Landlord and Tenant Flashcards
What is the difference between a lease and a licence? Any caselaw on this?
A lease gives EXCLUSIVE POSSESSION, for a term, at a rent. It is a contractual relationship between a landlord and a tenant.
A license gives PERMISSION to do something otherwise illegal. Licenses are personal arrangements and can not be assigned. Licenses are typically for a period of 6 months or less.
CASE LAW - STREET v MOUNTFORD
“it does not matter what the document calls itself on the cover sheet (e.g. license) if, in all other respects, the document looks like a lease then it probably is.”
Under the Landlord and Tenant Act 1954 what is a qualifying tenancy under S 23?
- Is there a tenancy?
- Does the tenancy relate to premises?
- Are the premises occupied for the purpose of a business?
- Is the business carried on by the tenant?
- Does the tenancy fall within any of the specific exclusions? (license / tenancy at will excluded).
What are the procedures for requesting a new tenancy under the Landlord and Tenant Act?
The Tenant must serve a S.26 notice on the landlord.
This must be:
- In the prescribed form.
- Served on the competent landlord not more than 12 months and not less than 6 months before the proposed commencement date specified in the request (which cannot be before the contractual expiry of the current lease).
What are the implications of contracting out of the L and T Act?
For TENANT
- No right to remain in the property at the end of the lease;
- Must leave the property at the end of the lease unless the landlord chooses to offer a new lease;
- No right to compensation from the landlord on leaving the property at the end of the lease;
- No right to ask the court to fix the rent or the terms of the lease if the landlord chooses to offer another lease.
For LANDLORD
- The lease itself may not have much capital value;
- The lease may not be attractive to any prospective new tenants;
- The lease may not be attractive to company buyers.
Explain the processes that enables contracting out?
Section 38 - HEALTH WARNING!
- The landlord serves a warning notice on the tenant, with specified content, explaining that the tenant’s rights are being waived.
- The tenant makes a statutory declaration to acknowledge that it understands the consequences of contracting out.
- 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.
What governs a rent review?
The rent review clause in the lease.
Refer to the assumed term for the rent review.
At Pepys Court explain the process of serving notice to renew a lease?
I read the lease.
I wrote to the client, summarising the salient points of the lease, including the term, passing rent, reviews, breaks, schedule of condition, alienation.
I summarised the review clause, and the Dispute Resolution Mechanism (expert in this case).
I provided a schedule of relevant comparable evidence.
My client’s solicitor then served a S.25 on the tenant offering to renew the lease. (HL policy - do not serve).
The Tenant served a written counter-notice (s.26) to our client’s solicitor, confirming that they did want to renew the lease but rejected the rent quoted.
What would happen if no notice was served to end a lease?
That depends whether the lease was granted inside or outside the L&T Act.
If the lease was Inside the Act then the lease would continue on the current terms.
If the lease was Outside the Act, it would naturally come to and end (effluxion). Unless terms are agreed to renew, the landlord can kick you out.
How would you approach matters if you wished to deviate from the existing terms?
If the parties cannot reach agreement then you would need to apply to the court to deviate on the lease terms.
What would have happened should you not been able to agree terms?
An application to court would have been made. The court would have to make a judgement.
Why did you disregard tenant’s improvements?
Normally under a lease tenant’s improvements are disregarded assuming:
they improve the value
they were not an obligation to LL.
carried out in current tenancy last 21 years
When you take a lease on a premises and spend lots of money on improvements the LL can not rentalise these improvements.
License to Alter is imperative.
When would you have regard to tenant improvements in calculating the rent?
Where a license to Alter has not been agreed you might have regard to the tenant’s improvements.
Unauthorised alterations.
If there are tenant’s lease obligations to carry out specific works, then these may be factored in at review.
At Retail Unit Greenwich what does the review clause to ‘shell and core’ mean?
The unit was in a base build condition with capped services such as power and drainage. There is no fitout attached to this.
In rent review clause: For avoidance of doubt the premises are to be reviewed to shell and core condition.
A lease plan can also add weight if it specifies shell and core.
What did the review clause say about an uplift in rent?
The review clause specified that the rent was to be reviewed on an upward only basis.
One thing that may have been of benefit to the landlord would have been an RPI increase clause in the lease.
Why did you advise that you should counter the Calderbank offer?
Countering the Calderbank offer was a good way to engage with the other side in an attempt to settle the review outside of court with limited costs.
