Landlord annd Tenant Flashcards
What is the difference between a lease and a license?
A lease provides exclusive possession with a legal interest
License is non-exclusive, often temporary, no legal interest
What is a dilapidation and how do you calculate that?
Dilapidation = Failure from the tenant to repair or restore the property to its original condition as stated in the lease agreement.
Damages to remedy dilapidations are calculated the reasonable cost to the Landlord of doing the works plus loss of rent for the period until the works have been completed.
What is compensation?
If you are unsure of whether an applicant can afford a rent, what may you request?
You may request them to provide you with a guarantor, who would be liable for costs if the tenant failed to pay rent, or caused significant damage
What is a guarantor and who would make a good guarantor?
A person who gives/acts as a guarantee (agrees to pay rent, repairs if the tenant fails to do so)
Good guarantor should have a good, stable income, good credit rating, and assets.
What are the initial checks when considering a new tenant?
Financial check/income, credit check
Criminal record
Check for fraud and confirm ID (passport/address/current occupancy)
Consider meeting the tenant face-to-face during viewings
What cant you do when selecting a tenant?
unconscious bias, request information on personal information (e,g. religion, race, sexuality, gender)
What do you need to do before arranging a new residential tenant and signing the lease?
-Landlord Registration
-Property needs to meet the repairing and tolerable standards
-Legionellers, EPC, Asbestos, EICR, Gas safety,
-Compile inventory/RoC
-Advertise for tenant, arrange viewings
-Provide tenant with copy of documentation
What are the key changes between an LDT and MLDT?
MLDT introduced in 2016 Legislation
LDT introduced in 2003 Legislation
can contain:
- Mutually agreed break clause for new entrants, 5 years after commencement
-Landlord can contract out of obligation to renew/replace FE
-If not terminated, it will continue for another 7 years, on continuous cycle. Whereas an LDT only continues on 3 year cycle.
What key changes were introduced from the 2016 Land Reform (Scotland) Act?
-MLDT Introduced (min. 10 years)
-Repairing Tenancy (min. 35 years, initial 5 year repairing period
-Tenants right to buy ‘requirement to register’ removed
-Rent review moved away from ‘open market rent’ to show ‘fair rent’
-1991 Act tenants can relinquish their tenancy to the landlord in exchange for compensation (half the difference between the value of the holding with a sitting tenant and the VP value)
-Landlord must provide written notice before undertaking an improvement, the tenant can object.
Talk me through serving the appropriate Rent Review Notices?
Initiate RR by serving section 13 (more than one, but less than two years before RR date)
Inspect farm and begin discussions (not less than 6 months before)
Written proposal (not less than 4 months before due date) detailing rent, comparbale
Written response from Tenant (not less than 2 months before due date) either accepting or seeking clarification
If not agreed:
Proceed with further discussion, lodge application with land court, professional mediation, sometimes by expert determination, binding arbitration
What is the minimum rent review cycle for Agricultural tenancies?
3 years, or commencement of the new tenancy
What must NOT be taken into consideration when compiling a ‘new rent’ at a rent review?
-The ‘scarcity of lets’ which could distort value
-Any increase in value due to tenants improvements on the holding
-Any impact on rent due to the occupation of the tenant on the farm
-Improvements executed by the landlord which see the landlord receiving grants/payments from their improvement
-dilapidations/deterioration from the tenant does NOT bring down the rental value
What MUST be taken into consideration when compiling a ‘new rent’ at a rent review?
-Well presented, well analysed comparable data of similar holdings, preferably recently settled rents.
-Current economic conditions in relevant section of Agriculture
-Terms of the tenancy, relating to rent
If a rent review cannot be decided, what is the next step?
Determination by land court, to settle dispute ideally with negotiation rather than litigation
What is the difference between Mediation and Arbitration?
Mediation, involved a 3rd party who will help to facilitate discussion and come to a conclusion that all parties agree to. The individuals will still maintain control over the process and final decision. Mediation is less formal.
Arbitration, involves an independent/neutral 3rd party who will assess the data and stories, and will make the final decision, which is legally binding.
What is the ‘productive capacity’ of the holding?
The sustainable yield of agricultural products that would reasonably be expected from the agricultural holding under a system of farming suitable when farmed by: a competent, efficient and experienced tenant farmer; with adequate resources
When does the rent review date take place?
No longer has to take place on the anniversary date, and instead simply a ‘rent agreement date’