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APC TH > Landlord and Tenant > Flashcards

Landlord and Tenant Flashcards

1
Q

What is the information required from a client to initiate a rent review/lease renewal (7)?

A

”- 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”

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2
Q

What must you check before you take on a lease renewal/rent review instruction?

A

”- Whether you’re competent
- No personal interest or conflict
- Confirmation of complaints handling procedure
Agreed terms of engagement
“

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3
Q

How can fees for a rent reviews or lease renewals be structured?

A

”- Percentage of new rent agreed
- A percentage of the saving made form quoted rent
- Fixed fee
- Hourly rate”

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4
Q

What actions are required by a surveyor in a lease/rent review (14) (Time of essence or contracted out?) ?

A

“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”

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5
Q

What does Without prejudice mean?

A

”- 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 “

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6
Q

What does Subject to contract mean?

A

Subject to contract

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7
Q

What is a licence?

A

”- Passes no interest in land but makes lawful what otherwise would be unlawful
- A personal right which can be terminated by either party “

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8
Q

What are the four requirements of a lease?

A

“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”

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9
Q

What are 3 differences between a lease and a licence?

A

“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

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10
Q

What case sets out differentiation between a lease and a licence?

A

Street v Mountford (1985) Mountford occupied two rooms subject to weekly rent. Court ruled it was a lease - Rent, exclusive possession and term certain

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11
Q

What is a tenancy at will?

A
  • Form of licence created by written agreement for an unspecified time in which the landlord may evict the tenant at any time
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12
Q

What are the two uses for a tenancy at will?

A

“1. Allowing tenant early entry for fit out works
2. Tenant is agreeing a new contracted out of the 1954 Act Lease”

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13
Q

What is a Wayleave?

A

”- 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
“

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14
Q

What is an Easement?

A

”- 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”

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15
Q

What is adverse possession?

A

“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”

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16
Q

What are the four usual assumptions to a rent review?

A

“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”

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17
Q

What are the 3 usual disregards?

A

“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”

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18
Q

What is the case linked to Time is of the Essence?

A

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

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19
Q

What should you do if the lease is silent on hypothetical/notional term?

A

“Assume the residue of the term
Basingstoke and Deane Borough Council v Host Group 1987”

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20
Q

What is a deeming provision?

A

”- 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”

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21
Q

What is the courts take on post dated evidence?

A

Courts hold that it is admissable provided it supports circumstances which could have been known about at the time of the review

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22
Q

What is the hierachy of evidence?

A

“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”

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23
Q

What is a Calderbank letter and what’s its purpose?

A

”- 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”

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24
Q

What guidance note offers guidance on acting as an arbitrator?

A

RICS Guidance Note ‘Surveyors acting as arbitrators in commercial property rent reviews’ 2013

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25
Q

What is the current cost of the application for third party determination by the President of the RICS?

A

£425

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26
Q

How do you determine the method of determination for the rent review?

A

RTL

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27
Q

Tell me about an independent expert

A

”- 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”

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28
Q

Tell me about arbitration

A

”- 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”

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29
Q

What 3 specific grounds can you appeal to the High Court on, regarding an Arbitrators submission?

A

“1. A challenge to the tribunal’s jurisdiction
2. On a point of law
3. Serious irregularity”

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30
Q

What is disclosure?

A

“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 “

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31
Q

What is the Guidance note for an Independent Expert?

A

RICS Guidance Note - Independent expert determination 2016

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32
Q

What is an advocate?

A

“Represents their client at a hearing or in court
- Duty is to act in the best interests of their client”

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33
Q

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

A

“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”

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34
Q

What must a rent review memorandum contain?

A

”- 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”

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35
Q

What 6 basic elements must there be for a business tenancy have for protection under the Landlord and Tenant Act, under Section 23?

A

“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”

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36
Q

What does Section 24 of the Landlord and Tenant Act 1954 cover?

A

” - 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”

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37
Q

What is Section 25 of the Landlord and Tenant Act 1954?

A

”- 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) “

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38
Q

What must a s25 notice contain?

A

”- 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”

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39
Q

What is a Section 26 notice?

A

“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”

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40
Q

What is a section 27 notice?

A

”- Notice to be served by tenant if they want to leave with a 3 month notice after the lease expiry date
- If tenant moves out prior to the lease expiry date then no notices needs to be served if the property is vacant”

41
Q

What section of the Landlord and Tenant Act 1954 sets out the ground for opposing a new tenancy and what are they (7)?

