Landlord And Tenant - Summary Of Experience Flashcards
Please tell me what information is required from the client at commencement of the instruction?
- Agreed terms of engagement
- An understanding of your client’s strategy and objectives.
- A copy of the existing lease and any plans attached to the lease.
- Copies of any licences e.g. LTA’s, improvements, deeds of variation.
- Copy of any rent review memorandums.
- Contact details from the tenant to arrange an inspection of the property or details of the landlord/agent.
- Copy of the Property Management file.
- Details of any comparable evidence.
What are the main differences between a Lease and a Licence? (There are 3)
1) A Lease provides an occupier with an estate in the relevant land, a Licence is a permission to make it lawful for them to use the land.
2) A Lease can be assigned, a Licence is normally a personal right that cannot be assigned.
3) A Lease cannot be terminated until it expires (unless there is a break clause,) A Licence cause usually be revoked at any time.
If exclusive possession is granted of a defined area for over 6 months, it is likely to be a lease.
Can you name any case law linked to Leases and Licences?
Street v Mountford 1985
Sets out the differentiation between a lease and a licence.
What are the FOUR requirements of a lease?
1) Exclusive occupation
2) Payment of rent
3) Duration for a specified term
4) If more than 3 years, the terms must be in writing, signed as a deed.
Tell me what is included your Term’s of Engagement in respect to Rent Reviews & Lease Renewals.
Our fees in respect to Rent Reviews and Lease Renewals are based on:
- A Fixed Fee in two stages. Stage 1 - report and Stage 2 - negotiations.
- An hourly rate for A Director, Chartered Surveyor, Graduate Surveyor.
Also a copy of our PI Insurance and CHP
What actions are required by the surveyor in respect to a new instruction?
- Undertake a Conflict of Interest & competency check.
- Agree terms of engagement with the client.
- Understand the Client’s objectives.
- Read the lease packet and any licences carefully.
- Check whether time is of the essence for a rent review.
- Undertake a site inspection & measurement in accordance with RICS Surveying Safely.
- Undertake a market rent valuation.
- Prepare a report to your client setting out your recommendations
What does ‘Without Prejuice mean’?
Means that during the period of negotiations, the opposing party cannot subsequently rely upon any document or discussions held which are labelled ‘Without Prejudice.’
The information is therefore privileged.
What are some of the common Lease terms?
- Names of parties involved (including company number)
- Term / Dates of Lease
- Rent payable
- Service Charge payable
- Landlord’s Obligations
- Tenant’s Obligations.
What could be seen in a rent review clause?
A Rent Review clause may be positioned in a Lease as a ‘Schedule’
It will included how the Rent is going to be ascertaining i.e.:
- RPI
- Upwards only
- On Market Evidence.
Talk me through your discussion and approach to dealing with this matter? (New Century Road Example)
Our firm was instructed by a new client to conduct a rent review in Basildon.
I approached the tenant after receiving contact details from the client and made arrangements to inspect and measure the property at a date that was convenient
After collecting the correct floor areas. I complied comparable evidence and considered an uplift by £6k p.a.
I entering a dialogue with the tenant stating this amount who agreed terms in writing and the RRM was sent out to be signed.
What is a Calderbank Offer?
A Calderbank offer is an offer settled at a given level of rent within a certain time period and if it is not accepted then a third-party surveyor will look at the matter for determination.
Used mainly in rent reviews.
Costs usually awarded to successful party.
Why did you consider the rent to be increased? (New Century Road Example)
The evidence that I collated showed signs that the market rent was higher in Ballisdon local agents backed up my evidence.
What was the square footage of the property (New Century Road Example)
1151 square feet.
What is a Tenancy at Will?
A form of licence created by written agreement for unspecified time in which the landlord may evict the tenant at any time.
Not a legal interest in land with no renewal right.
What is a Wayleave?
A temporary right and receives an annual payment e.g right for an electricity company to install and retain their apparatus.
What is an Easement?
This is a permanent right and receives a capital payment, it allows a right enjoyed by one party over the land of another.
What is Adverse Possession?
The process by which a person who is not the legal owner of the land can become the legal owner through possession of the land for a specified period of time without the owners permission.
Registration Act came into effect in 2003.
10 or 12 years time frame.
What is the basis of a rent review?
- Normally upwards only to the market rent using standard assumptions.
- Other bases of rent review include indexation (often RPI or CPI with caps & collars), turnover rents and stepped increases.
- Time is not normally of the essence (United Scientific Holdings Ltd v Burnley Borough Council 1977)
What are the FOUR usual assumptions of a Rent Review?
