Landlord & Tenant

Question 1

Sections of 1954 Act

Answer 1

Section 23 Defines a tenancy to which the Act applies

Section 24 Gives Ts security of tenure: L or T can apply to Court to determine the terms of the new tenancy

Section 24A Application to Court for an Interim Rent

Section 25 Ls notice of termination

Section 26 Ts request for a new tenancy

Section 27 Ts notice of termination

Section 28 Agreement for a new tenancy results in existing tenancy losing protection

Section 29 Time-scales for application to Court

Section 30 Seven grounds upon which L may object to a new tenancy

Section 31 Court will dismiss Ts application where L successfully opposes a new tenancy

Section 32 Property to be comprised in the new tenancy

Section 33 Court has power to grant new tenancy for a term not exceeding 15 years

Section 34 Assumptions to be made the and matters to be disregarded in assessing the rent under the new tenancy

Section 35 Other terms of the new tenancy

Section 36 Carrying out the order for the new tenancy

Section 37 Compensation where new tenancy not granted on certain grounds

Section 38 Contracting out of Sections 24 to 28

Section 39 Saving for Compulsory Acquisitions

Section 40 Duty to give information

Section 43 Defines a tenancy to which the Act does not apply

Question 2

Basic difference between lease renewal and rent review? 

Answer 2

Lease renewal is a statutory procedure laid down by the Landlord & Tenant Act 1954 Part II (as amended)

A rent review is a contractual procedure contained within a lease

NOTE: if the lease is contracted out of 1954 Act then there is no statutory procedure 

Question 3

To what tenancies does the 1954 Act apply?  

Answer 3

Section 23 - Tenancies to which the Act applies

➢ Business tenancies - premises must be occupied by T for business purposes (trade, profession or employment)

Question 4

When was the LL&T Act 1954 last amended? 

Answer 4

1st June 2004 

Question 5

Name the tenancies to which the 1954 Act does not apply  

Answer 5

Agricultural holdings

Mining leases

Residential tenancies

Tenancies granted as a condition of employment

Tenancies not exceeding 6 months unless a) there is a provision for extension or b) tenant has been in occupation for more than 12 months.  

Question 6

Tell me about your understanding of the Landlord and Tenant Act 1954

Answer 6

An act that provides business tenancies with security of tenure

Question 7

What is a s25 notice?  

Answer 7

A notice served by the Landlord to the Tenant so that they can terminate lease at its contractual expiry 

Landlord either wishes to oppose a renewal of the lease or set out the terms of a new lease

Question 8

When can a LL serve a s25 notice?  

Answer 8

Between 6-12months month’s prior to

(a) the contractual end of the tenancy (or anytime after this)

(b) the date specified in the notice i.e. if the tenancy has less than 6 months to run, T is holding over under S24, tenancy is on a periodic basis. 

Cannot be earlier than the term date of the lease.

Question 9

What must a LL s25 notice contain?  

Answer 9

If L does not oppose a new tenancy (sometimes referred to as a friendly notice) the Notice must state:

Name and address of landlord and tenant

➢ the property comprised

➢ the rent

➢ the other terms

A health warning would explain to T

➢ that Ls proposals are for the purposes of negotiation

If landlord opposes new tenancy:

The ground(s) under section 30(1) upon which he would opposed the tenants application for a new tenancy

Question 10

What advice would you give a LL in respect of a lease renewal where a property is significantly over rented CLASSIC LEVEL 3

Answer 10

Do nothing - carry on receiving higher rent when holding over but tenant can give 3 months notice and leave, you will then have a void unit and void costs, which will decrease the market value of your investment .well conversely we could serve S.25 notice terminate the tenancy and agree new terms, rent would be lower but you would have a secure tenant, are you willing to take a risk or are you risk adverse and let the client take initiatives  but if it is a good tenant with a good covenant and you could get a 10-15 year lease - this is a good investment

Question 11

When is the best time to serve the s25 notice: 12months or 6months before lease expiry? 

Answer 11

Serving 12 months before means if tenant stays then you have to agree rent far in advance and don’t know what a sensible rent would be for a tenant in 12 months’ time - uncertainty (If markets are improving it would be best to wait) - gives you time to negotiate or max time to relet

6 months, means we are negotiating as close to the renewal date as possible.

