Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

AM AAPPCC > L&T Subs > Flashcards

L&T Subs Flashcards

1
Q

What does Without Prejudice mean?

A

Any statements made during the process of negotiations cannot be put before a third party

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What does without Prejudice Save as to Costs mean?

A

Statements made during the course of negotiations cannot be put before a third party apart from when determining costs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

You say you understand the process of serving notices, What is the process of serving notices?

A

The main notices that a landlord would serve are section 25 non-hostile and a section 25 hostile. These would be served when the tenant wanted to renew the lease or get the tenant out.

A tenant would serve a section 26 notice in order to renew their tenancy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the grounds that a landlord must satisfy?

A

S30 LTA 1954: 7 grounds

a) persistent delay in paying rent
b) breach of a repair cov
c) breach of any covenant
d) suitable accommodation
e) uneconomic subdivision
f) demolition
g) re-occupation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Talk me through your rent review in Borough

A
  1. Instructed by client (tenant) to conduct RR
  2. CIT
  3. Requested the lease - time not of the essence.
  4. Objectives - nil increase
  5. Inspection - secondary stock, carpeted floors, 1,000 sq ft
  6. Measured on both an NIA and IMPS basis.
  7. Researched Market Rent on a net effective basis.
  8. Produced a report
  9. Commenced negotiations
  10. Rent review memo drafted and signed.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Why did you do it on a Net effective basis?

Borough

A

To see what Tenants are actually paying in the market.

Tells you in RR Clause:
‘Assumed the T has had benefit of rent free period, minus fitout.’

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How do you calculated a Net Effective Rent?

Borough Market

A

[ Rent * (Term-rent free)] / term

Taking into consideration 3 months for fitout

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What was the hypothetical term? And how much rent free did you adopt? (borough)

A

5 year term, Rent Free of 9 months

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What was your headline rent? (borough)

A

£45 for the space

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What was your net effective rent (borough)

A

[45 * (5-0.5)] / 5

£40.5 to 5 years

Break at 3

£37.5

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What does Time of Essence Mean?

A

If the rent review is not agreed in that period of time the landlord and tenant loses the right to review the rent.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What was in your section s26 notice you served in Edmonton?

A

Date of Letter: 1 March 2019
Name of Tenant & Landlord:
Address of Property
Date of New tenancy: 1 September 2019
If you wish to ask the court to grant a new tenancy you must do so by the date of 1 September
If landlord opposes: 2 months and on grounds
section 30.
Name of correspondence: Solicitors
Signed & Dated

Terms: Attached in Appendix
Demise: As per existing lease
Term: 5 years
Break: 3 years
Rent: £30 psf (£60,000)
Other terms: AS per existing lease.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What were the timings, how much notice did you give in your section 26 ?

A

12 months

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the standard notice periods for a section 26?

A

Landlord to respond in 2 months

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Did the Landlord agree for you to stay? (Edmonton)

A

Yes, but disputed the rent and term so ended up negotiating on those points.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Did you think the rents in the area were going up or down? (edmonton)

A

Rents going down

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Why did you serve a section 26 on 12 months notice?

edmonton

A

As rents were going down so I felt the T should serve a section 26 at the latest possible time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What was in the Heads of Terms? (edmonton)

A
  • Subject to Contract
  • Date of the old lease
  • Date of the new lease
  • Term (5 years)
  • Break (3 years)
  • Other Terms (As per Existing lease)
  • Inside LTA
  • Landlord and Tenants Solicitors
  • Rates
  • Service Charge
  • User Clause
  • Alienation
  • Repair
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What would have happened if you could not agree on this with the landlord?

(lease renewal edmonton)

A

2 choices:

  1. PACT (Professional Arbitration on Court Terms)
    • Arbitrator is nominated by RICS President
    • Advantages - faster, less expensive, decision by a
      surveyor
  2. County Court - Following the Civil Procedures Rules 1998
    • used when court proceedings are anticipated
    • Part 36 offer - used to induce other party to settle
      (similar to a Calderbank)
    • Offer open for 21 days - after this time period it can
      be accepted but can be withdrawn
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

For your Lease Renewal in Bedford, how much of an increase did they propose?

