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RICS APC1 > Landlord & Tenant > Flashcards

Landlord & Tenant Flashcards

1
Q

Under what Act is a Forfeiture issued by a Landlord and what is included in the notice

A

L must give notice under Section 146 of the Law of Property Act 1925
➢ specifying the breach
➢ requiring T to remedy the breach (if it is capable of remedy)

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2
Q

Under what Act can a Landlord seek damages for a breach of a covenant or agreement to keep or put premises in repair, what is the leading case law?

A

Landlord and Tenant Act 1927 Section 18(1)
➢ damages limited to the diminution in value to Ls reversion caused by the Ts breach
Jones v Hexheimer [1950]

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3
Q

What case does ‘How’s Mary’ relate to and what were the implications of this case

A

Mannai Investment Co. Ltd v. Eagle Star Assurance

Break Notice served one day early

Held that with reading all the information a reasonable person would know what was meant even with a mistake

The lords exampled getting a friends wife’s name wrong e.g. how’s Mary when the friends wife was called Jane, the friend would know what was meant.

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4
Q

What are the differences between an Arbitrator and an Independent Expert?

A

ARBITRATOR
1 Acts only on evidence and arguments submitted but can draw parties’ attention to matters. Award must lie between the extremes of the parties. Must use expertise in assessing the quality and relevance of the evidence
2 Cannot decide without receiving evidence (can receive evidence from one of the parties only)
3 Procedure regulated by Arbitration Act 1996
4 A party can (through the Courts) compel disclosure of documents or the attendance of witnesses
5 May not delegate any duties
6 Can determine the fees and costs and can order one party to pay all or part
7 Arbitrator’s fees can be determined by the Court
8 Some right of appeal on a point of law
9 Not liable for negligence
INDEPENDANT EXPERT
1 Has duty of investigation but may receive evidence from the parties
2 Bases decision on own knowledge and investigations. However, may be required under the lease to receive evidence
3 No legislation governing procedure
4 No such powers
5 May seek assistance
6 No power to make any orders as to fees
7 No procedure
8 No right of appeal but a Court might set it aside
9 Liable for damages through negligence

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5
Q

What is a lease?

A

Grant of a right to exclusive possession of land for a determinable period of time

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6
Q

Where the Leasehold Property Repairs Act 1938 Section 1 applies to forfeiture outline the procedure that must be followed

A

➢ L serves Section 146 Notice
➢ T serves counter-notice within 28 days
➢ no action unless Court gives leave
➢ L must establish one of the five grounds specified in Section 1(5)
1. the value of the reversion has been substantially diminished
2. repair is necessary to comply with any Act
3. repair is necessary to protect another occupier
4. the cost of immediate repair would be small compared to the cost of future repair
5. special circumstances render it just and equitable to grant leave

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7
Q

What is a licence?

A

Personal right to use a property in a certain way

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8
Q

Key legal case for lease vs licence

A

Street vs Manford

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9
Q

What are the key requirements of a lease in the street vs manford case?

A
  1. Exclusive possession
  2. Fixed or periodic term
  3. Reserves a specific rent
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10
Q

What types of rent review basis are there?

A

1.Fixed uplift
2.Index linked
3.upward only
4. upward downward
5.whatever the parties agree on

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11
Q

Legal case relating to time of the essence

A

United scientific holdings V Burnley Borough Council

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12
Q

When might time be of the essence

A
  1. Express provision in the lease
  2. Emphatic language
  3. Contradictions in the review clause or lease clause
  4. Provisions for consequences of non compliance within a specified time limit
  5. Rent review clause linked to a break option
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13
Q

Why is it important to establish if time is of the essence?

A

Getting it wrong might mean the right to rent review is lost.

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14
Q

What does without prejudice mean?

A

Cannot be disclosed to a 3rd party/tribunal/court if it is genuinely aimed at settling a dispute.

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15
Q

What does subject to contract mean?

A

That parties do not intend to be legally bound until a formal contract is executed.

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16
Q

What type of offer would have without prejudice save as to costs?

A

Calderbank Offer

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17
Q

How do you know the rent review basis in a rent review?

A

Detail in the lease

Based on the premises at the start of the original lease date discounting improvents

Assess the hypothetical lease terms, starting with the presumption of reality.

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18
Q

Name some typical assumptions in a rent review clause

A
  1. Willing tenant
  2. Willing Landlord
  3. Covenants observed by the landlord
  4. Let as a whole
  5. Let in parts
  6. Tenant has already had the benefit of a rent free for
    fitting out
  7. Anything else parties agree on
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19
Q

What is the difference between an alteration & improvement

A

Alteration = making any physical changes to a premises

Improvement = An alteration which adds value to the premises

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20
Q

How does a valuation basis for a rent review differ from that of a lease renewal?