1) Property available to let on the open market by willing tenant to a willing landlord for a term of years as stated.
2) Property is fit and available for immediate occupation and use.
3) All covenants observed by landlord and tenant
4) Property may be used for purpose set out in lease
What are the THREE usual disregards with a Rent Review?
1) Any effect of goodwill on tenant’s occupation
2) Ignore goodwill attached to the property
3) Tenant’s improvements if landlord consent has been granted for the works.
What are Headline Rent Review Clauses?
Headline Rent Review Clauses ignores all Tenant’s incentives / concessions granted on a letting, whether they be for fitting out, pure incentive or in lieu of dilapidations / works.
What is the difference between a Lease Renewal and a Rent Review?
A Lease Renewal occurs when the Lease agreement comes to an end.
A Rent Review is normally scheduled in the lease and can lead to an increase or decrease in rent depending on evidence supported / what the lease clause says.
Talk to me about your discussions with the Tenant (Scarborough Example)
The discussions for this example took longer than what I had in mind when approaching the situation. As the evidence was clear that there was an increase in the rental value and according to local agents the demand for small industrial units with access to a service yard had risen since the lease start date.
The Tenant was Scarborough Borough Council who were going through a large restructuring which is why I think the negotiations took longer than expected.
What was included in the Rent Review Memorandum? (New Century Road Example)
- Name of Landlord and Tenant
- Address of the property
- Date of the lease and rent review
- Confirmation of the new rent agreed
- Signed and dated by both parties.
Why did you advise your client to offer the tenant a new lease despite them being in rent arrears? (East Ham Example)
I advised that our client should only offer a new lease on the condition that the service charge arrears were paid in full, either in one sum or a payment plan is agreed in writing. By keeping the tenant in occupation, it would allow for our client to maintain their income and avoid the liability of void costs if the unit became vacant.
What rights does the tenant have given the lease was outside the L&T Act 1954?
The tenant has no rights to a new lease at the end of the term.
Talk me through your discussions with the solicitors? (East Ham Example)
After agreeing Heads of Terms with the tenant, I sent these to the solicitor via an email and backed this up with a telephone making sure they had received my email. I stated to the solicitor of the conditions of granting a new lease (service charge arrears needed to be paid off)
Why did you suggest a payment plan for the tenant to pay off his arrears?
I met the tenant in person to discuss his arrears and acted professionally by understanding the tenant’s financial position. After speaking with my client and reporting on my discussion with the tenant, we thought this was the best solution for the tenant to pay over a period of time to assist him in what was a difficult time for his business.
Do you have a duty of care to your tenants as well as to your client?
We as management surveyors have a duty of care so far as to what the lease states. However, I always say to the tenants that I am the ‘bridge’ between Landlord and Tenant and thus if they have any queries then I am on hand to assist in the most professional way I can by keeping a rep-our and reporting any queries to my client.
What did the lease state in respect to the Skylight? (Scrutton Street Example)
Under the tenants obligations in the lease, the tenant at all times during the term is to repair and maintain the interior of the premises including the fixture and fittings, doors, window glazing and all appurtenances.
What is the cases involved in relation to Time Of The Essence?
United Scientific Holdings v Burnley Borough Council (1978) provides that the general presumption is that time is not of the essence unless indicated otherwise.
Bello v Ideal View (2008) related to a lease where the landlord had not initiated the rent review for 13 years. The court held that time was not of the essence and the rent review could proceed.
What does “Without Prejudice save as to costs” mean?
Is an offer to afford a party to dispute some protection against the high costs of dispute resolution.
Explain Section 24 of the Landlord and Tenant Act 1954?
At the end of the fixed term of a business tenancy to which the act applies, the tenancy will not come to an end if the tenant remains in occupation for business purposes until either L & T serves a notice - HOLDING OVER.
Explain what Section 25 covers in the Landlord and Tenant Act 1954
Section 25 is the LANDLORD’S notice to grant or end a/the lease.
Not more than 12 months, not less than 6 months.
Tactics - is the rent rising or falling and who benefits
A landlord can either issue a hostile (ending) or friendly (granting) notice
Can you tell me the contents of a Section 25 notice?
- Name and address of the landlord and tenant.
- Address of the property.
- Notice of the date to end the tenancy (hostile or friendly)
- Confirmation of the date by which the tenant must ask the court for a new tenancy.
- Landlord’s proposal for a new tenancy.
- A strong recommendation to seek legal advice.
Explain to me a Section 26 notice?
Section 26 is the TENANTS notice to renew.
Not more than 12 months, not less than 6 months.
