Landlord and Tenant Flashcards
What is the information required from a client to initiate a rent review/lease renewal (7)?
”- Agreed terms of engagement
- Understanding of client strategy
- Copy of lease, plans, deeds of variations, licences
- Copy of rent review memos
- Contact details of other party
- Existing file for the property
- Any comps details held on file”
What must you check before you take on a lease renewal/rent review instruction?
”- Whether you’re competent
- No personal interest or conflict
- Confirmation of complaints handling procedure
Agreed terms of engagement
“
How can fees for a rent reviews or lease renewals be structured?
”- Percentage of new rent agreed
- A percentage of the saving made form quoted rent
- Fixed fee
- Hourly rate”
What actions are required by a surveyor in a lease/rent review (14) (Time of essence or contracted out?) ?
“1. Undertake competency/conflict of interest check
2. Agree terms of engagement with client
3. Obtain understanding of client’s objectives
4. Obtain information req.
5. Read the lease pack.
6. Check lease is not contracted out (if doesn’t mention then it’s contracted in)
7. Check whether time is of essence for rent review
8. Undertake site inspection and measure in line with RICS Surveying Safely 2018 and RICS Property Measurement 2018
9. Undertake market rent valuation
10. Prepare report setting out recommendations
11. Agree strategy with client - who will serve notices? Solicitor to serve notice
12. Check notices are valid, open negotiations on instruction from client
13. Conclude negs and document rent in memo
14. For LR instruct solicitors to prepare new lease in accordance with HoTs”
What does Without prejudice mean?
”- During period of negotiations opposing party cannot rely upon document or discussions held which are labelled ‘Without Prejudice’ where representations made in litigation
- In rent reviews correspondence marked WP cannot be shown to arbitrator or independent expert “
What does Subject to contract mean?
Subject to contract
What is a licence?
”- Passes no interest in land but makes lawful what otherwise would be unlawful
- A personal right which can be terminated by either party “
What are the four requirements of a lease?
“1. Exclusive occupation
2. Payment of rent
3. Duration for a specified term
4. If more than 3 years then terms must be writing, signed and registered as a Deed”
What are 3 differences between a lease and a licence?
“1. A lease provides an occupier with an estate in the relevant land - licence is a permission to make it lawful for them to use the land
2. A lease can be assigned - a licence is normally a personal right that cannot be assigned
3. Exclusive possession
What case sets out differentiation between a lease and a licence?
Street v Mountford (1985) Mountford occupied two rooms subject to weekly rent. Court ruled it was a lease - Rent, exclusive possession and term certain
What is a tenancy at will?
- Form of licence created by written agreement for an unspecified time in which the landlord may evict the tenant at any time
What are the two uses for a tenancy at will?
“1. Allowing tenant early entry for fit out works
2. Tenant is agreeing a new contracted out of the 1954 Act Lease”
What is a Wayleave?
”- Temporary right for an annual payment eg electricity company keeping their kit in on someone elses property
- Personal to the company and cannot be transferred
- It is not compulsorily registrable
“
What is an Easement?
”- Permanent right and receives a capital payment
- Capable of being registered at the land reg
- Allows a right enjoyed by one party over the land of another
- Prescriptive RoW or Easement can be obtained by continous or uninterupted use being proven over period of not less than 20 years”
What is adverse possession?
“Process by which a person who is not the legal owner of the land can become the legal owner through possession of the land for a specificed time without the owner’s permission
- Pre Land Registration Act 2003 12 years of possession
- Post then 10 years
- Land not registered then 12 years”
What are the four usual assumptions to a rent review?
“1. Property to let on open market by willing tenant and a willing landlordfor a term of years a stated
2. Property is fit and avilable for immediate occupation and use
3. All covenants observed by landlord and tenant
4. Property may be used for purpose set out in lease”
What are the 3 usual disregards?
“1. Any effect of goodwill on tenant’s occupation
2. Ignore goodwill attached to the property
3. Tenants improvements if landlord consent has been granted for the works”
What is the case linked to Time is of the Essence?
United Scientific Holdings Ltd v Burnley Borough Council 1977 and Bello v Ideal View 2006 - Court determined that a rent review was valid even after 13 years
What should you do if the lease is silent on hypothetical/notional term?
“Assume the residue of the term
Basingstoke and Deane Borough Council v Host Group 1987”
What is a deeming provision?
”- RR in older leases require a landlord to specify the rent in a trigger notice
- If tenant does not serve appropriate counter notice then tenant will have been deemed to accept the new rent”
What is the courts take on post dated evidence?
Courts hold that it is admissable provided it supports circumstances which could have been known about at the time of the review
What is the hierachy of evidence?
“1. Open market lettings
2. Rent reviews and lease renewals
3. Independent expert determinations
4. Arbitrator determinations
5. Court determinations under L&T Act 1954
6. Hearsay evidence
7. Sale and leasebacks
8. Surrender and renewals
9. Inter company arrangements”
What is a Calderbank letter and what’s its purpose?
