Landlord & Tenant Flashcards

1
Q

What kind of law is L&T law?

A

Law:
Criminal law /
Civil Law >
Law of Tort (liability for loss or harm) /

Law of Contract (enforce agreements) /
Land Law (real property rights) >
LL&T Law

  • sources:
    statute (written law passed by legislative body)
    case law (past legal decisions, precedent, common law)
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2
Q

Law of Property Act 1925

A

Rights in land =
Ownership rights > Legal Estates > Freehold / Leasehold
3rd Party rights > Legal Interests: e.g. easements / Equitable Interests e.g. restrictive covenants

Only 2 types of tenure:
freehold and leasehold
and only 5 types of legal interests:
- easement or right over land
- rentcharge
- charge or mortgage
- other charge
- right of entry

  • intended to modernise the English law of real property
  • principally deals with the transfer of FH or LH land by deed

s196:
notices sufficiently served if left at last-known place of abode or business in UK by post in registered letter

s146:
notice if a breach other than payment of rent to notify LL intends to forfeit lease, must state breach and allow T to remedy it

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3
Q

L&T Act 1927 s1

A

Improvements:
- if a T wants to carry out, can serve notice with spec and plan
- LL has 3 months to object
- if refuse, court can award consent if reasonable
- LL can agree to carry out in return for increase in rent
- LL obliged at end of term to compensate T

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4
Q

L&T Act 1927 s18

A

Dilapidations:
- a claim generated by a LL relating to repairs at end of tenancy
- first limb assumes hypothetical sale, loss of value = value - cost of repairs
- second limb assumes LL’s intention, can’t recover if demolish/alterations

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5
Q

L&T Act 1954 Part 2

A

s23: defines tenancy to which Act applies
s24: gives security of tenure
s24a: application to court for an interim rent
s25: LL’s termination/renewal notice
s26: T’s request for a new tenancy
s27: T’s notice of termination
s28: “by agreement”
s29: timescales for application to court
s30: 7 grounds upon which LL may object to new tenancy
s31-36: court procedures for determining new tenancy
s37: compensation where new tenancy not granted
s38: contracting out s24-28
s40: duty to give info
s43: defines tenancy to which Act doesn’t apply

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6
Q

L&T Act 1988

A

LL consents:
- places statutory duties upon the LL in relation to granting consent for assignment, underletting etc.
- reasonable only to withhold consent if LL can prove
- LL to prove dealt with in reasonable time, any conditions reasonable
- applies when tenancy states T not to assign etc. without consent not to be unreasonably withheld

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7
Q

L&T Act 1995

A

Authorised Guarantee Agreement:
- where a T assigns a “new” lease (post-1995), the outgoing T is released from liability, as is any guarantor
- an AGA is required to extend the T’s liability
- the code for leasing business premises recommends AGA only if new T is of lower financial standing or registered overseas and for smaller Ts to accept deposit instead
- a T’s guarantor cannot agree to give a guarantee for the assignee
- a T’s guarantor can guarantee the outgoing T’s obligations under an AGA
- a T cannot assign a lease to its guarantor

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8
Q

Difference between lease and licence

A
  • a leasehold interest is a collection of rights in the land itself
  • “natural rights” inc exclusive possession, enjoyment, alienation
  • a licence is simply permission to do something unlawful; creates personal rights between parties but not the land itself
  • test case = Street vs Mountford 1985
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9
Q

What constitutes a business tenancy?

A
  • where premises occupied by a T for purpose of a business
  • business = a trade, profession or employment and inc any activity carried on by a body of persons whether corporate or unincorporate
  • tenancy = an estate in land, fixed term of periodic, with exclusive use in exchange for a rent
  • can contract out LTA 54 s24-28 if LL serves “health warning” notice 14 days prior to lease start (simple dec) or if less than 14 days must swear in front of sol (stat dec)
    (Business Tenancies Order 2003)
  • doesn’t apply to tenancies not exceeding 6 months unless have already been in occupation for 12 months
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10
Q

How would you deal with a lease renewal?

A
  • conflict of interest/money laundering checks on client
  • agree ToE
  • read lease, contracted out?
  • inspection, measure (breach? tenant improvements?)
  • valuation, approval
  • HoTs and/or s25 notice, diarise timescales
  • agree, approval, instruct solicitors
  • liaise with Legal to complete
  • update records, diarise next milestone
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11
Q

What are the procedures for lease renewal?

