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APC 2023 > Landlord and Tenant > Flashcards

Landlord and Tenant Flashcards

1
Q

What is a lease?

A

A binding contract in law that sets out the terms and conditions of the tenancy between parties and their defined rights and obligations

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2
Q

What are the requirements for a lease?

A

Four requirements:
1. Exclusive occupation
2. Payment of rent
3. Duration for a specified term
4. If >3 years, terms must be in writing, signed and registered as a deed

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3
Q

What is a licence?

A

A licence passes no interest in the land, but makes lawful what would otherwise be unlawful

  1. A right to enter a property
  2. A personal arrangement between the licensor and licensee
  3. Acquires no interest in the property
  4. Can be terminated by either party
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4
Q

What are the main differences between a lease and licence?

A
  • A lease provides an occupier with an estate in the land – whereas a licence is a permission to make it lawful for them to use the land
  • A lease can be assigned – a licence cannot
  • A lease cannot be terminated until expiry – a licence can be revoked at any time
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5
Q

Are you aware of any cases relating to leases or licences?

A

Street v Mountford 1985

  • Licence was granted by Street
  • Went to court and disputed the contents of the licence
  • A tenancy was effectively created and thus created a lease, despite being labelled a licence
  • This was based on the fact it granted exclusive possession with regular payments
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6
Q

What is a tenancy at will?

A
  • Form of licence for an unspecified time in which the LL may evict the tenant
  • Used for allowing tenant early access or for post lease expiry whilst negotiations are ongoing
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7
Q

What is a Wayleave?

A
  • A temporary right to do something i.e provides an electricity company the right to install and retain apparatus
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8
Q

What is an Easement?

A
  • A permanent right capable of being registered with the land reg
  • Allows a right enjoyed over the land of another
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9
Q

What are the normal contents of a rent review clause?

A
  • Normally upwards only to marketing rent using standard assumptions
  • Can be linked to indexation, CPI or RPI with cap and collar, or have stepped increases
  • Time is not usually of the essence
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10
Q

Talk me through the standard assumptions and disregards within a rent review clause

A

Assumptions
1. Property available to let on open market by a willing tenant and a willing landlord for a specified term
2. Property is fit and available for immediate use
3. All covenants observed by landlord and tenant
4. Property may be used for purpose set out in lease

Disregards
1. Any effect of goodwill on the tenant’s occupation
2. Ignore goodwill attached to the property
3. Tenant improvements if landlord consent has been granted

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11
Q

What is the Hierarchy of Evidence?

A

Referred to in ‘The Handbook of Rent Review Reynolds & Bernstein

Common weighting:

  • Open market lettings
  • Rent reviews and lease renewals
  • Independent expert determinations
  • Arbitrator awards
  • Court determinations
  • Hearsay evidence
  • Sale and leasebacks
  • Surrender and renewals
  • Inter-company arrangements
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12
Q

What is a Calderbank?

A

Calderbank v Calderbank 1975

  • Used to achieve early resolution of a dispute and prevent costs escalating
  • Must be served ‘Without prejudice save as to costs’
  • Used as a tool for influencing negotiations in rent reviews as losing party will have to pay other side’s costs
  • Must set out all terms to settle dispute and time limit to accept (usually 21 days)
  • Must be a genuine offer to settle
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13
Q

What is in a Rent Review Memo?

A
  • Name of landlord and tenant
  • Address of the property
  • Date of the lease and rent review
  • Confirmation of new rent agreed
  • Signed and dated by both parties
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14
Q

Talk me through Sections 24 to 28 of the LTA Act?

A

s24 - A tenancy to which the act applies does not expire by effluxion of time - notices must be served. No notice is known as ‘holding over’.

s25 - A landlord notice served on the tenant between 6-12 months before stated lease expiry

s26 - A tenant notice served on the landlord requesting a new tenancy between 6-12 months before lease expiry, whereby the landlord has 2 months to serve a counter notice

s27 - A notice served by tenant on the landlord stating they want to leave with3 months notice

s28 - Renewal of tenancy by agreement

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15
Q

What are the grounds for refusal of a new lease? / What is Section 30?

A

Section 30 sets out the seven grounds for opposing a new tenancy:

a. Breach of repairing covenant
b. Persistent delay in paying rent
c. Other substantial breach
d. Provide suitable alternative accommodation
e. Uneconomic subdivision (compensation payable)
f. Demolition or reconstruction (compensation payable)
g. Owner occupation (compensation payable)

1 to 5 are at the discretion of the court whereas 6 and 7 are mandatory.

*For redevelopment, LL must provide intentions, funding and planning etc.