Tactics - is the rent rising or falling and who benefits
If the landlord wants to oppose a s26 notice, L must serve a valid counter-notice within 2 months specifying grounds for opposition.
Explain Section 27 of the LTA 1954 ?
Section 27 is the TENANTS notice to end the tenancy .
3 months notice of the tenant leaving after expiry - S.27 (1)
Tenant has no obligation to inform the landlord they intend to vacate.
What should you always check in respect to notices when acting for a client?
The validity of the notice.
Explain the grounds for opposition of a new lease under section 30 (7)? (LANDLORD opposing new lease)
1) Breach of repairing covenant
2) Persistent delay in paying rent.
3) Other substantial breach
4) Provide suitable alternative accommodation.
5) Uneconomic subdivision (compensation payable)
6) Demolition or reconstruction (compensation payable)
7) Owner occupation (compensation payable)
Summarise the key sections of the 1954 Act?
23 - Application of the Act
24 - Security of tenure provisions & continuation of tenancy.
24a - Interim Rent
25 - Landlord’s notice to end the lease or seek a new lease
26 - Tenant’s notice to seek a new lease
27 - Tenant’s notice to end the lease.
28 - Renewal of tenancy by agreement
29 - Order by Court for a new tenancy.
30 - Landlord’s grounds for opposition of a new lease.
32-35 - Terms of the new lease
What are the proposed changes in respect to the LTA 1954?
- In March 2023, the Law Commission announced that it intends to review Part II of the LTA 1954
- The stated aims of the review are, “Ensuring Part 2 of the Landlord and Tenant Act 1954 works for today’s commercial leasehold market”
- As at January 2024, the next steps are stated to be “The Commission aims to publish a consultation paper as soon as possible in 2024”
Talk to me about Contracting Out (Lease Renewals Outside the Act)
Section 38A of the Act sets out the procedure which must be followed to contract outside the Act.
When the lease comes to an end, the tenant has no statutory right to remain in occupation.
Landlord must ensure the premises are vacant or ensure new lease is in place at the lease expiry date. If they accept rent, then a protected tenancy may be created.
What are the TWO types of declaration?
1) Simple Declaration - given when the parties have at least 14 days or more prior to committing to the lease.
2) Statutory Declaration - given when the parties have less than 14 days prior to committing to the lease. If this is the case, a Statutory Declaration must be made before an independent solicitor.
Tell me the various ways to terminate a lease?
- Forfeiture
- Surrender and negotiation
- Merger
- Disclaimer (due to insolvency)
- Break Clauses
- Lease expiry and services of notices under the LTA 1954.
What do you understand about break clauses?
Normally a highly litigious area and I would advise my client to seek legal advice if there was a dispute.
What is the process of a rent review (Step by Step)?
1) Conflict Check
2) Agree TOE
3) Find out clients objective
4) Read lease, understand RR clause, check if contracted out.
5) Check time limits for review
6) Check notice requirements.
7) Inspect and measure
8) Obtain Comparables
9) Analyse comparables
10) Estimate rental value
11) Report to Client & agree next steps
12) Negotiate with opposing party
13) Settle or refer to 3rd party if not agreed.
14) Document and instruct solicitors in required.
15) Issue invoice
16) Record / Diarise next lease event.
What happens if there is a dispute regarding a rent review?
The lease will state the dispute resolution mechanism which is usually an independent expert or arbitrator.
Can issue a Calderbank Letter
Can issue a Part 36 offer
What is a part 36 offer and why would you use it?
Part 36 offer from CIVIL PROCEDURE RULES can be issued at any time after the proceedings are issued.
Part 36 offer is “without prejudice save as to costs”
Must be made in writing and clear that is is made in relation to part 36
Offer can be withdrawn
Part 36 offers are more tempting for the other side if genuine offer to settle AND pay their costs
USED TO ENCOURAGE SETTLEMENT
Why use a Calderbank offer?
Provides flexibility and is most likely the best offer the other side will make.
Not governed by strict court rules.
What are the FOUR key points in Surveyors Acting as Expert Witnesses
- Expert evidence must be impartial and objective
- Duty of care to the court overriding any obligations to the client .
- Evidence must be independent work of surveyor.
- Surveyor must believe that the facts on which they rely are complete and true.
What do you know about Compensation in respect to Section 30 of the LTA Act 1954
Relates to the THREE grounds for refusal set out in Section 30 and the tenant may be liable for compensation.
- 14 years + occupation - Rateable Value x 2
- Less than 14 years occupation - Rateable Value x 1
- Rateable Value is the RV in force as at the date of a hostile S.25 or S.26 counter notice.
