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RICS APC 2022 > Landlord and Tenant > Flashcards

Landlord and Tenant Flashcards

1
Q

Difference between a lease and a licence?

A
  • Lease gives exclusive possession for a term at a rent.
  • Licence gives permission to do something otherwise illegal. Licences are personal arrangements not capable of being assigned.
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2
Q

Tell me of some case law relating to defining a lease or a licence

A

Street v Mountford - It doesn’t matter what the document calls itself on the cover sheet, if, in all other respects, the document looks like a lease it probably is.

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3
Q

What does “contracted out” mean?

A

Excludes the security of tenure provisions of the Landlord and Tenant Act 1954 Part II.

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4
Q

What is a tenancy at will?

A

Occupied at the will of the Landlord. Short term. Still allows exclusive possession. Must be careful not to create a periodic tenancy

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5
Q

Assignment V Subletting what is the difference?

A

1) Assignment - Dispose of whole lease (pre 1996 Privity of contract applies, original tenant remains liable). AGA introduced by L & T Covenants Act 1995.
2) Subletting - subsidiary lease created.

Both need permission, usually not unreasonably withheld but usually subject to conditions

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6
Q

What is privity of contract?

A

Tenant who is the original Tenant under a
commercial lease has always been responsible for the rent
and other covenants in the lease throughout the length
of the lease, even after he has transferred it to someone
else. 1st Jan 1996

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7
Q

What legislation ended privity of contract

A

Landlord and tenants (Covenants) Act 1995. Applies to all leases from 1st Jan 1996

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8
Q

What is a hostile notice from a LL?

A

S.25 Notice with ground in s.30 a-g

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9
Q

Break clauses and how to account for them in a valuation

A

Valuation impacts.

Use term and reversion, increase yield slightly, defer for a void period after a break, can allow for costs.

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10
Q

Case law on Break Clauses

A

Marks & Spencers v BNP Paribas 2014 - Court held that pro-rata rent rebate not implied in lease.

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11
Q

What is interim rent?

A

Payable after current lease has ended and the tenant is holding over. LL or tenant can apply for it.
Effective from new lease would have been effective as stated in s.25/26 notice (6 months after notice been served).
Market rent of property.

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12
Q

Which section of L&T act describes a qualifying tenancy

A

S.23

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13
Q

What is a qualifying tenancy under s.23 of L&T Act p2?

A
  • Not contracted out.
  • More than 6m.
  • Not a tenancy at Will.
  • Not mining or agricultural.
  • Not licence.
  • Business tenancy - used mostly for business.
  • Must be in occupation.
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14
Q

Which section describes the procedure to exclude security of tenure?

A

s.38A

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15
Q

What is contained in s.38a of L&T Act?

A
  • Procedure to exclude tenancy from L&T Protection.
    1) Landlord gives warning notice to tenant that their rights are being waived.
    2) Tenant must give Informal notice if more than 14 days prior to granting lease. Formal notice if less than 14 days before grant of lease.
    3) Lease must endorse contracting out.
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16
Q

What is security of tenure?

A

Tenant has right to remain in demise and right to lease renewal.

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17
Q

What legislation amended the procedure for contracting out?

A 
Regulatory reform (Business Tenancies) (England and Wales) Order 2003. 
>14 days notice = simple declaration. 
<14 days notice = stat declaration
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18
Q

Which dispute resolution would you use for a RR and a LR?

A

RR - Independent expert or arbitrator.

LR - Court or PACT

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19
Q

What is PACT?

A

Professional Arbitration on Court Terms - ADR for lease renewals - ‘delegated’ to an independent third party who act as arbitrator or independent expert.
- Parties no longer need to obtain consent from courts.

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20
Q

What does a tenant have a right to at renewal?

A

Same terms as previous or market practice to max 15yrs.

- Same terms unless good reason - O’May Tests

21
Q

Case law on how to agree lease renewal terms

A

O’May v City of London Real Property Co Ltd (1983)

22
Q

Name 11 important sections of L&T Act

A

23) business tenancy
24) Comes to an end via provisions in act.(holding over)
24a) Interim rent
25) LL end current tenancy
26) tenant request new tenancy
27) Tenant end tenancy
28) Regear (T & LL agree terms in writing for new lease)
29) Order by court for a new tenancy
30) Grounds for opposition
37) Compensation
38) Health warning/prescribed form - tenant make stat declaration that 54 Act excluded.

23
Q

s.23

A

Business Tenancy

24
Q

s.24

A

Comes to an end via provision of act.

Tenancy will continue until either party serves notice.

25
Q

s.24a

A

Interim rent

26
Q

s.25

A

LL end tenancy.

  • 6-12m before expiry.
  • Friendly or hostile.
27
Q

s.26

A

T end tenancy and request new.

  • 6-12m before tenancy ends.
  • If LL wants to oppose, then has to serve counter-notice in 2 months specifying ground.
28
Q

s.27

A

T end tenancy.

