Landlord and Tenant L2 Flashcards
Tell me about an instance of when you have reflected market conditions on rental value.
Premises with an ratable value just over the threshold I tend to be more cautious on rental values. The reverse is also true.
My area tends to bias towards small businesses where this is a more significant factor.
How do you collate, analyse and adjust comparable evidence?
I try to maintain comparable evidence databases and update each one where there is a relevant instruction. Then i look at recent transaction and include the value significant factors within the dataset. Excel provides an easy way of analyzing the data and making adjustments based on variances.
Tell me about a landlord & tenant negotiation you have been involved with.
Bin Store.
What is the hierarchy of evidence?
Direct comparable transactions
General market data - commercial databases, indexes
Other data - data from other real estate types, interest rates etc
Tell me about a contracted out lease renewal you have dealt with.
The Manor.
80 year old woman, claimed not to know the lease was contracted out.
Landlord agreed to provide right to renew without committing to protected tenancy.
How would you advise a tenant differently between a contracted in and contracted out renewal?
Contracted out - establish what the landlord is likely to be able to achieve in the open market and the cost of doing so. Aim for open market less the difference between landlords cost to re-let and tenant cost to move.
Protected tenancy - seek better than market terms, settle at nothing less than market terms.
Cotswold Garden Tea Rooms. Tell me about your lease summary.
Lease dates
Landlord - Wilsden
Tenant - Michelle Haste
Guarantor - N/A
Term - 15 Years
Rent - £27,500
Review - Every 3 years, upward only MR
Inside the act.
User
Alienation
Alterations
Reparis
Service Charges
Cotswold Garden Tea Rooms. Was the rent review time of the essence?
No
Cotswold Garden Tea Rooms. What did the lease say if an agreement couldn’t be met between the landlord and the tenant?
Independent Expert.
Cotswold Garden Tea Rooms. Was the tenant not represented?
No.
Cotswold Garden Tea Rooms.Would your stance on the review had changed if they were?
I suspect I would have had much more push back, and it would likely have been more adversarial. Me and the landlord were keen not to take advantage of the situation.
Cotswold Garden Tea Rooms. Did you advise them at any point to get representation?
I would always advise tenants to take representation, including legal representation, as well as share the RICS Code for Leasing Business Premises. It is not uncommon in my sector for tenants not to be represented or take legal representation on a lease either.
Cotswold Garden Tea Rooms. Was there any push back from the tenant on the level of rent you were proposing?
Yes, but I was not challenged in the way I might have been had they been represented.
Cotswold Garden Tea Rooms.Tell me about your negotiation strategy.
Primarily to understand the landlords interest. He was keen to make sure the rent review was enacted without it being burdensome to a tenant that was already struggling and seeking to sell their business as a result. He was pragmatic, so it really came down to seeking consent on an increase that reflected inflation rather than the highest possible rent achievable.
