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APC > Landlord & Tenant > Flashcards

Landlord & Tenant Flashcards

1
Q

What information do you require from the Landlord before commencing a lease renewal or rent review ?

A
  • Agreed terms of engagement
  • Understanding of clients objectives
  • A copy of the existing lease
  • Lease Plan
  • Copy of any licenses. For example alterations, sub letting etc.
  • Copy of any rent review memorandums
  • Access arrangements
  • Property management file
  • Details of comparable evidence.
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2
Q

How are fee’s usually based for rent reviews/ lease renewals ?

A

Rent reviews are usually % of the new rent agreed, can often be a fixed fee.

Incentive based fee’s.

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3
Q

What is the process from start to finish for a rent review ?

A
  1. Conflicts / Competency Check
  2. Agree terms of engagement
  3. Understand clients objectives
  4. Collate relevant information
  5. Analyse lease - Specifically rent review clause.
  6. Produce report: Including; evidence, market rent, negotiation strategy and dispute resolution options.
  7. Contact the tenant via letter ‘labelled without prejudice’ and ‘subject to contract’.
  8. Once agreed. Have solicitors agree rent by way of a written memorandum, which will be attached to the lease.
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4
Q

What is the process from start to finish for a lease renewal ?

A
  1. Conflicts/ competency check
  2. Due diligence
  3. Issue terms of engagement
  4. Inspection and measurement
  5. Analyse market rent
  6. Discuss with client
  7. Issue heads of terms
  8. Negotiate and agree
  9. Instruct lawyers.
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5
Q

Why label something ‘without prejudice’ ?

A

labelling correspondence ‘without prejudice’ prevents statements made in attempt to settle disputes from being used as evidence against one party or another.

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6
Q

What is the difference between a licence and a lease ?

A

A license refers to a right to enter a property, and is a personal agreement between the licensor and licensee. It’s a personal right that can be terminated at any time by any party.

A lease provides an occupier with an estate in the relevant property/land. Leases cannot be terminated until expiry or break options being activated.

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7
Q

What are the 4 requirements of a lease ? (SPED)

A
  1. Exclusive occupation.
  2. Payment of rent
  3. Duration for a specific term
  4. The term must be in writing, signed and registered as a specific deed.
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8
Q

What is a Tenancy at Will?

A

A from created by written agreement. The landlord may evict the tenant at any time, as it is not a legal interest.

Usually used for giving a tenant an early entry for tenant works.

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9
Q

What is a Wayleave?

A

A right of way granted by a landowner, generally in exchange for payment and typically for purposes such as the erection of telegraph wires or laying of pipes.

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10
Q

What is an Easement ?

A

An easement is a nonpossessory right to use a property without possessing it.

Examples include:

  1. right of way exercised on foot or in a vehicle
  2. rights of access for maintenance purposes.
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11
Q

What is an Adverse Possession ?

A

Adverse possession describes a legal concept where someone who does not have legal title to land and who did not buy it can become its legal owner. They do this by possessing it for a long enough period to override the interests of the original owner.

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12
Q

What are the basis of valuation for a rent review ?

A
  • Normally upward only to market rent using special assumptions.
  • RPI - CPI
  • Capped and Collared
  • Time is not normally of the essence.
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13
Q

What 4 usual Assumptions for a Rent Review ?( PAAC)

A
  1. Available to Open Market - The property is available to let on open market by a willing tenant and willing landlord for a specific term.
  2. Available - Property is fit and available for immediate occupation and use.
  3. Covenants - All covenants observed by landlord and tenant.
  4. Property Use - Use property may be used as per the use set out in the lease.
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14
Q

What are 3 usual disregards with undertaking a rent review ?

A
  1. Goodwill of tenants occupation
  2. Goodwill attached to the property
  3. Tenants improvements
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15
Q

What is a Calderbank letter ? and what should it include ?

A

A Calderbank can be used to achieve an early resolution of a dispute and to prevent the situation from escalating.

The Calderbank letters should be headed with ‘without prejudice save as to costs’.

It is a tool to influence negotiations in rent reviews.