What are the FOUR disregards under s.34 ‘Rent Under a New Tenancy”?
- Any effect on rent of the tenant’s occupation.
- Any goodwill in the tenant’s business attaching to the premises.
- Any effect on rent on improvements carried out by the tenant.
- In case of licensed premises, any effect on rent of additional value because of licence i.e. liquor licence.
What THREE specific grounds can you appeal to the High Court within 28 days of Arbitrator award?
- A challenge to the tribunal’s jurisdiction.
- On a point of law
- Serious irregularity
What is meant by the ‘Hypothetical Term’?
Hypothetical Term is another saying for ‘assumed term of lease’ and relates to rent review purposes and can influence rental value.
Unless the wording is explicit, the assumed term is likely to be the unexpired residue.
Latest case law was Canary Wharf (Three) v Telegraph Group Ltd (2003)
What is a PACT?
Professional Arbitration on Court Terms
Only an option if both parties agree to refer to the dispute to PACT - must be consensual.
Advantages include:
- Faster
- Cost Saving
- Greater Flexibility
- Decision by a surveyor
What is the difference between a lease renewal inside the act and outside the act?
The tenant loses their automatic right to renew the lease at the end of the tenancy if contracted out.
What is a lease?
Grant of a right to exclusive possession of land for a determinable period of time.
What is a Licence?
Personal right to use a property in a certain way and is a permission to make to lawful for a party to use the land.
What is a Tenancy at Will?
A tenancy with exclusive possession but not for a term of years certain and can be terminated at any time by the landlord.
What is the key legal case relating to the Lease vs Licence distinction?
Street v Mountford (1985)
What are the key requirements of a lease in the case, Street v Mountford (1985)
Exclusive Possession
Fixed or Periodic Term
Reserves a specified rent
What types of rent review basis exist?
Fixed uplift
Index Linked
Upward Only
Upward/Downward
Infinite possibilities - whatever the parties agree on.
What legal case relates to time being of the essence?
United Scientific Holdings v Burnley Borough Council (1978)
When might time be of the essence?
Express provision in the lease.
Emphatic language
Contraindications in the rent review clause or the lease
Provision for consequences of non-compliance
Rent Review clause linked to a break option.
Why is it so important to establish whether time is of the essence?
Getting it wrong, may mean that the right to review is lost.
What does ‘Without Prejudice’ mean?
Cannot be disclosed to a third party / tribunal / Court if it is genuinely aimed at settling a dispute.
What does ‘Subject to Contract’ mean?
That the parties do not intend to be legally bound until a formal contract is executed.
What does “Without Prejudice Save As To Costs” mean?
That the matter can only be brought before third party/tribunal/Court on the matter of costs (providing it is a genuine attempt to settle)
What type of offer would have ‘Without Prejudice Save As To Costs” on it?
Calderbank Offer
How do you know the valuation basis in a rent review scenario?
Assess the hypothetical lease terms, starting with the presumption of reality.
What are some typical assumptions you might find in a rent review clause?
Willing tenant
Willing landlord
Covenants observed by the landlord and tenant
Let as a whole
Let in parts
Tenant has already had the benefit of a rent free for fitting out
Anything else the parties agree on in the rent review clause
How does the valuation basis for a rent review differ from that for a lease renewal?
The basis for a lease renewal is prescribed by the 1954 Act, not the lease.
Would you apply a discount if a rent review clause had a restrictive user clause?
Yes - see Plinth Properties v Mott Hay & Anderson (-30% discount in this case - but will be assessed on a case-by-case basis)
Which of these are typical disregards you might find in a rent review clause?
Goodwill
Tenants occupation
Tenants improvements
Anything the parties agree on in the review clause.
What is typically found at the top of the hierarchy of evidence?
Open Market Letting
What is higher r.e. Hierarchy of Evidence between Lease Renewal, Rent Review, Sale&Leaseback, Arbitration Award?
Lease Renewal
What are the differences between an Arbitrator and an Expert?
Arbitration is governed by the Arbitration Act 1996, an Expert by the lease.
An Expert has a duty of investigation, an Arbitrator acts only on the evidence submitted by the parties (whilst also drawing their attention to matters they may not be aware of)
An Arbitrator always has discretion on costs, an Expert only has power if the lease reserves this.
An Arbitrator must refer to the parties’ evidence submissions aren’t always required for Expert Determination.
There is no right of appeal for an Expert (although the Court may set aside the Determination in limited circumstances) , an Award can be challenged under the 1996 Act.
