Land & Property Practice Flashcards
What Act governs security of tenure in commercial leases?
The Landlord and Tenant Act 1954.
What two kinds of lease are excluded from the Landlord & Tenant Act 1954?
a) A tenancy at will; and
b) A fixed-term tenancy not exceeding 6 months.
What 3 steps need to be followed in order to contract out of the Landlord & Tenant Act 1954?
1) The landlord must serve a health warning on the tenant;
2) The tenant must declare they have received it and are contracting out; and
3) The lease must reference the contracting out.
What must the tenant do if the landlord serves a health warning fewer than 14 days before their tenancy begins?
Make a statutory declaration of waiver in front of a solicitor.
When must a Section 25 notice or a Section 26 notice be served in order to be effective?
6 - 12 months before the end of the tenancy / new lease.
Who serves a Section 25 notice?
The landlord.
Who serves a Section 26 notice?
The tenant.
What are the 4 ‘fault’ grounds for a landlord to serve a Section 25 notice on the tenant?
1) The tenant has failed to carry out repairing obligations;
2) The tenant continually pays rent late;
3) The tenant has substantially breached other obligations; and
4) There are other suitable alternative premises.
What are the 3 ‘no fault’ grounds for a landlord to serve a Section 25 notice on the tenant?
1) The landlord requires the whole property for subsequent letting;
2) The landlord intends to demolish or reconstruct the premises; and
3) The landlord intends to occupy the holding.
In what instances is the tenant entitled to compensation upon being served a Section 25 notice?
If the landlord uses any of the 3 ‘no fault’ grounds AND does not offer alternative suitable premises.
How long does the landlord have to respond to a Section 26 notice?
2 months.
What must the landlord do when responding to a Section 26 notice?
List a statutory ground for refusing the new tenancy.
What is an easement?
A right which benefits one piece of land over another piece of land.
What are the 4 requirements for an easement to exist?
1) A dominant and servient tenement;
2) A benefit of the dominant land (so not personal);
3) Separate ownership between the land; and
4) Recognised as capable of being an easement.
What are the two requirements to create a legal easement?
1) Created by deed; and
2) For the equivalent of a freehold or leasehold term.
What are the 3 ways an easement can be created?
1) Express;
2) Implied; and
3) By prescription.
What are the 2 ways in which an easement might be implied?
1) Necessity; or
2) Existing use.
What is required for an easement to be created by existing use?
a) Continuous and apparent;
b) Necessary for the reasonable enjoyment of the land; and
c) Used by the seller for the benefit of the land now being sold.
What is required for an easement to be created by prescription?
a) The right has been used unchallenged for over 20 years; and
b) It has been used ‘as of right’.
Where will the benefit of an easement appear?
On the property register of the dominant tenement.
Where will the burden of an easement appear?
On the charges register of the servient tenement.
How should an easement be protected for unregistered land?
It should be registered as a D(iii) land charge.
What Act governs planning laws in England & Wales?
The Town & Country Planning Act 1990.
What are the two forms of planning regulations that must be considered?
a) Planning permission; and
b) Building regulations.
What kind of work requires planning permission?
Development.
What kind of work is granted deemed permission?
Small home extensions within certain size limits or conservatories.
How can a Local Authority remove deemed permission?
Through an Article 4 Direction.
What are the two kinds of planning permission?
a) Outline; and
b) Detailed.
What does outline planning permission give?
Permission as to the principle of the work with reserved matters.
How long do clients have to make an application for detailed permission after receiving outline permission?
3 years.
How long do clients who had outline permission have to begin the work after receiving detailed permission?
2 years.
How long generally do you have after receiving detailed permission to start building work?
3 years.
How long do local authorities have to enforce planning permission breaches relating to construction work?
4 years.
How long do local authorities have to enforce planning permission breaches relating to change of use?
10 years.
What do listed buildings require if work is to be carried out?
Listed building permission.
Where are listed buildings registered?
Historic England.
How long is the enforcement period for breaches of listed building permission?
Unlimited.
What is issued in the event that a local authority believes someone has breached listed building permission?
An enforcement notice.
What are the consequences of failing to comply with an enforcement notice?
It is a criminal offence.
Where do sellers inform buyers of any work carried out?
The Property Information Form.
Who enforces building regulations?
Building Control.
What is issued by the building officer after the work has been completed if it is compliant?
A final certificate.
How long does a local authority have to enforce building regulations breaches?
12 months, but an injunction can be issued to force the owner to bring it up to standards after that
What could a buyer do in the event that an enforcement period for planning permission has passed?
