Landlord and tenant - lvl 3 Flashcards
Tell me about a challenging landlord and tenant case you have dealt with.
28 Jamestown Road - I was instructed on behalf of the tenant for a rent review for an office property of floor space totalling 25,000 sq ft. The tenant was served a rent review notice letter at a significant increase for the rent review. Further to a lack of market evidence transacted for larger spaces I served a Calderbank Letter at a nil increase. After I began negotiations, the landlord’s surveyor was not willing to reduce the rental value and I applied to the DRS for Arbitration. Following our first session I negotiated a nominal uplift which the client accepted because they wanted to avoid further costs in Arbitration.
Tell me about when and why you have served a Calderbank offer or other offer to settle.
28 Jamestown Road - I served a Calderbank letter prior to Arbitration to protect my client’s position on costs. The costs of the Arbitrator, and expert witness costs are all payable in Arbitration. The costs are payable by parties, which is dependent on how costs are awarded and the parties position in respect of served Calderbank Letters.
Tell me about an example of when you have assisted with the third party process.
28 Jamestown Road - I assisted in arbitration where Directions and the Timetable were agreed during our meeting.
Why do you need client’s instructions before submitting a third party application?
28 Jamestown Road - My client could incur further costs in arbitration. The Arbitrator and expert witness costs are all payable in Arbitration.
What are the advantages and disadvantages you have pointed out to clients in relation to third party procedures?
28 Jamestown Road -
Arbitration. This is a form of third party determination used when the other party is not willing to agree on the MR by negotiation.
Either party can protect on costs. If the Award is granted in one party’s favour, they would avoid costs.
L - Done in accordance with the AA1996
E - Arbitrator must rely on Surveyor’s evidence
A - Limited ground of appeal
D - Has powers of disclosure
O - The outcome is an Award
N - The arbitrator is not liable for negligence
How could MEES impact impact upon your advice on a landlord and tenant case?
I would read the lease which would detail who should finance the proposed works, e.g., which party should contribute under the lease or would they use market finance available for specific improvement measures. I would advise to instruct the party to undertake works in good time and seek to minimise disruption to operations or tenant’s trade. I would advise the party to take advice from an accountant on the tax liability and potential to write off expenditure on improvements as capital allowances.
28 Jamestown Road - did your measurement coincide with the plan provided?
My measurements were similar to the floor areas plan and measurement provided to me by the tenant.
28 Jamestown Road - what was the lease provision on the rent review?
The rent review clause had a year 5 rent review, the lease term was 10 years and time was not of the essence. The rent review clause had the following assumptions and disregards:
Assumptions -
- the property could be let in the open market:
between a willing landlord and willing tenant,
as a whole,
with vacant possession,
without fine or premium,
for a term equal to the unexpired residue of the contractual term at the relevant review date or 5 years if longer,
on the same terms of this lease except as to the rent
- the landlord and tenant fully comply with their lease (the property is fit for occupation and use)
- if the property has been destroyed it has been fully reinstated
- no works have been carried out on the property which have diminished rental value
Disregards:
- Tenant occupation
- Goodwill attached by carrying out of business
- Improvement
For the rent review time was not of the essence
For third party determination the surveyor should be an arbitrator
28 Jamestown Road - what can an arbitrator do?
The arbitrator has powers of disclosure.
28 Jamestown Road - why did you serve a Calderbank letter?
To protect my client’s position on costs. The costs of the Arbitrator, and expert witness costs are all payable in Arbitration.
28 Jamestown Road - what is the significance of a Calderbank letter?
To protect my client’s position on costs. The costs of the Arbitrator, and expert witness costs are all payable in Arbitration.
28 Jamestown Road - if you could not find supporting evidence to justify an increase, why was it agreed?
The market was poor because of Covid-19. I used the comparable method of real estate valuation to determine MR. The lack of rental transactions indicated that rents had not increased relevant to the subject property which justified my position that the rent should not increase at the review.
9A Ironmonger Lane - how did you know the lease was outside the Act?
I read the lease.
9A Ironmonger Lane - during conversations with the tenant, did they state they wanted a new lease?
My client had not stated they wanted a new lease.
9A Ironmonger Lane - would you advise a tenant to have their lease protected?
I would advise my client to have a lease provided with protection of the LTA1954. However, it would be up to the discretion of the landlord whether they wanted the lease to be inside the act.
