Grant of a lease or underlease Flashcards
Procedure: term over 7 years
Deed (intended as a deed, validly executed by landlord and delivered)
Registration
Procedure: term 3-7 years
Deed (intended as a deed, validly executed by landlord and delivered)
Overriding interest
Procedure: term 3 years or less
No formalities, providing:
- Lease takes effect in possession
- Is granted at market rent
- No premium is payable
Code for Leasing Business Premises
Mandatory requirements for RICS members
- Negotiations must be approached in a constructive and collaborative manner
- Party not represented by RICS member must be told about the existence of the code and recommended to seek professional advice
- Agreement of the terms of the lease must be set out in the heads of terms
Good practice
- Break clause should be conditional on tenant having paid the rent (not service charge and insurance rent)
- Repairing obligations should be appropriate to the length of the term
- Non-structural alterations: landlord should not prohibit these in a lease of whole
- Terrorism should be covered by insurance provided it’s available at a reasonable rate
Underlease term
Must be for a shorter term than the lease itself
Underlease procedure: license to underlet
The tenant’s solicitor will apply to the landlord for consent
The landlord’s solicitor will require the tenant’s solicitor to give an undertaking for costs before beginning work
Once the undertaking for costs is in place, the landlord’s solicitor will prepare the draft licence to underlet
Underlease procedure: underlease
The landlord’s solicitor will also want to see the draft underlease to ensure that it will comply with the tenant’s obligations under the lease
The underlease may be a full form lease, which will look similar to the tenant’s own lease, or it may be a lease by reference, which incorporates sections of the tenant’s lease by reference
