Landlord and Tenant (Level 2 and Level 3) Flashcards

1
Q

Explain the provisions of Section 18 of the Landlord and Tenant Act 1927?

A

Limits the amount of damages a Landlord can recover for breach of repairing covenant.

Protects tenants

If the disrepair does not reduce the property’s value, no damages can be claimed

If the landlord intends to demolish or carry out development, then no damages for disrepair can be claimed.

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2
Q

What is the difference between a schedule of condition and a schedule of dilapidations?

A

A schedule of condition records the state of a property at the start of the lease

schedule of dilapidations outlines breaches in lease covenants (repairing obligations etc)

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3
Q

What are the grounds of opposition for a new lease under Section 30 of the Landlord and Tenant Act 1954?

A

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

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4
Q

Explain the difference between an “interim” and a “terminal” schedule of dilapidations?

A

An interim schedule of dilapidations is served during the lease term to address breaches that need immediate remedy

A terminal schedule of dilapidations is issued near or after lease expiry

Final schedule may follow after lease expiry if breaches remain unresolved

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5
Q

What is a Scott Schedule

A

A document used in legal proceedings, particularly in property disputes, to identify and clarify the key issues and allegations in a structured, item-by-item format, helping the court understand the parties’ positions

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6
Q

When can a landlord occupy their own building under Section 30 (g)?

A

The landlord intends to occupy the premises for their own business or residence.

The landlord must have owned the property for at least five years before serving notice.

The intention to occupy must be genuine and proven (i.e., not just to remove the tenant).

The landlord must be an individual or a company with a legitimate reason for occupation.

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7
Q

How would a Section 38 Notice be served?

A

Simple Declaration - The landlord must serve the notice at least 14 days before the lease is entered into.

Statutory Declaration - If less than 14 days notice is given. Must be signed before an independent solicitor

Must be served with a clear health warning - outlining to the tenant that they will not have the automatic right to a new lease when the current one expires.

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8
Q

What is the maximum term of a new lease granted by the court at lease renewal (1954 Act)?

A

15 years

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9
Q

What is an Arbitrator?

Can you appeal to Court? In how many days and on what grounds? (3)

A

Governed by the Arbitration Act 1996
Cannot be sued for negligence
Power to award costs
Appointed by the RICS President and Chartered Institute of Arbitrators
Investigates using information provided to them

Can appeal to court within 28 days on 3 bases:

A challenge to the tribunal jurisdiction
On a point of law
Serious irregularity

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10
Q

What is an Independent Expert?

A

RICS Guidance Note: Surveyors acting Independent Expert Determination (2016)

Appointed by RICS President

Makes their own investigation

Bound by the terms of the lease

No judicial function

No appeals but can be sued

Hearing or written

No power of disclosure

Power over their own costs

Level Properties v Balls Brothers (2007) Independent Expert found to have misinterpreted the Rent review clause and so discussion was non binding.

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11
Q

What is interim rent?

A

Interim rent is the rent payable between the expiry of a lease and the start of a new lease under the Landlord and Tenant Act 1954.

It is payable from the earliest date specified in a Section 25 or Section 26 notice until the new lease is agreed or determined by the court.

It is the lower value of the new agreed rent or the market rent

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12
Q

Tenants may be entitled to compensation under the Landlord and Tenant Act 1927 if:

A

The improvements were carried out with the landlords consent

The improvements add value to the property

The tenant quits the premises at the end of the lease without renewal

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13
Q

What does the Landlord and Tenant Act 1988 state?

A

Governs the assignment of leases and obligations of landlords in granting consent.

Landlord Duty to Act Reasonably

Must respond in a Reasonable Timeframe

Landlord must provide written reasons if consent is refused

An outgoing tenant remains liable unless released by the landlord

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14
Q

How much does RICS dispute resolution scheme cost?

A

£425

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15
Q

What are the Jackson Reforms?

A

Set of changes introduced in 2013, aimed at reducing legal costs, improving access to justice and encouraging ADR.

Key reforms include introduction of fixed costs, success fees, after the event insurance premiums and a focus on proportionality in legal costs.