However, also a risk that the tenant may not respond for a few months and then confirm they’re leaving on the last day of the term.  

Question 12

Why would a LL give 12 months’ notice when he could give 6 months?

Answer 12

If you could achieve a higher market rent

Question 13

What action should LL take if require possession of a property at end of lease? 

Answer 13

Serve notice under s25 to terminate tenancy and objecting to tenant having new tenancy under one or more of the grounds listed in s30(1)  

Question 14

What can a LL do if cannot get response from T to friendly s25 notice?  

Answer 14

Write to tenant and say unless I hear from you by X time on X date (14 days later is reasonable), my client will be making an application to the court to determine the terms of the new tenancy and will be looking to you to recover costs.

Tenant will unlikely actually end up in Court - good way to get a response! 

Question 15

What advice would you give a T when a LL s25 notice is due to expire in 2 weeks-time and agreement for new lease not yet agreed?  

Answer 15

Request an extension under which an interim rent is agreed

LL does not have to agree to an extension 

If not agreed, T would have to apply to Court for a new tenancy  

Note: If s25 notice expires, then the tenant loses security of tenure - the day after the expiry date, and the LL says these are the terms and if you don’t agree to them then you have to leave 

Question 16

Name grounds under the s30(1) of LL & T Act 1954 under which a LL can obtain possession COMMON QUESTION 

Answer 16

There are 7 grounds a L may oppose the request for a new tenancy in their S25 notice, or in response to Ts S26 request:

T has failed to carry out repairs 

T has persistently delayed paying rent 

T is in substantial breach of some other covenant  

L offers suitable alternative accommodation (LL doesn’t have to own the property, so long as they can secure another space) 

Where the tenancy was created by a sub-tenancy and the building let as a whole would produce a higher rent than from separate lettings 

L intends to demolish or substantially reconstruct the premises and cannot do so without possession 

L intends to occupy the premises for his own purposes (LL must have been LL for minimum of 5 years - S30(2)) 

(last 3 grounds e,f,g are the no-fault grounds) 

Question 17

A lease of a shop property is due to expire in 12 months’ time. You are instructed for the first time by the LL to negotiate a new lease with the T. How would you deal with this instruction? 

Answer 17

In the following order 

Need copy of lease (and other relevant documents)

Conduct conflict of interest checks

Agree terms of engagement - only act for client after that 

Inspect the property to a) measure, b) carry out rental valuation, c) see if there any breaches of tenants covenants (i.e. unauthorised alterations, breach of user, unauthorised sub-let to another tenant, failure to repair) 

Search for comparable evidence

Produce a rental analysis and valuation report

Once agreed serve a section 25 notice not opposing renewal via solicitors

Question 18

In what circumstances is a T entitled to compensation when a LL successfully opposes a new lease under the 1954 Act? COMMON QUESTION  

Answer 18

The last three grounds e,f,g (the no-fault grounds) as the tenant is required to leave through no fault of their own 

And NO OTHER GROUND

You can serve notice on more than one ground if this includes another ground and other than e,f,g and one of the no fault grounds, you will not pay compensation

Question 19

How is T compensation assessed under 1954 Act? 

Answer 19

In the form of a Rateable Value Multiplier

If tenant has been in occupation for 14 years or more, then get RV X 2

If less they get RV X 1

Question 20

Explain the power of the court in ordering a new lease 

Answer 20

If the tenancy has been terminated in accordance with the Act and

➢ an application made by T or L under Section 24(1)

The Court has the power under Section 29(1) to grant a new tenancy, and may determine

S32 = property comprised 

S33 = term (not exceeding 15 years)

S34 = rent  

S35 = other terms  

S24a = interim rent 

Question 21

What do you understand s34 rent to be? 

Answer 21

S34 - The rent the property might reasonably be expected to let at in the open market by a willing lessor, disregarding:

i) Tenants previous occupation

ii) any goodwill

iii) Certain improvements carried out by the tenant

iv) Any licence to sell intoxicating liquor if the licence belongs to a tenant

Improvements are to be disregarded if they were carried out by T other than as a lease obligation, and,

(i) during the old tenancy, or,

(ii) less than 21 years before the application for the new tenancy was made

Question 22

What do you understand interim rent to be?  Section 24A

Answer 22

➢ the interim rent is for the period from the expiry of the Section 25 or 26 Notice and the start of the new lease should such a period exist.