*For owner occupation, landlord must have owned for at least 5 years and prove intentions

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16
Q

What compensation is payable if a hostile s.25 notice is successful?

A

Only applies for reasons e. to g.

1x rateable value for less than 14 years occupation
2x rateable value for more than 14 years

17
Q

What is an interim rent?

A

Under Section 24a of the act

  • Is the rent payable by a tenant under the act for the period of occupation between the termination of the former tenancy and the commencement of the new lease
  • Earliest date to serve is alongside s25 or s26 notice
18
Q

What is a Section 40 request?

A

A section 40 notice requests information from either the landlord or the tenant

  • Either party can serve a s40 during the last 2 years of the tenancy
19
Q

What is a ‘competent landlord?’

A

Defined under Section 44 as the person or body whom a notice should be served or whom should serve the notice
- Must be a freeholder or superior tenant with an unexpired term of over 14 months

20
Q

How do contract a lease outside the act?

A

Section 38A sets out the procedure which must be followed:

  • Landlord must issue a notice warning the lease will not be protected - known as a ‘health warning’

2 types of declaration:

  • Simple dec - when parties have 14 days or more prior to completion of the lease
  • Stat dec - given when less than 14 days available. Must be signed before an independent solicitor.
21
Q

Why would a landlord want a lease to be contracted outside the act?

A
  • A requirement of the headlease
  • The landlord will want to re-occupy
  • The landlord wants to develop
  • The landlord wants more flexibility
22
Q

How does a lease contracted inside the act differ from one outside the act?

A
  • Contracted out leases - the tenant has no statutory right to remain
  • No notices need to be served
23
Q

How can a lease be terminated?

A
  • Forfeiture
  • Surrender and negotiation
  • Merger
  • Disclaimer
  • Break clauses
  • Lease expiry / serving of notices
24
Q

What are the third party determinations for a rent review?

A

Depends on what is stated within the lease

  • Independent expert
  • Arbitrator
25
Q

What is an independent expert?

A

Set out within RICS Guidance Note on Independent Expert determination 2016

  • Appointed by the RICS by the Dispute Resolution Service
  • Has detailed knowledge of the market as a valuer
  • Can make own investigations and have own opinion of market rent
  • Bound by the terms of the lease
  • Cannot appeal their decision but can be sued for negligence
  • Outcome is called a ‘determination’
  • Has powers over their own costs
26
Q

What is an arbitrator?

A

Set out within RICS GN ‘Surveyors acting as arbitrators in commercial rent reviews 2013

  • Acts on the evidence provided and arguments submitted
  • A right to appeal but cannot be sued for negligence
  • Outcome is called an ‘award’
  • Has power over all costs
27
Q

What are the third party determinations for a lease renewal?

A
  1. County Court
  2. Professional Arbitration on Court Terms (PACT)
28
Q

Talk me through County Court with regards to a lease renewal?

A
  • Follows the Civil Procedure Rules 1998
  • Follows pre-action protocols
29
Q

Talk me through PACT?

A

Professional Arbitration on Court Terms

  • RICS encourages use as an alternative service over court
  • Normal service of notices take place with normal application for court
  • Both parties agree what is agreed and which are to be decided by the third party
  • Arbitrator is nominated by the RICS
  • Decision is binding
30
Q

What are the advantages of PACT?

A
  • Faster
  • Full court hearing avoided
  • Greater flexibility and control
  • Cheaper
  • Decision made by a surveyor acting as an arbitrator, not a judge
31
Q

What is the Landlord & Tenant Covenants Act 1995?

A
  • Relates to the assignment of leases
  • Abolished the privity of contract
  • Introduced the AGA
  • A section 17 must be served within 6 months of tenant defaulting to require old tenant to pay the arrears
  • Code for leasing business premises advises against the use of AGAs.
32
Q

What is Section 18 of the Landlord & Tenant Act 1927?

A
  • Relates to Dilapidations
  • A claim is limited by the cost of the works or the diminution in value
  • This is the difference in value of the property upon possession had covenants not been undertaken
33
Q

What is Section 19 of the Landlord & Tenant Act 1927?

A
  • Relates to tenant improvements
  • States that the landlord cannot unreasonably withhold consent
34
Q

What is a Part 36 offer?

A
  • Similar to a Calderbank

A genuine offer to settle for a protected lease renewal under part 36 of the civil procedure rule 1998

  • Must be made in writing and remain open for acceptance for 21 days
35
Q

What is the LTA 1954?

A

Provides security of tenure for tenants of business premises

APC 2023 (23 decks)

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