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16
Q

Section 23 L+T Act 1954

A

Application of the Act - Business Tenancy

It is a tenancy
Used for business
Occupation of at least part
More than 6 months
No exempted or excluded tenancy
Competent Landlord

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17
Q

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

Check lease, building regulations, planning, service charge implications, landlord consent, RAMS, insurance

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18
Q

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

A

I would advise my client to review the lease to check if tenant improvements are allowed and whether consent is required. Under the 1927 Act, improvements can be registered, which may entitle the tenant to compensation at lease end.

I would recommend:

Assessing the impact of the improvements.
Seeking legal advice on eligibility for compensation.
Ensuring proper consent is given and works are compliant with regulations.
Documenting the works via a Licence for Alterations.

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19
Q

How is compensation for tenants improvements calculated?

A

If they have occupied for less than 14 years - 1x rateable value

If they have occupied for more than 14 years 2x rateable value

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20
Q

What lease terms are implied under Section 19 of the Landlord and Tenant Act 1927?

A

Section 19 of the Landlord and Tenant Act 1927 allows tenants to make improvements to the property with the landlord’s consent, which cannot be unreasonably withheld.

If the lease ends, tenants are entitled to compensation based on the increase in the rateable value of the property due to the improvements, typically calculated over a period of up to 14 years.

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21
Q

What legislation needs to be considered in the assignment of a lease?

What is a Section 17 notice?

A

Landlord and Tenant (covenants) Act 1995

Landlord and Tenant Act 1988

The Act abolished privity of contract for ‘new’ leases

A section 17 notice (1995 Act) must be served upon a guarantor within 6 months of the tenant defaulting to require the former tenant who has entered into an AGA to pay the arrears

Introduced AGA’s

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22
Q

What do you understand by the expression “authorised guarantee agreement” or AGA?

A

An Authorised Guarantee Agreement (AGA) is a legal agreement where the outgoing tenant guarantees the incoming tenant’s performance of lease covenants after assignment.

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23
Q

In what circumstance is it appropriate to have restrictive user covenants in leases?

A

Restrictive user covenants in leases are appropriate when the landlord wants to control the type of business activity, protect the property’s value, or prevent competition between tenants.

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24
Q

What do you understand a “conditional break clause” to be?

A

A conditional break clause is a provision in a lease that allows a tenant or landlord to terminate the lease early, but only if specific conditions (e.g., rent paid up to date, vacant possession) are met.

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25
Q

What “conditions” are usually attached to break clauses?

A

Rent and payments up to date – All rent, service charges, and other payments must be fully paid.

Vacant possession – The tenant must leave the property empty of people, belongings, and any ongoing business operations.

Repair and maintenance compliance – The tenant must meet repair and reinstatement obligations.

No material breach – The tenant must comply with all lease terms.

Notice period compliance – Proper written notice must be served within the required timeframe.

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26
Q

What are the likely consequences if a tenant serves a break notice giving the correct time period but the notice expires one day before it should?

A

It would invalidate the break

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27
Q

What are Calderbank Letters used for?

A

Unequivocal offer to settle (Calderbank v Calderbank 1975)

Served without prejudice and save as to costs

Rent reviews and other disputes

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28
Q

What is a hypothetical lease?

A

A hypothetical lease is a fictional lease created for the purpose of determining the market rent during a rent review. It outlines assumed terms (such as length, use, and repairing obligations) that may differ from the actual lease terms, enabling a fair and consistent rent assessment.

In a rent review, the “hypothetical lease” term, which determines the rent, is often assumed to be the unexpired residue of the original lease term unless the lease specifies otherwise, such as a defined term or the full original term

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29
Q

Name the four assumptions and three disregards at rent review?

A

Assumptions

Property available to let on open market by willing tenant to a willing landlord for a term of years as stated

Property is fit and available for immediate occupation and use

All covenants observed by the landlord/tenant

Property must be used for purpose set out in the lease

Disregards

The effect on the rent of the tenants occupation

Ignore goodwill attached to the property

Tenant’s improvements if landlord consent has been granted for the works

Tenants licences - liquor licence for example

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30
Q

Tell me about a challenging Landlord and Tenant case you have dealt with?

A

My case study

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31
Q

Tell me about when and why you have served a Calderbank offer or other offer to settle?