A

If you are inside the Act and you go to Court, the court can only award a Net Effective Rent, not allowed to award a Headline and Rent Free.

HR of £85 psf ZONE A (£10 increase)
5 year term
6 months rent free
Do not take into account fit out!!!!
In court they dont.

Passing Rent : £70 ZONE A
MR: £65 ZONE A
L Proposed: £85

Net Effective L proposed: £77

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What are the differences between Arbitrators and Independent Experts?

A

7 main differences:

C osts
A ppeal
N egligence
D isclosure
E vidence
L aw
O utcome
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is a Calderbank?

A

An offer with your final position on rent and its:

  • an attempt to achieve a resolution of a dispute
  • protect your clients costs if it goes to 3rd party
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What did you Calderbank contain?

RR City of London

A
  1. Without Prejudice Save as to Costs
  2. Rent
  3. Time limit in which to respond - 21 days
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

If you had the choice, would you have preferred an Arbitrator or an Independent Expert?

A

Market was rising so I would have preferred an Independent Expert as I was acting for the Landlord.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

If you were acting for the client, would you have gone as an advocate or an expert witness?

A

Expert Witness:

  • trying to find the correct market rent
  • duty of care to the court
  • Statement of Truth
  • Not immune from civil action - Jones v Kaney.

Advocate

  • acting for the client (so miss out evidence)
  • but must uphold integrity

Real life - everyone says they’re going as an expert witness as they are looking to find the ‘correct MV’

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Describe office in Borough

A
  • 1,500 sq ft
  • First Floor Office space
  • Dated
  • Carpeted floors
  • Wall mounted aircon
  • lack of natural light
  • period building brick construction
  • above retail
  • single glazing
  • good location
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What was your opinion of MR for your rent review in City of London?

A

HR: £50 psf

RFP: 9 months

Term: 5 year term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What was your net effective rent for your RR in city of london?

A

[50x (5-0.5) / 5]

NET EFFECTIVE RENT WAS £45

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What was the negotiations saying for your RR in City of London?

A

Tenant: NIL INCREASE

Landlord: £50

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Why did you request licences for alteration?

RR City

A

Because you had to disregard T fit out in the lease

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Why did you request any deeds of variation?

RR City

A

In order to obtain the latest legal documents.

If the lease had been varied then I would need to know

32
Q

What is an example of deed of variation?

A

A deed of variation is when there has been a change in one of the terms of the lease.

eg. deleting a clause, rewording a clause.

33
Q

What is the hierarchy of evidence?

A
  • OML
  • LR / RR
  • Independent Experts
  • Arbitration
  • Hearsay
  • Lease re-gearing
34
Q

What recommendations did you make to the client?

RR city of London

A
  • Advised MR was £50
  • Net Effective rent was £45
  • PR: £42

I advised the client:

  • My opinion of MR
  • lease terms and RFPs
  • Start negotiations on £50 to hopefully get a rent of £45
35
Q

What was in your trigger letter to the Tenant for your rent review?

A
  • Address and Name of C
  • Rent Review Date
  • Proposed Rent £50
  • Lease Date
  • My contact details
36
Q

What was included in your rent review memordandum?

A
  • Name of L&T
  • Rent agreed
  • RR Date
  • Date of Memo
  • Date of lease
  • Signatures
37
Q

Describe the office for your RR in City of London?

A
  • 1960s building
  • 7,500 sq ft
  • Good condition
  • Raised Floors
  • Suspended ceilings
  • WCs separate
  • Good natural light
  • 3rd floor
38
Q

What was in the RR clause for your rent review in City of London?

A

ASSUMPTIONS:

  • OML
  • VP
  • Willing leasor / Leasee
  • Term 5 years (as break in 5th year)
  • Ready for fitout
  • L&T complied with obligations

DISREGARDS:

  • Good will of property
  • Goodwill of T
  • T improvements
39
Q

How did you know it was contracted inside the LTA?