A
  • is business tenancy, T can remain in occupation until terminated in accordance with Act
  • s25 served between 6 and 12 months prior to end date stating property comprised, rent, other terms
  • if hostile, must state grounds for possession
  • a s26 served between 6-12 months prior to end (commencement date any time up to 12 months after notice):
    LL may serve counter-notice within 2 months;
    failure to serve counter-notice lose right to objection but not terms;
    T court application by notice expiry (can extend by agreement)
  • s27 at least 3 months to expire
  • s28 by agreement
  • s40 within last 2 years of term, must provide info within 1 month
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12
Q

What are the grounds on which a LL can refuse a new lease?

A

s30
a) T has failed to carry out repairs
b) T has persistently delayed paying rent
c) T is in substantial breach of some other covenant
d) LL offers suitable alternative accommodation
e) where tenancy was created by a sub-tenancy and the building let as whole would produce a higher rent
f) LL intends to demolish or substantially reconstruct premises and cannot do so without obtaining possession
g) LL intends to occupy for own purposes (LL for 5 years)
- compensation e-g:
1 x RV for term less than 14 years
2 x RV for term 14 years or more

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13
Q

How would you deal with a rent review?

A
  • conflict of interest/money laundering checks on client
  • agree ToE
  • read lease
  • time of the essence? diarise timescale
  • note disregards and assumptions
  • inspection and measure (breach? tenant improvements?)
  • valuation, approval
  • serve notice, follow up
  • negotiate
  • ADR if necessary
  • agree, obtain approval, record via memo
  • update records, diarise next review
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14
Q

Procedure for rent reviews

A
  • usual for LL to serve trigger notice
  • failure to adhere to timetable could result in T stuck with new rent/LL missing review (“deeming provisions”)
  • but usually time not of the essence
  • time only of essence where lease explicitly says so/lease makes clear time limits strict (i.e. related to break option)
  • basis of valuation usually MR
  • usually an unexpired term or hypothetical term
  • usually property vacant and to let on terms of existing lease
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15
Q

Usual assumptions for rent reviews

A
  • subject premises fit for immediate use and occupation
  • MR payable after expiry of any rent-free period or T’s fitting out works
  • no work has been carried our by T that has reduced rental value
  • if premises have been destroyed or damages, they have been reinstated
  • T has complied with its covenants in existing lease
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16
Q

Usual disregards for rent reviews

A
  • those matters in s34 LTA54
  • T’s previous occupation
  • any goodwill
  • certain improvements (if T improves, increase in rental value to be disregarded)
17
Q

Calderbank letter

A
  • an unconditional offer to settle on specified terms, and expressly reserving the right to refer the offer to the arbitrator after he has made his award except for costs
  • must contain:
    an unconditional written offer to settle the RR;
    a reasonable proposal re costs incurred up to date of offer (usual 50%);
    a statement “without prejudice save as to costs”
  • if T does not accept and arbitrator awards equal or higher, T pays LL’s costs, and vice versa
18
Q

Dispute resolution procedures

A
  • ADR (alternative to litigation)
  • mediation (neutral 3rd party, parties retain control)
  • arbitration (agree to be bound by expert determination, lease refers, usually RR or S/C, award based on evidence provided)
  • independent expert (based on own expertise, agrees own contract with parties)
  • forfeiture (by peaceable re-entry or by proceedings)
  • CRAR (LL can collect overdue rent by seizing goods by certified enforcement agent to be sold at auction, must have lease in place)
  • debt proceedings (can issue claim under Part 7 or 8 of Civil Procedure Rules in county/high court to recover rent arrears; part 7 “summary judgement”)
19
Q

What are ways tenants can “go bust”?

A

administration:
- company can’t pay debts
- protected from legal action by creditors
- can negotiate a CVA (company voluntary arrangement)
- if wound up, administrator writes to creditors/Companies House/The Gazette
- better to surrender than apply to forfeit

liquidation:
- compulsory/voluntary
- can forfeit peacefully

receivership:
- banks and secured creditors paid first
- LL paid from remaining assets
- where creditor of secured loan appointed to manage asset(s) or can step in to manage whole company
- no bar on forfeiture

20
Q

How do you manage the LL and T relationship?

A
  • communication
  • build relationship
  • approachable
  • act ethically, reasonably, fairly
  • deal with requests in timely way
  • legal requirements
  • manage disputes