An Arbitrator is not liable for negligence if they acted in good faith, an Expert can be liable in damages for losses sustained through negligence.
Can an Arbitrator require disclosure by the parties?
Yes
How would you seek a third party appointment?
Apply using an RICS DRS1 form.
Mutual agreement
What is the difference between an interim and final Arbitrator’s Award?
An Interim Award is final in all respects except as to costs.
What is the purpose of a Calderbank Offer?
Protection on costs.
Genuine attempt to encourage settlement by negotiation.
What is a Barclays Bank letter?
Used where only the landlord can apply for the appointment of an Expert.
What is the difference between a contracted in and out lease renewal?
If a lease is within the Act, the tenant has security of tenure.
What is the maximum length of lease term which can be granted by the Court under the 1954 Act?
15 years
Under what section of the 1954 Act can either party request information on the other?
Section 40
What are the requirements for a business tenancy under Section 23 of the 1954 Act?
Occupation of at least part by the tenant
Used for business purposes
Tenancy (not a licence or excluded tenancy)
Can you contract out of the 1954 Act?
Yes - by serving the required notices (Simple declaration with 14 day cooling off period or Statutory declaration if within 14 days of lease commencement)
Why might you want to contract a lease outside the 1954 Act?
Requirement of headlease
Landlord wants to redevelop or reoccupy at a future date
Tenant may be able to secure a lower rent
What is the relevant amount of time relevant to a Section 44 competent landlord?
14 months - freeholder or superior lease not ending within 14 months of the freehold,
What is holding over?
After a lease (with security of tenure) expires until the lease is brought to an end by service of the relevant notice.
What are the relevant timescales for a Section 25 or 26 notice?
6-12 months
What is the relevant timescale for a Section 27 notice?
3 months after lease expiry.
Can a tenant serve a Section 27 notice after a Section 25 notice has been served?
Yes
What does Section 30 relate to?
Grounds of opposition (landlord)
What are some examples of grounds of opposition (Section 30)?
Breach of repair covenant
Persistent delay in paying rent
Other substantial breach
Suitable alternative accommodation
Uneconomic subdivision
Redevelopment
Own occupation
Does a tenant have to serve a counter notice to a landlords Section 25?
No
What is interim rent ?
Rent payable between expiry of the old lease and commencement of the renewal lease.
To what extent can lease terms be modified in the new lease (O’May case)?
Landlord must have a valid reason on estate management grounds.
Changes capable being compensated by change in rent
Changes must not materially affect security of tenure
Must be reasonable
What happens if the parties do not agree a new lease by the notice expiry date?
Tenant loses security of tenure if they do not protect their position with a Court application.
Parties should consider PACT as an alternative to Court proceedings
What type of offer might you use to try to compromise a renewal dispute?
Part 36
Calderbank
When is the interim rent payable from?
Earliest date specified in the Section 25 or 26
Can an interim rent application be made after the old tenancy is terminated?
Yes - it can be served after a Section 25 or 26 notice is served within 6 months of termination of the old tenancy
How is compensation for disturbance assessed?
1 x rateable value (tenant in occupation for under 14 years), 2x rateable value (tenant in occupation for over 14 years)
Under which Section 30 grounds of opposition is compensation for disturbance payable?
E - Uneconomic subdivision
F - Demolition or reconstruction
G - Owner Occupation
Is there any other type of compensation?
Yes - under S1 Landlord & Tenant Act 1927 - for improvements (where the tenant had landlords consent or leave of Court)
How is compensation for improvements calculated?
Lower of the value (i.e. net addition as a direct result of the improvements) or the cost of carrying out the improvements at expiry (minus the cost to put into a reasonable state of repair)
What is PACT?
Professional Arbitration on Court Terms (although it can be via an Arbitrator or Expert)
What is a break option?
Lease clause allowing one/either party to terminate the lease early.
What happened in the M&S v BNP case?
The tenant couldn’t claim back overpaid rent for the remainder of the quarter after the break date (i.e no implied apportionment provision)
Why are break clauses contentious?
Getting it wrong can lead to a lease continuing to expiry
If a lease is within the ACT, does a landlord need to serve a hostile Section 25 notice to accompany a break notice?
Yes
Tell me about your understanding of the LTA 1927, LTA 1954, L&T (Covenants) Act 1995/LTA 1988?
LTA 1927 - primarily allows tenants to claim compensation from their landlords for improvements made to a property during their tenancy.
LTA 1954 - UK Law that protects business tenants by allowing them to renew their leases, also known as security of tenure. Applies to business tenants who occupy premises under a lease.
