Landlord and Tenant Flashcards
What are the four requirements for a lease?
- Exclusive occupation
- Payment of rent
- Specified term.
- Terms in writing, signed and registered as a deed (if term > 3 years).
A license can be ______ at any time.
Revoked
A license is a ______ right which can be terminated by either party.
Personal
A license is a right to do what?
Enter a property
No ____ in land is created by a license.
Interest
A lease provides an occupier with an ______ in land.
Estate
Can a license be assigned?
Usually can’t
What is a form of license created by written agreement for an unspecified time in which the landlord may evict the tenant at any time? Usually to allow early entry for fit out or whilst agreeing a new lease on expiry (where contracted out of 1954 Act)
Tenancy at will
What is a temporary right and receives an annual payment such as for an electricity company to install and retain their apparatus?
A wayleave
What is a wayleave?
A temporary right and receives an annual payment such as for an electricity company to install and retain their apparatus
Can a way leave be transferred to another company?
No, it is personal to the company
What is a permanent right enjoyed by one party over the land of another, receiving a capital payment?
An easement
Is an easement capable of being registered at the Land Registry?
Yes
What can be obtained as a result of continued and uninterrupted use being proven over a period of not less than 20 years?
A prescriptive right of way
What is adverse possession?
The process of gaining possession of land without the owners permission by proving uninterrupted use for a certain period.
12 years prior to Land Registration Act 2003, now 10 years. If not registered at land registry still 12 years.
What impact does the use of ‘Without Prejudice’ have during a period of negotiations?
Cannot later be relied upon in court by the opposing party.
What happens in a rent review where correspondence has been labelled ‘Without Prejudice’?
It cannot be shown to the arbitrator/independent expert to show how negotiations were conducted.
What should you state in order to prevent the terms being construed as a contract?
Subject to Contract
What should you understand in terms of engagement for rent reviews/lease renewals?
Strategy and objectives
What documents should be obtained for rent reviews/lease renewals?
Copy lease.
Plans attached to lease or Deeds of Variation.
Copies of any licenses e.g. for alterations, improvements, sub-letting, or assignment.
Copies of rent review memorandums.
How do you arrange an inspection?
Obtain contact details for tenant or agent.
What should be agreed in terms of serving notices?
Confirm who’s responsible for serving the notice.
What are fees based on for rent reviews/lease renewals?
A percentage of new rent agreed.
A percentage of the saving made from the quoting rent.
A fixed fee.
An hourly rate (more common for third party determinations).
Incentive fee.
What important aspects of the lease do you need to understand?
Rent review clause.
Check not contracted out of 1954 Act (security of tenure provisions) in case of a lease renewal. IF SILENT - lease is inside Act.
What is it important to check for a rent review?
Whether time is of the essence.
What should be done after accepting the instruction and studying the lease?
Inspection and measurement
What do you need to do after inspecting for a rent review?
Undertake a market rent valuation, having regard to the terms of the lease.
Prepare a report to the client setting out recommendations.
A lawyer should always be instructed to serve which type of notice?
1954 Act lease renewal
What do you need to do upon receipt of client instructions regarding a strategy?
Open negotiations once the correct notices have been served.
Check any notice received is valid!
What needs to be done upon conclusion of negotiations in a rent review?
Document the rent review in a rent review memorandum.
What should be done upon conclusion of lease renewal negotiations?
Instruct solicitors to prepare the new lease in accordance with the heads of terms.
What is the usual type of rent review?
Upwards only to market rent
Is time normally of the essence?
No
United Scientific Holdings v Burnley Borough Council (1977)
What are the 4 usual assumptions for a rent review?
- Property available to let on open market by willing tenant and willing landlord for term of years as stated.
- Property 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 the 3 usual disregards in a rent review?
- Any effect of goodwill on tenant’s occupation.
- Ignore goodwill attached to property.
- Tenant’s improvements if landlord consent had been granted.
What is the notional/hypothetical term of the lease?
The length of term to be value.
If the lease is silent on the notional/hypothetical term what should be valued?
The residue of the term.
What is it called if there is a provision within the lease requiring the landlord to specify the rent in a trigger notice, with the tenant being deemed to accept the new rent if they do not serve the appropriate counter-notice within a specified time?
Deeming provision
What is the hierarchy of evidence for market rent?
- Open market lettings
- Rent reviews and lease renewals
- Independent expert determinations
- Arbitrator determinations
- Court determinations under LTA 1954
- Hearsay evidence
- Sale and leasebacks
- Surrender and renewals
- Inter-company arrangements
What can be used to achieve an early resolution of a dispute and save on costs?
