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APC Revision > Landlord & Tenant > Flashcards

Landlord & Tenant Flashcards

1
Q

Section 23 of the 1954 Act states that a business tenancy must have 6 basic elements?

A
  1. Its a tenancy
  2. The premises must be for business purposes
  3. Tenant must occupy full or part of premises
  4. occupancy must be for more than 6 months
  5. must not be an exempted or excluded tenancy
  6. There must be a competent landlord
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2
Q

What do sections 23 - 44 of the 1954 act relate to?

A

section 23 - application of the act
section 24 - security of tenure provisions
section 24a - interim rents
section 25 - LL notice to end the lease or seek a new lease
section 26 - T notice to seek a new lease
section 27 - T notice to end the lease
section 28 - renewal of tenancy by agreement
section 29 - order by court for new tenancy
section 30 - LL grounds for opposition to new tenancy
section 32 - 35 - Terms of new lease
section 34 - basis of value for new rent
section 37 - compensation provisions
section 38A - contracting outside of the Act
section 40 - notice requesting information from other party
section 44 - definition of competent LL

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3
Q

How much notice must be provided for a section 25 notice?

A

between 6 -12 months before the termination date

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4
Q

A section 25 notice should include?

A
  1. name and address of LL & T
  2. address of the property
  3. Notice of date to end tenancy
  4. whether the a new lease is opposed or not?
  5. if opposed, grounds for opposition
  6. if unopposed, proposed new lease terms
  7. Confirmation of the date a response is required
  8. Recommendation to seek professional advice
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5
Q

What happens when you undertake lease renewal negotiations and you pass the date of the new lease/termination date?

A

Tenant loses security of tenure unless:

  1. there is a new lease in place
  2. either party has applied to court
  3. parties have agreed for an extension
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6
Q

How much notice should be provided by a section 26 notice?

A

between 6 -12 months after notice.

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7
Q

What must a section 26 notice include?

A
  1. Must state date of new lease
  2. must state new lease proposal including rent
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8
Q

How much notice must be provided for a section 27 notice?

A
  1. 3 months before lease expiry
  2. If tenant vacates with vacant possession before 3 months no notice required.
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9
Q

What are the section 30 grounds?

A
  1. Breach of repairing covenant
  2. persistent late rent payments
  3. Any other substantial breach
  4. Provision of alternative accommodation
  5. Uneconomic subdivision
  6. redevelopment
  7. re-occupation
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10
Q

What section 30 grounds are discretionary and which are mandatory ?

A

Discretionary:
1. Breach of repairing covenant
2. persistent late rent payments
3. Any other substantial breach
4. Provision of alternative accommodation
5. Uneconomic subdivision

Mandatory:
6. redevelopment - proof required
7. re-occupation - proof required & at least 5 years ownership.

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11
Q

What section 30 grounds is compensation payable?

A
  1. Uneconomic subdivision
  2. redevelopment
  3. re-occupation
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12
Q

How is compensation paid for applicable section 30 grounds after 1st April 1990?

A

1 x RV < 14 years occupation
or
2 x RV > 14 years occupation

RV is RV on date of notice

Compensation also available for improvements under L&T Act 1927

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13
Q

What does section 32 - 35 say about terms of new lease?

A
  1. after 1st June 2004 - maximum term of 15 years
  2. Must be a market rent

Disregards:
- previous occupation
- goodwill
- any LL approved improvements by tenant in last 21 years.

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14
Q

What are the 4 principles test for varying a lease to reflect modern lease terms?

A
  1. LL must have valid reason on estate management grounds
  2. changes proposed must be compensateable by change in rent
  3. changes proposed must not affect security of tenure
  4. changes must be reasonable
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15
Q

What are the 4 assumptions for market rent under the 1954 Act?

A
  1. rent regards the terms of new tenancy
  2. willing LL and T
  3. premises are let on vacant possession
  4. effect of L&T Covenants Act 1995 must be considered
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16
Q

What are the 4 disregards for market rent under the 1954 Act?

A
  1. effect of rent due to tenant occupation
  2. any goodwill due to tenants business
  3. any effect on rent due to tenant improvements - unless LL obligation or > 21 years
  4. any effect on rent due to licenses.
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17
Q

What are interim rents?

A
  1. defined by section 24a of 1954 Act
  2. payable between current lease end date and new lease start date
  3. either party can apply from date of notice
  4. once one party has, the other may not
  5. latest date is 6 months after lease expiry
  6. assumes annual tenancy at market rent
  7. can be decided by PACT
  8. No notice, no interim rent
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18
Q

What information can be requested with a section 40 notice?

A
  1. who the competent landlord or protected tenant is
  2. Request can be made at least 2 years before lease expiry
  3. Failure to do so is breach in statutory duty.
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19
Q

Who is the competent landlord?