L&T (Covenants) Act 1995 - Abolished Privity of Contract, original tenant remains liable for all covenants in a lease even after assigning.
LTA 1988 - Introduced Assured Shorthold Tenancies, focuses on regulating landlord & tenant relationships in the UK. Also known as the Housing Act.
Tell me about a key lease clause you are aware of ?
First Schedule in the lease predominately outlines the “property” edged in red and a plan of the property is normally attached to the lease. In a FRI Lease, this would outline what the tenant is responsible for repairing and maintaining and would outline the demised area.
If the lease is subject to a rent review, then the rent review clause is vital in ensuring the rent review is carried out in line with the wording of that clause.
What is alienation?
Alienation is an expressed provision in the lease when a tenant transfers their leasehold interest to another party which can include, assigning, under letting or sharing occupation.
Tell me about your understanding of the Code for Leasing Business Premises?
States that leases should allow tenants to assign the whole of the premises with landlord consent, which is not to be unreasonably withheld or delayed. Landlords may set out circumstances for refusal but these should be reasonable and appropriate.
Requirements for an Authorised Guarantee Agreement (AGA) clause should be clearly stated in the lease.
Tell me how you would summarise a lease and what terms you would be looking for?
A lease provides an occupier with an estate in the relevant land and grants exclusive possession.
The key terms I would be looking out for are;
Term
Rent payable & rent frequency (i.e. monthly or quarterly)
Service Charge provision
Landlord & Tenant obligations
Rent Review clauses
What is the Regulatory Reform (Business Tenancies) (England & Wales) Order 2003?
Came into effect on 1 June 2004, introduced new procedures for terminating or renewing business tenancies under the LTA 1954 & procedures for contracting out of sections 24-28 relating to security of tenure.
Changes to contracting out. Stat Dec and Simple Dec.
Stated that a 15 year maximum term can be granted by the court.
How does the role of an expert witness change from when you are negotiating?
The role of an expert witness during negotiations is to clearly state the relevant facts and provide expert opinions based on those facts.
As an expert witness, your communication with the opposing expert is typically limited to clarifying technical issues or identifying areas of agreement.
How does an advocate differ from an expert witness?
An advocates sole duty is to represent their client whereas an expert witness’s sole duty is to represent the court and not the client.
How would you establish the relevant third party procedure for a rent review?
Refer to the lease agreement to identify the designated method for appointing an independent expert or arbitrator.
How much does it cost to submit an RICS DRS application?
£425
Tell me about a challenging landlord & tenant case you have dealt with?
One case I was involved with was with regard to an office tenant who was in substantial arrears, had an overseas guarantor who was a subsidiary company to the tenant, both companies were on the verge of liquidation from looking at their financial accounts. No agreement had been made between landlord and tenant but tenant wanted to exit their lease early and claimed that the landlord hadn’t advised them of their break within the lease. Tenant argued improvements on dilapidations and was under the impression that if they removed items from site it would terminate their lease. Agreement was made, if a new tenant was found to take the lease over, landlord would consider a surrender of the existing lease. Rent deposit was drawn down in full.
Tell me about when you have served a Calderbank offer or other offer to settle.
I haven’t served a Calderbank offer in practice but I know that a Calderbank offer is a settlement proposal that encourages parties to negotiate instead of going to court. I have agreed payment plans in line with my clients instructions to settle outstanding arrears over a fixed period of time as well as any interested incurred on the arrears as per the terms of the lease (4% above BOE base rate.)
Tell me about an example of when you have assisted with the third party process?
I have assisted in advising my client to seek professional advice by means of a solicitor on a complex landlord and tenant matter as this was outside my scope of experience.
I have further assisted my client in seeking professional advice from asbestos companies to advise on management of asbestos.
Why do you need client’s instructions before submitting a third party application?
In the clients best interest.
They may be fronting costs.
Providing good quality and diligent service.
Maintaining industry and public confidence.
What are the advantages and disadvantages you have pointed out to clients in relation to third party procedures?
To be honest, I haven’t been involved with a third party procedure but if I were I know the advantages and disadvantages of third party procedures which include;
Advantages - unbiased opinions, impartial and objective opinions based of the evidence.
Disadvantages - costly, time consuming.
How could MEES impact upon your advice on a landlord & tenant case?
MEES could impact cases by potentially triggering disputes over compliance obligations particularly concerning EPC ratings and necessary improvements which could lead to financial penalties. This would have to be reviewed on a case-by-case basis before I would advise my client accordingly.
East Ham Lease Renewal - Why did you advise the service charge arrears should be settled before issuing a new lease?