A

In a recent lease renewal negotiation, I advised my client on serving a Calderbank offer to the tenant. The lease was due to expire, and both parties were negotiating new terms, but the tenant was disputing the proposed rent increase.

To avoid protracted negotiations or potential legal action, I recommended issuing a Calderbank offer on a “without prejudice save as to costs” basis. This outlined a reasonable rent proposal aligned with the current market and included flexible lease terms, such as a break clause and a rent review mechanism.

The purpose of the offer was to encourage the tenant to settle amicably, while also protecting my client’s position on costs should the matter proceed to court. Ultimately, the tenant accepted the offer, allowing us to agree the new lease terms quickly and avoid unnecessary legal expenses.

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32
Q

Tell me about a time when you have assisted with a third party process?

A

In a recent case, I assisted a client in resolving a commercial lease dispute with a tenant through Alternative Dispute Resolution (ADR). The tenant had raised concerns regarding the condition of the property, arguing that necessary repairs had not been carried out by the landlord, which resulted in a breakdown of the landlord-tenant relationship.

Rather than pursuing litigation, I recommended mediation as a more efficient and cost-effective method for resolution. I helped facilitate the mediation process by gathering all relevant documentation, including repair schedules, the lease terms, and correspondence between both parties. During the mediation, I represented my client, ensuring they clearly communicated their position while also being open to negotiating terms that could resolve the dispute amicably.

Through ADR, both parties were able to reach a mutually agreeable settlement. The tenant received a reduction in rent for a defined period, and the landlord agreed to carry out the required repairs within a set timeframe. This resolution allowed both parties to avoid the expense and time involved in court proceedings, preserving the professional relationship and protecting my client’s interests in the long term.

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33
Q

Why do you need clients instructions before submitting a third party application?

A

You need client instructions before submitting a third-party application or engaging in ADR to ensure the actions align with their goals, legal position, and interests, avoiding unintended outcomes or acting outside their authority.

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34
Q

How do you collate, analyse and adjust comparable evidence?

A

To collate, analyse, and adjust comparable evidence, I first gather relevant data from various sources such as public records, property databases, and market reports.

I then assess the comparability of each property based on factors like location, size, condition, and lease terms. Adjustments are made for differences between the comparables and the subject property, such as market conditions or specific features, to ensure an accurate comparison.

Finally, I synthesize this information to provide a clear, reasoned conclusion.

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35
Q

What is hierarchy of evidence?

A

The relative weight attached to comparable evidence.

Open market lettings
Lease renewals
Rent Reviews
Independent expert determinations
Arbitrators awards
Court determinations under L+T Act 1954
Heresay evidence
Sale and Leasebacks
Surrender and renewals
Inter-company arrangements

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36
Q

Index linked Rent Review, Retail Unit, London

How did acquire the RPI figures?

A

Office for National Statistics

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37
Q

What is the difference between RPI and open market rr?

A

An open market rent review adjusts the rent based on the current market conditions while an RPI rent review links the rent adjustment to changes in the Retail Price Index (RPI), reflecting inflation.

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38
Q

Can the tenant refuse the RPI increase at rent review?

A

No, a tenant generally cannot refuse an RPI increase if it is specified in the lease agreement as the method for rent review. However, the tenant may dispute the calculation or the accuracy of the RPI figures used.

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39
Q

How did you present the workings of the RPI increase to the tenant?

A

Clearly outline the rent review clause in the lease, explaining the basis for the RPI increase.

Provide the relevant RPI figures from a reliable source, such as the Office for National Statistics (ONS)

Explain the calculation method, showing the percentage increase in RPI over the agreed period and how it applies to the current rent.

Present the new rent based on the RPI adjustment, demonstrating the updated figure.

Provide supporting documentation, including the RPI data and any calculations, for transparency

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40
Q

What is the purpose of a rent review memorandum?

A

It is a formal document that records the agreed revised rent following a rent review, ensuring clarity and providing a legal reference for both parties.

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41
Q

Assignment, Portobello Dock

What is your understanding of ‘not to be unreasonably withheld or delayed’

A

Means that a landlord cannot refuse or delay giving consent (e.g., for an assignment or alterations) without valid reasons

42
Q

How do you assess a tenants covenant strength?