A

The lease renewal is prescribed by the L&T Act 1954, not the lease.

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21
Q

Would you apply a discount if the rent review clause had a restrictive user clause?

A

Yes - see Plinth Properties V Mott Hay & Anderson (-30% discount in that case - but assessed on a case by case basis).

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22
Q

Typical disregards in a rent review clause?

A
  1. Goodwill
  2. Tenants Improvements
  3. Tenants occupation
  4. Anything the parties agree on
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23
Q

When can a tenant apply for relief from forfeiture

A

T may apply for relief under Leasehold Property Repairs Act 1938 Section 1
➢ applies to leases for more than seven years where three years or more is left to run

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24
Q

What is at the top of the hierarchy of evidence?

A

Open Market Letting

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25
Q

Can an arbitrator require disclosure by the parties?

A

Yes

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26
Q

How would you seek third party appointment

A
  1. Apply using an RICS DRS1 form
  2. Mutual Agreement
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27
Q

Difference between an interim and a final arbitrators award?

A

An interim award is final in all respects except as to costs.

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28
Q

What is the purpose of a calderbank offer?

A
  1. Protection to costs
  2. Genuine attempt to encourage settlement by negotiation.
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29
Q

What is a Barclays Bank letter

A

Used where only the landlord can apply for the appointment of an expert.

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30
Q

What is the difference between contracted in and out lease renewal?

A

if a lease is inside the Act there is a security of tenure

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31
Q

What is the maximum length of lease term a court can grant in 1954 Act?

A

15 years

32
Q

Under what section of the 1954 Act can either party request information on the other?

A

Section 40.

33
Q

Under section 23 of 1954 Act what are the requirements for a business tenancy?

A
  1. Occupation of at least part by the tenant
  2. Used for business purposes
  3. Tenancy (not a licence of exclude tenant)
34
Q

Can you contract out of the 1954 Act?

A

Yes by simple declaration with a 14 day cooling off period - Or Statutory declaration if lease commencement is within 14 days.

35
Q

Why might you opt out of the 1954 Act?

A
  1. Requirement of head-lease
  2. Landlord wants to redevelop or reoccupy at a future
    date
  3. Tenant may be able to secure a lower rent
36
Q

What is the relevant amount of time relevant to a Section 44 competent landlord?

A

14 months - freeholder or superior lese not ending within 14 months of the freehold

37
Q

What is holding over?

A

After a lease with security of tenure expires until the lease is brought to an end with a relevant notice

38
Q

What are the time scales for a section 25 or 26

A

6-12 months

39
Q

What is the relevant timescale for a section 27 notice?

A

3 months

40
Q

Can a tenant serve a Section 27 after a Section 25 has been served?

A

YES

41
Q

What does section 30 relate to?

A

Grounds for opposition (Landlord)

42
Q

Give examples of ground of opposition

A
  1. Breach of repair
  2. Persistent delay in paying rent
  3. Other breach
  4. Suitable alternative accommodation
  5. uneconomical subdivision
  6. Redevelopment
  7. Own occupation
43
Q

Does a tenant have to serve a counter notice to a section 25?

A

NO

44
Q

What is an interim rent?

A

Rent payable between expiry of the old lease and the commencement of the renewal lease

45
Q

To what extent can lease terms be modified in the new lease (O’May Case)?

A
  1. Landlord must have a valid reason on estate management grounds
  2. Changes capable being compensated by change in rent
  3. Changes must not materially affect security of tenure
  4. Must be reasonable
46
Q

What happens if the parties don’t agree a new lease by the notice expiry date?

A
  1. Tenant loses security of tenure if they do not protect their position with a court application.
  2. Parties should consider PACT as an alternative to Court proceedings.
47
Q

What type of offer might you use to try to compromise a rent review dispute?

A

Calderbank

48
Q

When is an interim rent payable from?

A

Earliest date specified in the Section 25 or 26

49
Q

Can an interim rent application be made after the old tenancy is terminated?

A

Yes - it can be served after a Section 25 or 26 notice is served and within 6 months of termination of the old tenancy.

50
Q

How is compensation for disturbance assessed?

A

1 x Rateable Value for under 14 years occupation

2 x Rateable Value for over 14 years occupation

51
Q

Under which Section 30 grounds is compensation payable?

A

E, F AND G

52
Q

Is there any other type of compensation aside from that of a S30?

A

Yes - Under S1 L&T 1927 - For improvements (where the tenant had landlords consent or leave of Court).

