L&T Level 1 2023 Flashcards
LTA 1954
The Landlord and Tenant Act 1954, part II gives business teants the right to a lease renewal at the end of the contractoral term of the lease and the ability to remain in occupation.
LTA 1927
An Act to provide for the payment of compensation for improvements and goodwill to tenants of premises used for business purposes, or the grant of a new lease in lieu thereof; and to amend the law of landlord and tenant.
L&T (Covenants) Act 1995
Assignment
An Act to make provision for persons bound by covenants of a tenancy to be released from such covenants on the assignment of the tenancy, and to make other provision with respect to rights and liabilities arising under such covenants; to restrict in certain circumstances the operation of rights of re-entry, forfeiture and disclaimer; and for connected purposes.
LTA 1988
Assigning or subletting consent
An Act to make new provision for imposing statutory duties in connection with covenants in tenancies against assigning, underletting, charging or parting with the possession of premises without consent.
Tell me about a key lease clause you are aware of?
Alienation, the ability or restriction on transferring or subletting of the whole or part of the property to another. If the lease is silint on this point the tenant has the ability to transfer or sublet.
What is alienation?
A covenant in a lease determining whether the tenant can alienate the land, that is, whether there is any absolute prohibition or restriction against the tenant charging, assigning, underletting or parting with possession of the demised premises.
Tell me about your understanding of the Code for Leasing Business Premises.
Its now a professional standard.
The objective is to improve the quality and fairness of negotiations on lease terms and to promote the issue of comprehensive heads of terms that should make the legal drafting process more efficient.
Tell me about how you would summarise a lease and what terms you would be looking out for.
If I was summerising a lease I would be looking at;
- Secuirty of Tenure
- Length of Term
- Rent review Provisions
- Alienation
- Assumptions and disregards in the rent review clause
- Allowed Use
- Service charges
- Deposit or guarantor
- Date of the lease
- Repairing obligations (FRI or other)
- Strength of Covenant
- Break Clauses
What is the Regulatory Reform (Business Tenancies) (England & Wales) Order 2003?
The Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 sets the procedure for the Landlord and Tenant to contract out of the security of tenure provisions of the LTA 1954.
What is the role of an expert witness?
An expert witness’s primary duty is to help the Court or tribunal reach an informed decision by providing an impartial expert opinion on matters which are in dispute. An expert witness is not an adviser for any party to proceedings.
How does an advocate differ from an expert witness?
Your primary duty as an expert witness is not to a client but to the tribunal, the Advocate represents their client
What is an arbitrator?
A RICS arbitrator is a chartered surveyor or another qualified professional who is appointed by RICS to act as an arbitrator in disputes related to the built environment.
What is an independant expert?
Appointed by the president of the RICS and has a detailed knowledge of the market as a valuer. Details in RICS GN Independent Expert Determination 2016.
How does an arbitrator and expert’s roles differ?
The Arbitrator and Experts roles differ as the arbitrator is there to conduct the arbitration and are trained as such. The expert is there to give impartial expert opinion.
How would you establish the relevant third party procedure for a rent review?
Read the lease and the relevant rent review clause within.
How much does it cost to submit an RICS DRS application?
£425
What is the difference between the hypothetical lease at a rent review and lease renewal?
Modern leases generally set out the meaning of market rent in detail, by means of the theory of the grant of a hypothetical lease taking place in the open market. Under this type of clause, the valuer is required to assess the rent that hypothetically would be obtained if the premises were being let to a new tenant at the review date.
What is PACT?
PACT is a process where the determination of all or some of the terms of a renewal lease is (with the consent of both parties) ‘delegated’ to an independent third party who may act either as an arbitrator or as an independent expert.
What is a Calderbank offer?
A Calderbank offer which is made without prejudice save as to costs is an attemt to settle the dipute that cannot be disclosed until the dispute has been resolved but can be used to acertain if some or all of the costs should be awarded to one of the parties. This would be the case if an arbitrators decision was less that the offer then the party who didnt accept the offer could be liable for all or some of the costs. It comes from the case of Calderbank v Calderbank 1976.
What is a break clause?
A break clause is a set time in which a lease can be terminated which would be included within the terms of the lease.
Tell me about your understanding of notices under the LTA 1954.
The landlord and Tenant Act 1954 has specific forms by which notices are to be served.
S.25 Notice - Opposing or offering a new lease.
S. 26 Request - by tenant wanting a new lease.
S.27 - Notice the tenant wanting to end the lease
S.40 Notice - parties wanting information on the parties to the lease
Tell me about the method of serving the notice?
The Landlord and Tenant Act 1954 (LTA 1954), section 66(4), provides that section 23 of the Landlord and Tenant Act 1927 (LTA 1927) shall apply to any notices required to be served under the LTA 1954. Section 23(1) of the LTA 1927 provides that a notice may be served in a number of ways, including:
personal service
leaving it at the recipient’s last known place of abode
sending it by registered post or recorded delivery
Although section 23 of the LTA 1927 expressly refers to the above modes of service, it is widely accepted that the provision is permissive, rather than mandatory; a notice may be served by one of the three methods detailed in section 23(1), it does not say a notice shall be served by those methods.