A

defined under section 44

the person/body upon whom notice should be served.

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20
Q

What third party determinations are there for lease renewals?

A
  1. County Court including use of Part 36 offers.
  2. PACT
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21
Q

What is the process for contracting out the act?

A
  1. simple declaration - at least 14 days notice to tenant.
  2. statutory declaration - can be done with less than 14 days in front of solicitor who can administer oaths.
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22
Q

What are the consequences of contracting out to a Tenant?

A
  1. no security of tenure
  2. no compensation payable at lease expiry
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23
Q

Why might a LL want to contract out of 1954 act?

A
  1. more flexibility
  2. reoccupation
  3. redevelopment
  4. headlease requirement
  5. lower rent payable
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24
Q

What would you request from your client before taking on a L&T instruction?

A
  1. signed terms of engagement
  2. an understanding of their objectives and strategy.
  3. copy of existing lease, licences, side letters, plans etc.
  4. previous RR memorandums
  5. Contact details for tenant for inspection
  6. confirmation of the party that is responsible for service of notices.
25
Q

How can fees be charged for a L&T instruction?

A
  1. fixed fee
  2. percentage of uplift or saving depending on client
  3. hourly rate
  4. incentive fee
26
Q

How would you carry out a L&T instruction?

A
  1. check competence
  2. undertake COI check
  3. Agree ToE with client
  4. Obtain understanding of client objectives.
  5. Obtain relevant documents. Lease etc
    6 Read lease and any other relevant documents understanding RR clause if a RR or if there is security of tenure for LR.
  6. Check if time is off the essence if RR.
  7. Undertake site inspection
  8. Undertake market valuation
  9. Prepare recommendation report to client.
  10. Agree negotiation strategy.
  11. Conclude negotiations and draft either RR memo or new lease.
27
Q

What does without prejudice mean?

A

Other party cannot rely on information provided during negotiations, if this term is used.

28
Q

What are the three requirements of a lease?

A
  1. Exclusive occupation
  2. payment of rent
  3. for a specified term
29
Q

What is a Licence?

A
  1. A right
  2. personal arrangement between licensee and licensor
  3. Acquires no interest in land
  4. Can be terminated at any time by either party.
30
Q

What is a tenancy at will?

A
  1. written agreement between landlord and tenant for an unspecified time.
  2. Can be terminated at any time by either party.
  3. Usually used when a tenant is agreeing a new contracted out tenancy.
31
Q

What is a wayleave?

A

A temporary right that receives an annual payment.

32
Q

What is an easement?

A
  1. A right enjoyed by one party over the land of another.
33
Q

What types of RR are there?

A
  1. upward only rent review
  2. Indexed (RPI or CPI)
  3. Stepped
34
Q

What are the 4 usual assumptions of a rent review?

A
  1. Property available on the open market between a willing landlord and tenant.
  2. Available for immediate occupation
  3. not existing breaches in the lease
  4. Property may be used for use set out in the lease.
35
Q

What are the 3 usual disregards of a rent review?

A
  1. Any effect of goodwill due to the tenant occupation
  2. Goodwill attached to the property
  3. LL approved tenant improvements.
36
Q

What are the 3 categories of comparable evidence? And is there any relevant guidance.

A
  1. Category A - direct comparables. e.g direct comp transactions
  2. Category B - general market data. e.g. public sources
  3. Category C - other sources e.g data from other property types.

RICS PS: comparable evidence in real estate valuation (2019)

37
Q

What is the typical order of weighting applied to comparable evidence?

A
  1. Open market lettings
  2. RR & lease renewals
  3. independent expert determination
    4.Arbitrator determinations
  4. Court determinations under the 1954 act.
  5. hearsay evidence
  6. Sale & leasebacks
  7. Surrender & renewals
38
Q

What is the relevant case law for Calderbank offers?

A

Calderbank v Calderbank (1975)

39
Q

What are Calderbank offers?

A
  1. used to achieve early resolution and prevent costs from escalating
  2. letter must be headed without prejudice
  3. letter must set out the terms to settle the dispute and the timeframe for which the offer can be accepted (usually 21 days)
40
Q

Differences between Arbitrator and Independent Expert determination? What is the relevant guidnace

A
  1. A acts on evidence provided by parties, IED does not.
  2. A can be appealed against, IED cannot.
  3. A cannot be sued for negligence, IED can.
  4. A acts within the Arbitration Act 1996. IED within the procedural timetable set out.
  5. A gives an award whilst IED gives a determination.
  6. RICS PS: RICS surveyors acting as arbitrators in rent reviews (2013). RICS PS: Independent Expert Determination (2016)
41
Q

What role could you play if your client was going through ADR procedures?

A
  1. Expert witness
  2. Advocate
42
Q

What is included in a RR memorandum?