A

“Section 30
a) Breach of repairing covenant
b) Persistent delay in paying out
c) Other substantial breach
d) Provide suitable alternative accommodation
e) Uneconomic subdivision (compensation payable)
f) Demolition or reconstruction (compensation payable) - must provide intention, prove funding and planning, substantial work & necessity to gain vacant possession & ability to redevelop provided vacant possession is secured
g) Owner occupation (compensation payable) - must have owned property for 5 years and prove intentino to occupy and/or run a business”

42
Q

Opposing a renewal - Which grounds are discretionary and the court will decide if their reasonable, and which are mandatory?

A

“a) to e) discretionary
f) and g) are mandatory “

43
Q

Name some cases related to opposition of new tenancies

A

” 1) S Franses Ltd v The Cavendish Hotel (London) Ltd, 2017
- Initially held that a landlord is entitled to refuse new business tenancy on redevelopment grounds even where the redevelopment is devised solely for evicting the tenant
- Supreme Court overruled in favour of the tenant in 2018 meaning landlord has to prove a firm and settled intention to carry out works
2) Betty’s Cafes Ltd v Phillip Furnishing Stores (1959)
- Court held that facts underlying grounds a0 to c) will need to be established at the date of the hearing and the statements given in a notice must be given honestly and truthfully
3) Associated British Ports v Humber Oil Terminal Trustees
- Case relates to the landlord wishing not to renew a lease if it planned to occupy the premises for their own purposes
- Tenant tried to seek new lease as landlord wanted terminal for own occupation to open it up to third party users
- Court held that landlord did not have to renew the lease on the grounds that it could deminstrate clear intentions to occupy the holding for it’s own purposes”

44
Q

What does Section 37 of the Landlord and Tenant Act 1954 relate to?

A

“Compensation of successful Section 25 opposing new business tenancy notice
- 14 years plus occupation then it’s 2x RV
- Less than 14 years 1x RV
- RV in force as at the date of the hostile s25 or s26 counter notice”

45
Q

What do Sections 32-35 of the Landlord and Tenant Act 1954 cover?

A

Terms of the new lease

46
Q

What are the four principles under O’May and City of London Real Property Co. (1982) to test the variation of lease terms to reflect ‘modern’ lease terms

A

“1. Landlord must have valid reason reason on estate management grounds
2. Change proposed must be capable of being compensated by a change in rent
3. Change must not materially adversely affect the tenants security of tenure
4. It must be reasonable”

47
Q

Tell me about rental valuation under the landlord and tenant act 1954, s34

A

”- Valuation date = date of commencement of the new lease as per notice
- If new renewal goes to court then date of commencement of new tenancy will be 3 months and 2 weeks from the date of the hearing at which the court determines the rent
- Court should assess rent based on the best available evidence at the date of the hearing
Four assumptions for market rent:
1. Regards to the terms of the new tenancy
2. There is a willing landlord and a willing tenant
3. The premises are to be let with vacant possession
4. Any effect on rent of the operation of the Landlord and Tenant Covenants Act 1995 “

48
Q

What four matters are disregarded by the court in rent valuation as set out in Section 34 of the 54 Act?

A

“1. Any effect on rent of the tennats occupation
2. Any goodwill in the tenants business attaching to the premises
3. Any effect on rent improvements carried out by the tenant (unless obligated by LL or carried out 21 years before tenancy application)
4. In the case of licensed premises, any effect on rent of additional value because of a license belonging to the tenant “

49
Q

What part of the 1954 Act governs interim rent?

A

s24a

50
Q

What is interim rent?

A

“Rent payable by business tenant under the Act for the period of occupation between the period of occupation between the termination of the former tenancy and the commencement of the new lease
- Rent assumes annual tenancy and a market rent
- Normally market rent but can be subject to adjustment if market conditions change significantly
- Can be decided by PACT
- No notice then no interim rent
- Rent to be paid from end of fixed term tenancy until new rent starts “

51
Q

Who can apply for interim rent?

A

Either party from the date of a s25 or s26 notice

52
Q

What does s40 of the 1954 Act enable?

A

”- Request information from either landlord or tenant
- Will be able to see who is competent landlord and tenant
- Either party can serve in last two years of tenancy
- Name and registered address for other party
- Other party must respond within one month
- Not limited to service of just one notice
“

53
Q

Which section of the 1954 Act defines competent landlord?

A

Section 44

54
Q

What are the two choices for third party determinations for lease renewals?

A

“1. County court - follow civil procedures rules 1998
- Used only for anticipated or on-going court precedures
- A part 36 is similar to a calderbank to induce the other party to settle if the offer is a genuine attempt to settle. Offer only open for 21 days. Still be accepted after but party can withdraw”
2. PACT

55
Q

What does PACT stand for and tell me about it?