It is common in commercial leases to see the express incorporation of Section 196 of the Law of Property Act 1925 (“s196”).
Tell me about your understanding of interim rent.
An interim rent is usually made in the course of a lease renewal proceedings in court.
Tell me about your understanding of the Court procedure at lease renewal.
If the landlord agrees to a new lease, either party can apply to the court for an order granting a new lease under section 24 of the landlord and tenant act 1954. The application must be made within the time limit specified in the section 25 notice or the section 26 request.
If the landlord opposes the grant of a new lease, they must serve a counter notice on the tenant within two months of receiving a section 26 request stating the grounds for their opposition under section 30 of the act. If landlord opposes, either party can apply to the court for determination under section 29.
What are the Civil Procedure Rules?
If either party applies to court for a new lease or for termination of tenancy, they must follow Civil Procedure Rule 56 (CPR 56), which sets out the requirements for starting and conducting such claims. The claim form must contain certain information and be accompanied by evidence. The defendant must file an acknowledgment of service and a defence within specified time limits. The court may order a trial or a hearing to decide on any disputed issues.
What are the Jackson Reforms?
The Jackson reforms are a set of changes to the civil litigation costs system in England and Wales, which were implemented in April 2013. One of the reforms was the new test of proportionality for costs, which means that costs incurred in litigation must be proportionate to the value, importance and complexity of the case, and not just reasonable and necessary.
What is a Part 36 offer?
A Part 36 offer is a form of offer used to settle all or part of a dispute between parties to civil litigation, which is governed by Part 36 of the Civil Procedure Rules (CPR). It is a method by which claimants and defendants can settle their claim without need for a trial or for the court to be involved.
Can you serve a Calderbank offer at a lease renewal?
Yes a Calderbank save as to costs offer is typical when wither party has applied to court to determin the terms of the new lease.
What does Section 34 relate to in a lease renewal?
Section 34 gives the court the power to determine the level of rent when the parties have not been able to reach an agreement on that aspect of a renewal lease.
What is compensation for disturbance?
Under section 37 of the 1954 Act, the tenant is entitled to statutory financial compensation for the disturbance to their security of tenure rights where the landlord relies on one or more of the no-fault grounds of opposition including:
Ground (e) – where the landlord requires possession of the holding for the purpose of letting or otherwise disposing of the property as a whole.
Ground (f) – where the landlord intends to demolish or reconstruct the premises comprised in the holding, or a substantial part of them, or to carry out substantial work of construction.
Ground (g) – where the landlord intends to occupy the holding for the purposes, or partly for the purposes of, a business to be carried on by him, or as his residence.
The statutory compensation is paid when the tenant vacates the property, whether it is voluntarily or following a Court order. The amount payable is dependent on the rateable value of the property and the length of time the tenant (and any predecessor in title carrying on the same business) has been in occupation of the property.
The date that a landlord serves its opposed section 25 notice or serves a counternotice to a section 26 request (opposing renewal) fixes the date on which the rateable value is determined for calculating statutory compensation.
What does Section 18 mean in relation to the LTA 1927?
Section 18 of the Landlord and tenant Act 1927 relates to dilapidations claims and the amount of damages that can be awarded for breach of repairing obligations.
Why would you contract out a lease?
To contract out of sections 24 to 28 of the Landlord and Tenant Act 1954 is a way of not giving the business tenant security of tenure and therefore the lease can be ended without following the statutory provisions in the act.
How would you contract out a lease?
A lease can be contracted out of sections 24 to 28 of the Landlord and Tenant Act 1954 by serving a warning notice on the tenant stating that the lease they are about to enter into is contracted out of those sections of the act. They would then either have 14 days cooling off period before the lease is entered into or a statutory decleration can be signed by a solicitor who will advise them of what they are signing up to.
Tell me about the LTA 1954 in relation to contracting out a lease.
The 1954 Act does not apply to tenancies that have been ‘contracted out’. That is, under section 38A, the landlord and tenant can agree to exclude the tenancy (provided that it is not a periodic tenancy) from the security of tenure provisions of the 1954 Act.
What are the Section 30 grounds under the LTA 1954?
The grounds are:
paragraph (a): failure to comply with obligations to repair and maintain
paragraph (b): persistent delay in paying rent
paragraph (c): other substantial breaches or other reasons
paragraph (d): provision of suitable alternative accommodation
paragraph (e): landlord wishes to let the property as a whole
paragraph (f): landlord intends to demolish or reconstruct and
paragraph (g): landlord intends to occupy the premises.
What time limits apply in relation to lease renewal notices?
A lease renewal notice and request must be no more than 12 months and no less than 6 months before the lease end date.