Calderbank letter
How must a Calderbank letter be headed?
‘Without prejudice save as to costs’
What does the losing party have to pay?
The other sides’s recoverable costs
What must the letter set out?
All the terms to settle the dispute and a time limit in which the other party must accept the offer.
What is the usual Calderbank offer time limit?
21 days
A Calderbank letter must be a genuine offer to settle and not simply used as a mechanism to _____ costs or pressure the other party.
Influence
Who is obliged to make an award for costs?
The arbitrator
What is the similar mechanism to Calderbank for lease renewals?
Under Part 36 of the Civil Procedure Rules
How is the method of determination established for a rent review?
Read the clause in the lease.
An independent expert has detailed _____ of the market as a valuer.
Knowledge
An independent expert is appointed by who?
President of RICS by Dispute Resolution Service
An independent expert is not bound by what?
Judicial rules
An independent expert can have his own opinion as to the _______ _____.
Market rent
An independent expert is bound by the terms of the _____.
Lease
The decision of an independent expert cannot be _____ against but they can be sued for _______.
Appealed, Negligence
How is an independent expert involved?
Via a hearing or written representation
An independent expert is good when there is a lack of _____ _________ and need to be up to date.
Market comparables
Does an independent expert have the power to order disclosure?
No
An independent expert orders ____ as set out in the lease.
Costs
In which case was an expert’s determination of a rent review not held to be binding due to his decision being based upon an incorrect interpretation of the rent review clause?
Level Properties Ltd v Balls Brothers Ltd (2007)
Who appoints an Arbitrator?
RICS President using Dispute Resolution Service
An arbitrator can decide how to _____ the case and order ____.
Hear, Costs
An arbitrator can only use ____ submitted by the parties, and/or from an _____ ______.
Evidence, Expert Witness
Arbitrators are immune from _______.
Negligence
Arbitrators can order _______.
Disclosure
What happens if an Arbitrator orders disclosure of documents by the parties to the arbitration?
It entitles a party to obtain details of all the other side’s rental evidence (when they would prefer to confine submissions to deals most favourable to their case).
Which Act is relevant to Arbitrators?
Arbitration Act 1996
The Arbitration Act 1996 also sets out the procedures to secure the attendance of ________ or the ________ of third party documents.
Attendance, disclosure
An Appeal to the High Court can be made within 28 days under what 3 grounds?
- A challenge to the tribunal’s jurisdiction.
- On a point of law.
- Serious irregularity.
Who acts on the evidence provided and the arguments submitted?
Arbitrator
Who has a duty of investigation to discover the facts, details or comparables and other relevant information, and does not have to just consider the evidence provided (own knowledge and expertise can be used).
Independent expert
________ provides a limited right to appeal to the High Court.
Arbitration
Who can be liable for damages as a result of negligence by being sued?
Independent expert
Who has no powers of disclosure?
Independent expert
Who acts within a formal statutory framework?
Arbitrator
Who acts with an informal procedural timetable?
Independent expert
Who makes an award?
An arbitrator
Who makes a decision as an outcome?
Independent expert
Who would be preferable to act for a landlord in a falling market?
An arbitrator
Who would be preferable to act for a landlord in a rising market?
An independent expert
Who would be preferable to act for a tenant in a rising market?
An arbitrator
An advocate represents his client at a ______ or in ______.
Hearing, court
An advocate’s duty is to act in the best interests of _______.
His client
An advocate must act with _______.
Integrity
What is the relevant Practice Statement and Guidance Note relating to Expert Witnesses?
Surveyors Acting as Expert Witnesses 2014
Surveyors Acting as Expert Witnesses applies to evidence given to ______ and ________ ______.
Arbitrators and Independent Experts
Expert evidence provided by a chartered surveyor must be seen to be ________ and objective.
Impartial
Who is the surveyor’s duty to as an Expert Witness?
The Court
What must be clearly stated within the Terms of Engagement for an Expert Witness instruction.
Fee basis
What does the Expert Witness have to sign at the commencement of his evidence?
Statement of Truth
Can the expert witness be sued for negligence?
Yes, following Jones v Kaney 2011
What are the contents of a rent review memorandum?
Name of L & T
Address of property
Date of lease and rent review
Confirmation of new rent agreed
Signed and dated by both parties
** Can also be recorded by an independent expert’s decision or arbitrator’s award or written acceptance of the Calderbank Offer.
When answering any question on rent review, what should you always state?
You would read the rent review clause in the lease.
