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APC > Landlord and Tenant (L3) > Flashcards

Landlord and Tenant (L3) Flashcards

1
Q
  1. What governs whether a tenant has security of tenure?
A

Landlord and Tenant Act 1954

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2
Q
  1. What sections are you mindful of under this act?
A

S.23 - Defines a tenancy to which the Act applies
S.24 - Gives Ts security of tenure: L or T can apply to Court to determine the terms of the new tenancy
S.24A - Application to Court for an Interim Rent
S.25 - Ls notice of termination
S.26 - Ts request for a new tenancy
S.27 - Ts notice of termination
S.28 - Agreement for a new tenancy results in existing tenancy losing protection
S.29 - Timescales for application to Court
S.30 - Seven grounds upon which L may object to a new tenancy
S.31 - Court will dismiss Ts application where L successfully opposes a new tenancy
S.32 - Property to be comprised in the new tenancy
S.33 - Court has power to grant new tenancy for a term not exceeding 15 years
S.34 - Assumptions to be made the and matters to be disregarded in assessing the rent under the new tenancy
S.35 - Other terms of the new tenancy
S.36 - Carrying out the order for the new tenancy
S.37 - Compensation where new tenancy not granted on certain grounds
S.38 - Contracting out of Sections 24 to 28
S.40 - Duty to give information
S.43 - Defines a tenancy to which the Act does not apply

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3
Q
  1. What is S.23/24?
A

23 states which leases the Act applies, 24 states a lease doesn’t expire and will continue unless notice served ‘holding over’.

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4
Q
  1. To what lease does the Act apply?
A

Premises occupied by T for business purposes.

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5
Q
  1. To what lease does the Act not apply?
A

Agricultural holdings, mining leases, residential tenancies, tenancies granted as condition of employment, tenancies not exceeding 6 months unless provision for extension or T in occupation for > 12 months.

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6
Q
  1. You mention that you received a S.26 notice from a tenant to renew the lease. If you hadn’t and the LL wanted to kick off the lease renewal, what notice would they need to serve?
A

S.25

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7
Q
  1. When would a section 25 notice need to be served?
A

No more than 12 months or less than 6 months before lease expiry

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8
Q
  1. Do all S.25 notices confirm the landlord’s intention to agree a new lease?
A

No, that would be a non-hostile notice, a hostile notice would express LL intent to oppose new lease.

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9
Q
  1. What are the grounds for serving a S.25?
A

Must be served by a LL and served correctly on T and relate to whole of demise and be in prescribed form.

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10
Q
  1. What is the prescribed form?
A

Name and address of L&T, address of property, notice of the date to end tenancy (hostile/friendly), whether new lease or opposed, confirmation of date for response, proposed rent/grounds for opposition- always seek professional i.e. solicitor advice on validity.

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11
Q
  1. What are some of the grounds under which a LL can serve a hostile S25 notice?
A

S.30, grounds A-G, breach of repair, persistent delay in paying rent, other substantial breach, provide suitable alternative accommodation, uneconomic subletting of part, demolition or reconstruction, owner occupation (L for > 5 years).

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12
Q
  1. What are grounds E-G?
A

The ‘no fault’ grounds and compensation is due to T if opposing on these grounds.

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13
Q
  1. What compensation would be owed?
A

<14 yrs = 1x RV, >14 yrs = 2x RV

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14
Q
  1. What are S.26/27?
A

S.26 is the T’s notice to request a new tenancy, (12/6-month rule applies) if LL wants to counter must be within 2 months. S.27 is notice by T if they want to end lease with 3 months’ notice after lease expiry.

