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APC 2023 - Land and Resources > Landlord and Tenant > Flashcards

Landlord and Tenant Flashcards

1
Q

Name some of the information required at the start of an instruction (RR)

A
  1. TOE
  2. Clients strategy and objectives
  3. Copy of existing lease, lease plans and D of V
  4. Copy of any licences
  5. Copy of any previous RRMs
  6. Contact details of tenant
  7. Copy of property Management file
  8. Comparable evidence held by the client.
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2
Q

What should you check before agreeing TOE?

A
  1. Competence
  2. Conflicts of Interest
  3. Complaints handling procedure
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3
Q

What are some bases of fee in RR/lease renewal?

A
  1. % of new rent agreed
  2. % of the saving made from the quoting rent
  3. A fixed fee
  4. An hourly rent
  5. An incentive fee
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4
Q

What are the actions required by the surveyor in a lease renewal/RR?

A
  1. Conflict of Interest and competency check
  2. Agree TOE
  3. Obtain understanding of clients objectives
  4. Obtain information from client (as above)
  5. Read the lease! - RR clause/ inside the act? / any renewal terms
  6. Is time is of the essence in RR ?
  7. Inspect and Measure
  8. Undertake a MR valuation
  9. Prepare a report to client
  10. Agree strategy with client
  11. Check any notice received is valid
  12. Conclude negotiations and document:
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5
Q

What 4 requirements must a lease have?

A
  1. Exclusive occupation
  2. Payment of rent
  3. Duration for a specific term
  4. If more than 3 years must be in writing, signed and registered as a deed
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6
Q

What is the case law for lease / licence?

A

Street v Mountford 1985
It does not matter what the document calls itself, if in all other respects the document acts like a lease then it counts as a lease

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7
Q

What is a tenancy at Will?

A

Tenancy at Will – licence created by written agreement for an unspecified time in which the landlord may evict the tenant.
No legal interest and no renewal right. (often used for allowing tenant early entry for fit out works)

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8
Q

What is adverse possession?

A

Adverse Possession – process by which the person who is not the legal owner can become the legal owner by possession of the land for a specified period of time. If the land is registered and there is 12 years possession before 2003 then the claim can be successful, if it is since 2003 then only 10 yrs are needed.

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9
Q

What is an assignment and how are old tenants still liable?

A

The tenants disposal of whole lease. Pre 1996 the previous tenant had privity of contract which meant the old tenant is automatically still liable. Post 1996 (intro’d by L&T (covenants) act 1995 the landlord can request an AGA (Authorised Guarantee Agreement).

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10
Q

What is a sublease?

A

a subsidiary lease created. Both need permission, not unreasonably withheld

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11
Q

What are 4 usual assumptions of a RR?

A
  1. Available to let on open market by willing tenant and a willing landlord for a term of years as stated
  2. Property is fit and available 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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12
Q

What are 3 usual disregards of a RR?

A
  1. Any effect of goodwill on tenants occupation
  2. Ignore goodwill attached to the property
  3. Tenants improvements if landlord consent has been granted for the works.
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13
Q

What is Time of the Essence and give an example of Case Law.

A

Time is of the Essence means there is a specific time limit for which the right needs to be exercised, otherwise it is lost.

Bello v Ideal View (2008) related to a lease where the landlord had not initiated the RR for 13yrs. The court held that time was not of the essence and the RR could proceed.

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14
Q

What is Notional Term in a RR and give an example of Case Law.

A

Notional Term = length of term to be valued – if silent assume that it is the remainder of the term.
Canary Wharf Investments v Telegraph Ltd, 2003

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15
Q

Can you use post dated evidence at a rent review?

A

the courts have held this is admissible provided it supports circumstances which could have been known about at the effective rent. A timeline can be used to devalue post-dated evidence.

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16
Q

What is a Headline rent review clause?

A

when the basis of valuation cannot consider any incentives agreed when analysing a comparable of a letting to arrive at net effective rent. Normally not agreed.

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17
Q

What is the Hierarchy of Evidence?