”- Can achieve early resolution of a dispute and prevent costs escalating
- Must be served on a letter ‘Without Prejudice and Save as to Costs’
- In rent reviews losing party would have to pay all the costs
- Letter must set out all the terms to settle the dispute and the time limit for the other party to accept the offer - often 21 days
- Must be genuine offer to settle
- Arbitrator is obliged to make award for costs
- Lease renewals (Under Part 36 of the Civil Procedures Rules, 1998) - must be made in writing and remain open for acceptance for a min of 21 days”
What guidance note offers guidance on acting as an arbitrator?
RICS Guidance Note ‘Surveyors acting as arbitrators in commercial property rent reviews’ 2013
What is the current cost of the application for third party determination by the President of the RICS?
£425
How do you determine the method of determination for the rent review?
RTL
Tell me about an independent expert
”- Detailed knowledge of the market as a valuer
- Appointed by President of the RICS by the Dispute Resolution Service
- Not bound by judicial rules
- Can make own investigations and have own opinion
- Bound by terms of lease
- No appeal against their decision but they can be sued for negligence
- Good when there is a lack of comparables
- No power to order disclosure
- Orders costs as set out in lease but only has power over their own costs”
Tell me about arbitration
”- Arbitration Act 1996
- Can be appointed by RICS President using the Dispute Resolution Service and be a member of the Chartered Institute of Arbitrators
- Format decided by arbitrator to include agreed statement of facts and timetable for submission
- Statement of facts is a summary of the points agreed between both parties
- Can order costs (power over all costs)
- Provides a reasoned award
- Can only use evidence submitted by the parties
- Limited right of appeal
- Immune from negligence and can order disclosure - Section 34 of the Arbitration Act - rent review, comprable evidence has to be revealed”
What 3 specific grounds can you appeal to the High Court on, regarding an Arbitrators submission?
“1. A challenge to the tribunal’s jurisdiction
2. On a point of law
3. Serious irregularity”
What is disclosure?
“Entitles parties of a rent review to see the other sides rental evidence by ordering disclosure of the contents of a file at the decision of an arbitrator
- Can be used to secure the attendance of a witness
- ‘Without Prejudice’ makes a document legally privileged so it is protected against disclosure “
What is the Guidance note for an Independent Expert?
RICS Guidance Note - Independent expert determination 2016
What is an advocate?
“Represents their client at a hearing or in court
- Duty is to act in the best interests of their client”
What are the four key points of the RICS Practice Statement and Guidance Note ‘Surveyors Acting as Expert Witnesses (4th Edition) 2014? Applies to evidence given to arbitrators and independent experts
“1. The expert evidence provided by a chartered surveyor must be impartial and objective
2. Duty of the surveyor is to the court and this will override any obligations to the client
3. Evidence must be the independent work of the surveyor
4. The surveyor must believe that the facts upon which they rely are complete and true and their opinions are correct”
What must a rent review memorandum contain?
”- Name of landlord and tenant
- Address of the property
- Date of the lease and rent review
- Confirmation of the new rent agreed
- Signed dated by both parties”
What 6 basic elements must there be for a business tenancy have for protection under the Landlord and Tenant Act, under Section 23?
“1. It is a tenancy
2. Premises must be used for a business
3. Must be occupation of at least part of the premises by the tenant
4. There must be occupancy for at least 6 months
5. Must not be an exempted or excluded tenancy (tenancy at will eg)
6. Must be a competent landlord (freeholder or superior tenant with more than 14 months to run”
What does Section 24 of the Landlord and Tenant Act 1954 cover?
” - States that a business tenancy won’t expire through the elapsing of time but only when a notice is served
- Otherwise deemed to be holding over until either LL or Tenant serves a notice to terminate the lease”
What is Section 25 of the Landlord and Tenant Act 1954?
”- Landlord notice served not more than 12 months but not less than 6 months before the date for the termination of the tenancy to be specified
- Must be served by competent landlord
- Relate to whole of the property comprised in the tenancy
- State the date for termination
- Inform tenant of their rights
- Non hostile, LL is prepared to grant a new tenancy - proposed terms for new lease including new rent must be included
- Hostile, LL opposes new lease - grounds for opposition must be proposed
- Maximum term of 15 years can be granted by County Court
- If you pass date for new lease/termination as specified by s25/s26 notice then tenant loses their security of tenure unless:
1. New lease in place
2. Either party has applied to court
3. Parties have agreed in writing to an extension of their statutory period (a stay) “
What must a s25 notice contain?
”- Served on correct party
- Name and address of the landlord and tenant
- Address of the property
- Notice of the date to end tenancy (either hostile or non)
- Whether new lease is to be opposed or granted
- Confirmation of the date of response required
- Landlords proposals for new tenancy to include new rent
- Grounds for opposition if hostile
- Recommendation to seek professional advice”
What is a Section 26 notice?
“Tenant can serve a notice requesting a new tenancy beginning with a date more than 12 months and not less than 6 months after the making of a request
- Served on correct party
- Notice must be in prescribed form
- Must tenant’s contain proposal plus rent for new lease
- If landlord opposes they must serve counter notice within 2 months”