Ask the seller to provide indemnity insurance.
How long does an Energy Performance Certificate last?
10 years.
When an EPC not required?
When the building is listed.
What 2 steps does an estate agent take at the pre-market stage?
1) Negotiate the price; and
2) Send a memorandum of sale to the solicitors.
What Code sets out best practice at the pre-market stage when leasing commercial premises?
The Code for Leasing Business Premises.
What does the Code for Leasing Business Premises set out about offers made by landlord to tenants?
The offer should be made in writing, include clear terms regarding rent and length, any right to break the lease etc.
What is almost always required if an existing commercial tenant is assigning their lease?
Permission of the landlord.
What will the landlord often require when considering if a tenant can assign their lease?
3 years of bank references/business accounts and a reference from the assignee’s landlord.
Who drafts a license to assign?
The landlord’s solicitor.
What will a landlord often require as a condition of assigning a lease?
An Authorised Guarantee Agreement.
How long does the pre-contract stage typically take?
4 - 6 weeks.
How does the seller’s solicitor deduce title at the pre-contract stage for registered land?
By obtaining the Official Copies from the HMLR portal.
How does the seller’s solicitor deduce title at the pre-contract stage for unregistered land?
By obtaining the root/epitome of title.
What will the seller’s solicitor have to do at the pre-contract stage if unregistered property deeds have been given to a lender as security for a mortgage?
Give an undertaking to retain the deeds pending the redemption of the mortgage.
When does the Law Society’s Conveyance Protocol require that the seller’s solicitor remedy any defects in the seller’s title?
At the pre-contract stage.
What 4 things does the contract package sent to the buyer’s solicitor contain?
a) The draft contract in duplicate;
b) The PIF and Fittings & Contents form;
c) A copy of the seller’s title or epitome of title; and
d) Any guarantees or planning permissions.
What kind of defects must be disclosed at the pre-contract stage?
Latent defects & burdens.
What is a latent defect?
One that would not be apparent from a reasonable inspection of the land.
What can the buyer do if the seller attempts to cover up a patent defect?
Sue the seller in tort for willful deceit.
What are the three main searches carried out by the buyer’s solicitor at the pre-contract stage?
1) Local searches;
2) Drainage and water search; and
3) Environmental search
What is included under the umbrella of local searches?
1) Local land charges;
2) Planning charges;
3) Listed building charges; and
4) Enquiries of local authorities.
When is a search of the Index Map required?
When the property is unregistered to check if it is registered.
When will a bankruptcy search be carried out by the buyer’s solicitor at pre-contract stage?
When the buyer is obtaining a mortgage.
When will a company search be carried out by the buyer’s solicitor at pre-contract stage?
When the seller is a company.
What will the buyer’s solicitor do if they discover any title defects or issues at pre-contract stage?
They will raise enquiries of the seller’s solicitor.
At the pre-contract stage of a leasehold transaction, what must the landlord do to enable the tenant to register the lease with title absolute?
They must deduce title.
At the pre-contract stage of a leasehold transaction, what two things must the seller do if they are assigning the lease and consent is required?
1) Apply for consent at their cost; and
2) Use all reasonable endeavors to obtain it.
At the pre-contract stage of a leasehold transaction, what can the seller do if the seller has not gained permission to assign their lease?
If it is 3 working days before completion, the seller can rescind.
Who drafts the transfer form?
The buyer’s solicitor.
When does the buyer need to sign the transfer form?
If there are any declarations of trust (i.e. more than one buyer) or covenants.
What 2 things does the seller prepare before completion?
1) The Completion Information and Undertakings Form for the buyer; and
2) A completion statement for the seller.
If the buyer is using a mortgage, what does the buyer’s solicitor submit to the lender before completion?
The Certificate of Title.
What two functions does the Certificate of Title serve?
1) To confirm the property is good and marketable; and
2) To act as a drawdown request for the lender.
What search does the buyer’s solicitor always carry out at pre-completion stage?
An OS1 or OS2 search.
What search does the buyer’s solicitor carry out at pre-completion stage if the buyer is using a mortgage?
A bankruptcy search on behalf of the lender.
How long is the OS1’s priority period for the buyer to register the disposition?
30 working days.
What does the seller’s solicitor do after completion?
Redeem any mortgages and request a release from their undertaking to do so.
What two things does the buyer’s solicitor do after completion?
1) Prepare the SDLT form and pay any due; and
2) Submit the application to register the transfer at the Land Registry within the priority period.
What does a prospective tenant need to do if they are unhappy with the terms of the lease?