A
  1. Open Market Letting
  2. Lease Renewal
  3. Rent Review
  4. Independent/Arbitrator/Court determinations
  5. Sale and Leasebacks
  6. Lease re-gear
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18
Q

What are the benefits of a Calderbank?

A

Can achieve an early resolution and prevent costs escalating

Tool for influencing costs and negotiations in RR as the losing party will have to pay the other side’s recoverable costs

Avoids the equal awarding of costs

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19
Q

What must a Calderbank include/not include?

A

Letter must be headed ‘without prejudice save as to costs’ and not marked ‘subject to contract’

Letter must set out all the terms to settle the dispute and a time limit in which the other party must accept the offer. ( often 21 days)

Must be a genuine offer to settle and not simply used as a mechanism to influence costs/ pressure the other party

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20
Q

What are the 4 recommendations for RR in the Code for Leasing Business premises?

A
  1. Review clause should be clear
  2. Headline RR clauses should not be used
  3. Landlords should, on request, offer proposed option for RR based on a risk-adjusted basis. Where a landlord is unable to offer alternatives, a reason should be given.
  4. Leases should allow both the landlord and tenant to start the rent review process.
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21
Q

What is the RICS Note for Expert Determination?

A

RICS Guidance Note on Independent Expert Determination 2016

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22
Q

What is the Guidance note for Abitrators and what is the statue governing?

A

‘Surveyors acting as arbitrators in commercial property RR’s’ 2013’ and Arbitration Act 2016

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23
Q

What are the grounds and time limit for Appealing an arbitration to the High Court?

A

28 days

  1. A challenge to the tribunals jurisdiction
  2. A point of law
  3. Serious irregularity.
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24
Q

What is disclosure?

A

Section 34 of Arbitration Act: an arbitrator may order the disclosure of documents by the parties to the arbitration.

It entitles a party to a RR to obtain details of the other sides rental evidence

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25
Q

What are the differences between an Arbitrator and Expert Witness? EVIDENCE

A

Arbitrator must use only the evidence provided

Expert has duty of investigation

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26
Q

What are the differences between an Arbitrator and Expert Witness? APPEAL

A

Arbitrator - right to appeal to High Court within 28 days on 3 grounds (appeal the tribunal’s jurisdiction, on the basis of law, serious irregularity. )
Expert - no right to appeal

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27
Q

What are the differences between an Arbitrator and Expert Witness? NEGLIGENCE

A

Arbitrator cannot be liable for negligence

Expert can be liable for negligence

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28
Q

What are the differences between an Arbitrator and Expert Witness? DISCLOSURE

A

Arbitrator can award disclosure
Expert has no powers of disclosure

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29
Q

What are the differences between an Arbitrator and Expert Witness? LAW

A

Arbitrator has duties under the Arbitration Act 1996
Expert RICS Guidance Note on Independent Expert Determination 2016

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30
Q

What are the differences between an Arbitrator and Expert Witness? OUTCOME

A

A: Award
E: Determination

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31
Q

What are the differences between an Arbitrator and Expert Witness? RICS GUIDANCE NOTES

A

A: RICS Guidance Note on Surveyors acting as arbitrators in commercial property RR’s’ 2013
E: RICS Guidance Note on Independent Expert Determination 2016

32
Q

What are the differences between an Arbitrator and Expert Witness? COSTS

A

A: Power to award all costs
E: Power to award only her costs.

33
Q

Name the key areas of difference between Arbitration and Expert Witnesses

A

Evidence, Appeal, Negligence, Disclosure, Law, Outcome, RICS Guidance Notes, Costs.

34
Q

What is an advocate?

A

Represents their client in a hearing or in Court
Duty to act in best interest of client
Needs only to disclose what they want to disclose
Must act with integrity

35
Q

What is the RICS note for Advocates?

A

RICS Practice Statement ‘Surveyors acting as Advocates’ 2008

36
Q

What are the 4 key points relating to Expert Witnesses?

A
  1. Must be impartial and objective
  2. Duty is to the court, not the client
  3. Evidence must be their independent work
  4. Must believe the facts upon which they rely are complete and true
37
Q

What is the RICS note for Expert Witnesses?