Note: do not have to go to court, can just agree an interim rent between parties 

Question 23

How is the Interim Rent assessed?  –> look

Answer 23

It is the rent under the new tenancy unless L or T show otherwise i.e.

➢ different valuation dates

➢ different terms of old and new tenancy

Question 24

In what circumstances would you recommend a tenant to serve a S26 notice? 

Answer 24

If they wish to remain in occupation and enter a new lease agreement (as holding over doesn’t provide certainty) OR if the property is over-rented

Question 25

Explain when tenant's improvements are disregarded at lease renewal 

Answer 25

Improvements are to be disregarded if they were carried out by T other than as a lease obligation, and, (i) Firstly during the old tenancy, OR, (ii) less than 21 years before the application for the new tenancy was made    Not all alternations are improvements - an improvement must add value  Note: not disregarded if they were lease obligation.    

Question 26

What action should a tenant take if there is 6 months of the lease remaining and they want to vacate at expiry. The LL has not served a s25 notice.  

Answer 26

T is within their right to vacate could serve S.27 or just had keys back on the end of the term. T should give MINIMUM 3 months notice.

Question 27

What are the key elements of a rent review clause? 

Answer 27

The Machinery for effecting the rent review, basis of value, and means of settling disputes  

Question 28

What is a trigger notice? 

Answer 28

A notice that triggers a pre-determined sequence of events  e.g. the first notice (served by LL or T depending on what lease states) to trigger the rent review 

Question 29

What is 'time of the essence' 

Answer 29

If time is of the essence, then the time scales in the lease must be strictly adhered to, failure to exercise the right in time will mean that the right maybe lost.

Question 30

What are the two landmark cases in respect of 'time of the essence' 

Answer 30

Why is time not normally of the essence? Because of CASE LAW - The Burnley and The Cheapside cases - two cases in 1977 (held that time is not the essence of the contract and the essence of the contract is that the rent IS reviewed from that date) United Scientific Holdings Ltd vs Burnley Borough Council (1977) Cheapside Land & Development Co Ltd vs Messels Services Ltd (1977) more recent: → Bello vs Ideal View (2008) → RR not initiated for 13 years. Court said time was not of the essence and the RR could proceed

Question 31

In what circumstances is it likely that time is of the essence?  

Answer 31

➢ the lease says so ➢ the lease makes it clear that time limits are strict (if there are interrelating clauses) ➢ there are deeming provisions* ➢ T serves notice making time of the essence [Barclays Bank v Savile estates 2002]

Question 32

What are deeming provisions? 

Answer 32

Assumption of acceptance Where the lease states:  L to give notice proposing a new rent  T to serve counter notice with counter proposal within stated time  If T fails to serve counter notice in time, T is deemed to have agreed LL rent   LL could be deemed to accept T counter proposal if lease states so  Starmark Enterprises v CPL Distribution [2001] ➢ Ls trigger notice quoted £84,800 ➢ Ts counter notice quoting £52,275 was late Held: Rent £84,800

Question 33

What lease terms affect the rent at review? COMMON QUESTION 

Answer 33

The rent review clause itself - definition of rent, assumptions, disregards. (MOST SIGNIFICANT) The frequency of review (the longer the period between reviews, the higher the rent)   Restrictions on user/alienation, insurance provisions, repairing liability etc (the more flexible a lease is, the higher the rent)  

Question 34

What assumptions are usually made in determining the rent at review? 

Answer 34

Assumption made to make a level playing field between parties and find the real open market value (not Red Book) Willing landlord and willing tenant, Vacant possession  That premises is fit for immediately occupation/use  Assume market rent payable after any rent free period No work carried out by T has reduced rental value  T has complied with terms of existing lease   If premises have been damaged/destroyed, they have been re-instated 

Question 35

What is the hypothetical term?  The term stated in the rent review clause

Answer 35

A hypothetical term would usually say - where the years assumed at rent review is term of years equal to that are the start of the lease - review this more!!!! Rent review clause will either say, 1) term is equal to unexpired term at review, or 2) assumed hypothetical term  "hypothetical lease" – requiring the rent to be valued as a fictional lease - with certain assumptions and disregards. Assume property is vacant and to let on same terms of existing lease, except the rent  

Question 36

Is the hypothetical term more advantages to the landlord tor tenant

Answer 36

A longer term more advantages to the Tenant A shorter term more beneficial to the landlord

Question 37

What matters are usually disregarded? (The usual disregards)

Answer 37

➢ those matters in Section 34 of the Landlord and Tenant Act 1954 should be disregarded (i) Ts previous occupation (ii) any goodwill (iii) certain improvements (iv) any licence to sell intoxicating liquor if it appears that the licence belongs to T

Question 38

Where do the usual disregards originate from? 