A

Review company accounts (or recommend that these are reviewed by a qualified accountant)

Complete the profits test - net profit must be 3x the annual rent for 3 consecutive years

Dun and Bradstreet report - score 80-100 minimal risk

43
Q

What other checks do you undertake when checking an assignee?

A

I review financial accounts, obtain trade references, check credit ratings, verify company structure, and confirm previous landlord references.

44
Q

Assignment - Portobello Dock

If a tenant was of weaker covenants, how would you approach this?

A

I would negotiate additional security measures, such as a rent deposit, guarantor, or AGAs, and ensure the lease terms reflect appropriate safeguards to protect the landlord’s position.

Landlord and Tenant Covenants Act 1995 - introduced AGA’s

Section 17 notice must be served on a guarantor within 6 months of the tenant defaulting

Abolished privity of contract for new leases

45
Q

What is privity of contract?

A

Privity of contract means that only the parties to a contract have rights and obligations under it.

46
Q

What is the difference between a sublease and assignment and why would you rather sublet than assign?

A

An assignment transfers the entire lease to a new tenant, while a sublease creates a new lease between the original tenant and a subtenant.

You might sublet instead of assigning to retain control, earn profit rent, sublet part, or keep a future right to reoccupy.

47
Q

For assignment would you request character references?

A

Yes as It helps to gauge their reliability and ability to meet lease obligations, especially if their financial standing or covenant strength is uncertain.

48
Q

Advantages and disadvantages for ADR - 3rd party determination

A

Advantages of ADR for rent reviews and lease renewals include cost-effectiveness, faster resolution, and less formal than court proceedings.

Disadvantages include limited binding power, potential for an unsatisfactory outcome, and reliance on both parties’ willingness to negotiate.

49
Q

How could MEES impact your advice on a landlord and tenant case?

A

Mees could affect the value of property and the rent. For example an occupier could be willing to pay a higher rent for a unit that has strong ESG credentials and a strong EPC (lease renewal)

Whereas a unit with a lower EPC rating could affect the amount of rent/uplift a tenant is willing to pay

50
Q

Rent Review Pall Mall East (Open Market)

Was time of the essence and tell me your assumptions and disregards?

A

Timing was not of the essence

Assumptions

Property is available to let on open market
Property is fit and available for immediate use
All covenants observed
Property may be used for purpose as set out in the lease

Disregards

Any effect on goodwill on tenants occupation
Ignore goodwill attached to the property
Tenants improvements if landlord consent has been granted for the works

51
Q

For the open market rent review (Pall Mall) where did you obtain comparables from?

A

Online resources and recently completed transactions - Costar and EGI

Validation from agents

Industry reports

52
Q

Tell me about your valuation that ascertained the property was under rented?

A

From market research and comparable evidence - gathered recent comparable date - similar location, building type size etc

validated this with agents in the market

Used reports to benchmark

53
Q

Was the tenant represented? Would you advise the tenant seek representation?

A

They were. Always.

For a rent review, I would advise a tenant to seek representation from a chartered surveyor specializing in commercial property.

Speak to the RICS or find a Chartered Surveyor

54
Q

Lease Renewal High Holborn - Inside the Act

How long was left on the unexpired term?

A

6 months - It was protected under the L+T Act 1954

Must be between 6 and 12 months

55
Q

Lease Renewal High Holborn

How did you ascertain the passing rent was the market rent?

A

Researched and acquired comparable evidence

Checked with agents and reviewed market insight reports

56
Q

Lease Renewal High Holborn

Did you advise the solicitor on the terms to include in the Section 25 notice?

A

Yes

Confirmation of lease expiry and that the tenant is within the protection of the Landlord and Tenant Act 1954.

Market Rent analysis to confirm that the current rent is in line with the market rate.

Proposal of lease terms, including the proposed lease length (e.g., 5 years), rent, and any other relevant terms

Tenant’s desire to remain in occupation, once confirmed.
Property inspection details to ensure no alterations have been made.

57
Q

Lease Renewal High Holborn

Why did you inspect and measure if there was no uplift in rent? i.e open market?

A

To ensure that the tenant had abided by their lease obligations

58
Q

Lease Renewal High Holborn

Did you advise to issue Section 25 notice prior to inspection

A

No - I inspected before and after.