LR Bedford

A

Lease was silent

40
Q

What was contained in section 25 Notice from L?

A
  • NAME L&T
  • ADDRESS OF PROPERTY
  • DATE TO END TENANCY (no less than 6 months, no more than 12 months) (served 6 months prior to lease expiry)
  • CONFIRMATION OF A NEW LEASE TO BE PROPOSED
  • RESPONSE DATE
  • Proposal for a New Tenancy in Annex.
    • term 5 years
    • Rent £85 psf
  • Recommendation to get PROFESSIONAL ADVICE

HR of £85 psf ZONE A (£10 increase)
5 year term
6 months rent free

Passing Rent : £70 ZONE A
MR: £65 ZONE A
L Proposed: £85

41
Q

What were the clients objectives?

LR Bedford

A
  • Reduce rent

- Negotiate a 3 year term with annual breaks

42
Q

Describe property in Bedford

A
  • Retail unit over Ground and First Floor
  • 800 sq ft Zone A
  • 1,800 overall
  • Period building of brick construction beneath a pitched roof
  • Good retail pitch
43
Q

What is the RICS GN on Comparable Evidence in RE Valuation 2019

A

Category A - direct comparable evidence

Category B - general market data

Category C - other sources

44
Q

What was included in your H of T for your lease renewal in Bedford?

A
  • Date of Lease
  • Date of HofT
  • Subject to Contract
  • Rent £65
  • RFP (2 months)
  • Term - 3 years
  • Break option - annual breaks
  • Inside Act
  • Repair Clause
  • Alienation Clause
  • T Solicitors and agents
  • L solicitors and agent
45
Q

What are rents in Borough

A

Grade A space - £60-£70

Secondary stock £45-£50

46
Q

What were the RR provisions that affected value?

A

ASSUMPTIONS

  • OML
  • Willing L&T
  • Term 5 years
  • Fit and Available for immediate occupation
  • All covs observed by both L&T
  • Property used for purpose set out in lease

DISREGARDS

  • goodwill of T
  • goodwill of Property
  • T improvements
47
Q

What did your report contain?

RR Borough

A
  • My opinion of MR - HR £45 but Net Effective £37
  • Negotiate a Nil increase
  • Passing at £35
  • Area 1,500 sq ft
  • comparable evidence
  • terms of 5 years normal, break at year 3
  • RFP of 9 months normal
48
Q

What is holding over?

A

when the occupier remains in the property even after expiry of the lease.

s24 LTA

49
Q

Describe retail unit in Edmonton

A
  • 4,000 sq ft overall
  • 2,000 ZONE A
  • Frontage
  • Brick construction
50
Q

For your LR in Edmonton, what did you think MR was?

A

ZONE A £30 psf

Passing Rent £40

51
Q

What is contained in your Terms of Engagement for a LR/ RR?

A

xxx

52
Q

What two areas have the highest amount of litigation for Rent Reviews?

A
  1. Hypothetical Term

2. Net Effective Rents

53
Q

Tell me about a time you provided advice in your time with lease advisory?

A

Calderbank

54
Q

What would happen if you had not negotiated a new lease by the time of the date specified in the notice what happens?

A

TENANT LOSES SECURITY OF TENURE UNLESS….

  • new lease in place
  • either party has applied to court
  • parties have agreed to an extension of their statutory period
55
Q

If Time is of The Essence is not in lease what do you assume?

A

Time is not of the essence

56
Q

Why is determining competence important?

A

RULES OF CONDUCT FOR MEMBERS AND FIRMS

57
Q

For your rent review in the city you established it was under-rented? Talk me through how you reached that conclusion?

A

I analysed the market to find comparable properties that were of a similar age, specification, location, term etc and analysed what I felt the MR would be.

