Landlord & Tenant Flashcards
Tell me about your understanding of the LTA 1927/LTA 1954/Landlord & Tenant
(Covenants) Act 1995/LTA 1988?
Part II of the L&T act 1953 is a statutory code governing business tenancies.
The Covenants Act abolishes privity of contract for all new leases (although in certain circumstances an outgoing tenant may be required to guarantee its immediate assignee).
Tell me about a key lease clause you are aware of from the LTA 1927/LTA 1954/Landlord & Tenant
(Covenants) Act 1995/LTA 1988?
The Landlord and Tenant (Covenants) Act 1995 (“LTCA”) introduced a framework within which landlords can seek to recover sums outstanding under a lease from a former tenant or guarantor, but which prevents them from allowing historic arrears to rack up over a long period of time and issuing a surprise claim. Under section 17 LTCA, landlords must notify the former tenant or guarantor of its intention to recover within six months of the sums becoming due. If the notice is not served within this six-month window, the non-paying party’s liability to the landlord ends.
What is alienation?
A covenant in a lease determining whether the tenant can alienate the land, that is, whether there is any absolute prohibition or restriction against the tenant charging, assigning, underletting or parting with possession of the demised premises.
Tell me about your understanding of the Code for Leasing Business Premises.
The objective is to improve the quality and fairness of negotiations on lease terms and to promote the issue of comprehensive heads of terms that should make the legal drafting process more efficient. The statement and code do not prescribe the outcome, but seek to make it fair and balanced
Tell me about how you would summarise a lease and what terms you would be looking
out for.
information about the lease’s key provisions (such as the term, rent reviews and the repairing covenants, Breaks, Permitted use)
What is the Regulatory Reform (Business Tenancies) (England & Wales) Order 2003?
introduced new procedures for terminating or renewing business tenancies under the Landlord and Tenant Act 1954, and procedures for contracting out of sections 24 to 28 relating to security of tenure.
What is the role of an expert witness?
to assist the court in reaching its decision by providing independent expert/technical analysis and opinion on an issue(s), based on the information provided by those instructing him. The expert evidence should provide as much detail as is necessary to convince the judge that the expert’s opinions are well founded.
How does the role of an expert witness change from when you are negotiating?
An expert witness is an independant expert for the court whereas a negotiation is a discussion
How does an advocate differ from an expert witness?
An advocate will argue a case on behalf of his client, whereas an expert witness is impartial and gives an opinion on the merit of both sides arguement
What is an arbitrator?
an impartial person or group that is given the power by disputing parties to resolve their dispute
What is an expert?
An expert is somebody who has a broad and deep understanding and competence in terms of knowledge, skill and experience through practice and education in a particular field
What is the difference between an expert and an arbitrator
An expert will consider the evidence provided by the two parties and make a final decision thereon.
An arbitrator will often encourage collaborative communication between disputing parties in an attempt to reach settlement, not unlike a referee
How would you establish the relevant third party procedure for a rent review?
by reading the rent review clause in the lease
How much does it cost to submit an RICS DRS application?
£425
What is the difference between the hypothetical lease at a rent review and lease
renewal?
A hypothetical lease is formed from assumptions and disregards so therefore are not assessing market rent on the actual terms of the lease whereas at renewal the review is on market rent
What is PACT?
Professional Arbitration on Court Terms
Provides parties with an alternative way to resolve outstanding issues on a lease renewal without them being decided by a court
How do in and out of Court PACT differ?
Under PACT, the parties also benefit from flexibility not usually found in the Court process. This is because the parties can agree to circumvent some of the requirements traditionally found in the Court’s timetable (for example disclosure or a full hearing) and to elect for the issues to be determined upon the papers with written submissions and without a hearing. Consequently, the use of an independent expert to determine the terms of a new lease has generally resulted in not only better decisions, but cheaper and quicker ones too.
What is a Calderbank offer?
A Calderbank offer is an offer of settlement made by one party to another in an attempt to resolve the dispute which may afford some protection against costs.
What is a break clause?
A break clause is a term in a contract that allows early termination of the agreement
Tell me about your understanding of notices under the LTA 1954.
A section 25 notice must specify the date on which the landlord proposes to bring the existing lease to an end.