Answer 38

They are included in the rent review clauses in many leases   They originate from s34 from LL & T Act 1954 (this act has nothing to do with rent reviews, the words have just been poached!) Rent Reviews only started being put into leases in 1960s (came in after 1954 Act) 

Question 39

How may a rent review be resolved if a LL and T cannot reach agreement? 

Answer 39

Lease should state the matter will be determined by a third party → Arbitrator or independent expert → if can’t agree on third party, President of RICS appoints

Question 40

What are the differences between an independent expert and an arbitrator? COMMON QUESTION 

Answer 40

The arbitrator reaches a decision – which is called an “award” – after hearing evidence from the different parties. The independent expert, too, may receive evidence and listen to arguments, but also has a duty to make his or her own investigations to determine an appropriate rent. An Arbitrator can award costs , whereas an independent expert cannot unless the lease states so Arbitrator / Independent Expert Acts only on evidence and arguments submitted but can draw parties’ attention to matters / Has duty of investigation but may receive evidence from the parties Cannot decide without receiving evidence (can receive evidence from one of the parties only) / Bases decision on own knowledge and investigations. However, may be required under the lease to receive evidence. Procedure regulated by Arbitration Act 1996 / No legislation governing procedure May not delegate any duties / May seek assistance Not liable for negligence / Liable for damages through negligence ➢ Surveyors acting as arbitrators in commercial property rent reviews, 9th Edition, 2013 ➢ Surveyors acting as independent experts in commercial property rent reviews, 9th Edition, 2014

Question 41

What is the purpose of a Calderbank letter/offer? COMMON QUESTION 

Answer 41

An intended means of reaching a settlement before a matter reaches trial (prevents costs from escalating). It is a settlement offer which is marked 'without prejudice save as to costs'

Question 42

What must a Calderbank letter/offer contain? COMMON QUESTION 

Answer 42

An unconditional written offer to settle the rent review   A reasonable proposal regarding costs incurred up to the date of the offer (usual to propose that each party bears their own costs plus 50% of any arbitrator’s fees)  A time within which the other party must accept the offer by (usually 21 days)  A statement that is made 'without prejudice save as to costs'  - Review this more online! (Put simply, this means that if you make a Calderbank offer and it’s not accepted by the other party, it can’t be referred to during the course of the legal proceedings relating to the claim itself, but it can be referred to the court on the question of costs at the end of the proceedings.)

Question 43

How long is Calderbank offer available for acceptance? 

Answer 43

Usually 21 days  

Question 44

What is the difference between a lease and a licence? 

Answer 44

A lease is a contractual arrangement where a tenant agrees to pay rent to a landlord for exclusive occupation of a property for a fixed or periodic term. Unlike a lease, a licence does not grant the tenant ‘exclusive possession’ of the property. A licence is merely a right to use the property.

Question 45

What is the leading case in the matter of lease or licence? 

Answer 45

Street and Mountford [1985] ➢ a licence to occupy a furnished room in a house ➢ the agreement conferred exclusive possession at a rent ➢ the owner provided neither attendance nor services ➢ the House of Lords ruled that this agreement constituted a lease as the women had exclusive possession and building owner provided neither attendance nor services - therefore was not a licence, the women had a key and exclusive possession

Question 46

Examples of when you could grant a licence? 

Answer 46

Car Parking, Pavement licence (to let people drink outside pubs- these are granted by the council), Seating licence outside restaurants  

Question 47

You are managing a property that is going to be redeveloped soon. What letting options do you have to generate some rental income without giving the tenant security of tenure under the 1954 Act?  

Answer 47

Short term - LTA 1954 does not apply to leases under 6 months - so could grant a lease less than six months Long term - if want more than 12 months then can exclude s24-s28 as long as the lease is more than 1 year 

Question 48

A tenant has entered into a full repairing and insuring lease of a property in disrepair. The LL requires T to remedy this disrepair. What advice would you give T? 