Ask the seller to negotiate with the landlord to get a deed of variation.
What are ‘prescribed clauses’ in the context of a lease?
A summary of the lease terms that must be included in any lease that is registrable to help HMLR complete registration quickly.
What length of lease term is generally not acceptable to a lender?
Less than 80 years.
What clause is generally included in a commercial lease that is not included in a residential one?
A rent review clause.
What should a solicitor do if the buyer refuses to disclose a material change in circumstances to the lender?
Stop acting for the client.
What two things should a solicitor ensure clients do if they are buying property as tenants in common?
1) Enter into a declaration of trust; and
2) Have wills drafted to dictate what they want done with their shares.
What can parties do from 2pm on the day of completion if it is delayed?
Claim interest at the contract rate.
How can an innocent party make time of the essence when completion is delayed?
By serving a notice to complete.
How long does the breaching party have to complete after being served a notice to complete?
10 working days.
What is the innocent party stating when they serve a notice to complete?
That they are ready, willing and able to complete.
What two things can the buyer do if the seller does not complete after being served with a notice to complete?
1) Claim their deposit back with interest; and
2) Claim for damages.
What two things can the seller do if the buyer does not complete after being served with a notice to complete?
1) Keep the deposit; and
2) Sell the house and claim damages for any loss in house price.
What must you make sure happens if there is a non-owning occupier in the property?
Have the non-owning occupier sign the contract to agree to move out after completion.
What remedies can the buyer claim between exchange and completion?
Specific performance, damages or rescission.
When can a contract be rescinded under the Standard Conditions of Sale?
1) There is an element of fraud or recklessness; or
2) If the innocent party took the property, it would be substantially different from the property they expected to take.
What is a misrepresentation?
A statement of fact made by one party that induced the other party into entering a contract.
What are the 3 kinds of misrepresentation?
a) Fraudulent;
b) Negligent; and
c) Innocent.
What can a buyer do if there has been a misdescription?
Rescind the contract and claim damages.
Why are fewer remedies available after having completed?
Because the terms of the contract merge with the purchase deed.
What does Commercial Rent Arrears Recovery allow a commercial landlord to do?
Enter the property and take the tenant’s goods to sell them after having given notice 7 days prior.
How can the right to forfeiture enter a lease?
ONLY by express incorporation.
What can a tenant do if the landlord exercises their right to forfeiture?
Apply for statutory relief.
How can a landlord waive their right to forfeiture?
By accepting the breach.
Who can be pursued for a breach of covenant in leases made before 1996?
The original tenant is always liable. There is usually a chain of indemnity.
Who can be pursued for a breach of covenant in leases made after 1996?
Under the Landlord and Tenant (Covenants) Act 1995, tenants are automatically released on assignment.
Which three of the Section 25 grounds are “mandatory” grounds?
a) The availability of alternative suitable premises;
b) The landlord intends to destruct or demolish the premises; and
c) The landlord intends to occupy the premises.
Which four of the Section 25 grounds are “discretionary” grounds?
a) The tenant has consistently been late in paying rent;
b) The tenant has breached their repair covenant obligations;
c) The tenant has substantially breached other covenants; and
d) The landlord wants to rent out the whole premises (if only part has been let).
How is SDLT calculated?
It is a tiered tax.
How much extra SDLT is charged for second properties?
3% on each band.
How is SDLT calculated on a lease?
a) Any lease premium paid; and/or
b) The net present value of the rent.
What are the relief rates for the purchase of first residence relief?
0% up to £300,000 then 5% on any remainder. After £500,000, no relief is given.
When does a trust of land arise automatically?
When land is owned by more than one person.
How must co-owners hold the legal estate in land?
As joint tenants.
What happens when a joint tenant dies?
Their share of the land passes automatically to the surviving tenant by survivorship.
In what 3 scenarios would a tenancy in common be appropriate?
a) Where it’s clear that the parties did not intend to hold as joint tenants;
b) Where they contributed in equal portions to the purchase price; and
c) Where they entered into a commercial transaction where a joint tenancy would be inappropriate.
What are the 5 major ways in which a joint tenancy can be severed?
a) Written notice;
b) Treating share as separate;
c) Disposal of the equitable interest;
d) Mutual agreement; and
e) Course of dealings.
What is the presumption regarding equitable ownership of land?
That equity follows the law.
How does a buyer take land free of beneficial interest if there are multiple owners?
By overreaching.
How can a buyer overreach any beneficial interest?
Pay the purchase price to at least two beneficial owners.