The section 26 request must also set out the tenant’s outline proposals for the terms of the new lease
The tenant alone has the right (under section 27 of the Act) to bring the tenancy to an end
requests for information made under section 40
Tell me about your understanding of the Court procedure at lease renewal.
the competent landlord can serve a Section 25 notice that proposes new terms for the lease (or opposing renewal of the lease) - known as a ‘hostile Section 25 notice’ or the tenant can serve a Section 26 notice requesting a renewal lease under the 1954 Act. There are prescribed forms, strict processes and timeframes around both of these notices.
After the notice has been served (either a Section 25 or a Section 26), the parties will then often negotiate the terms of a new lease. If there is disagreement about whether a new lease should be granted (for example, if the landlord opposes the tenant’s right to renew), or the terms of the new lease itself, then either party can apply to the courts for a decision on the terms of new lease.
Where the grant of a new lease is not opposed, the claimant must start the claim.
The defendant in the proceedings needs to complete an acknowledgment of service within 14 days of service of the claim form. There is no requirement to serve a formal defence.
Once proceedings have been issued the parties will either agree directions for the future steps to be taken in the claim, such as disclosure and exchange of evidence, or have the directions determined by the court at a case management conference (CMC).
Settling the terms of the new lease between the parties
The landlord and tenant can agree new terms of the lease in writing. If not, the court will settle any new terms of the lease the parties have been unable to agree.
What are the Civil Procedure Rules?
The Civil Procedure Rules set out the practice and procedure to be followed in courts in simple laymans terms
What are the Jackson Reforms?
deal with the costs associated with litigation,
What is a Part 36 offer?
an offer made by either the claimant (the person making the claim) or the defendant (the person whom the claim is being made against) as a tactical step designed to convince the other party to settle the claim early without the matter having to go to Court.
Can you serve a Calderbank offer at a lease renewal?
yes
What does Section 34 relate to in a lease renewal?
the rent payable under a tenancy granted by the court is that at which, “having regard to the terms of the tenancy (other than those relating to rent), the holding might reasonably be expected to be let in the open market by a willing tenant
What is compensation for disturbance?
it is compensation payable to a claimant following compulsory acquisition
What does Section 18 mean in relation to the LTA 1927?
provides guidance on how the diminution in value of a landlord’s property should be handled.
The Landlord’s Section 18 valuation is essentially a comparison of the value of the property in repair against its condition in dis-repair at lease termination, with reference to the assessment of the cost of putting the property into the appropriate state of repair as required by the lease covenants.
Why would you contract out a lease?
to redevelop the property or land and will want the ability to do this when the lease term ends as the tenant will have to vacate. It could also be because it wants short term ‘pop-up’ lettings or perhaps a tenant is not ideal tenant at a particular time but it wants the rental income rather than having an empty property.
How would you contract out a lease?
statutory declaration for less than 14 days or simple declaration if more than 14 days to commencement of the lease
Tell me about the LTA 1954 in relation to contracting out a lease.
provisions of section 24-28 do not apply under the contracted out lease
What are the Section 30 grounds under the LTA 1954?
7 grounds to oppose a new lease:
a) the tenant has obligations in relation to repair and maintenance under the current lease and the property is in disrepair;
(b) there has been a persistent delay in the payment of rent;
(c) the tenant has been/is in breaches of other terms of the existing lease;
(d) the landlord is able to provide suitable alternative accommodation;
(e) the tenancy was created by a sub-letting;
(f) the landlord intends to demolish or reconstruct the property and it is not possible without the landlord recovering possession;
(g) the landlord intends to occupy the property or part of the property for the purposes of its own business or as its residence.
What time limits apply in relation to lease renewal notices?
The landlord can serve a Section 25 notice not more than 12 months and not less than 6 months before the date upon which the landlord wants the current lease to end. The landlord cannot bring the lease to an end before the lease expiry date.
The tenant can serve a Section 26 notice not more than 12 months and not less than 6 months before the date upon which the tenant wishes a new lease to begin. The tenant cannot begin a new lease until after the expiry date of the existing lease.
When would you recommend that a landlord/tenant serves notice in a LTA 1954
renewal?
12 months prior to the lease expiry date
What does Section 40 of the LTA 1954?
A Section 40 notice is a form that can be served by either the landlord or the tenant on the other in order to gather information to be able to make a decision on whether or not to renew or end a business lease
What tenancies are covered by the LTA 1954?
business tenancies