Answer 48

Tenant must put in repair if agreed to keep in repair in the lease

Question 49

What advice would you give to a tenant wanting to take a full repairing and insuring lease of a property in disrepair but suiting his business? 

Answer 49

→ Reflect the expense of repair in the rent → Agree a specific state of repair e.g. good, habitable, tenantable → Agree a specification of works (ideal)

Question 50

What action can a LL take when a tenant is in breach of repairing covenant? 

Answer 50

L give notice under Section 146 of the Law of Property Act 1925 ➢ specifying the breach ➢ requiring T to remedy the breach (if it is capable of remedy) Sue and damages are limited by S18 of 1927 Act   (Forfeiture with damages is what you would say) If the lease permits, then LL could enter premises and repair, and re-charge the tenant   Forfeiture, damages, exercise the right of entry to repair  If the lease is silent on whether a LL can come in and carry out repairs, then LL cannot do it (T gets exclusive right of possession)   Most leases do contain provision that says LL can enter if they give notice 

Question 51

What action can a tenant take when a LL is in breach of repairing covenant  

Answer 51

Tenant can request LL carries out repairs  Can get injunction from court compelling LL to carry out repairs  If T is refused an injunction ➢ he may seek a declaration from the Court that L is in breach and ➢ that T is entitled to carry out the works and recover the cost by withholding rent If a T carries out repairs without giving L notice that it is his responsibility ➢ in law, T has no right to recover costs If T gives L notice and L fails to do the work Lee-Parker v Izzet [1971] ➢ cost can be recovered by a reduced rent payment

Question 52

What does the Jervis v Harris case mean? 

Answer 52

Exercise Right of Entry to Repair Many leases have this provision Jervis v Harris [1996] Allows the landlord to reclaim the cost of the works from the tenant as debt rather than damages → Not subject to Leasehold Property Repairs Act 1938 → usually requires court permission to seek damages → Not subject to Section 18(1) of LTA 1927 → this is used to cap landlords damages claim to loss in value

Question 53

How are damages assessed when a tenant is in breach of repairing covenant?  

Answer 53

Landlord and Tenant Act 1927 Section 18(1) →Damages limited to the loss in value to Landlords interest caused by the Tenants breach 

Question 54

How are damages assessed when a LL is in breach of repairing covenant? 

Answer 54

Difference in value in repair and out of repair   i.e. roof is leaking, and T can't use half the premises - T wants half rent, half rates, half s/c etc.   i.e. if can't use 1/4 of the premises, then want 25% discount  

Question 55

Explain the provisions of S18(1) of the LL & T Act 1927 

Answer 55

Statutory cap on damages → Damages for breach by the Tenant of its repairing cov enants cannot be more than the reduction in value of the landlords reversionary interest → No damages are payable if the Landlord is going to make structural alterations which would render the repairs valueless

Question 56

Explain difference between Schedule of Condition and Schedule of Dilapidations  

Answer 56

Schedule of Condition is a statement describing physical state of building, usually prepared by T surveyor to limit repairing liability (needs to be agreed with LL surveyor).   Schedule of Dilapidations is a record of alleged breaches of repairing covenant, usually prepared by L surveyor 

Question 57

Explain difference between interim and terminal schedule of dilapidations:  

Answer 57

Interim is served when there are more than 3 years left to run Terminal/Final is served in the last three years of the term 

Question 58

What is a Scott Schedule? 

Answer 58

Used if the matter is going to court - Schedule of Dilaps is turned into a Scott Schedule as this is the recommended form (recommended by RICS) of which a Schedule of Dilaps should be presented in court.

Question 59

What is the difference between an alteration and an improvement?  

Answer 59

Alteration makes physical changes to the property An improvement is an alteration that adds value  

Question 60

Your tenant client wishes to extend an industrial property. Explain the factors that need to be considered and the action that needs to be taken 

Answer 60

Review lease and check wording → shall not make any alterations, additions or improvements to the demised premises → without prior written consent? → is consent required to comply with lease? Also consider: unexpired term of lease and rent review clause wording- need to see whether improvements are to be disregarded  If rent review is silent (e.g. just says will be reviewed to market rent) then T would have to pay rent on their improvements  

Question 61

You are managing a property for your LL client and have received a request from a T to carry out improvements. The T has requested that improvements are registered under the 1927 Act. What advice would you give the LL? 