53
Q

How is compensation for improvements calculated?

A

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).

54
Q

What is PACT?

A

Professional
Arbitration
on
Court
Terms

(Although it can be an arbitrator or an expert!!!)

55
Q

Describe a break option

A

Clause to allow early termination by either landlord or tenant.

56
Q

Why are break clauses contentious?

A

Getting it wrong can lead to a lease continuing until expiry.

57
Q

What happened in the M&S V BNP case?

A

The tenant (M&S) couldn’t claim back overpaid rent for the remainder of the quarter after the break date (no implied apportionment provision).

58
Q

If a lease is within the Act does a landlord need to serve a hostile Section 25 notice to accompany a break notice?

A

YES!

59
Q

Can you describe the rent review process start to finish?

A
  1. Conflict Check
  2. Agree TOE
  3. Find clients objective
  4. Read lease
  5. Check time limits
  6. Check notice requirements
  7. Inspect & measure
  8. Seek out comps
  9. Adjust & analyses
  10. Value to estimated rental value
  11. Report to client
  12. Negotiate
  13. Settle of refer to 3rd party
  14. Document, instruct solicitors
  15. Issue invoice
  16. Diarise next lease event
60
Q

What is the difference between a Claderbank offer and Part 36?

A

Part 36 are more tempting for the other side as a genuine offer to settle and pay their costs

61
Q

Can you outline the key issues of the L&T Act 1927, 1988, 1954 & 1995?

A

1927 = Landlord not to reasonably withhold consent
1954 = Security of tenure
1988 = Build on 27 Act adds DELAY
1995 = Privity of contract

62
Q

What are the usual assumptions for rent review?

A

Hypothetical letting
Open Market
Willing parties
Fit for immediate occupation
Vacant possession
Assumed term
User as stated
Rent review date
Willing landlord, willing tenant
Rental basis
Subject to all other terms

63
Q

What are usual disregards for rent review?

A

Tenant occupation
Treatment of rent free period for fit out
Goodwill

(tenant improvements where consent obtained)

64
Q

What advice would you give to a landlord client in respect of a lease renewal where a property is significantly over-rented?

A

To serve a section 25 notice with 12 months notice, to provide a longer period to benefit from the profit rent

65
Q

What does a section 25 notice contain?

A

➢ the property comprised
➢ the rent
➢ the other terms
A health warning would explain to T
➢ that Ls proposals are for the purposes of negotiation

66
Q

What do you understand a Section 34 rent to be?

A

Section 34 provides that when determining the level of rent payable, the court will have regard to the terms of the tenancy

(the court must have regard to the level of rent that a hypothetical landlord would reasonably be expected to receive from a hypothetical tenant)

67
Q

How is the Interim Rent assessed?

A

Where the landlord does not oppose a new tenancy, the rent under the new tenancy will also be the interim rent

68
Q

What are deeming provisions?

A

They outline the hypothetical scenarios around rent review

e.g An express deeming provision in a rent review clause which sets out what should happen if a counter-notice is not served within the time limits prescribed by the lease, is sufficient to rebut the presumption that time is not of the essence

69
Q

A tenant has entered into a full repairing and insuring lease of a property in disrepair. The landlord now requires the tenant to remedy this disrepair. What advice would you give to this tenant?

A

Remedy the disrepair
They could apply for relief under Leasehold Property Repairs Act 1938 Section 1, if the landlord serves a section 146 Notice.

70
Q

What action can a landlord take when a tenant is in breach of repairing covenant?

A

Jervis vs Harris - enter and repair and recharge as a debt

71
Q

What action can a tenant take when a landlord is in breach of repairing covenant?

A

DAMAGES
The difference in value to T between
➢ the premises in their condition at the time of assessment and
➢ their value if L had fulfilled his obligations on receiving notice of disrepair

72
Q

How are damages assessed when a tenant is in breach of repairing covenant?

A

Damages limited to the diminution in value to Ls reversion caused by the Ts breach
Jones v Hexheimer [1950]

73
Q

Landlord and Tenant Act 1927 Section 18(1)

A

➢ damages limited to the diminution in value to Ls reversion caused by the Ts breach

74
Q

Explain the legislation that needs to be considered in an assignment of a lease?

A

L&T Act 1927 request can not be unreasonably withheld
L&T Act 1988 request must be given within a reasonable time
L&T 1995 privity of contract

75
Q

What are reasonable grounds for refusing consent to assign?

A

Reasonable grounds for refusal must relate to
➢ the character of the proposed assignee, or
➢ the effect on rental or capital values

RICS APC1 (18 decks)

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