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15
Q
  1. What are S.32-35?
A

S.32: the property comprised (usually same as old tenancy) S.33: the length of the tenancy (Court has the power to grant a term <15 years). S.34: the rent (open market disregarding (i) Ts previous occupation, (ii) any goodwill, (iii) certain improvements, (iv) any licence to sell intoxicating liquor if licence belongs to T. Improvements to be disregarded if carried out by T, and (i) during old tenancy or (ii) less than 21 years before application. S.35: other terms (must have regard to old tenancy)

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16
Q
  1. What case law governs terms of a lease renewal?
A

O’May v City of London Real Property Co, new lease should be on basis of old and must show changes to be fair and reasonable.

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17
Q
  1. Would the tenant need to serve notice if they were leaving at expiry?
A

No, they would just need to give vacant possession.

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18
Q
  1. What if I needed information on the other party to serve notice?
A

Serve a S.40 requesting information, you can serve it during the last 2 years and get names and registered address (1 month to provide

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19
Q
  1. What is a competent landlord?
A

S.44, a landlord that has at least 14 months unexpired interest in the property so is in a position to grant or oppose renewal of occupational tenancy.

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20
Q
  1. What is there is a dispute over lease renewal?
A

In event of non-agreement, matter is settled by the Court, an unopposed lease renewal can be determined under the PACT. LL could make a Part 36 offer in the Civil Procedure Rules.

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21
Q
  1. Deadline for Court?
A

T must apply to Court before the expiry of S.25 or S.26 or will lose security of tenure. L can apply before expiry of S.25 or S.26 where opposes new tenancy in a S.25 or in response to S.26. L & T may agree to extend date for Court, and further agreements may be made, the date of expiry of the last agreement becomes the expiry date of the tenancy.

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22
Q
  1. What’s interim rent?
A

S.24A: rent that is paid between the end of the original tenancy and the start of the new lease. Either party can also apply to the court to determine whether interim rent is required and, if so, what the amount should be. Can be included as part of lease renewal court proceedings, or as a stand-alone application. Payable from expiry current tenancy, therefore, the earliest date that could have been specified in S25 or S26. Either party giving notice must give notice at least 6 but no more than 12 months before the current tenancy will end. Therefore, the earliest possible date that interim rent becomes payable may not be the same as the termination date stated in the notice or request, if more than 6 months’ notice is given.

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23
Q
  1. What’s PACT?
A

It was set up by RICS and Law Society, don’t need to go to court, quick, efficient, and more cost effective.

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24
Q
  1. You say all leases at Richmond are contracted out of S.24-28, what does this mean?
A

No security of tenure, tenant would have to leave at expiry if a new lease hasn’t been agreed.

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25
Q
  1. How do you contract out a lease?
A

Under section 38A of act, landlord to serve a notice on tenants, tenant makes declaration confirming receipt and acceptance and must be complete and signed prior to lease. You will find the declaration separate but also in lease. Simple/statutory declaration depending on how long before lease its signed, (14 days).

26
Q
  1. What advice would you give to a L in respect of a lease renewal where a property is significantly over-rented?
A

Find out client objectives, If it’s solely collecting maximum rent, then would not advise they serve a S.25. Advise that this has a negative effect on Capital Value because it is uncertain, the Tenant can leave after 3 months when they’re holding over, and there is a high risk of this happening if the property is over-rented. If they wish to maximise the Capital Value, serve a friendly S25, get the tenant on a 10-year lease.

27
Q
  1. What are the contents of a RR clause?
A

Machinery, who can initiate the RR, State assumptions/disregards and basis for the rent review, i.e. market upwards only, could be RPI, turnover or stepped increase, and a method of dispute resolution. May also state if time is of the essence.

28
Q
  1. Is time usually of the essence for a RR? Case law?
A

Not usually, if the lease is silent time is not of the essence. United Scientific Holdings Ltd V Burnley Borough Council, not usually, left for 13 years and judge said it could go ahead.

29
Q
  1. What are the assumptions in a RR clause?
A

available to let on open market (between willing L&T), property fit for immediate occupation and use, T has complied with its covenants in the existing lease.

