Landlord and Tenant

Question 1

What is the difference between a licence and a lease?

Answer 1

A lease = an agreement whereby a tenant will occupy a property exclusively, for a fixed period of time,

whereas

A licence = grants permission for the licensee to do certain agreed activities on a licensor’s property. A licence does not grant the licensor exclusive occupation.

The key legal case = Street v Mountford

Question 2

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

Answer 2

e
f
g

Question 3

What are the differences between an Arbitrator and an Expert?

Answer 3

• 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 is not liable for negligence if they acted in good faith, an Expert can be liable in damages for losses sustained through negligence
• 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

Question 4

What does without prejudice mean?

Answer 4

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

Question 5

What does subject to contract mean?

Answer 5

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

Question 6

What does without prejudice save as to costs mean?

Answer 6

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)

Question 7

What was the O’May v City of London Real Property Co Limited case?

Answer 7

The current lease will form the basis for any new lease ordered by the court, subject to any modification or changes that might be justified by the parties.

Substantial variations in the existing terms of the lease need to be agreed between the parties. If an agreement cannot be reached between the parties the court will begin its considerations by looking at the terms of the existing lease.

Question 8

What is a superior lease / head lease?

Answer 8

This will commonly be a long lease for the whole of the building or an estate in which individual leases for part may be created under this.

Question 9

What is the importance of a head lease / superior lease on renewal?

Answer 9

Need to be checked to ensure that the landlord is entitled to grant the term and the privileges that are contained in the occupational lease. The head lease may also require the occupational lease to contain rent reviews at specified intervals or that the occupational lease rent may not be less than that payable under the head lease.

Question 10

What does a licence for alteration outline?

Answer 10

• The extent of works that may have been carried out by either party
• The extent to which these should be regarded as improvements and
• The existence of reinstatement provisions.

The date that improvements or alterations were carried out may affect the extent of the demise to be valued on renewal.

Question 11

What are the benefits and disadvantages of a side letter?

Answer 11

• Can be personal to the particular landlord and tenant.
• Helps to protect evidence on the estate.
• Unlikely to be significant on renewal.

Question 12

What is a Deed of Variation?

Answer 12

A document which supplements an existing lease putting into effect a variation to that lease. E.g. A variation allowing a leaseholder to sublet their property where previously it had been prohibited.

Question 13

Tell me what you know about the potential changes to the Landlord and Tenant Act 1954.

Answer 13

⦁ Review being undertaken by the Law Commission
⦁ Decision expected late 2023.
⦁ Reviewing possible options concerning:
⦁ Grounds of opposition for the redevelopment of a property
⦁ The renewal of turnover rent leases
⦁ Alternative forms of dispute resolution procedures.
⦁ Contracting out provisions

Question 14

What is the difference between leases within the Act and Contracted Out leases?

Answer 14

• Relates to sections 24 to 28 of the Landlord and Tenant Act 1954
• Leases within the Act means that the Tenant:
• Has security of tenure
• Has the right to be granted a renewal lease and the landlord can only oppose it on certain limited grounds
• Is entitled to a renewal lease of the same terms, save as for rent and duration.
• Contracted Out leases means that the Tenant:
• Sections 24 to 28 of the Landlord and Tenant Act 1954
• Has no security of tenure
• Must leave at the end of the term (unless the landlord offers a new lease)
• Has no right to compensation from the landlord
• Has no right to ask the court to fix the rent or the terms of the lease if the landlord offers a new one

Question 15

What are the pros and cons to a Landlord of a Tenant holding over under the terms of an existing lease?

Answer 15

Pros:
- Can allow the Landlord to negotiate terms with the Tenant once marketing conditions are more favourable
- Provides the Tenant with increased flexibility meaning they can remain in occupation longer depending on their business plan.

Cons:
- No security of tenure for the Landlord
- Can be disadvantageous if the Landlord is wanting to sell the premises as an investment.
- Landlord has no control over how long it can stay in occupation of its premises
Allowing a Tenant to hold over

Question 16

What due diligence would you undertake before entering into negotiations on a Lease renewal?

Answer 16

• Check the Tenants financial history on companies house and look for any signs of changes in persons with significant control.
• Check the Tenant is still trading well.
• ## Check the Tenant is continuing to comply with all covenants of the existing lease

Question 17

How would you determine a fair rent?

Answer 17

Review of comparable transactions in the market and make any adjustments where appropriate.

Question 18

What is an extension of time?

Answer 18

Extension of the expiry date of the Section 25 Notice agreed between the Landlord and Tenant.

Question 19

What legislation was bought in by the Government during COVID-19 and what impact did this have?

Answer 19

Commercial Rent (Coronavirus) Bill which has now been passed as the Commercial Rent (Coronavirus) Act 2022.

• Moratorium on enforcement of protected rent debts
• Arbitration process for protected rent debts.

Coronavirus Act 2020 - implemented a moratorium on forfeiture

Question 20

What process was available to landlords and Tenants to resolve non-payment of rents disputes during the COVID-19 pandemic?

Answer 20

Arbitration related to “protected rent” which was rent incurred during the period March 2020 - July 2021 in England and August 2021 in Wales where the Tenant was adversely affected by coronavirus.

Question 21

What is the process for forfeiting a lease for non-payment of rent?

Answer 21

• Check the Lease for a forfeiture clause and the date in which a landlord in able to forefeit the lease due to non-payment of rent (i.e. 14 or 21 days)
• Rent must have been properly demanded
• Landlord enters the property by peaceable re-entry or court proceedings.
• peaceable re-entry - property must not be occupied.
• Lease is terminated
• Tenant has the right to relief from forfeiture from the court within 6 months provided outstanding arrears are settled

Question 22

What is the process for initiating a lease renewal from the landlord and the tenant’s perspective?

Answer 22

Section 25 Notice - Landlord (hostile or non-hostile)

Section 26 Notice - Tenant.

Question 23

Would the landlord negotiate out a break if the lease was inside the Act?

Answer 23

They could try however, should the Tenant dispute this and the matter was to go to court, it is likely that the Court would consider the case of O’May and the market at the time.

Question 24

What is an interim rent and under what circumstances is this likely to come into play?

Answer 24

Payable in a lease renewal situation where notices have been served and the expiration date in the Notice is the date in which the new rent will be payable from. If the new lease is agreed following the date in the notice the interim rent would be payable from the expiration date in the notice to the date in which the rent is payable under the new lease.

Section 24 of the Landlord and Tenant Act 1954.

Make an application to the Court to determine the interim rent. Time limit of 6 months after the termination of the relevant tenancy to apply for an interim rent to be determined.

Question 25

What is a Section 25 Notice?

Answer 25

Notice served by the Landlord on the Tenant no less than 6 months and no later than 12 months in advance of the date in which the Landlord wants the existing tenancy to end.

Hostile section 25 Notice - landlord opposes a new tenancy on Grounds A - G

Non-hostile Section 25 Notice - landlord includes the terms of a new tenancy

Question 26

When would you serve a Section 25 Notice?

Answer 26

When you are acting for a Landlord and you are wanting to trigger a Lease renewal.

Question 27

What would the recipient need to do when they receive a Section 25 Notice?

Answer 27

Tenant doesn’t have to acknowledge the notice or respond immediately, however, by the expiration date within the Section 25 Notice the Tenant must have either negotiated an extension of time, made an application to Court, vacated the premises or agreed a new lease to prevent them losing their security of tenure rights.

Question 28

When would a Landlord serve a hostile Section 25 Notice?

Answer 28

Where a landlord wishes to oppose a new tenancy on Grounds A - G.

Question 29

What should be included in a Rent Review Notice?

Answer 29

• Details of the parties.
• Details of the revised rent proposed
• Details of the Lease in which the rent can be revised
• Without prejudice basis

Question 30

What should be included in a Rent Review Memorandum?

Answer 30

• Details of the parties.
• Details of the revised rent agreed in words and figures
• Details of the Lease in which the rent is revised
• Signed by both parties
• Dated

Question 31

How is compensation payable to a Tenant calculated?

Answer 31

• If the tenant (and any such predecessor) has been in occupation for less than 14 years, compensation will be payable at 1x the rateable value of the property
• If for 14 years or more, the compensation will be 2x the rateable value

Question 32

What is the process for serving a Section 25 Notice to oppose a new tenancy?

Answer 32

• The notice must be served no more than 12 months and no less than 6 months before the landlord wants the present tenancy to end.
• The date the Landlord specifies for the end of the tenancy can be the last date of the lease or any date after that
• Follow the prescribed format for the forms which is in two parts: the notice and the notes for the tenant.
• Following the service of the Notice and the prescribed forms, there is a period of negotiation.
• It is common for the parties to agree that the tenant will surrender its lease and vacate the property, subject to payment of compensation. However, if the parties cannot agree terms for the tenant to vacate, either one of them will have to apply to the Court to resolve the matter.

Question 33

What are the grounds for refusal of a new lease?

Answer 33

A. Breach of repairing covenant
B. Persistent delay in paying rent
C. Breaches of other obligations
D. Availability of alternative accommodation
E. Sub-tenant - possession required for letting or disposing of whole of property
F. Landlord intends to demolish or reconstruct
G. Landlord intends to occupy the premises themselves

Question 34

What is ground A requirement for refusal of a new lease?

Answer 34

A. Breach of repairing covenant

• discretionary ground
• The landlord must show that the tenant ought not to be granted a new tenancy in view of the state of repair of the premises.
• The court may take into account an offer by the tenant that the new tenancy should contain a covenant obliging the tenant, immediately to repair the premises as the original lease required
• Evidence: Schedule of dilapidations showing the condition of the premises, the work required to remedy it and the covenant of which the tenant is allegedly in breach.

Question 35

What is ground B requirement for refusal of a new lease?

Answer 35

B. Persistent delay in paying rent

• Discretionary ground
• The landlord must show that the tenant ought not to be granted a new tenancy in view of its persistent failure to pay the rent at the time stated in the lease.
• The court’s main consideration will be whether the landlord will be able to rely on the tenant to pay the rent promptly in the future.
• If the landlords has been consistently accepting late payment of rent from the tenant without insisting compliance, the Court is likely to give consideration to this.
• evidence: statement showing the date the rent was payable and the date in which it was paid.

Question 36

What is ground C requirement for refusal of a new lease?

Answer 36

C. Breaches of other obligations

• This is a discretionary ground.
• The landlord must show that the breaches are such that the tenant ought to be deprived of a new tenancy
• Any waiver of, or acquiescence in, a breach by the landlord will influence the court against the refusing of a new tenancy on the grounds of the breach.
• The court will consider all the circumstances surrounding the breach and the past conduct of the tenant.
• Evidence: Schedule of the covenants of which the tenant has been in breach and details of the breach or breaches complained of.

Question 37

What is ground D requirement for refusal of a new lease?

Answer 37

D. Availability of alternative accommodation

• The Court has little or no discretion.
• The landlord must show that they have offered suitable alternative premises to the tenant on lease terms that are reasonable in the round.
  Evidence: Description of the alternative accommodation, which the landlord intends to provide; or better still, details of the particular property.

Question 38

What is ground E requirement for refusal of a new lease?

Answer 38

E. Sub-tenant - possession required for letting or disposing of whole of property

• This is a discretionary ground.
• Requires the property to have been sublet and for the landlord to be able to show that if it were able to let the property as a whole that would be more beneficial than the current subletting scenario.
• This is conditional on proof by landlord that the superior tenancy will have come to an end by the date on which the applicant’s current tenancy is due to terminate.
• Evidence: Full detailed calculations of the level of the rent which the Landlord maintains is obtainable on a letting of the whole and of the individual parts together with an explanation showing when the landlord will obtain vacant possession of the remainder of the building.

Question 39

What is ground F requirement for refusal of a new lease?

Answer 39

F. Landlord intends to demolish or reconstruct

• This is a mandatory ground.
• The landlord must show that they intend either to demolish or to reconstruct the premises comprised in the holding or a substantial part of those premises, or to carry out a substantial work of reconstruction which they could not reasonably perform without obtaining possession of the premises.
• The landlord must be genuine in their intention with firm plans.

Evidence: Description of the works that the landlord intends to undertake.

If planning consent is required, whether it has been obtained and, if not, when it is expected.

When the landlord intends to start the work.

A necessary explanation of the landlords position with regard to adjacent land or consents that might be needed for the scheme.

Evidence that the landlord has the financial ability to complete the scheme.

Question 40

What is ground G requirement for refusal of a new lease?

Answer 40

G. Landlord intends to occupy the premises themselves

This is a mandatory ground.

The landlord must show that they intend to occupy the premises for the purposes of their own business, or as their residence.

The landlord must have owned the premises for at least five years before the termination of the current tenancy.

Description of the business that the landlord intends to carry on at the premises.

Question 41

What happens if a lease hasn’t been completed and the Section 25 Notice expiry is due within say 10 days?

Answer 41

If close to completion agree an extension of time ASAP.

If in negotiations and acting for the Landlord wait for the Tenant to make an application to Court. Failure to do so will result in the Tenant losing the right to security of tenure, gives the Landlord the upper hand in negotiations.

• If acting for the Tenant make an application to court to avoid losing security of tenure.

Question 42

What happens if a Tenant does not respond to a Section 25 Notice?

Answer 42

Tenant doesn’t have to acknowledge the notice or respond immediately, however, by the expiration date within the Section 25 Notice the Tenant must have either negotiated an extension of time, made an application to Court, vacated the premises or agreed a new lease to prevent them losing their security of tenure rights.

Question 43

What is a Section 26 Notice?

Answer 43

Notice served by the Tenant to the Landlord proposing terms for a new Tenancy.

Question 44

When would you serve a Section 26 Notice?

Answer 44

When acting for the Tenant and you wanted to propose terms for a new tenancy, likely you would do this where the rent is likely to go down on renewal or you would like to agree a new lease and provide security of tenure.

Question 45

What would the recipient need to do when they receive a Section 26 Notice?

Answer 45

You must respond within two months with a counter-notice. You cannot serve a Section 25 Notice after you receive a Section 26 Notice.

When you respond with a counter notice, you can either:

accept the Section 26 Notice agreeing to the terms and new lease start date;
negotiate different lease terms; or
oppose the request for the lease renewal.

Question 46

What happens if a lease hasn’t been completed and the Section 26 Notice expiry is due within say 10 days?

Answer 46

Either party should make an application to Court.

You can apply to court after the landlord has served a counter notice or the deadline for doing so has expired. The application to the court must be made by the day before the commencement date specified in the Section 26 request.

Failure to make an application to Court means the Tenant will lose their security of tenure rights.

Question 47

What is the process for contracting out a Lease?

Answer 47

1. The landlord serves a warning notice on the tenant, with specified content, explaining that the tenant’s rights are being waived.
2. The tenant makes either a simple or statutory declaration to acknowledge that it understands the consequences of contracting out. A simple declaration can only be made if the tenant has received the warning notice at least 14 days before the grant of the lease.
3. The lease includes an endorsement referring to the landlord’s notice and the tenant’s declaration and the parties’ agreement that the relevant provisions of the 1954 Act are to be excluded from the lease.

Question 48

What is a calderbank offer?

Answer 48

Calderbank offers are a highly effective
tool to manage risk and help to reach a
negotiated settlement. They are served in a genuine attempt to reach a settlement without moving to third party proceedings. They are made on a “without prejudice save as to costs basis”, meaning that they can only be drawn to the attention of the third party on the matter of costs.

Question 49

What is the process for serving a calderbank offer?

Answer 49

• Served on a without prejudice save as to costs basis.
• Ensure you have your clients written consent to serve the offer and at the level of settlement proposed as the acceptance of a calderbank offer is legally binding.
• Addressed to the other party or their solicitor
• Set the offer out clearly and in precise certain terms
• capable of acceptance and should state a reasonable amount of time for the party to accept.
• a genuine compromise that warrants consideration.
• Multiple calderbank offers can be served throughout a rent review dispute.

Question 50

What is the Court process for lease renewals?

Answer 50

• must make an application to court before the expiration date in the notice /extension of time.
• if Section 26 Notice, cannot apply within the first 2 months unless the landlord has served it’s acknowledgment notice

Question 51

Explain your understanding of compensation for Tenant improvements.

Answer 51

Landlord and Tenant Act 1927 sections 1, 2 and 3 give a tenant who has made improvements to their premises during their tenancy, the right to compensation.

• compensation can still be payable even if the landlord did not consent to the improvements.
• Tenant can’t claim compensation for tenants and trade fixtures which the tenant is by law entitled to remove and improvements made pursuant to an obligation for which the tenant received valuable consideration.

Question 52

How would you negotiate an extension of time?

Question 53

How could a party determine information on who to serve the Notice on?

Answer 53

Serve a Section 40 Notice - Landlord and Tenant Act 1954. Duty for parties to disclose the information within one month.

Question 54

How would you advise a client in how they can protect their position on costs in a rent review situation?

Answer 54

Serve a calderbank offer on a without prejudice save as to costs basis. Can help to project the client from a costs perspective and can also help to reach a negotiated settlement.

Question 55

What is the process for dealing with a rent review?

Answer 55

• Undertake pre-instruction checks;
• Agree written terms of engagement;
• Undertake due diligence, including reading the lease and summarising the rent review clause, eg hypothetical term, assumptions, disregards and third party process;
• Inspection and measurement;
• Report to the client on market rent and
  negotiation strategy;
• Serve rent review notice
• Negotiation;
• If negotiations become contentious,
  report to the client on any Calderbank
  offers before submitting a DRS 1
  application for the appointment of an
  expert or arbitrator (as per the terms of
  the lease);
• Either reach agreement documented
  by way of formal memoranda, or move to
  third party proceedings

Question 56

What are some considerations on the costs of an independent expert?

Answer 56

• The power of an expert on
  costs will depend on the wording of the
  lease. For example, a lease may provide
  that the parties will bear their own costs
  but that the expert has power over the
  expert’s own costs. This will affect the
  wording on costs contained within the
  Calderbank offer. If an expert has no
  power over any costs, for instance, if they
  are simply to be split between the parties
  equally, then a Calderbank offer will have
  no effect, unless the parties have agreed
  in advance that costs will be at issue.

Question 57

What are the key terms that should be set out in a calderbank offer?

Answer 57

• Property address
• Identity of both parties
• Rent review date
• Proposed settlement figure (numerically and in writing for clarity)
• Cost position before and after expiry of the offer. While the offer is open for
  acceptance, usually each party bears its own costs and 50% of the third party’s
  costs. After expiry, all costs fall to the other side.
• How long the offer remains open (usually 21-28 days), but this can be shorter
  if the circumstances dictate that this is appropriate, such as if an arbitrator’s
  award was being released imminently
• A statement that the offer is an offer to settle and not a valuation
• Confirmation of the without prejudice save as to costs position, so the offer
  will only be presented to the third party on the matter of costs (not before this)

Question 58

What is a CPSE 1 form?

Answer 58

Commercial property standard enquiries

General pre-contract enquiries for all property transactions

Includes things such as rights benefitting the property, boundaries and extent of the property, insurance, physical condition etc.

Question 59

How would you advise the client on a tenants request for an additional break option to be included in the lease?

Answer 59

• Consider whether this can be agreed in exchange for something in return or whether the existing break in the lease could be pushed back as a compromise

Question 60

What was the advice you gave to your client on the tenants break options and lease terms to reduce voids on the Estate?

Answer 60

• considered existing break options on the estate and other lease expiries and advised the client to time the break option if possible so that it did not coincide with other tenants’ break options and lease ends where possible to reduce the risk of there being multiple units vacant at any one time.

Question 61

What are the disadvantages and benefits on contracted out leases to a Landlord and Tenant?

Answer 61

Landlord Advantages:
- landlord can regain possession of the property at the end of the term
- tenant not entitled to a new lease based on the same terms (i.e. if existing lease was granted with favourable terms for the tenant such as frequent breaks etc, the tenant would not be entitled to a new lease with the same terms).
- can mean that they can have a short term ‘pop-up’ letting rather than having an empty property.

Disadvantages Landlord
- has no security of tenure
- can create a tenancy at sufferance if the tenant does not leave at the end which can be costly to resolve

Advantages Tenant
- may be good for the tenant / in line with their business plan to have a contracted out tenancy

Disadvantages Tenant:
- has no right to stay in the premises and must leave at the end of the term (unless the landlord offers a new lease)
- has no right to compensation from the landlord
- has no right to ask the court to fix the rent or the terms of the lease if the landlord offers a new one

Question 62

When would you advise a client to consider contracting out a renewal / new lease?

Answer 62

• If acting for a landlord and the tenant has proposed terms that you wouldn’t want to be carried forward to a lease on renewal.
• you only want a temporary letting or have plans for the property in the future.

Question 63

What advice did you give to the client in relation to a Tenant being in breach of their lease by not seeking prior approval to alterations within the property?

Question 64

What are some of the advantages and disadvantages of arbitration?

Answer 64

Adv:
- can be cheaper than litigation

Disadv
- more costly than other forms of dispute resolution

Question 65

How did you advise the client on a strategy of negotiation for non payment of rent during the Covid-19 Pandemic?

Question 66

What was the moratorium of forfeiture?