I advise to my client that in their best interests they should start a new lease on a clean state and I advised that a tenancy at will could be issued until the arrears where cleared. In this case, a TAW didn’t need to be issued as the tenant cleared the arrears and a new lease was issued.
Why did you arrive at an opinion that there should be a nil uplift to the rent? - East Ham Lease Renewal
Based on the market evidence I gathered and from speaking to local agents, there was no evidence to suggest that a fair market rent was higher than the passing rent.
Why did you advise ending the new term 3 months before the head lease? - East Ham Lease Renewal
My client had a leasehold interest in the property which expires in May 2031. I advised ending the new term 3 months before the head lease ended to pre empt a claim for dilapidations and to ensure unlimited access could be provided for repair works to the property without disrupting potential tenants.
Birmingham Lease Renewal - Tell me about the recent market transactions?
I had undertaken two lease renewals for other similar units in the building which we agreed uplifts from the passing rent.
There was a similar building in Livery Place not far from the subject property that had undertaken 3 new leases, similar amenities to the subject property which provided brilliant comparable evidence for myself to analyse the evidence and submit a proposal to the client before issuing a proposal to the tenant.
How much of an uplift did you advise was justified - Birmingham Lease Renewal.
Passing rent was £22.50 per square foot and my proposal was at £25.00 per square foot.
What did you include in your Heads of Terms?
Name of Landlord
Name of Tenant
Landlord Solicitor
Tenant Solicitor
Details of Premises
Headline Rent
Break Date
Rent Review Date
Service Charge Payable
How would you advise your client if you couldn’t agree terms?
If negotiations went on for sometime and no agreement is reached, I would advise my client that we should consider appointing a third party surveyor to provide impartial evidence / negotiations to attempt to reach an agreement.
How did you ensure the new lease was contracted outside the Act?
I ensured that the tenant signed a statutory declaration contracting out of sections 24-28 of the Landlord & Tenant 1954. I advised my client that this should be undertaken by a qualified solicitor.
Tell me about an instance of when you have reflected market conditions on rental value?
Just recently for a building in Birmingham, we were getting interests and as such prospective tenants were looking around some vacant suites but there was no formal offers submitted. This forced me to look into the market conditions and it was apparent after seeking advice from a local agent and obtaining my own research that the rental value we were quoting was too high.
I also advised my client to consider letting some suites fully furnished and on serviced office basis in line with the market competition and conditions.
How do you collate, analyse and adjust comparable evidence?
Search CoStar
Withdraw information from CoStar to my own schedule of comparable evidence
Considering Hierarchy of Evidence
Confirm findings with agents listed on CoStar
Adjust accordingly with Hierarchy of Evidence
What is the hierarchy of evidence?
Hierarchy of Evidence is the relative weight attached to different types of evidence split into three categories, Category A, Category B & Category C.
Tell me about a landlord and tenant negotiation you have been involved with?
Negotiation an incentive on a new lease. Tenant wanted a six week rent free period, Landlord only wanted to grant four week rent free period. Negotiations went on for 2 weeks. I was acting for the landlord and therefore wanted to push a four week rent free period through in the best interests of my client.
How would you advise a tenant differently between a contracted in and contracted out renewal?
In both situations I would advise the tenant to seek legal advice.
Contracted In - refer to the lease carefully and review timescales for notices to be served.
Contracted Out - state in good time whether T would like to stay in the premises, ensure that the Landlord has provided the tenant with the proper notices.
New Century Road - Where did you source your comparable evidence from?
CoStar database.
How did you determine an increase of £6k per annum was appriopriate? - New Century Road Rent Review
After obtaining comparable evidence and using hierarchy of evidence in my analysis, it was evident that an increase was reasonable. I calculated the increase by increasing the £ psf and after undertaking calculations and speaking to my director, I proposed a £6k per annum increase.
How did you initiate the rent review?
Wrote to the tenants representative formally stating that my company had been instructed by the landlord to perform the rent review of the subject property in line with the specific rent review clause stated in the lease.
Initiated the rent review by inspecting & measuring the property in the first instance.
Scarborough - what did the rent review clause contain?
Review Period
Assumptions
Disregarded Matters
Alternative Dispute Resolution (Arbitration)
Payment of Revised Rent
Why did negotiations take 3 months?
Tenants surveyor changed so time lost in new surveyor getting up to speed.
Talk me through your negotiations? - Rent Review
Once I had discussed with my director on the level of rent and this was agreed with the client I;
Wrote to the tenants representative with proposal.
They requested evidence to be submitted as well, so i submitted my comparable evidence analysis.
