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APC > L & T - Rent Reviews > Flashcards

L & T - Rent Reviews Flashcards

1
Q

Name some of the information required at the start of an instruction (RR)

A
  • TOE
  • Clients strategy and objectives
  • Copy of existing lease, lease plans and D of V
  • Copy of any licences
  • Copy of any previous RRMs
  • Contact details of tenant
  • Copy of property Management file
  • Comparable evidence held by the client.
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2
Q

What should you check before agreeing TOE?

A

1) Competence
2) Conflicts of Interest
3) Complaints handling procedure

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3
Q

What are some bases of fee in RR/lease renewal?

A
  • % of new rent agreed
  • % of the saving made from the quoting rent
  • A fixed fee
  • An hourly rent
  • An incentive fee
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4
Q

What are the actions required by the surveyor in a lease renewal/RR?

A
  • Conflict of Interest and competency check
  • Agree TOE
  • Obtain understanding of clients objectives
  • Obtain information from client (as above)
  • Read the lease! - RR clause/ inside the act? / any renewal terms
  • Is time is of the essence in RR ?
  • Inspect and Measure
  • Undertake a MR valuation
  • Prepare a report to client
  • Agree strategy with client
  • Check any notice received is valid
  • Conclude negotiations and document:
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5
Q

What are the three main difference between a lease and a licence?

A
  1. A lease provides an occupier with an estate in the land
  2. A lease can be assigned
  3. A lease cannot be terminated until it expires (or break clause)
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6
Q

What 4 requirements must a lease have?

A
  1. Exclusive occupation
  2. Payment of rent
  3. Duration for a specific term
  4. If more than 3 years must be in writing, signed and registered as a deed
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7
Q

What is the case law for lease / licence?

A

Street v Mountford = it does not matter what the document calls itself, if in all other respects the document acts like a lease then it counts as a lease

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8
Q

What is a tenancy at Will?

A

Tenancy at Will – licence created by written agreement for an unspecified time in which the landlord may evict the tenant.
No legal interest and no renewal right. (often used for allowing tenant early entry for fit out works)

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9
Q

What is adverse possession?

A

Adverse Possession – process by which the person who is not the legal owner can become the legal owner by possession of the land for a specified period of time. If the land is registered and there is 12 yrs possession before 2003 then the claim can be successful, if it is since 2003 then only 10 yrs are needed.

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10
Q

What is a Wayleave?

A

temporary right and received an annual payment. E.g. provides a right for electricity company to install and retain apparatus. It is personal to the company and cannot be automatically transferred

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11
Q

What is an easement?

A

permanent right and receives a capital payment. It can be registered at the Land registry. Allows a prescriptive right of way

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12
Q

What is an assignment and how are old tenants still liable?

A

The tenants disposal of whole lease. Pre 1996 the previous tenant had privity of contract which meant the old tenant is automatically still liable. Post 1996 (intro’d by L&T (covenants) act 1995 the landlord can request an AGA (Authorised Guarantee Agreement).

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13
Q

What is a sublease?

A

a subsidiary lease created. Both need permission, not unreasonably withheld

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14
Q

What are 4 usual assumptions of a RR?

A
  1. Available to let on open market by willing tenant and a willing landlord for a term of years as stated
  2. Property is fit and available for immediate occupation and use
  3. All covenants observed by Landlord and Tenant
  4. Property may be used for purpose set out in lease.
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15
Q

What are 3 usual disregards of a RR?

A
  1. Any effect of goodwill on tenants occupation
  2. Ignore goodwill attached to the property
  3. Tenants improvements if landlord consent has been granted for the works.
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16
Q

What is Time of the Essance and give an example of Case Law.

A

Time is of the Essence means there is a specific time limit for which the right needs to be exercised, otherwise it is lost.

Bello v Ideal View (2008) related to a lease where the landlord had not initiated the RR for 13yrs. The court held that time was not of the essence and the RR could proceed.

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17
Q

What is Notional Term in a RR and give an example of Case Law.

A

Notional Term = length of term to be valued – if silent assume that it is the remainder of the term. (Canary Wharf Investments v Telegraph Ltd, 2003)

18
Q

Can you use post dated evidence at a RR?

A

the courts have held this is admissible provided it supports circumstances which could have been known about at the effective rent. A timeline can be used to devalue post-dated evidence.

19
Q

What is a Headline RR clause?

A

when the basis of valuation cannot consider any incentives agreed when analysing a comparable of a letting to arrive at net effective rent. Normally not agreed.

20
Q

What is the Hierarchy of Evidence?