- 3 months’ notice.

29
Q

s.28

A

Regear (usually regarding rent/term). LL and T agree to lease renewal. Terms are agreed in writing.

30
Q

s.30

A

Grounds for opposition:

a) Breach of repair.
b) Persistent delay in paying rent.
c) Other substantial breach.
d) Suitable alternative premises (non-fault no compensation).
e) Uneconomic subdivision (sub-let, LL can let whole for more than parts) - Non fault.
f) Demolition - Non-fault.
g) Owner to occupy - LL must have owned property for 5yrs - Non fault

31
Q

s.37

A

Compensation

32
Q

s.38

A

Health Warning/Prescibed form - tenant make declaration of lease to be excluded

33
Q

s.29

A

Order by court for new tenancy

34
Q

Compensation for non fault grounds. How much and which grounds

A

<14yrs occupation = 1 x RV.
>14yrs occupation = 2 x RV.

Grounds e, f & g

35
Q

Rent review process

A

1) Conflict check.
2) ToE
3) Establish client objectives.
4) Review lease, contracted out, understand RR clause.
5) Check time limits for review.
6) Check notice requirements and time limits for implementing RR stages.
7) Inspect and measure.
8) Comparables.
9) Analyse comparables.
10) Value to specified basis.
11) Report to client and agree strategy.
12) Negotiate.
13) Settle/refer to 3rd party - review ADR clause.
14) Document and instruct solicitors.
15) Invoice.
16) Note next lease event.

36
Q

What are RR usual assumptions?

A

1) Hypothetical Letting.
2) Open Market.
3) Willing parties.
4) Fit for immediate occupation and use.
5) VP.
6) Assumed term.
7) User stated in the lease.
8) Rent review date.
9) Willing LL & T.
10) Rental basis.
11) Subject to all other lease terms.

37
Q

What are RR usual disregards?

A

1) Tenants occupation.
2) Rent free for fit-out.
3) Goodwill.
4) Tenant’s improvements where consent obtained (Ponsford v HMS Aerosols)

38
Q

What is a Calderbank Letter?

A

From divorce case Calderbank V Calderbank 1975.
Genuine offer to settle “save as to costs”.
The losing party’s offer does not have to exceed what was granted but can help reduce their costs. Recipient needs to be careful, only refuse if convinced of being able to get more.

39
Q

Part 36 offer

A

From Civil Procedure Rules (CPR).
Can be issued at any time after proceedings issued.
Can be withdrawn in writing.
They are more tempting for other side as you will pay their costs.

40
Q

Landlord and Tenant Act 1927

A

Sets out that a Landlord cannot unreasonably withhold consent for alterations.
LL can still ask for :
- Payment if property value decreases, is damaged or value reduced of neighbouring LL property.
- Legal Fees.
- Full reinstatement unless value increased.

41
Q

L & T Act 1988

A

Adding to 1927 Act ‘Delay’

42
Q

L & T Act 1995

A

Abolishes Privity of contract from Jan 1996

43
Q

Code for leasing business premises 2020 PS

A

Obj - to improve quality and fairness of terms.

Identifies important terms: Demise, term, renewal rights, Rent, RR, Alienation etc.

44
Q

Recent case law

A

1) S Franses Ltd v The Cavendish Hotel (London) Ltd - looked at motivation behind LL wanting to ‘redevelop’ under s.30 grounds (f). Supreme court found that the LL had to have a genuine intention to redevelop - T friendly.
2) Canary Warf (BP4) T1 Limited & Ors v. European Medicines Agency (2019) EWHC 335 (Ch) - looked at Brexit and whether this would frustrate the lease. High court ruled they had to pay rent and keep covenants.

45
Q

What is the difference between dispute resolution and alternative dispute resolution?

A

ADR is used to avoid litigation.

  • Cheaper & quicker
  • More flexible
  • Confidential
  • Specialists can be involved rather than lay judge.
46
Q

What is litigation?

A

Taking legal action through the Courts, defined by the Civil Procedure Rules. Litigation is a public process so it is not possible to preserve confidentiality.

47
Q

How does 3rd party process work?

A

1) Surveyors representing parties becomes expert witness with duty to court.
2) They must submit a statement of truth.
3) They must state the main facts upon which they rely.
4) Submit a joint statement of agreed facts.
5) Parties submit their representations. Scrutinised by other party and 3rd party.
6) Arbitrator or independent issue final award or determination.

48
Q

What is the role of an arbitrator?

A

1) Governed by Arbitration Act 1996.
2) Arbitrator award is confidential. Court isn’t.
3) Award is binding.

49
Q

What is the role of an independent expert?

A

1) No legislation governing role.
2) Role governed by lease and GN Independent expert determination 1st edition.
3) May be required to consider evidence from the parties’ representatives.
4) May have to give a reasoned determination.
5) May have power to determine part or all costs.
6) Determination not binding (can be taken to court) unless explicitly stated in lease.

RICS APC 2022 (23 decks)

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