59
Q

What is the difference between a Lease and Licence?

A

Lease - Exclusive occupation, legally binding between Landlord and Tenant, Right to use the property for a specified period in exchange for rent, can be transferred

Licence - Personal agreement between a licensor and licensee to use the land, Can be revoked at any time

60
Q

What is adverse possession and what are the timings?

A

Process by which a person who is not the legal owner of the land can become the legal owner by occupying for period of time.

Registered Land - Before 2003 12 years - After 2003 10 years

Unregistered Land - 12 years

61
Q

Section 23 of the Landlord and Tenant Act 1954?

A

Application of the Act

Is it a business tenancy (is it a business/is it a tenancy)
Occupation for at least part
More than 6 months
No exempted or excluded tenancy
Competent Landlord

62
Q

Section 24 of Landlord and Tenant Act 1954?

A

Security of tenure provisions - Holding over under the Act

63
Q

Section 24a Landlord and Tenant Act 1954?

A

Interim rent

64
Q

Section 25 notice?

A

Landlords notice to end lease or seek a new lease. Friendly or hostile.

Must be given by a competent landlord to competent tenant

In the prescribed form

Not less than 6 months and not more than 12 months before date of expiry/date of termination

friendly - includes the proposed terms of the new lease

hostile - grounds for opposition must be stated under section 30

65
Q

What is the maximum term that can be granted by a county court?

66
Q

Section 26 notice?

When should Landlord respond?

A

Tenants request for a new tenancy - not more than 12 months not less than 6 months before the date of the new tenancy

Must be in the prescribed form and must state tenants proposals for a new lease (including proposed rent)

Landlord must serve counter notice within 2 months if they oppose this

67
Q

Section 27 notice

A

when the tenant does not want the lease to continue beyond the original fixed term

tenant must serve notice giving 3 months notice of termination

tenant only has to serve this after expiry when holding over

68
Q

Section 28 notice

A

Renewal of tenancy by agreement

69
Q

Section 29 notice

A

Order by court for a new tenancy

70
Q

Section 30 notice

A

Landlords grounds for opposition of a new lease

Breach of repairing covenant

Persistent delay in paying rent

Other substantial breach

Provide suitable alternative accommodation

Uneconomic subdivision (compensation payable)

Demolition or reconstruction (compensation payable)

Owner occupation (compensation payable)

71
Q

Sections 32-35

A

Terms of a new lease

72
Q

Section 37

A

Compensation

Under 14 years occupation - 1x rateable value

Over 14 years occupation - 2x rateable value

Rateable value is the RV at the time the Section 25 notice is served or when the Landlord opposes the Section 26 notice

Case Law : S Francis v Cavendish Hotel 2017

73
Q

Section 38a

A

Contracting outside the L+T Act. Landlord must serve a ‘Health Warning’

Simple Declaration - Given when the parties have at least 14 days or more prior to the commencement of the new lease

Statutory Declaration - Served less than 14 days prior to committing to the lease. Must be made in front of an independent solicitor.

74
Q

Section 40

A

Notice requesting information about the other party

75
Q

Section 44

A

Definition of a competent landlord

76
Q

What is the caselaw for time is of the essence relating to rent reviews?

A

United Scientific Holdings v Burnley Borough Council 1978

Time is not of the essence if the lease is silent on it

77
Q

Different types of rent reviews?

A

Usually upwards only - open market - can also go down

Indexed (RPI or CPI with caps and collars)

Turnover rents

Stepped increases

fixed increases

78
Q

What are the key elements of a rent review clause?

A

Machinery of the rent review (RPI linked, open market)

Basis of Valuation

Settling disputes

79
Q

Whats the basic difference between a lease renewal and a rent review?

A

Lease renewal - A statutory procedure

Rent Review - A contractual procedure

80
Q

What are the dispute resolution procedures that are available to LL’s and T’s in the event a lease renewal cannot be agreed?

A

PACT

Mediation

Could end up in Court. Maximum term of 15 years. New lease terms set out in O’May vs City of London case to determine terms of new lease

81
Q

What is a Calderbank Offer - Calderbank v Calderbank

How must it be served?

