Landlord and Tenant Flashcards
Name some of the information required at the start of an instruction (RR)
- TOE
- Clients strategy and objectives
- Copy of existing lease, lease plans and D of V
- Copy of any licences
- Copy of any previous RRMs
- Contact details of tenant
- Copy of property Management file
- Comparable evidence held by the client.
What should you check before agreeing TOE?
- Competence
- Conflicts of Interest
- Complaints handling procedure
What are some bases of fee in RR/lease renewal?
- % of new rent agreed
- % of the saving made from the quoting rent
- A fixed fee
- An hourly rent
- An incentive fee
What are the actions required by the surveyor in a lease renewal/RR?
- Conflict of Interest and competency check
- Agree TOE
- Obtain understanding of clients objectives
- Obtain information from client (as above)
- Read the lease! - RR clause/ inside the act? / any renewal terms
- Is time is of the essence in RR ?
- Inspect and Measure
- Undertake a MR valuation
- Prepare a report to client
- Agree strategy with client
- Check any notice received is valid
- Conclude negotiations and document:
What 4 requirements must a lease have?
- Exclusive occupation
- Payment of rent
- Duration for a specific term
- If more than 3 years must be in writing, signed and registered as a deed
What is the case law for lease / licence?
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
What is a tenancy at Will?
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)
What is adverse possession?
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.
What is an assignment and how are old tenants still liable?
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).
What is a sublease?
a subsidiary lease created. Both need permission, not unreasonably withheld
What are 4 usual assumptions of a RR?
- Available to let on open market by willing tenant and a willing landlord for a term of years as stated
- Property is fit and available for immediate occupation and use
- All covenants observed by Landlord and Tenant
- Property may be used for purpose set out in lease.
What are 3 usual disregards of a RR?
- Any effect of goodwill on tenants occupation
- Ignore goodwill attached to the property
- Tenants improvements if landlord consent has been granted for the works.
What is Time of the Essence and give an example of Case Law.
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.
What is Notional Term in a RR and give an example of Case Law.
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
Can you use post dated evidence at a rent review?
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.
What is a Headline rent review clause?
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.
What is the Hierarchy of Evidence?
- Open Market Letting
- Lease Renewal
- Rent Review
- Independent/Arbitrator/Court determinations
- Sale and Leasebacks
- Lease re-gear
What are the benefits of a Calderbank?
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
What must a Calderbank include/not include?
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
What are the 4 recommendations for RR in the Code for Leasing Business premises?
- Review clause should be clear
- Headline RR clauses should not be used
- 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.
- Leases should allow both the landlord and tenant to start the rent review process.
What is the RICS Note for Expert Determination?
RICS Guidance Note on Independent Expert Determination 2016
What is the Guidance note for Abitrators and what is the statue governing?
‘Surveyors acting as arbitrators in commercial property RR’s’ 2013’ and Arbitration Act 2016
What are the grounds and time limit for Appealing an arbitration to the High Court?
28 days
- A challenge to the tribunals jurisdiction
- A point of law
- Serious irregularity.
What is disclosure?
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
What are the differences between an Arbitrator and Expert Witness? EVIDENCE
Arbitrator must use only the evidence provided
Expert has duty of investigation
What are the differences between an Arbitrator and Expert Witness? APPEAL
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
What are the differences between an Arbitrator and Expert Witness? NEGLIGENCE
Arbitrator cannot be liable for negligence
Expert can be liable for negligence
What are the differences between an Arbitrator and Expert Witness? DISCLOSURE
Arbitrator can award disclosure
Expert has no powers of disclosure
What are the differences between an Arbitrator and Expert Witness? LAW
Arbitrator has duties under the Arbitration Act 1996
Expert RICS Guidance Note on Independent Expert Determination 2016
What are the differences between an Arbitrator and Expert Witness? OUTCOME
A: Award
E: Determination