rent review to avoid paying twice
SDLT consequence of implied surrender
Pay again, as calculated on multiplier of length of term + annual rent
What can consent under 19(2) still be conditional on
Reasonable sum for diminution, reinstatement, and L’s reasonable expenses in granting consent
Two ways of giving consent to T for change of use/alteration
Licence for Alteration/Use or Deed of Variation
Cheat for remembering Quarter Days
Units number is same as number of letters in month
When can L charge payment for consent under 19(3)
If change of use involves structural alterations
Three things to consider for LA consents + L title
PP needed, BR required, and check OCs for any restrictions
Who can usually exercise break clause
Either or both
What is an absolute covenant
T shall not do X
What is the usual nature of a commercial lease term
Fixed
When is a deed of variation more likely
If permanent and long-term - most likely for CoU
Do the conditions of a fully qualified alteration covenant need to be reasonable?
Yes
19(2) has what effect
Turns qualified covenant into fully qualified
What is the usual grace period for paying rent
14/21 days
What happens if lease does not expressly prohibit alteratons
T can carry out any works subject to legal doctrine of waste
What is a likely expense for L if giving consent for alteration
Engaging surveyor to look over plans
Handy structure for advice on alterations and use
Four Ls
Who does an undertenant need to get consent from for alterations
Both immediate L (T) and T’s L
LR consequence of implied surrender
Close existing leasehold reg + open new one
Why will T negotiate ‘unreasonably withheld or delayed’
1 LTA does not apply, requiring reply within reasonable time
What law applies to alterations and use
19(2) and (3) LTA
What is it vital to check for consent to use/alteration, beyond landlord consent
Check OCs for RC/Lender, and check if PP/BR needed
What is a market lease
Paying monthly/quarterly rent
What is the normal condition for exercising break clause
T pays all rent
When does 19(2) apply
If alteration = improvement
What if the lease does not expressly prohibit change of use
T can use premises as he pleases
What covenants are not subject to reasonableness
Absolute alteration covenants and any use covenants
What CAN L charge under 19(3)
Reasonable sum for diminution and expenses