A
  1. Open Market Letting
  2. Lease Renewal
  3. Rent Review
  4. Independent/Arbitrator/Court determinations
  5. Sale and Leasebacks
  6. Lease re-gear
21
Q

What are the benefits of a Calderbank?

A

Can achieve an early resolution and prevent costs escalating

Tool for influencing costs and negotiations in RR as the losing party will have to pay the other side’s recoverable costs

Avoids the equal awarding of costs

22
Q

What must a Calderbank include/not include?

A

Letter must be headed ‘without prejudice save as to costs’ and not marked ‘subject to contract’

Letter must set out all the terms to settle the dispute and a time limit in which the other party must accept the offer. ( often 21 days)

Must be a genuine offer to settle and not simply used as a mechanism to influence costs/ pressure the other party

23
Q

What are the 4 recommendations for RR in the Code for Leasing Business premises?

A
  1. Review clause should be clear
  2. Headline RR clauses should not be used
  3. Landlords should, on request, offer proposed option for RR based on a risk-adjusted basis. Where a landlord is unable to offer alternatives, a reason should be given.
  4. Leases should allow both the landlord and tenant to start the rent review process.
24
Q

What is the RICS Note for Expert Determination?

A

RICS Guidance Note on Independent Expert Determination 2016

25
Q

What is the Guidance note for Abitrators and what is the statue governing?

A

‘Surveyors acting as arbitrators in commercial property RR’s’ 2013’ and Arbitration Act 2016

26
Q

What are the grounds and time limit for Appealing an arbitration to the High Court?

A

28 days

  1. A challenge to the tribunals jurisdiction
  2. A point of law
  3. Serious irregularity.
27
Q

What is disclosure?

A

Section 34 of Arbitration Act: an arbitrator may order the disclosure of documents by the parties to the arbitration.

It entitles a party to a RR to obtain details of the other sides rental evidence

28
Q

What are the differences between an Arbitrator and Expert Witness? EVIDENCE

A

Arbitrator must use only the evidence provided, Expert has duty of investigation

29
Q

What are the differences between an Arbitrator and Expert Witness? APPEAL

A

Arbitrator - right to appeal to High Court within 28 days on 3 grounds (appeal the tribunal’s jurisdiction, on the basis of law, serious irregularity. )
Expert - no right to appeal

30
Q

What are the differences between an Arbitrator and Expert Witness? NEGLIGENCE

A

Arbitrator - cannot be liable for negligence

Expert - liable for negligence

31
Q

What are the differences between an Arbitrator and Expert Witness? DISCLOSURE

A

A: can award disclosure
E: no powers of disclosure

32
Q

What are the differences between an Arbitrator and Expert Witness? LAW

A

A: Arbitration Act 1996
E: None

33
Q

What are the differences between an Arbitrator and Expert Witness? OUTCOME

A

A: Award
E: Determination

34
Q

What are the differences between an Arbitrator and Expert Witness? RICS GUIDANCE NOTES

A

A: RICS Guidance Note on Surveyors acting as arbitrators in commercial property RR’s’ 2013
E: RICS Guidance Note on Independent Expert Determination 2016

35
Q

What are the differences between an Arbitrator and Expert Witness? COSTS

A

A: Power to award all costs
E: Power to award only her costs.

36
Q

Name the key areas of difference between Arbitration and Expert Witnesses

A

Evidence, Appeal, Negligence, Disclosure, Law, Outcome, RICS Guidance Notes, Costs.

ELO DAN RC

37
Q

What is an advocate?

A

Represents their client in a hearing or in Court
Duty to act in best interest of client
Needs only to disclose what they want to disclose
Must act with integrity

38
Q

What is the RICS note for Advocates?

A

RICS Practice Statement ‘Surveyors acting as Advocates’ 2008

39
Q

What are the 4 key points relating to Expert Witnesses?

A
  1. Must be impartial and objective
  2. Duty is to the court, not the client
  3. Evidence must be their independent work
  4. Must believe the facts upon which they rely are complete and true
40
Q

What is the RICS note for Expert Witnesses?

A

RICS Practice Statement and Guidance Note ‘Surveyors Acting as Expert Witnesses (4th edition) 2014

41
Q

What are the 5 key contents of a RRM?

A
  1. Name of Landlord and Tenant
  2. Date of lease and RR
  3. New passing rent
  4. Address of the property
  5. Signature and Date of both parties
42
Q

What are the 4 ways a RR can be documented?

A
  1. RRM
  2. Expert Witness Determination
  3. Arbitration Award
  4. Written acceptance of Calderbank

APC (17 decks)

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