Tenants surveyor came back with questions on evidence which I reviewed and formalised a response.
Issued my responses, tenant put forward a counter offer.
Proposal was agreed with the client.
Rent Review Memorandum was issued.
How did you conclude the rent review?
Issuing the rent review memorandum to the tenant, requesting a signed copy by both L&T.
Documented and distributed signed copy to both parties.
Filed RRM.
What are Jackson Reforms ?
Introduced in April 2023
Set of changes to civil litigation in England & Wales aimed at controlling costs and promoting efficiency including fixed recoverable costs and costs budgeting.
Making the litigation process more efficient and cost effective.
What is a Cap & Collar Rent Review?
Rent Review Mechanism sets both a maximum (cap) and minimum (collar) limit on rent increases during a review period - protecting tenants from excessive hikes while ensuring landlords receive some increase.
How do in and out of Court PACT differ?
In Court PACT - involves resolving lease renewal disputes through a court process with a sealed consent order.
Out-of-Court PACT - uses an independent third party to determine terms, offering an alternative to litigation.
What are the Civil Procedure Rules?
Aims to make property disputes fairer, quicker and less expensive.
What does Section 34 relate to in a lease renewal ?
Section 34 determines the rent payable when parties cannot agree, requiring the court to assess the rent based on what the property might reasonably be expected to let for in the open market.
What does Section 18 of the LTA 1927 state?
Limits the amount a landlord can claim for damages when a tenant fails to fulfil their repairing obligations.
What is the valuation date at lease renewal?
The date on which the Section 25 or Section 26 notice was served or when the court makes its determination.
What is a geared rent?
Also called a shared rent, side-by-side rent or indexed rent.
Refers to a head lease rent that is linked to the rent paid or obtained by the tenant from their underleases.
What RICS guidance relates to the use of comparables?
RICS Professional Standard: Comparable evidence in real estate valuation, 1st Edition, October 2019
What does the RICS say about conditional fee agreements when proceeding to third party (expert witness)?
RICS prohibits any form of conditional or success-based arrangements.
How would you deal with a post-dated rent review evidence?
I would focus on the lease terms and the relevance of the evidence to the review date & consider if the evidence is admissible.
What is a Scott Schedule?
A structured document, often in table format used in UK court proceedings to clearly list and address allegations or disputed facts.
What documentation do you need to consider in relation to a dilapidations claim?
Lease
Any schedule of condition.
Any LTAs
Deeds of Variation
Property Condition
How should you respond to a dilapidations claim?
To respond effectively, seek professional advice from a building surveyor or solicitor in this instance.
Why are turnover rents becoming increasingly popular and how might this affect future rent review ?
Reduced Costs
Cannot achieve market rent if turnover rent is agreed.
Explain the precedent set in WH Smith Retail Holdings v Commerz RI (2021) relating to pandemic rent suspension clauses?
The case highlights that courts are unlikely to automatically impose pandemic rent suspension clauses in leases renewals and Ts cannot expect to use lease renewal proceedings to force landlords to bear the brunt of commercial risk arising from the pandemic.
What was the outcome of the W (No.3) GP (Nominee A) Ltd & W (No.3) GP (Nominee B) Ltd v JD Sports Fashion Plc case in relation to turnover rents at a contracted in lease renewal?
The Judge decided a turnover rent in the lease renewal was not appropriate given it would far exceed the rental value of the premises.
What is the ‘Chartbrook’ principle on index linked rent reviews?
The Chartbrook principle is concerned not with imprudent provisions but with irrational ones.
What is the difference between a Part 36 Offer and a Calderbank Offer ?
A Part 36 offer is a formal, legally binding offer to settle a claim governed by specific rules, while a Calderbank offer is a more flexible, informal settlement offer, primarily focused on costs, and not bound by the same strict rules as Part 36 offers.
In a rising market, would an Arbitrator or an Independent Expert be preferable ?
In a rising market an Independent Expert would be preferable as their decision is based of evidence and facts which would be preferable in a rising market to achieve targeted rent.
Of course you would have to review the lease prior to see what the ADR clause provides.
Explain to me in more detail the case of Calderbank v Calderbank 1976 ?
Established the principle of “without prejudice save as to costs”
Case involved a divorce settlement where Mrs Calderbank made a pre-trail settlement offer to her husband Mr Calderbank which he rejected.
The Court of Appeal established that a party could make a settlement offer “without prejudice save as to costs”
What happens if a sublease continues after a head lease ends?
The sub tenant becomes the direct tenant of the superior landlord and the sublease continues on the terms agreed upon.