A

RICS Practice Statement and Guidance Note ‘Surveyors Acting as Expert Witnesses (4th edition) 2014

38
Q

What are the 5 key contents of a RRM?

A
  1. Name of Landlord and Tenant
  2. Date of lease and RR
  3. New passing rent
  4. Address of the property
  5. Signature and Date of both parties
39
Q

What are the 4 ways a RR can be documented?

A
  1. RRM
  2. Expert Witness Determination
  3. Arbitration Award
  4. Written acceptance of Calderbank
40
Q

What is Section 23 under the LTA 1954?

A

States that to gain protection there must be a business tenancy with 6 basic elements:

  1. It is a tenancy
  2. Premises must be used for business
  3. Must be occupation of at least part by the tenant
  4. Occupancy of more than 6 months
  5. Must not be exempted or excluded tenancy (e.g. tenancy at will)
  6. Must be a competent landlord - freeholder or superior tenant with more than 14 months.
41
Q

What is Section 24 under the LTA 1954?

A

The Act does not expire just because its passed the contract end date - only when one party serves notice

42
Q

What is Section 25 under the LTA 1954?

A

Landlords notice (served 12-6 months before the date for the termination of the tenancy)

43
Q

What must the Section 25 notice have? (6)

A
  1. A competent landlord
  2. Relate to the whole property of the tenancy
  3. State date of termination
  4. Be in the prescribed form
  5. Friendly - contain terms of new lease
  6. Hostile - contain grounds for opposition
44
Q

What happens if you serve a s.25 or s.26 notice but pass the date with out agreeing a new lease?

A

The tenant loses their security of tenure unless parties have agreed to extend or one has applied to court

45
Q

What is Section 26 under the LTA 1954?

A

A tenants notice to request a new tenancy. Must be in prescribed form and contain proposals for new lease.

46
Q

How long does a landlord have to respond to tenants s.26 notice?

A

2 months

47
Q

What is Section 27 under the LTA 1954?

A

Notice to be served by tenant if they want to leave within 3 months after expiry date

If the tenant has already vacated no notice needs to be served.

48
Q

What is Section 30 under the LTA 1954?

A

Landlord grounds for opposition of new lease.

a) Breach of repairing covenant
b) Persistent delay in paying rent
c) Other substantial breach
d) Landlord provides suitable alternative occupation
e) Uneconomic subdivision
f) Redevelopment
g) Owner Occupation

49
Q

Which s. 30 grounds get compensation? How much is the compensation?

A

e) Uneconomic Subdivision
f) Redevelopment
g) Owner Occupation

Less than 14 yrs = 1* RV, More than 14 yrs = 2* RV

50
Q

Which case law supports S.30 (f) (redevelopment) grounds for compensation?

A

S Franses Ltd. v Cavendish Hotel (2017) - landlord must prove firm intent to carry out redevelopment works.

51
Q

What is Section 37 under the LTA 1954?

A

Details compensation due to tenant due to S.30 grounds e-g.

Tenants can also get compensation under Part 1 of LTA 1927.

52
Q

What is Sections 32-35 under the LTA 1954?

A

Outlines terms of a new lease.

53
Q

What sections outline the terms for a new lease, and what must be included?

A

Sections 32-35 - must be market rent, max. 15 yrs awarded by court, must ignore previous occupation, goodwill and any landlord improvements carried out by the tenant in past 21yrs.

54
Q

What are the 4 assumptions for Market Rent?

A
  1. Agreed between willing landlord and tenant
  2. Unit ready for immediate occupation
  3. Used for the purpose on the lease
  4. Any effect of L+T (covenants) Act 1995 should be considered.
55
Q

What are 3 main disregards for Market Rent?

A
  1. Ignore Goodwill provided by tenant
  2. Ignore goodwill provided by premises
  3. Ignore tenant improvement works given landlord consent
56
Q

What is Section 24A under the LTA 1954?

A

Sets our Interim rents - was changed in 2004”

57
Q

What are the rules around interim rents?

