Landlord and Tenant Flashcards
What do you know about the 1st Jan 1996?
Relates to “new leases” under the Landlord and Tenant Covenants Act 1995.
What did the Landlord and Tenant Covenants Act 1995 do?
It introduced Authorised Guarantee Agreements.
Under an “old” lease (signed prior to 1st Jan 1996) the original tenant would still be liable for the new tenants covenants
Under “new” leases, old tenants who assign their lease to another party are released from their obligations.
When might it be reasonable to deny the landlord’s request for a AGA?
You should ensure it is written into the lease prior, but if the assignee is financially strong enough, has paid an appropriate deposit or provides a suitable guarantor then you could refuse to enter into an AGA.
When letting a property, what document is useful to consult?
RICS professional standard “The code of leasing business premises 2020”.
What are the main points of the Landlord and Tenant Act 1927?
- If the lease prohibits improvements being made to a property without Landlord’s consent, section 19 of the act imposes a provisio that such consent cannot be unreasonably withheld
- If section 19 procedures have been followed, the landlord may be obliged to pay compensation for alterations that may constitute improvements
- Dilaps claim is limited to cost of the works or under s.18 - the diminution in value of the reversionary interest
Tell me about the Law of Property Act 1925.
- Prior to this act, property law was fragmented and complex.
There were numerous statutes and common law principles that governed different aspects of property ownership, making it difficult for individuals to navigate the legal landscape. - The Law of Property Act 1925 was introduced to address these issues and provide a comprehensive legal framework for property transactions.
- One of the key provisions of the Law of Property Act 1925 is the consolidation of registering land.
- Also relevant for forfeiture and dilapidations claims. Serve a S.146 notice which notifies the tenant of a breach and requires them to 1. specify the breach complained of 2. importantly if the breach is capable of remedy, require the leaseholder to remedy the breach 3. in any case require the leaseholder to make compensation in money for the breach.
Tell me some more about dilapidations, what is the S.146 process?
I have not had experience in this, but I understand that you would be required to:
- Serve a S.146 notice in line with the Law of Property Act 1925 which notifies the tenant of a breach and requires them to:
A. specify the breach complained of
B. importantly if the breach is capable of remedy, require the leaseholder to remedy the breach
C. in any case require the leaseholder to make compensation in money for the breach.
Tell me some more about forfeiture?
I have not had experience with this, but I understand that:
- Consider whether you want to forfeit the lease - is there a rent deposit, guarantor, do you need to serve a 146 notice under the law of property act 1925?
- Check that the lease contains a clause allowing you to re-enter the premises in certain circumstances - chances are slim if not, are there any preconditions like serving notice etc
- Avoid wavering your rights by (a) know of your tenant’s breach; and (b) do something which unequivocally recognises the lease as existing or continuing. Need legal advice on this.
- Physical re-entry and changing the locks. - Sometimes you are not allowed to do this unless consent from the court.
In forfeiture, when is a S.146 notice under the LoP Act 1925 required?
For all breaches of covenant other than the non-payment of rent, you will need to give the tenant notice of your intention to forfeit the lease - under Section 146 of the Law of Property Act 1925.
Sometimes you are not allowed to use physical re-entry in forfeiture proceedings unless you have consent from the court - when would this apply?
- When the tenant is insolvent
- where the forfeiture is for breach of a covenant to repair and the tenant has claimed the benefit of the Leasehold Property (Repairs) Act 1938.
How is a dilapidations claim limited?
Under the Landlord and Tenant Act 1927 a dilapidations claim is limited to cost of the works or under s.18 - the diminution in value of the reversionary interest. If the landlord is redeveloping or refurbishing then the reversionary interest may be nil.
What are some of the types of insolvency and what does this mean for forfeiture?
- Company voluntary arrangement - No moratorium unless “small company” – so no restriction on forfeiture.
- Administration - there is a Moratorium so you must get court’s permission or administrators’ consent for:
‒ Forfeiture
‒ CRAR
‒ Legal proceedings
* Rent deposit deed may allow drawdown
* No restriction on recovering under guarantees - Compulsory Liquidation - Moratorium – must get court’s permission or liquidators’ consent for:
‒ Forfeiture
‒ CRAR
‒ Legal proceedings
No restriction on enforcing security of rent deposit
* No restriction on pursuing guarantors - Voluntary liquidation
No moratorium on landlord taking action
* Court may restrain action on application
* No restrictions on security enforcement
What happened in S Frances Ltd v Cavendish Hotel (London) Ltd [2018]
in S Frances Ltd v Cavendish Hotel (London) Ltd [2018] UKSC 62, a break will not be granted by the courts if the landlord only intention to carry out the works is for the sole purpose of evicting the tenant. The landlord must prove that they would still undertake the works if the tenant vacated voluntarily.
What is the case law regarding the grant of break clauses under 1954 act renewals?
Under National Car Parks Limited v The Paternoster Consortium Ltd [1990] The test to be applied is whether there is a “real possibility (as opposed to a probability) that the premises in question will be required for reconstruction during the continuance of the proposed new tenancy” If there is, then a break option should be included
What are the O’May Principles?
O’May v City of London Real Property Co Ltd (1983). Here, the House of Lords held that the court should not generally use its discretion to change lease terms: the new lease should be the same as the old lease. If a party wanted to change any terms, they must show that it is fair and reasonable