A

“Professional Arbitration on Court Terms
- RICS encoruages it as ADR
- IN-court PACT used for an unopposed tenancy where one of the parties has already made an application to court to fix the terms of the new tenancy
- Out-of-court-PACT when no application to court has been made and parties agree to postponement of such application pending out-of-court PACT resolution
- Both parties agree which parties are agreed and which are to be decided by third party
- Court needs to give a consent order binding on both parties
- Arbitrator is nominated by the President of the RICS
- Decision is binding
Advantages:
- Cheaper
- Faster
- Full court hearing is avoided
- Decision made by a surveyor not a judge
“

56
Q

What is Section 34 of the 54 Act?

A

Basis of valuation for the new rent

57
Q

What is 38a of the 1954 Act?

A

Sets out the procedure for contracting outside the 1954 Act

58
Q

What is s28 of the 1954 Act?

A

Renewal of tenancy by agreement. The tenant would lose their 1954 Act Protection.

he basic effect of section 28, therefore, is that where the current landlord and tenant reach an agreement for a new lease of the tenant’s premises to be granted at some date in the future, the tenant’s existing lease immediately loses its 1954 Act protection and terminates on the date the new lease has been agreed to begin.

The rationale for this section would appear to be simple: what need is there for a tenant to have a right to renew its current lease under the 1954 Act, if it has already agreed a new lease with its landlord?

59
Q

Why might a letting be contracted outside of the 1954 Act?

A

”- Headlease requires any subletting to be
- Landlord will want to reoccupy
- Landlord wishes to redevelop
- Tenant is happy to accept in exchange for a lower

60
Q

What’s the impact of being contracted outside of the 1954 Act?

A

”- Tenant has no statutory right to renew or to seek compensation for leaving
- Landlord must ensure the premises are vacant at lease expiry
- If they accept rent then a protected tenancy may be created
- No rent should be collected
- If terms haven’t been agreed but LL is happy to grant new lease then tenancy at will is required to ensure tenant cannot claim statutory protection between termination of old lease and the new
- Strict procedure must be followed to contract a lease outside of the Act
- Landlord must serve notice on prospective tenant warning that lease will not be protected ‘health warning’
- Proposed tenant must then make a declaration in their response
- Must complete before lease is signed
- 2 types of declaration:
1. Simple - 14 days or more before committing the lease
2. Statutory - Parties have less than 14 days prior to committing to lease - must be in front of an independent solicitor”

61
Q

What ways are their to terminate a lease?

A

“1. Forfeiture
2. Surrender and negotiation
3. Merger
4. Disclaimer (due to insolvency)
5. Break clauses
6. Lease expiry and service of notices uner Landlord and tenant Act 1954”

62
Q

What is a periodic tenancy?

A

“Protected tenancy
A rolling tenancy with no fixed end date, ie on a month to month basis or week to week “
If there are negotiations then most likely be a tenancy at will but the landlord should seek to document this.

63
Q

What is a tenancy at will?

A

Occupied at will of landlord although if longer than 6 months then there is risk of becoming a lease

64
Q

How do you calculate the interim rent date?

A

It is payable from the earliest date a that could have been specified in any 25/26 notice (12 months versus 6 months)

24b ‘Appropriate Rent’

Where a Landlord’s section 25 notice has been issued, the interim rent is payable from the earliest date that the existing lease could have been terminated.

Where a tenant has served a section 26 notice requesting a new lease, interim rent is payable from the earliest date that could have been given for the commencement of the new lease.

Is not applicable if neither a s25 or s26 notice is served and no application is made.

65
Q

Which case did a Calderbank derive from?

A

Calderbank v Calderbank 1975

66
Q

What did the Landlord and Tenant Act 1988 introduce?

A

The word delay in not to be unreasonably witheld from 1927 Act

67
Q

Talk me through a rent review you have been involved in step by step

A

…

68
Q

What is a Deed?

A

A legal instrument in writing which passes affirms or confirms an interest, right, or property ownership

69
Q

What is a restrictive covenant?

A

A covenant imposing a restriction on the use of the land so value and enjoyment of adjoining land will be preserved

70
Q

What are chattels?

A

“A personal possession
- Pick up and move”

71
Q

What are fixtures and fittings?

A

Anything attached to the property

72
Q

What is a Joint tenancy?

A

“A legal arrangement where two or more people own/lease a property each with equal rights/obligations
- Rights of Survivorship
- Tenancy in common would pass to heir”

73
Q

What is the latest case relating to s24d valuation?

A

S Frances Ltd v The Cavendish Hotel

74
Q

What does s24d of the 1954 Act relate to?