A
  1. Either party may apply from date of s.25 or s.26 notice
  2. Rent assumes annual tenancy and Market rent
  3. Can be decided using PACT
  4. Paid until new rent starts
58
Q

What is Section 40 under the LTA 1954?

A

Request for information from either landlord or tenant. Can be served from 2yrs before expiry and be served multiple times.

59
Q

What is Section 38A under the LTA 1954?

A

Sets out procedure for Contracting out the Act.

60
Q

What are some reasons for Contracting out the Act?

A
  1. Requirement of Headlease
  2. Landlord wishes to redevelop
  3. Landlord wishes to occupy
  4. Rent may be lower
  5. Landlord wants future flexibility
61
Q

What is the consequence of Contracting out?

A

The tenant has no statutory right to remain or seek compensation.

62
Q

How could a protected tenancy arise?

A
  1. Tenancy not within the Act
  2. No new lease but tenant remains in occupation after expiry AND/OR continues to pay rent
63
Q

How could a protected tenancy be avoided?

A

Granting a tenancy at will

64
Q

What is the process for contracting out?

A
  1. Landlord serves notice warning the lease wont be protected (Health Warning)
  2. Tenant must make a declaration confirming they have received and accept terms
  3. Must be completed before lease is signed
65
Q

What are two types of declaration under S.38A?

A

Simple - at least 14 days before lease starts
Statutory - less than 14 days. Is in front of an independent solicitor.

66
Q

What are some ways of terminating a lease?

A
  1. Forfeiture
  2. Surrender and negotiation
  3. Merger
  4. Disclaimer (due to insolvency)
  5. Break Clauses
  6. Lease expiry and serving of notices under LTA 1954.
67
Q

What are 2 ways of 3rd party determination?

A

County Court or PACT (Professional Arbitration on Court Terms)

68
Q

What is County Court 3rd part determination?

A

Part 36 offer - Similar to Calderbank. Encourages parties to settle. Open for 21 days or offering party can withdraw it.

69
Q

What is PACT?

A

Professional Arbitration on Court terms - it is an Alternative Dispute Resolution:

In-court PACT is designed to be used for an unopposed new tenancy where one party has already made an application to court to fix the terms of the new tenancy

Out-of-court PACT should be used when no court application has been made by either party and the parties agree to a postponement of such application pending an out of court PACT resolution

70
Q

What are the advantages of PACT? (5)

A
  1. Faster
  2. No full court hearing
  3. Greater flexibility and control
  4. Less expensive
  5. Decision by surveyor acting as arbitrator and not a judge.
71
Q

What does without prejudice mean?

A

Cannot be disclosed to a third party/tribunal/Court if it is genuinely aimed at settling a dispute

72
Q

What does subject to contract mean?

A

That the parties do not intend to be legally bound until a formal contract is executed

73
Q

What does without prejudice save as to costs mean?

A

That the matter can only be brought before a third party/tribunal/Court on the matter of costs (providing it is a genuine attempt to settle)

74
Q

How does the valuation basis for a rent review differ from that for a lease renewal?

A

The basis for a lease renewal is prescribed by the 1954 Act, not the lease

75
Q

What are the differences between an Arbitrator and Expert?

A

Arbitration is governed by the Arbitration Act 1996, an Expert by the lease
An Expert has a duty of investigation, an Arbitrator acts only on the evidence submitted by the parties (whilst also drawing their attention to matters they may not be aware of)
An Arbitrator must refer to the parties’ evidence, submissions aren’t always required for Expert Determination
An Arbitrator always has discretion on costs, an Expert only has power if the lease reserves this
There is no right of appeal for an Expert (although the Court may set aside the Determination in limited circumstances), an Award can be challenged under the 1996 Act
An Arbitrator is not liable for negligence if they acted in good faith, an Expert can be liable in damages for losses sustained through negligence

76
Q

What are the relevant timescales for a Section 25 or 26 notice?

A

6-12 months

77
Q

Under which Section 30 grounds of opposition is compensation for disturbance payable?

A

E,F,G

APC 2023 - Land and Resources (18 decks)

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