L&T and Leasing/Letting Flashcards
what is the difference between a lease and a licence
A lease grants a tenant exclusive possession of a property for a set period of time, while a licence gives a licensee permission to use a property for a specific purpose.
Lease:
Leases offer security of tenure, which means the tenant can’t be evicted without cause.
Licence:
Licences offer no security of tenure, and the landlord can end the agreement at any time.
What is the Landlord and Tenant Act 1927?
The Landlord and Tenant Act 1927 (LTA 1927) is a law that amends landlord and tenant law and provides compensation for tenants who improve business premises. It also gives landlords the right to be reimbursed for increased taxes, rates, and insurance premiums.
What is the Landlord and Tenant Act 1954?
The Landlord and Tenant Act 1954 is a law that gives business tenants the right to renew their tenancies. The Act also provides security of tenure for residential tenants and sub-tenants.
What is the Landlord and Tenant (Covenants) Act 1995?
Covered assignment of leases and introduced Authorized Guarantee Agreement (AGA).
S17 notice – allowing landlord to chase assignor for assignee’s debts.
What is the Landlord and Tenant Act 1988?
The Landlord and Tenant Act 1988 is a UK law that primarily focuses on imposing statutory duties on landlords regarding their obligation to reasonably respond to tenant requests for consent to assign (transfer) or sublet (underlet) a leased property, essentially requiring landlords to act within a reasonable timeframe when considering such requests from tenants
Tenancy at will
A form of licence created by written agreement for an unspecified time in which the landlord may evict the tenant at any time. Not a legal interest in the land, with no renewal right.
What is Grade A office space? what are 7 things that classify it as Grade A?
A “Grade A” office space is considered the highest quality commercial office space.
- Full access raised floors with floor boxes
- Carpeting
- Approximate ceiling height of 2.6m
- Suspended ceiling
- Airconditioning
- Double glazed windows
- passenger lifts
- maximum depht of 12-15m to allow for natural light
- Typical car parking ratios of approx 1 space per 200sqft
What is security of tenure?
Security of tenure is a legal right that gives tenants the right to stay in their property after their lease ends. It’s a statutory right in the UK, granted by the Landlord and Tenant Act 1954
What is a Section 23?
Business tenancy meaning (BOT): business purposes, occupation, formal tenancy
What is a Section 24?
Known as continuation of tenancy, Security of tenure (applies unless S38/outside Act agreement is made, always specified). Tenant is said to be holding over under the expired lease.
What is a Section 25?
Landlord termination (6 months notice)
What is a Hostile S25 notice?
A standard “S25 notice” is a formal notification from a landlord to a tenant regarding the renewal of a lease, potentially proposing new terms, while a “hostile S25 notice” is a specific type of S25 notice where the landlord explicitly states their intention to not renew the lease and actively oppose the tenant’s continued occupancy
What is typically included in a S25 Notice?
- Name and address of landlord and tenant
- Address of the property
- Notice of the date to end the tenancy (A “hostile” or “friendly” notice)
- Confirmation whether a new lease is to be opposed or granted
- Confirmation of date by which the tenant must ask the court for a new tenancy
- Landlords proposals for the new tenancy to include proposed rent if friendly notice
- If the landlord opposes the new tenancy, the grounds for opposition must be stated, which cannot be later amended.
What is a Section 26?
Tenant notice to seek new lease, (renewal) (6 months notice, cannot be served if S25 already done by LL), must state the tenants proposals for a new lease to include proposed rent.
*if the landlord opposes this, a counter notice must be served within 2 months
What is a Section 27?
Tenant termination (3 months notice) (Cannot vacate before lease end)
What is a Section 28?
Renewal by agreement (unprotected until new lease is in place)
What is a Section 29?
court order to grant new/terminate tenancy
What is a Section 30?
Landlord grounds for opposition (response within 2 months of S26 notice, if objecting):
a. Failure to repair
b. Persistent delay in rent payments
c. Other substantial breach – refusing access, planning breaches, unauthorized alterations
d. Suitable alternative accommodation
e. Uneconomic subdivision (sub-letting part at lower than market rent)
f. Demolition and/or reconstruction/redevelopment - If for redevelopment, landlord must provide firm proof i.e. funding, planning etc.
g. Intention to re-occupy (5 years ownership minimum)
What is Section 38A of the Act
S38A sets out the procedure which must be followed to contract outside the Act
What are some reasons a letting would be contracted outside the security of tenure provisions of the Landlord and Tenant Act 1954?
- A requirement of a headlease to grant any subletting outside the Act
- The landlord will want to re-occupy the property in due course
- The landlord wishes to redevelop the property at the lease end
- the rent may be lower
- The landlord wants future flexibility
What is the process to have a lease contracted outside of the Act?
- The landlord is required to serve notice on the prospective tenant, warning them that the proposed lease will not be protected. This is known as a health warning.
- The proposed tenant must then make a declaration in response, confirming that they have recieved the notice and accepts its terms.
- There is then a 14 day cooling off period before then committing to the lease
- This process must be completed before the lease is signed
What is a Section 40
Landlord request for information (last two years of the term)
What is a section 17 Notice?
Notice served upon a guarantor within 6 months of the tenant defaulting, to require the tenant who entered into the Authorised Guarantee Agreement (AGA) to pay the arrears.
What is the difference between and assignment and a sub-lease?
Upon assignment the new tenant (T2) has a direct relationship with the landlord. Where as when sub-letting, the new sub-tenant has a direct relationship with the original tenant, and pays them rent who in turn pays the landlord.