A

When the court has to assess an interim rent which is reasonable for a tenant to pay on an opposed renewal

75
Q

What section of the 1954 Act is Interim Rent governed by?

A

s24a

76
Q

Who can serve a s26?

A

A tenant via their lawyers

77
Q

What’s an IRI lease?

A

“Internal Repairing and Insuring
- Landlord is responsible for costs of external and structural repairs”

78
Q

What are the pros and cons of serving a Calderbank?

A

“Not revealed to dispute resolver until decision made
Flexible
Provide an offer on a certain basis
Parties shall bear own costs
Not governed by strict court rules
Costs could be at risk if wrong”

79
Q

Whats a part 36?

A

“Offer from civil procedure rules
Issued at any time after proceedings are issued
Must be made clear that it is made in relation to part 36
Must be made in writing
Can be withdrawn if expressly withdrawn in writing
If accepted then other side covers costs up to that point”

80
Q

How has your client occupied an expired lease?”

A

Under s24 of the Landlord and Tennat Act 1954

81
Q

Were you at risk of exposure to a counter notice if you contacted the landlord within two months post service of s26?

A

Yes

82
Q

Whats a part 36?

A

“Offer from civil procedure rules
Issued at any time after proceedings are issued
Must be made clear that it is made in relation to part 36
Must be made in writing
Can be withdrawn if expressly withdrawn in writing
If accepted then other side covers costs up to that point”

83
Q

What are the pros and cons of serving a Calderbank?

A

“Not revealed to dispute resolver until decision made
Flexible
Provide an offer on a certain basis
Parties shall bear own costs
Not governed by strict court rules
Costs could be at risk if wrong”

84
Q

What is time of the essence?

A

Timing material to the contract

85
Q

What is litigation?

A

Process of parties taking legal action through the courts, defined by the civil procedure rules

86
Q

How do you refer appointment to the RICS Dispute resolution service?

A

DRS1 form

87
Q

What is contained within a DRS1 form?

A

Authority to appoint
Property information
Lease info, plus dispute clause information
Information about parties and their representatives
Conflicts of interest

88
Q

What happens after a DRS1 form is submitted?

A

Dispute resolver is appointed who is free from conflicts of interest
- Representative surveyors switch to expert witness - duty is to the 3rd party or court
- Submit statement of truth with their submission
- State the main facts and assumptions they’ve use - can’t omit any material they’ve used to make their conclusion
- Joint statement of agreed facts is to be submitted (comps, lease terms)
- Submit written representation
- Swap
- Counter representation
- Third part issues award or determination

89
Q

What’s the difference between a stay and an extension?

A

…

90
Q

What is a UN1 form?

A

Unilateral notice
- Used to register an interest against a property by a third party
- Entered into the charges register of a property

91
Q

What is the interim rent date?

A

The earliest date that could have been specified in the notice as the commencement date of the new tenancy

92
Q

What does the Civil Procedure Rules (CPR) govern?

A

The conduct of all litigation in England and Wales

93
Q

How much does it costs to issue court proceedings?

A

Varies - £35 - £10,000 depending on size of claim

94
Q

What happens if parties cannot settle negotiations after notices have been served?

A
  • Either party can make the application to court - Proceedings can be issued immediately after serving a s25
  • Proceedings can be issued two months after the start of the s26
  • Tenant must issue no later than the date contained within the notice in order to protect its automatic renewal rights
  • Unless an extension is agreed in writing
  • Proceedings are issued by lodging papers at court with a fee
  • Either party can make an application for interim rent, for the rent payable during the statutory continuation of the tenancy
  • Once issued the claimant can delay serving them for up to 4 months. Defendant can compel the Claimant to serve proceedings.
  • Defendant has 14 days within which to serve Acknowledgement of Service setting out proposals
  • Timetable then agreed which will include dates for schedule of terms in dispute, exchange of expert reports and witness statements
95
Q

If you’ve received a hostile counter notice as the tenant what do you do?

A

Apply to the court under section 29 of the L&T 1954

96
Q

G owner occupation grounds for opposition = what’s the relevant case?

A

Bettys Cafe Ltd v Phillips Furnishing Stores 1959

97
Q

What does s37 of the Landlord and Tenant Act 1954 cover?

A

Compensation for disturbance under e,f and g of section 30

98
Q

What does the Law of Property (Miscellaneous Provisions Act) 1989 state in regard to new lease?

A
  • if less than 3 years then don’t need to be written
99
Q

What is a right of pre-emption?

A

Where a tenant serves notice to assign and the landlord has the right to take the premises back

APC TH (18 decks)

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