What should the buyer do if there is only one owner but there remains a Form A restriction on the proprietorship register?
Ensure a second trustee is appointed to overreach any beneficial interest.
What does section 14 of TLATA 1996 allow trustees to do?
Apply to the court for an order for sale or relieving requirement for consent.
What factors are set out by section 15 of TLATA which determine what they must consider when deciding a section 14 application?
a) The intentions of the person who created the trust;
b) The purposes for which the property is held;
c) The welfare of any minor who occupies; and
d) The interests of any secured creditor.
What will happen in the event that owners disagree but there is a declaration of trust?
The declaration of trust is usually conclusive.
If a property was transferred to owners jointly, how can a challenger challenge the presumption of a joint tenancy?
By proving there was a different common intention.
What will the court consider when an applicant challenges ownership of property via common intention?
All the circumstances.
When is CGT due?
31 January of the following tax year.
How do you declare any CGT due?
Annual self-assessment tax return.
How do you calculate a gain?
Proceeds of sale - costs of acquisition
What two costs are deductible from the proceeds of sale as well as costs of acquisition?
a) Costs of enhancements made; and
b) Costs of defending title.
What relief allows a full or partial exemption of a gain in property?
Private Residence Relief
What are the 4 different deemed occupations and their periods?
a) Last nine months of ownership;
b) Any period of absence up to 3 years;
c) Abroad for employment - unlimited; and
d) Absent from property due to working elsewhere for up to 4 years.
How much is the annual exempt amount for CGT?
£12,300.
What is a landlord required to serve on a tenant before exercising a forfeiture right after a tenant has failed to carry out their repair obligations?
A section 146 notice.
What three things must a section 146 notice include?
a) Specify the breach;
b) Require the breach to be remedied in a reasonable time; and
c) Require the tenant to pay compensation if required.
Who can always enforce covenants against each other?
The original parties.
What are the 4 requirements for a successor in title to enforce the benefit of a restrictive covenant?
a) The covenant touches and concerns the land;
b) The covenant was intended to run;
c) The covenantee held the legal estate when the covenant was made; and
d) The assignee of the covenantee now holds the legal estate.
What are the 4 requirements for a successor in title to enforce the burden of a restrictive covenant in equity?
a) The covenant is negative;
b) The covenantee owned the benefitted land when covenant was made;
c) The burden was intended to run; and
d) General equitable principles apply (registration required).
Can positive covenants run with the land?
No.
What are the 5 methods of granting an enforceable positive covenant?
a) Granting a lease;
b) Setting up a commonhold scheme;
c) Chain of indemnity covenants;
d) Right of re-entry coupled with rentcharge; and
e) The benefit and burden rule.
What does protection of a third-party interest count by registration do?
Counts as notice for prospective buyers.
How should a solicitor search for any registered third party interests protected by registration in unregistered land?
By searching the correct full name of the current proprietor(s).
What happens to an interest in unregistered land if it is not protected by registration when the land is sold?
The land charge is void against purchasers of the legal estate for money or money’s worth.
When is a buyer bound by an equitable interest in unregistered land?
If they have notice of it.
When will a buyer not be bound by an equitable interest in unregistered land?
If they are a bona fide purchaser for value of the legal estate without notice.
What 4 interests in unregistered land override first registration?
a) A lease of more than 7 years;
b) A legal easement;
c) A local land charge; and
d) An interest of someone in actual occupation.
How long must a squatter hold unregistered land to claim the title by adverse possession?
12 years.
What 3 things must an applicant for adverse possession of unregistered land show?
a) They have actual possession;
b) It is exclusive; and
c) It is without permission.
How soon should land be registered after a triggering event?
2 months.
What happens if a buyer fails to register land after a triggering event?
It reverts to the original owner.
What is absolute freehold title?
The Registered Proprietor takes the legal estate together with all interests benefitting that estate.
What is possessory title?
Title based on factual possession of the land e.g. adverse possession or title deeds lost.
What is good leasehold title?
The freehold title hasn’t been produced therefore the titleholder is subject to any previous leases.
What third-party interests in registered land are not complete until registration?
a) Dispositions of legal estate;
b) Mortgages;
c) Easements;
d) Leases of 7 years or longer; and
e) Certain other leases.
What restriction is standard when property is held as tenants in common?
A Form A restriction.
What 2 ways can a buyer avoid an overriding interest from someone in actual occupation?
a) Enquiry of the seller and failure to disclose; or
b) Occupation was not obvious on reasonable inspection of the land and the buyer did not know.