A

It is an unoquivacal offer to settle a dispute, MUST be served in writing and without prejudice and save as to costs.

82
Q

Would you serve a Calderbank if the third party was an independent expert rather than an arbitrator

A

No

Arbitrator can award costs. Independent Expert has to go off the lease terms which specify how the costs are awarded.

83
Q

Explain when a tenants improvements are disregarded at lease renewal?

A

When establishing the new rent at lease renewal

If licenced

Improvements carried out within the last 21 years should not be rentalised.

84
Q

What lease terms affect the rent at review?

A

The rent review clause (definition of rent, assumptions and disregards)

Rent review frequency

Repairing liability

Insurance liability

Alienation (assignment etc)

85
Q

What do you understand by the expression ‘time is of the essence’?

Whats the main case for this?

A

Parties must complete their obligations on time

Burnley Borough Council vs United Scientific Holdings Ltd 1978

time is of the essence when the lease says so, T serves notice making time of the essence, deeming provisions

86
Q

Whats a premium?

A

A one off payment usually made by a tenant to a landlord - separate from rent

87
Q

What does the Landlord and Tenant Act 1927 state?

A

The Landlord and Tenant Act 1927 gives tenants the right to claim compensation for certain improvements made to the property

88
Q

What are the different types of covenant?

A

Absolute Covenant – Strictly prohibits certain actions (e.g., no alterations allowed).

Qualified Covenant – Prohibits actions unless the landlord gives consent (e.g., no alterations without consent).

Fully Qualified Covenant – Allows actions with landlord’s consent, which cannot be unreasonably withheld or delayed (e.g., tenant may assign with landlord’s reasonable consent).

Restrictive Covenant – Prevents a party from doing something (e.g., no subletting).

89
Q

What is the difference between a Part 36 offer and a Calderbank Letter

A

A Part 36 offer is for lease renewals

90
Q

You can appeal to the High Court for an arbitration within 28 days of the award on THREE specific grounds

A

A challenge to the tribunals jurisdiction

On a point of law

Serious irregularity

91
Q

What is the difference between CPI and RPI?

A

RPI includes mortgage payments

92
Q

What is a deeming provision in a rent review clause?

A

The clause states that if the tenant does not serve a counter notice to a LL trigger notice within the specified time, the tenant will have deemed to accept the new rent.

93
Q

What is a periodic tenancy?

A

A rental agreement that continues indefinitely until either the landlord or tenant provides proper notice to end it

94
Q

What is adverse possession?

A

By which the person who is not the legal owner of the land can become the legal owner through possession of the land

Registered land 12 years - 10 years if after 2003

Unregistered land 12 years

95
Q

What is a tenancy at will?

A

A form of licence created by written agreement for an unspecified time in which the landlord may evict the tenant at any time.

Not a legal interest in land with no renewal right

96
Q

Is the Landlord and Tenant Act currently being reviewed?

What are the proposed changes?

A

Yes currently being reviewed by the law society

ESG and Sustainability

Lease Renewal Process: Review of tenant protections and procedures under the 1954 Act, including the ability to oppose or grant lease renewals.

Rent Review Clauses: Focus on fairness and transparency in rent review mechanisms, including market-based reviews and how rent increases are calculated.

Tenant’s Right to Assign or Sublet: Reviewing clauses that govern tenant flexibility to assign or sublet leases, with an emphasis on ensuring that landlords cannot unreasonably withhold consent.

97
Q

What’s the difference between a TAW and a periodic tenancy

A

A tenancy at will can be revoked at any time by both parties

98
Q

What is the hypothetical term at a rent review?

A

The hypothetical term at rent review is the notional lease length assumed when determining the market rent, as specified in the lease.

99
Q

What are the benefits of an LTA?

A

Landlord can reinstate the premises at lease end

Tenant is protected at rent review

100
Q

What is a sweeper clause?

A

In a lease, a sweeper clause for landlords or property managers covers unexpected costs or liabilities that aren’t specifically listed, allowing them to recover additional expenses from the tenant.

101
Q

What are the consequences if a tenant serves a break notice giving the correct time period but the notice expires one day before it should?

A

It would be invalid

Landlords discretion

Mamai Investments v Eagle Star Life Assurance Co Ltd (1997)