Landlord & Tenant Flashcards
Terms of Engagement: What must be agreed in writing at the start of the instruction ?
- That you are competent
- That there are no conflicts of interest
- You refer to the standard Terms of Business that will apply alongside the Terms of Engagement task
Terms of Engagement: What can fees for rent reviews or lease renewals be based on ?
- A fixed fee (e.g Part 1 report, Part 2 negotiations)
- Incentivised fee (e.g % of uplift achieved or saving made)
- An hourly rate (common in expert witness work)
With regards to the L&T Act, what does it mean if a lease is silent ?
If there is no mentioned of being contracted inside or outside of the landlord and tenant act 1954, the lease is silent and therefore is INSIDE the security of tenure provisions of the Landlord and Tenant Act 1954 (sections 24-28).
What does without Prejudice mean ?
‘Without Prejudice’ means that during negotiations, the opposing party cannot rely upon any document or discussions held, which are labelled ‘Without Prejudice’
The information is therefore privileged and cannot be used as evidence against the party that sent / shared it.
What is a licence ? (4)
- A right to enter property
- a personal arrangement between licensor and licensee
- The licencee acquires no interest in the property
- It is merely a personal right which can be terminated
What is a Lease ? (4)
- Exclusive possession
- Payment of rent
- Duration of specified term
- If more than 3 years, the terms must be in writing, signed as a deed
What are the 3 main differences between a lease and a licence ?
- A lease can be assigned, whereas a licence normally a personal right and cannot.
- A lease cannot be broken until expiry or break, whereas a licence can be revoked at any time
- A lease provided exclusive possession of property, whereas a licence grants legal use of land
What is the Case Law relevant to Leases and Licences ?
Street v Mountford 1985
Sets out the differentiation between a lease and a licence
What is a Tenancy at Will ?
- A form of licence
- agreed in writing
- for a unspecified period of time
[Landlord can evict whenever and there is no legal interest]
When would you use a Tenancy at Will ?
(fitting out time) To give a tenant early access to a property during lease agreement for fitting out
(lease renewal) Whilst a tenant is agreeing a new, contracted out lease terms after expiry
What is a Wayleave ?
Temporary right and receive an annual payment.
e.g Provides a right for an electrical company to install and retain apparatus
What is an Easement ?
A permanent right and receives a capital payment, allowing a right enjoyed by one party over the land of another. Can be registered with Land Reg
How can a perscriptive right of way or perscriptive easement be obtained ?
Continuous and uninterrupted use being proven over a period of 20 years or more
Who can grant a permissive right ?
By a landowner to allow access over the land. They are not public rights of way and the public do have a right to use them.
There is usually signage in place to confirm that this is a permissive right of way
What is Adverse Possession
When a non-legal owner of the land has had possession of registered land for 12 years, can become the legal owner through possession.
[Land Registration Act 2003]
Before 2003 - registered land and 12 years possession = ownership
After 2003 - registered land and 10 years possession = ownership
After 2003 - non-registered land and 12 years possession = ownership
Rent Reviews: What are the possible Basis of Valuation ?
Upwards only to market rent using standard assumptions
Or
Indexation - either CPI or RPI linked increases with Cap and Collars, turnover rents or stepped increases
What is time of the essence ?
A stated time of which the review has to have been conducted by.
Normally time is not of the essence and reviews can be conducted after the specified date
Time of the essence Case Law ?
United Scientific Holdings vs Burnley Borough Council 1977
- Provides the general presumption that time is not of the essence unless there are sufficient contra-indications that indicate otherwise
What is an RPI / CPI linked review ?
Retail Price Index / Consumer Price Index - both are measures of inflation of which RPI includes more measures than CPI like mortgage interest payments /housing components.
What is a turnover rent ?
Rent based on a business annual turnover.
Review standard assumptions
- Property is available to let in open market (vacant possession) by a willing landlord and a willing tenant for a term length (notional or hypothetical)
- Property is fit for immediate occupation and use
- All covenants observed by LL and T
- Property can be used for use stated in lease
Review standard disregards
- Goodwill from tenants occupation
- Goodwill attached to property
- Tenants improvements (if landlords approval granted for the works)
What is a more modern Assumption / Disregard appearing in Review Clauses ?
An additional assumption or disregard for fitting out incentives / rent free periods
RR may assume tenant has received the benefit of 3 months incentive for fitting out
OR
may disregard rent free for fitting out
Headline rent review clauses
Headline rent review ignores all incentives / concessions granted on a letting
These are more rare in modern leases
What is an assumed term / hypothetical term ?
The length of the lease you are to assume at rent review.
The length of lease has an effect on value
Unless wording is explicit the assumed term is the unexpired residue
Name any case law relating to Hypothetical term
British Gas v Dollar Land Holdings (1992)
The Ritz Hotel v The Ritz Casino (1989)
Tea Trade Properties v CIN Properties (1990)
Name the relevant case law for Time of the Essence
United Scientific Holdings v Burnley Borough Council (1978)
- General presumption that time is not of the essence unless sufficient contra-indications that indicate otherwise
Can you name a more recent Time of the Essence case law ?
Bello v Ideal View (2008)
- Argued that even though the review was 13 years old, the court ruled time was not of the essence and the review could proceed
Name relevant Case Law for using post review date evidence ?
Segama v Penny le Roy (1984)
- After review date evidence is admissible in rent review arbitration
- but in specific times of market change (e.g Covid19) this does not apply
Deeming Provisions
Some older leases require a trigger notice to include the new rental value and should tenant not serve a counter notice within a set timeframe, the trigger notice is deemed accepted and that rental value will be final
According to ‘The Handbook of Rent Review’ what is the Hierarchy of Evidence ?
Evidence deemed the most reliable when determining value.
1. Open Market Lettings
2. Lease Renewals
3. Rent Reviews
4. Independent Expert Determinations
5. Arbitrator Awards
6. Court Determinations
7. Hearsay evidence
8. Sale & Leasebacks
9. Surrenders & Renewals
10. Inter-company arrangements
What is the purpose of ‘Without Prejudice Save as to Cost’ offers ?
To afford a party to a dispute some protection against the high costs of dispute resolution, but they also have a useful secondary function of focusing the attention of disputing parties to achieve an agreement if the tribunal for dispute resolution has the power to award costs.
For disputing Rent reviews what document can be served ?
A Calderbank Offer (stemming from matrimonial case Calderbank v Calderbank 1975)
What must a Calderbank say ?
Without prejudice save as to costs
Calderbank Offer must include …
Without prejudice save as to costs
Clearly set out the terms being offered
A timescales for acceptance (3 weeks / 28 days)
What must a Calderbank offer be ?
It must be a genuine offer to settle
It must be clear
It must be capable of unconditional acceptance
It must be open for a sufficient period
