Landlord & Tenant Flashcards
What is the relevant legislation around Landlord and Tenant
Landlord and Tenant Act 1954
Describe the Landlord and Tenant Ac 1954
gives commercial tenants security of tenure,
meaning they have the right to renew their lease unless the landlord can oppose it on specific grounds
What is the difference between a lease and a licence?
3 main differences
1) a lease provides an occupier with an estate in the relevant land - a licence is a permission to make it lawful for them to use the land
2) A lease can be assigned - a licence is normally a personal right that cannot be assigned
3) A lease cannot be terminated until it expires (or a break clause) - a licence can usually be revoked at any time.
Please tell me the main clauses a lease that contribute towards value? (in order)
- Tenant details / covenant details
- Term
- Rent
- Break clause
- Rent review
- Repairing
- Alienation
- Protected by L&T act
What are the Mechanisms to exclude the act.
- Statutory declaration
- Simple declaration
What does insidethe act mean? How does this impact value?
The tenant has a legal right to renew the lease under the Landlord and Tenant Act 1954, providing security of tenure. This reduces landlord flexibility.
What does outside the act mean? How does this impact value?
The tenant has no automatic right to renew, giving the landlord full control over future occupation. This can lead to higher landlord flexibility but may make the lease less attractive to tenants.
Adverse Possession
Process by which a person, who is not the legal owner of the land, can become the legal owner through possession of the land for a specified period of time, without the owner’s permission.
If land is registered, 10 years.
If land is not registered, 12 years.
Most important parts of the L&T Act?
Section 24 - 27
& 38A
What is Section 24 of the Landlord and Tenant Act 1954?
Security of tenure provision and continuation of tenancy - Holding over under the Act
A fixed tenancy will not come to an end if the tenant remains in occupation for business purposes, it will automatically continue on the same terms until it is terminated in accordance with the Act.
What is Section 25 of the Landlord and Tenant Act 1954?
Landlord’s notice to end the lease or seek a new lease - no more than 11 months and no less than 6 months before the date of termination.
Must include:
- Name and address
- Notice of date to end tenancy
- confirmation if a new lease is to be opposed or granted
What is Section 26 of the Landlord and Tenant Act 1954?
Tenant’s notice to seek a new lease - If landlord opposes this, a counter notice mst be served within 2 months
What is Section 27 of the Landlord and Tenant Act 1954?
**Tenants* notice to end the lease - 2 ways
1) Tenant can simply vacate by contractural expiry
2) Serve a Section 27 notice on the landlord giving them 3 months Notice
Note - the tenant has no obligation to the landlord that they intent to vacate - there is no requirement to serve a S27 notice.
What is Section 28 of the Landlord and Tenant Act 1954?
Renewal of Tenancy by agreement -
What is Section 38a of the Landlord and Tenant Act 1954?
Contracting outside the Act
What are the grounds for refusal of a new lease?
Section 30 sets out the ground for refusal of a new lease
- breach of repairing covenant
- persistent delay in paying rent
- Provide suitable alternative accomodation
- Demolition or reconstruction
How do you grant a lease outside the Act?
What are the various ways to terminate a lease?
- Forfeiture
- Surrender and negotiation
- Break clause
- Lease expiry and service of notices under the L&T Act.
- Merger
- Disclaimer (due to insolvency)
What is a rent review?
A rent review is a clause in a lease that allows the rent to be adjusted at set intervals
What are common methods of a rent review?
1) Open market rent review
2) Indexation (RPI or CPI with caps & collars)
3) Turnover rent
4) Stepped increases
What does RPI or CPI with caps & collars mean?
Retail Price Index - a measure of inflation based on goods and services over time. Housing costs (e.g. mortgage interest) included
excluded.
Consumer Price Index - a measure of inflation based on goods and services over time. Housing costs (e.g. mortgage interest) included
excluded.
What are the four usual assumptions for a rent review?
Property available to let on open market by willing tenant to a wiling landlord
Property is fit and available for immediat eoccupation and use
All covenants observed by landlord and tenant
Property may be used for purpose set out in the lease
What are the three usual disregards for a rent review?
Tenant improvements
Goodwill attached to the property
Goodwil on tenant’s occupation
What is alienation?
Tenant’s ability to transfer their leasehold interest, which includes assigning the lease, subletting the premises, or sharing occupation.
Always read the lease!
What are dilapidations?
Negotiations that take place at the lease expiry to bring the property back to its original contition at the start of the tenancy.
Always read the lease!
What is a service charge?
Charges to tenants of multi-tenanted properties or costs incurred by a landlord to maintain and manage a property.
What are the usual methods of apportionment for service charge?
1) floor area
2) fixed percentages
3) rateable value
4) WEighted floor area