30
Q
  1. What are the three usual disregards you’d find in a rent review clause?
A

T’s previous occupation, any goodwill, certain improvements (LL consent), any licence to sell intoxicating liquor if belongs to T.

31
Q
  1. Why would you disregard tenants’ improvements?
A

Disadvantages tenant as you are effectively charging them twice as you are rentalising the improvement.

32
Q
  1. What is the hypothetical term?
A

Length of term to be valued to arrive at new rental figure, would be specified in RR clause or if silent assume the residual of the term.

33
Q
  1. How does the hypothetical term impact value?
A

If it stated a longer lease i.e. 15 yrs. for example and you had a retail unit unlikely a tenant would go for this term and rent would be adjusted downward, shorter lease would be the other way, depends on property/market.

34
Q
  1. Where might I find an index linked review?
A

Rent is reviewed by reference to index such as RPI or CPI usually with cap & collar. May be found in shorter leases or leisure premises e.g. pubs, hotels.

35
Q
  1. What’s a turnover rent?
A

% linked to turnover/revenue of a tenant’s business; would need tenant trading accounts.

36
Q
  1. What are deeming provisions?
A

Some RR’s in older leases state L to state rent in trigger notice and if T doesn’t counter within timeframe the rent is deemed to be accepted.

37
Q
  1. What is a headline RR clause?
A

The rent that would be payable after any rent-free period, concessionary rent period or other inducement has expired. These are now normally not agreed.

38
Q
  1. What does ‘without prejudice’ mean?
A

Statements which are made in an attempt to settle a dispute cannot be used in court/ADR as evidence against the party that made them.

39
Q
  1. When would you find ‘without prejudice’ on an invoice for rent?
A

RR outstanding or holding over.

40
Q
  1. What advice would you give to your client with regards to dispute resolution if you were acting on their behalf for a rent review and were unable to reach a settlement figure?
A

Refer to the lease with regards to dispute resolution, either independent expert or arbitrator.

41
Q
  1. What’s a calderbank letter?
A

An offer to settle to achieve early resolution of RR dispute, set out terms of settlement and time to respond (21 days), Part 36 is similar for lease renewals. Should be headed ‘without prejudice save as to costs’.

42
Q
  1. What does the Code for leasing business premises (2020) say about RR’s
A

RR clauses should be clear, Definitions of market rent should not result in a ‘headline rent’ unless that has been expressly agreed. Indexed reviews should not contain obscure formulae designed to produce a greater increase than is proportionate, should allow either party to initiate process and not impose time limits.

43
Q
  1. How was the rent review documented?
A

In a rent review memorandum

44
Q
  1. What are the difference between an arbitrator and an independent expert?
A

Arbitrator bound by rules of evidence and award (of rent) cannot be more or less than the extremes submitted by the parties. Independent expert bases decision on own knowledge and investigations. Arb regulated by Arbitration Act 1996, IE has no legislation governing procedure. Arb can award costs, IE has no power to make any orders as to fees. Arb not liable for negligence but can be sued on a point of law. IE liable for damages through negligence.

45
Q
  1. Difference between lease and licence?
A

Lease gives exclusion possession for a rent for a term. If >3 years needs to be in writing, signed and registered as a deed. A licence makes lawful what would otherwise be trespass e.g. car park, advertising rights. Lease can be assigned, licence is personal.
Street v Mountford

46
Q
  1. Land registry plans – what are the requirements?
A

The plan must be drawn accurately to a stated scale, show orientation (north point), show sufficient surrounding detail, show the extent of the property, state on which level the property is situated.

47
Q
  1. When is a land reg compliant plan required?
A

Any new lease >7 yrs must be registered with the Land Registry and, in almost all cases, have a compliant lease plan.

48
Q
  1. Talk me through your RR at Hampton Business Park
A
49
Q
  1. Talk me through your lease renewal at Richmond
A
50
Q
  1. What is the difference between an alteration and an improvement?
A

An alteration is making physical changes to a property, an improvement is an alteration that adds value.