I then allowed for rent free periods (discounting 3 months for fit out) to arrive at a net effective rent which was higher than the passing rent.

58
Q

What was the time scale specified in your Calderbank?

A

21 days

59
Q

What is that time limit in a Calderbank based on? market norm?

A

It is based on giving the other party enough time to process it and respond.

Most of the section 25 notices I have seen during my time in lease advisory gave around 21 days regardless of different markets etc.

60
Q

Was the Calderbank accepted within the 21 days?

If it wasn’t what would happen in relation to costs

A

Yes it was.

If it was accepted after the 21 days then the party which accepts it would be liable for the costs from that expiry of the calderbank

61
Q

How much is an application and how much is it? Is it inclusive or exclusive of VAT?

A

£425 INCLUSIVE of VAT

62
Q

Why did you write up a memorandum when you had an acceptance of the Calderbank?

A

Despite acceptance of a Calderbank being sufficient, for record purposes I drafted a RR memo and had it signed by both parties for completeness.

63
Q

How did the other party accept the Calderbank?

A

THERE WILL BE NO SUBJECT TO CONTRACT / WITHOUT PREJUDICE

Via email but they can also respond with a letter

64
Q

What are the ways you can document a rent review?

A
  • Acceptance of a Calderbank - email or letter
  • Rent Review memo
  • Award
  • Determination

All sufficient documentation

65
Q

How would your role change if you went to 3rd party?

A

EXPERT WITNESS - duty to court

ADVOCATE - duty to client

66
Q

What fee basis can you go to 3rd party as an expert witness?

A

Not an incentivised fee.

Fixed fee basis based on an hourly rate

67
Q

If you are negotiating against an unrepresented tenant is there anything you should consider?

A

CODE FOR LEASING BUSINESS PREMISES 2020

Recommend them to get professional advice

68
Q

What happens if a lease is not agreed before the date of the new lease?

A

T will lose their security of tenure unless:

  • New lease is agreed
  • One party has applied to court
  • Parties have a written agreement to extend their negotiations
69
Q

How do you check if a notice is valid?

A

Solicitors do but must be:

  • in the prescribed form in accordance with Act
  • upon the correctly named party.
70
Q

What was in your report and what were your recommendations to your client for your LR in Bedford?

A
  • My opinion of MR was £65 ZONE A
  • Passing Rent £70
  • Property was over-rented
  • In a strong position to negotiate a rental reduction and flexibility due to the high number of vacant units.
  • Included comps
  • There was one comparable that had accepted a 3 year lease with annual breaks
71
Q

During your LR in Bedford, talk me through the various ways you gave your client advice?

A
  • Researched the MR to advise my client of the Market Rent and informed them the property was over-rented.
  • Advised my client that due to the high number of units they were in a strong position to negotiate more flexible lease terms.
72
Q

Why did you serve a section 26 Notice when the T was holding over?

A
  • Risk of LL serving a hostile section 25 notice when you are holding over
  • If you serve a s26 notice you can secure T’s occupation if a L serves a counter notice within 2 months
73
Q

Why was the T holding over?

A

The T was holding over and expressed interest in staying so recommended to serve a section 26 straight away.

74
Q

How can a T terminate a lease?

A
  • Forfeiture (if there is one in the lease)
  • Surrender and negotiation
  • Break clauses
  • Lease expiry
  • service of notices under LTA 1954
75
Q

Process of Arbitration?

A
  • Arbitrator appointed
  • Arbitrator dictates timetable
  • Statement of Agreed Facts
  • Expert Witness reports
  • Rebuttals
  • New rent and costs awarded
76
Q

What costs are associated with 3rd party?

A
  • Cost of application
  • Surveyors costs
  • independent expert costs
77
Q

What are the other ways a rent review can be linked?

A
  • RPI (Most common)

RPI and CPI reflect the monthly change in the cost of a “basket” of goods and services but they differ, sometimes by a percentage point, as they track the costs of different items

  • CPI
  • Stepped
  • Turnover

AM AAPPCC (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions