Landlord and Tenant Flashcards
What is a section 25 notice?
A section 25 notice is served by the landlord and comes in two forms.
First, the landlord brings the current tenancy to an end and does not oppose the granting of a new lease, therefore proposing new terms.
Second, known as a hostile section 25, is where the landlord brings the current tenancy to end and opposes the granting of a new lease, taking into consideration the grounds of section 30.
What is security of tenure?
security of tenure is the tenant’s statutory right under the Landlord and Tenant Act 1954 to be granted a new lease of their business premises once their current lease expires. This statutory right can be ‘contracted out’, in other words the tenant’s statutory right to a new lease can be excluded.
What is a section 26 notice?
Served by the tenant, a request to bring the current tenancy to an end, and request new tenancy, providing proposed terms. This is to be served no earlier than 12 months and no later than 6 months from the contractual expiry date.
Can you explain Street v Mountford [1985]?
Street v Mountford [1985] established A lease must grant exclusive possession of the property for a fixed or periodic term at a rent. It is the nature of the rights created which are important. Superficial labels are irrelevant.
What is a rent review?
A rent review is a mechanism in a lease that looks to change the rental value. This would be determined by the clause in the lease. For example an upwards only rent review would seek to increase the rent payable to the current market level, provided there has been growth.
What is a lease renewal?
A lease renewal is where the current lease has expired, and a new lease has been requested. The renewal can be used to negotiate new terms, such as rent, break clauses, reviews and term.
What is a break clause?
A break clause usually specifies the form and length of the notice required to end the tenancy. Unless the break clause provides differently, the right to break is exercised by serving a written notice.
What are the different types of lease terms?
FRI, IRI, IR Only
What is the landlord and tenant act 1954 Part II Section 24-28?
Section 24-28 of the Landlord and Tenant Act 1954 provides statutory rights to tenants of business tenancies which satisfy the conditions set out in s23 of the Act
What is a section 30 notice?
A landlord can oppose the tenant’s statutory right to a lease renewal on any of the 7 grounds set out in Section 30(1) of the LTA 1954. A landlord must notify the tenant of its opposition to a renewal lease by notice.
What are the risks to holding over?
Holding over may create a new tenancy, or it may be considered a trespass. These outcomes can lead to uncertainty and adverse consequences to both parties which can be costly to resolve.
Tell me about your understanding of the LTA 1927? improvements
If a tenant carries out improvements to the leased premises, they should not have the improvements rentalised at review or renewal if they are within 21 years of being carried out. This can occur even if the landlord did not consent to the improvements.
Tell me about your understanding of the LTA 1954?
An Act to provide security of tenure for occupying tenants
Tell me about your understanding of the Landlord & Tenant (Covenants) Act 1995? covenants
provision for persons bound by covenants of a tenancy to be released from such covenants on the assignment of the tenancy
Tell me about your understanding of the LTA 1988? against alienation
covenants in tenancies against assigning, underletting, charging or parting with the possession of premises without consent.
Tell me about a key lease clause you are aware of? rr
rent review - after a time agreed in the lease the rent will be reviewed to increase in line with current market conditions
What is alienation?
Alienation’ is the right granted in a lease for a tenant to assign, sublet, or share occupation of their property.
Tell me about your understanding of the Code for Leasing Business Premises.
encourages fair commercial leases
ensure a clear head of terms
ensure parties adhere to the lease;
make landlords and tenants more aware of typical property issues; and
help commercial tenants negotiate good deals
In addition to an introduction, the Code consists of three parts:
mandatory requirements for commercial landlords;
best practice for landlords;
appendices with a heads of terms template, a checklist and guide for landlords and tenants on commercial leases.
Tell me about how you would summarise a lease and what terms you would be looking out for.
I would summarise a lease by creating a lease précis.
This would include details such as:
Property
Date
Term
Expiry
Landlord
Tenant
Landlords Title
Rent
Premiums
Rent Review
User
Break Clause
Repair
Insurance
Service Charge
Alienation
Security of Tenure
What is the Regulatory Reform (Business Tenancies) (England & Wales) Order 2003? new procedures
new procedures for terminating or renewing business tenancies under the Landlord and Tenant Act 1954, and procedures for contracting out of sections 24 to 28 relating to security of tenure.
What is the role of an expert witness?
by giving opinion which is objective and unbiased, in relation to matters within their expertise.
How does the role of an expert witness change from when you are negotiating?
How does an advocate differ from an expert witness?
What is an arbitrator?
An arbitrator plays the role of a neutral person, who makes decisions on a dispute based on evidence presented.
What is an expert?
Someone with broad competence, knowledge, and skill, acquired through research, education, experience, and practice in a particular field
How does an arbitrator and expert’s roles differ?
an arbitrator is immune from liability in negligence (section 29(1) of the Arbitration Act 1996) whereas an expert may be sued for negligence.
How would you establish the relevant third party procedure for a rent review?
The lease should state what level of expertise the third-party must have and who will be responsible for their fees. The third party will then determine the revised rent in accordance with the provisions of the lease and the finding will be binding on both parties.
How much does it cost to submit an RICS DRS application?
There is an application fee of £425 inclusive of VAT for this type of nomination.
What is the difference between the hypothetical lease at a rent review and lease renewal?
Hypothetical lease at rent review will have to consider the clauses within the lease.
Hypothetical lease at lease renewal will consider the current market conditions.
What is PACT?
PACT, or professional arbitration on court terms, provides for the landlords and tenants to choose who they select to determine the terms of their new lease.
How do in and out of Court PACT differ?
Out of Court PACT, the parties will identify the issues on which they disagree regarding the new lease and will agree themselves how that issue is to be resolved.
In Court PACT In the absence of an agreement by the parties upon how any issue(s) will be resolved, these issues will be determined by the Court.
What is a Calderbank offer?
It is a settlement offer which is marked ‘without prejudice save as to costs’ and is brought to the attention of the court after the judgment has been given, and when the issue of costs is being considered.
What is a break clause?
A break clause is a tenancy agreement clause that allows either the tenant or landlord, to end the tenancy agreement during the fixed term.
Tell me about your understanding of notices under the LTA 1954.
MY understanding of notices under the LTA 1954 is that they provide landlords and tenants the right to renew the lease or oppose a renewal provided they have security of tenure
Tell me about your understanding of interim rent.
Interim rent is rent payable after the expiry of the contractual term of a 1954 Act protected lease and before a formal lease renewal has been completed.
Tell me about your understanding of the Court procedure at lease renewal.
Neither the landlord nor the tenant can apply to the court until one of them has sent the other a notice: Section 25 notice – Served by the landlord to the tenant, ending the current lease. Where the landlord is willing to renew the lease, the notice will set out the terms of the new lease.
What are the Jackson Reforms? success fee
The Jackson change is that, with a few exceptions, the losing party will no longer be obliged to pay the success fee (ie anything above normal fees) as part of the winner’s costs.
What is a Part 36 offer? resolve matters
encourage parties to attempt to resolve matters at an early stage by making formal offers to settle that meet specific criteria.
Can you serve a Calderbank offer at a lease renewal?
It is possible to make an offer which is made without prejudice save as to costs (referred to as a “Calderbank” offer) which means that it is privileged and cannot be referred to, until the substantive decision has been made and the court is deciding the question of costs.
What does Section 34 relate to in a lease renewal? determine rent
Section 34 gives the court the power to determine the level of rent when the parties have not been able to reach an agreement on that aspect of a renewal lease.
What is compensation for disturbance? grounds e,f,g section 30
A tenant is entitled to statutory compensation from a landlord where a landlord opposes renewal on grounds (e), (f) or (g) only. Compensation is assessed at 1x the rateable value of the property or, where the tenant has been in occupation for 14 years or more, at 2x the rateable value.
What does Section 18 mean in relation to the LTA 1927? damages
limits the amount of damages that a landlord is able to recover for breach of the tenant’s repairing covenants.
Why would you contract out a lease?
? A landlord may have various reasons why it wants to contract-out. One reason could be that it decides to redevelop the property or land and will want the ability to do this when the lease term ends as the tenant will have to vacate.
How would you contract out a lease?
• a warning notice on the tenant, explaining that the tenant’s rights are being waived.
• The tenant makes either a simple or statutory declaration to acknowledge that they understand 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.
• 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.
Tell me about the LTA 1954 in relation to contracting out a lease.
Contracting out’ is where the landlord and tenant make an agreement prior to entering into the lease to exclude the statutory rights under the 1954 Act and the tenant therefore loses their automatic right to renew their lease at the end of the lease term.
What are the Section 30 grounds under the LTA 1954? R, R, B, A, S, D, O
- Ground A - The tenant has failed to meet their repair obligations.
- Ground B - The tenant has persistently delayed in paying the rent.
- Ground C - It is found that the tenant is in substantial breach of other obligations.
- Ground D - Alternative accommodation has been offered of a similar stature.
- Ground E - Subletting of part, where higher rent can be obtained by single letting of the whole building.
- Ground F - The Landlord intends to demolish or reconstruct the property which cannot reasonably be done without obtaining possession.
- Ground G - The Landlords intention to occupy the premises for their own business use or as a residence.
What time limits apply in relation to lease renewal notices?
not more than 12 months and not less than 6 months before the date upon which the tenant wishes a new lease to begin.
When would you recommend that a landlord/tenant serves notice in a LTA 1954 renewal?
The earliest that the notice can be served is 12 months before the lease is due to expire. The notice must specify a termination date that falls between 6 and 12 months after it is served and which is not earlier than the expiry date of the lease.
What does Section 40 of the LTA 1954?
Section 40 of the Landlord and Tenanct Act 1954 covers the ‘duty of tenants and landlords of business premises to give information to each other’
What tenancies are covered by the LTA 1954?
the 1954 Act governs the rights and obligations of landlords and tenants of premises which are occupied for business purposes.