51
Q
  1. Your tenant client wishes to extend an industrial property. Explain the factors that need to be considered and the action that needs to be taken.
A

. T should consider unexpired term (surrender and renewal?), Wording of any Rent Review clause (improvements disregarded?), S.34 of the L&T Act 1954 (improvements to be disregarded in new lease if carried out: during old tenancy, or <21 years before application.

52
Q
  1. You are managing a property for your landlord client and have received a request from a tenant to carry our improvements. The tenant has requested that improvements are registered under the 1927 Act. What advice would you give to your client?
A

L&T Act 1927 procedure: T must serve notice on L before works start with plans, L has 3 months to object or offer to do the works himself in return for increased rent. If L does not object or offer to do the works, T can proceed and must complete works within agreed time. If the L objects can be determined by Court (must be satisfied: i. improvement is of such a nature as to add to the letting value of the property at the termination of the tenancy ii. reasonable and suitable iii. does not diminish the value of any property belonging to L.

53
Q

How is compensation for tenant’s improvements calculated?

A

If an improvement is registered is accordance with the L&T Act 1927 compensation payable when the tenancy comes to an end. Compensation - shall not exceed the smaller of (i.) net addition to the value of the property (ii.) cost of carrying out the improvement at end of lease less cost of putting improvement in repair.

54
Q
  1. What lease terms are implied under Section 19 of the Landlord and Tenant Act 1927?
A

Consent cannot be unreasonably withheld.

55
Q
  1. Explain the legislation that needs to be considered in an assignment of a lease.
A

S19 of L&T Act 1927 implies that consent cannot be unreasonably withheld, L&T Act 1988 consent must be given within a reasonable time. L&T (Covenants) Act 1995 – AGA.

56
Q
  1. What do you understand by the expression authorised guarantee agreement or AGA?
A

L&T (Covenants) Act 1995 came into force Jan 1996. Assignor of the whole premises is released from T covenants. However, S16 entitles L to require an assignor to guarantee the performance of the covenants by the assignee T. Assignor released upon lease expiry or a further assignment.

57
Q
  1. Explain the difference between an Interim and a Terminal Schedule of Dilapidations?
A

Interim served where there are >3 years of the lease left to run. Terminal served in last 3 years. Can be served at termination or after subject to Limitation Act 1980. CPR Pre-Action Protocol (Dilaps Protocol): should be served within 56 days of lease expiry.

58
Q
  1. What is a Scott Schedule?
A

Extended version of the schedule which enables the tenant’s surveyor to respond and used if matter goes to Court.

59
Q
  1. Are there any implied repairing covenants that apply business premises
A

No, where there are no express provisions, T is required to use the premises in a “tenant-like manner”. For residential premises there are implied covenants under L&T Act 1985 - for tenancies of < 7 yrs. L is responsible for all repairs

60
Q
  1. Landlord remedies for breach of repair?
A

Forfeiture (S146 Law of Property Act 1925) T may apply for relief under Leasehold Property Repairs Act 1938 (applies to leases >7 yrs with > 3 years left to run). T serves counter notice and L must establish one of the five grounds specified e.g., repair is necessary to protect another occupier. Damages (S18 Landlord and Tenant Act 1927) damages limited to the diminution in value to Ls reversion caused by the Ts breach. Specific Performance - courts have been unwilling to order specific performance of repairs due to the need for detailed supervision in most cases damages considered adequate. Exercise Right of Entry to Repair (Jervis v Harris clause) recovery of cost of works being by way of claim for a debt rather than damages.

61
Q
  1. Tenant remedies for breach of repair?
A

Damages (difference in value), Specific Performance (injunction compelling L to carry out repairs), Declaration (if injunction refused may seek declaration L is in breach and T is entitled to carry out and recover cost by withholding rent), Set-off against Rent (T must give notice and L must fail to act).

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