A
  • name of landlord and tenant
  • address of the property
  • date of the lease and RR
  • the new rent agreed
  • signature from both parties
43
Q

What type of ADR would you advise your client in a falling market?

A
  • Arbitration
  • rising market - IED
44
Q

What is the relevant case law surrounding ‘time of the essence’ for RR.

A

United Scientific Holdings v Burnley Borough Council (1977)

Decision:
established that time limits will be strictly applied (i.e. of the essence) in a rent review clause if this is what the lease states.

45
Q

Is there any guidance around acting as an expert witness? and what are the 4 key points?

A

Yes

RICS Guidance Note: surveyors acting as expert witnesses 2014

4 key points:

  • evidence provided by the chartered surveyor must be impartial and objective
  • duty of the surveyor is to the court
  • evidence must be the independent work of surveyor
  • surveyor must believe the facts they are relying upon are true and correct.
46
Q

How are fees charged for expert witness instructions?

A
  • incentive fees are not allowed.
  • fee basis must be clearly stated in the terms of engagement.
  • fee should be fixed or for time spent.
47
Q

What does s19 of Landlord and Tenant Act 1927 provide.

A

consent cannot be unreasonably withheld.

48
Q

what does the s1 Landlord and Tenant Act 1988 say about consent? What case law

A

LL consent must be provided within a reasonable time.

Case Law: Dong Bang Minerva (UK) Ltd v Davina Ltd [1996]

49
Q

What is the main case law around break clauses?

A

Mannai Investments v Eagle Star [1997] AC 249 - Lord Hoffman: ‘where
a break clause requires break notices to be given on blue paper, a
notice on pink paper will not be effective to terminate the lease’

Marks and Spencer PLC v BNP Paribas Securities
Services Trust Company (Jersey) Limited [2015]

LL not required to pay back overpayment

Riverside Park Ltd v NHS Property Services
Ltd [2016

Partions remained and so had not been left with vacant possession.

50
Q

International Drilling Fluids Ltd v Louisville
Investments (Uxbridge) Ltd [1986] outlined what prinicples around consent:

A

Landmark case with 7 general principles:
1. Protect landlord from an undesirable tenant
2. Landlord cannot refuse outside Landlord and Tenant relationship
3. Onus to prove ‘unreasonable’ sits with tenant (***)
4. Reasons for refusal must be reasonable
5. Proposed use may give rise to grounds for refusal
6. Weigh up benefits and drawbacks to each party
7. Question of fact as to whether consent unreasonably withheld

51
Q

What does Aviva Investors Ground Rent
GP Ltd and another
(Respondents) v Williams
and others (Appellants)
[2023] provide?

A

LL can determine reapportionment of the service charge.

52
Q

What is PACT

A

Professional Arbitration on Court Terms

  • Launched by RICS & Law Society in 1997.
  • used for unopposed lease renewals
  • can be done inside and outside of court
  • in court PACT should be used where someone has already made an application to court.
  • normal notices must have been served.
  • parties agree which points are agreed and which to be decided by the third party.
  • arbitrator appointed by law society or president of RICS.
53
Q

What are the advantages of PACT?

A
  • faster
  • full court hearing avoided
  • more flexible
  • less expensive
    Decision by a surveyor rather than a judge.
54
Q

What must a Calderbank offer always say

A

without prejudice, save as to costs.

55
Q

When is a good tactical time to issue a Calderbank offer?

A

if you consider that the claim or counterclaim against you is fairly weak and you want to make a low settlement offer without risking liability for the Part 36 cost consequences if it isn’t accepted.

56
Q

Should rent free fit out periods be considered for lease renewals?

A

legal position remains unclear.

in HPUT Trustee No 1 v Boots UK 2021, the court held that the rent free period should not be considered as in reality the tenant already in situ does not need to fit out the unit.

Alternatively,

Old Street Retail Trustee (Jersey) 1 Ltd v GB Healthcare it was held that since the comps had rent free fit out periods then it should be considered for the lease renewal.

More disputes expected due to the difference of outcomes.

57
Q

How did you agree a rent of £8.25 for Birch House?

A
  • unit at a neighboring industrial park was available for £8.00 psf
  • LL offered £8.25 which we agreed to.
58
Q

How did you agree a rent of £33.00 psf for 1 Colmore Square?

A
  • carried out comparable method as per usual.
  • calculated 32.50 ppsf for MR.
  • During the negotiations another piece of evidence came to light at £33.00.
  • This was accepted as we believed we would not receive a lower outcome at arbitration.
59
Q

What was the hypothetical lease for 1 Colmore Square?

A
  • lease of whole of premises
  • same lease terms except rent
  • willing landlord & tenant
  • vacant possession
  • a term of 5 years.

APC Revision (15 decks)

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