What scheme is run by the RICS to have an independent surveyor settle disputed rent reviews for commercial properties with a rateable value of less than £10,000 (£15,000 in London)?
RICS Small Business Scheme for Rent Reviews
Which case relates to time usually not being of the essence in rent reviews?
United Scientific Holdings Ltd v Burnley Borough Council 1977
Which case relates to the the rent review being assumed to open market rent in the absence of clear wording?
British Gas Corporation v Universities Superannuation Scheme Ltd 1986
Which case relates to Calderbank letters?
Calderbank v Calderbank 1975
What does an advocates do?
Represents their client in court or at a hearing.
RICS Professional Statement ‘Surveyors Acting as Advocates 2017’.
Duty to client and must act with integrity.
What are the four key points of the Practice Statement, Surveyors Acting as Expert Witnesses 2014 (amended 2023)?
- Impartial and objective advice.
- Duty to the court override obligations to client.
- Evidence must be surveyor’s independent work.
- Surveyor must believe that the facts are complete and true.
Contents of a rent review memorandum?
- Name of LL and TT.
- Address.
- Date of lease & rent review.
- New agreed rent.
- Signed and dated by LL and TT.
- Can be recorded by Independent Expert’s determination, an Arbitrator’s award, or written acceptance of a Calderbank letter.
Which section of LTA 1954 states the basic elements of a business tenancy and what are they?
Section 23
- It is a tenancy
- Used for business
- Occupied by the tenant (at least in part)
- > 6 months occupancy
- Not exempted/excluded (e.g. tenancy at will)
- Competent landlord
What is S.24 of the act?
Tenancy does not expire by the effluxion of time, only when one party serves a notice.
No notice being served = holding over.
What is a S.25 notice in the act?
LL’s notice to terminate the lease.
What must a S.25 notice contain and when must it be served?
6-12 months from termination date.
- Served by competent LL, given to TT.
- Termination date.
- Prescribed form and state TT rights.
- If LL will grant new lease (non-hostile) proposed terms included.
- If LL opposes new lease (hostile) the grounds for opposition stated.
- Date response is required.
- Strong recommendation to seek professional advice.
What is a S.26 notice in the act?
Tenant’s notice requesting new tenancy beginning 6-12 months from notice.
Must included new rent.
Landlord must serve counter-notice within 2 months if they oppose.
What is a S.27 notice in the act?
Tenant’s notice to leave with 3 months’ notice after the expiry date.
What are the S.30 grounds for opposing a new tenancy?
Discretionary (court decides if reasonable):
1. Breach of repairing covenant
2. Persistent delay in paying rent
3. Other substantial breach
4. Providing suitable alternative accommodation
5. Uneconomic subdivision (compensation due)
Mandatory
6. Demolition or reconstruction (compensation due)
7. Owner occupation (compensation due)
What must the LL prove for redevelopment grounds for opposing a new lease?
Firm intention.
Funding.
Planning.
Substantial work.
Necessity to gain vacant possession.
What must the LL prove for owner occupation grounds for opposing a new lease?
5 years ownership.
Intention to occupy.
What is the compensation due under S.37 of the act?
If landlord gains possession through S.25 notice, tenant due compensation for leases after 1 April 1990 if they haven’t breached the tenancy.
<14 years = rateable value x1
>14 years = rateable value x2
Can also be for tenant’s improvements under LTA 1927 part 1
Terms of new lease under the act
Max 15 years.
Must be market rent.
Ignore previous occupation, goodwill and landlord’s approved improvements carried out by tenant in last 21 years.
What are the two 3rd party determination options for lease renewals?
- County court - Civil Procedure Rules
- pre-action protocols.
- part 36 offer is similar to Calderbank; open for 21 days, after which it can be withdrawn. - Professional Arbitration on Court Terms (PACT)
- launched by RICS 1997.
- for unopposed lease renewals.
- decision is binding.
- it is faster, cheaper, more flexibility and control, decision by surveyor not judge.
What are the proposed changes to the LTA 1954?
March 2023 Law Commission announced plans to review Part II, covering security of tenure, interim rents, process of serving notices.
Which section relates to contracting out?
S.38A:
- LL must serve notice on prospective tenant (health warning).
- Proposed tenant must make declaration confirming receipt and acceptance. Simple declaration (>14 days to lease start) or statutory declaration (<14 days) - before an independent solicitor.
- Must be completed before lease is signed.
How can a lease be terminated?
- Forfeiture
- Surrender and negotiation
- Merger
- Disclaimer (insolvency)
- Break clause
- Lease expiry / notices under LTA 1954