Answer 66

Prevented landlords from forfeiting leases for non-payment of rent during the COVID-19 pandemic where the business that owes the arrears was required to fully or partially close due to coronavirus regulations, for example a shop, restaurant, nightclub or bar.

Question 67

If a lease renewal ended up at Court what terms can the Judge determine and what impact do you think the current economic climate may have on the Judge’s decision?

Question 68

What information would you provide to a solicitor for them to prepare a Section 25 Notice?

Answer 68

• address of the property
• terms proposed, level of rent, duration, any other terms that do not form part of the existing lease).
• timescale (i.e. the date in which you wish for the tenancy to come to an end)

Question 69

As Landlord what conditions would you attach to a Tenant option to break?

Question 70

If you were acting for a Landlord on a new lease which form of Third Party referral process would you recommend is included in the lease?

Question 71

What is a tenancy at will?

Question 72

What is a periodic tenancy?

Answer 72

A periodic tenancy allows a tenant to remain within the property for an undetermined period of time, as the lease has no set end date. The lease, however, typically stipulates when notice to vacate is required, and both parties are bound to adhere to that clause.

Question 73

What should landlords consider to protect their position at expiry of a contracted out lease?

Answer 73

If the landlord wishes to gain possession, make sure they indicate a desire to recover possession; stop demanding and accepting rent. To prevent a periodic tenancy being created and the Tenant having security of tenure. In this scenario the tenant is considered a trespasser and must move out. If they don’t, the landlord can begin eviction proceedings.

Where the landlord wishes to agree a new tenancy negotiations should start as early as possible and consideration entering into a tenancy at will to ‘regularise’ any occupation by the tenant after lease expiry and pending completion of a new lease.

Question 74

What other types of CPSE forms are there?

Answer 74

CPSE 1 covers all commercial property transactions
CPSE 2 is used when a property is being sold subject to commercial use by the tenant.
CPSE 3 is used on the grant of a lease.
CPSE 4 is used when the property being sold is leasehold or on an assignment of the lease.
CPSE 5 is used when the leased property is to be surrendered.
CPSE 7 is a shorter form and the alternative to CPSE 1.

Question 75

What’s the difference between a Part 36 offer and a Calderbank offer?

Answer 75

Calderbank offers are not governed by the same strict set of rules as Part 36 offers. This means there is greater flexibility in terms of making the offer itself in the form of time limits for acceptance, payment and payment terms, for example. Also, unlike a Part 36 offer, a Calderbank offer is usually made as inclusive of costs.

Question 76

What is the amount of compensation payable for Tenants improvements?

Answer 76

The maximum amount of compensation that can be claimed by a tenant under the Act is the lesser of:
- The net addition to the value of the holding as a whole which may be determined to be the direct result of the improvement;
and
* The reasonable cost of carrying out the improvement at the termination of the tenancy.

In relation to the first of these, the intentions of the landlord after the termination of the tenancy are relevant. If the landlord intends to demolish the property, make structural alterations or change the use of the property, this will be taken into account in deciding what additional value is attributable to the improvement. There may be none.

Question 77

What are the requirements of a Tenant in order to be able to claim for compensation?

Answer 77

The tenant must have served notice on its landlord of its intention to carry out improvements together with a specification and plan showing the proposed improvements,
before commencing work.

Landlord is required to respond within three months. If they don’t respond, the tenant is entitled to complete the improvements described in the notice.

If the landlord should object to the proposed alterations and litigation occurs a court will either certify the improvements as being proper or prohibit the improvements.

Question 78

What do you understand about alterations vs improvements?

Answer 78

Any alterations that render occupation of the premises more beneficial to a tenant constitute improvements for the purposes of the Act, including demolition of part and almost any scope of works the tenant desires.

If the tenant can show that the alteration or improvement
is calculated to add to the letting value of the property at the termination of the tenancy, is reasonable and suitable to
the character of the property and will not diminish the value of any other property which belongs to the landlord, then the landlord may not apply contractual restrictions in the
lease to prevent the tenant carrying out the works, even if, in the absence of the Act, the landlord’s refusal of consent to
the works would not be unreasonable.

Question 79

What is a tenancy on sufferance?

Answer 79

A tenancy on sufferance arises when a tenant wrongfully remains in occupation of the premises after its lease has expired and the landlord has not confirmed whether or not it is willing for the tenant to remain. This type of tenancy is created by operation of law and can enable the landlord to recover possession.