L&T 1 Flashcards
What is the basic difference between a lease renewal and a rent review?
A rent review is a function as stated within the lease
A lease renewal is a statutory procedure as per the Landlord & Tenant Act 1954
To what tenancies does the 1954 act apply?
Premises occupied for business purposes.
When was the 1954 act (part 2) last amended?
1st June 2004
Name the tenancies that the 1954 act does not apply?
Section 43
- Agricultural holdings
- mining
- residential
- Tenancies not exceeding 6 months
What is a Section 25 Notice?
A notice that is served by the LL on the Tenant to terminate a tenancy within the act
When can a landlord serve a section 25 notice?
Between 12 & 6 months before the end of a contractual term or any time thereafter but still with 6 months notice.
What must a landlord’s Section 25 Notice contain?
- Landlord, Tenant
- Property conprised
- health warning
- Date
- Specify date of termination
- friendly or hostile
(section 30 is the grounds for not providing a new tenancy)
What advice would you give to a landlord client in respect of a lease renewal where a property is significantly over-rented?
Depends on situation:
- Do nothing. Let tenant take initiative, hold over lease and take advantage of overrent.
- S25. Would decrease rent however secures income for longer period. Reduces risk of vacancy costs
When is the best time to serve the Section 25 notice: 12 months or 6 months before lease expiry?
Depends on client intentions:
Notice at 12 months
- you have time on your hands, 25 notice - looking to vacate and then will get them to make a decision and minimise the void.
- Disadvantage = unsure rent in the next 12 months and negotiation with uncertainty.
Why would a landlord give 12 months’ notice when he could give 6 months’?
- Minimise risk of void property
- if the property is overrented and you can maximise the time with that income
What action should a landlord take if he/she requires possession of a property at the end of a lease?
Object to any new tenancy under section 30 of the landlord & tenant 1954 act
What can Landlord do if he cannot get a response from T to his friendly Section 25 Notice?
Send them a letter saying that if they have not replied within x date we will apply to the courts to determine a new lease and you can pay all of the costs.
tenant will lose security of tenure
What advice would you give to a tenant when a landlord’s Section 25 Notice is due to expire in two weeks’ times and an agreement for a new lease has not yet been agreed?
- Request time extension from landlord
- If not granted, apply to the courts (S29A) before the end of the notice. (if not completed by the end of the notice, lose security of tenure)
Name the grounds under Section 30(1) of the Landlord and Tenant Act 1954 under which a landlord can obtain possession.
- Failed to undertake repairs
- Tenant has consistently delayed paying rent
- Tenant is in substantial breach of other continent
- LL offers suitable alternative accommodation
- Tenancy created by sub let and building let as whole would produce higher value than separate lettings
- LL wants to demolish/refub and cannot do so without possession.
- LL occupy for own purpose
A lease of a shop property is due to expire in 12 months’ time. You are instructed for the first time by the landlord to negotiate a new lease with the tenant. Explain how you would deal with this instruction.
- Agree terms of engagement
- Ask for the lease
- Is it inside or outside
- visit the site, are there any breaches of covenant = no
- Agree to serve section 25
- Conduct the necessary negotiations
In what circumstances is a tenant entitled to compensation when a landlord successfully opposes a new lease under the 1954 Act?
Under S37 tenant is applicable for compensation if objected a new lease under non fault grounds of section 30(1)
1x rentable value > 14 years
2x rentable value < 14 years
How is tenant’s compensation assessed under the 1954 Act?
Section 37
2x rent value if great than 14 years
1x rent value if less than 14 years
Explain the power that the Court has in ordering a new lease.
Court under S32-35 can grant a lease (no longer than 15 years) and determine Property comprised, Length of lease, Rent, other terms and interim Rent
What do you understand a Section 34 rent to be?
the rent that a property may reasonably be expected to let at in the open market by willing lessor and lessee DISREGARDING:
1.previous occupation,
2.Any goodwill,
3. improvements carried out by Tenant.
4. Licences belonging to the tenant.
What do you understand an Interim Rent to be?
This would be the market rent at the expiry of the lease term.
Both parties would agree the market rent.
Either landlord or tenant can apply to court for an interim rent. (S24A)
How is the Interim Rent assessed?
The rent payable under the new lease
unless either party can show otherwise under S24A
In what circumstances would you recommend a tenant to serve a Section 26 Notice?
Property is over rented or tenant wants security of fixed terms
Explain when tenant’s improvements are included at lease renewal.
Improvements are to be disregarded if:
- Carried out by tenant during the old tenancy
- over 21 year old
- specified in the lease obligations
Explain what action a tenant should take if there are 6 months of the lease remaining and he/she wants to vacate at expiry. The landlord has not served a Section 25 Notice.
serve a section 27 notice at least 3 months in advance or just hand the keys back on expiry