It should include all the terms needed to settle the dispute, as well as a time limit to accept (usually 21 days).

it should be a genuine offer to settle and not used as a way to pressure other partys.

-

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16
Q

What are the contents of a Rent Review Memorandum ?

A
  • Name of Landlord
  • Name of Tenant
  • Address of the Property
  • Date of the lease and rent review
  • Confirmation of new rent agreed
  • Signed and dated by both parties.
17
Q

What is geared rent ?

A

Based on a percentage of market rent.

18
Q

What is turnover rent ?

A

Based on occupiers profits

19
Q

Fixed increases ?

A

Outlined at the commencement of the lease.

20
Q

What is Cap and Collard ?

A

Collar and cap is a commonly-used mechanism to set a maximum and minimum increase on each review. So, for example, a collar of 2% and a cap of 5% ensures that the rent will always increase between 2% and 5% per annum on each review, even if the index has increased by more or less than those figures.

21
Q

Where can you find the rent review clause in a lease ?

A

Often towards the schedule at the end of the lease.

22
Q

In regards to Rent Reviews on leases - surveyors should be able to give a clear summary on what?

A
  • Current rent payable
  • Rent review date
  • Rent review basis
  • Whether time is of the essence
  • Whether there are trigger notice requirements
  • Assumptions
  • Lease commencement date
  • Dispute resolution requirements
23
Q

What is the main legislation around lease renewals ? and what is it ?

A

Landlord & Tenant Act 1954

  • An Act to provide security of tenure for occupying tenants
  • An act to enable tenants occupying property for business, professional or certain other purposes to obtain new tenancies in certain cases; to amend and extend leases.
24
Q

What types of lease surrender options are there ?

A
  • Lease expiry
  • Break options
  • Surrender/Negotiations
  • Assign / sub lease
25
Q

What is Tacit Relocation ?

A

If neither party serves notice prior to expiry then the lease continues for a 12 month period.

The rent remains static.

26
Q

What is the usual cap and collar ?

A

Collar 1%
Cap 3%

27
Q

What information is required to undertake a rent review ?

A
  • Agreed terms of engagement
  • Understanding of clients objectives
  • Copy of all relevant docs (lease, plans, deeds)
  • Copy of any rent memorandums
  • Contact details for tenant
  • Confirmation of which party will serve notice
  • details of comparable rental evidence.
28
Q

Talk me through a rent review from start to finish?

A
  1. T+C’s - Competency Check - Conflict Check
  2. Understand Clients Objectives
  3. Obtain all relevant info
  4. Read lease carefully (rent review clause)
  5. Site Inspection/Measurement
  6. Undertake market rent valuation
  7. Prepare report for your client
  8. Agree Strategy
  9. Service notice - open negotiations
  10. Conclude and document with a Rent Review Memorandum.
29
Q

Talk me through a lease renewal from start to finish?

A
  1. T+C’s - Competency Check - Conflict Check
  2. Understand Clients Objectives
  3. Obtain all relevant info
  4. Read lease carefully.
  5. Site Inspection/Measurement
  6. Undertake market rent valuation
  7. Prepare report for your client
  8. Agree Strategy
  9. Service notice - open negotiations
  10. Agree heads of terms and instruct solicitors.
30
Q

What is in a Rent Review Memorandum ?

A

Name of landlord
Name of Tenant
Address of property
Date of lease and rent review
Signed and dated by both parties
Witnessed

31
Q

What does without prejudice mean?

A

That the information cannot be used in any subsequent legal matter as evidence.

32
Q

What does ‘subject to contract mean’?

A

Still negotiating but nothing is binding until legal contract is agreed.

33
Q

What is a calderbank letter ?

A

A letter written containing a settlement offer
Includes ‘without prejudice save as to costs’
It’s an offer to the other party during a rent review, inviting the other party to settle, without taking further dispute resolution actions.
It must contain all the terms needed to settle in the dispute.

34
Q

What is arbitration?

A

Arbitration is a way of settling a dispute without going to court. Both parties put forward a case to an independent person ‘arbitor’ - who then decides the outcome.

APC (25 decks)

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