Answer 61

For improvements to qualify for compensation the procedure in the 1927 Act must be followed: → Tenant must serve notice on Landlord before works start, with details and plans → Landlord has 3 months to object or offer to do works himself in return for a reasonable increase in rent → If Landlord does not object or offer to do the works himself, Tenant can proceed and must complete the works within an agreed period If rejecting, can only reject if works do not add value, diminish value, or unreasonable/unsuitable

Question 62

How is compensation for tenant's improvements calculated?  

Answer 62

It is the lower of the addition in value, or the cost of doing the repairs less the cost of any disrepair (e.g. lower of value or cost)  If improvements are registered under 1927 act, the T gets compensation when they leave REGARDLESS of the reason that they leave for  

Question 63

What lease terms are implied under s19 of the LL & T Act 1927?  

Answer 63

The Landlord and Tenant Act 1927 Section 19(2) provides that where Ls consent can be given ➢ it is implied that such consent shall not be unreasonably withheld 1927 Act relates to alterations, improvements, assignments and sub-letting 

Question 64

 Explain the legislation that needs to be considered in an assignment of a lease  

Answer 64

Section 19(1)(a) of the Landlord and Tenant Act 1927 implies that where consent can be given by L ➢ such consent cannot be unreasonably withheld Landlord and Tenant Act 1988 where consent can be given by L ➢ Ls consent must be given within a reasonable time LL&T Covenants Act 1995 - Section 16 entitles L to require an assignor to guarantee the performance of the covenants by the assignee T ➢ called 'Authorised Guarantee Agreements" (AGA's)

Question 65

In what circumstances could no restrictions on assignment and subletting be appropriate? 

Answer 65

If expressly stated in the lease Proposed tenant is of higher covenant strength and same user clause that doesn’t diminish value of interest

Question 66

What are reasonable grounds for refusing consent to assign? 

Answer 66

The character of the proposed assignee (e.g. poor tenant covenant strength)  The  effect on rental or capital values (weaker covenant strength would reduce rental value)  

Question 67

What is the usual amount of an assignee's business profit that a LL will look for before giving consent to assign? 

Answer 67

Profits test - Ts profit to exceed 3x the annual rent and other payments due under the lease

Question 68

What do you understand by the expression 'authorised guarantee agreement' (AGA) 

Answer 68

Agreement that places obligation on outgoing tenant to guarantee performance of covenants   Comes from LL & T covenants act 1995 section 16, and came into effect 1 Jan 1996 (if lease starts before this date, the AGA does not apply)  Assignor guarantees performance of assignee (as per s16)  Act releases assignor on lease expiry or on further assignment   

Question 69

In what circumstances is it appropriate to have restrictive user clauses in leases? 

Answer 69

➢ protect the value of the investment ➢ protect the value of other premises in their ownership If LL has lots of retail units, they won't want competition so would use a user clause so there can't be more than one/two of each type of shop e.g. one Chinese take away and one Indian take away (provides a balanced mix) If there's too much competition, someone will go bust and LL will be left with a vacant unit. Provides a balanced tenant mix  

Question 70

How would you adjust for a restrictive user clause?

Answer 70

Reduction in rent (depend on state of the market - could look to comparables)

Question 71

What do you understand a conditional break clause to be? 

Answer 71

T can only break the lease if pre-conditions are met   If not satisfied the break notice will not be valid. 

Question 72

What conditions are usually attached to break clauses? 

Answer 72

Usually having to serve written break notice (frequently 6 months notice required) Typical pre-conditions attached to a break clause include: The tenant must have paid all of the rent(s) due under the lease. Compliance with tenant's covenants - repair and redecoration Vacant possession 

Question 73

Give 2 examples of situations where it was held in court that a break notice was invalid/ineffective? 

Answer 73

Osborne Assets Ltd vs Britannia Life Ltd Case   T was due to have painted x3 coats of paint every 5 years   Invoices showed only x2 coats of paint   Held: Break ineffective Riverside Park vs NHS Property Services  Break conditional on 'vacant possession'  T did not remove demountable office partitions   Held: Break ineffective

Question 74

What factors affect value in a lease? 

Answer 74

Rent, term, other terms, whether it is inside the Act, repairing clause (if tenant does not have to repair, it is more cost for the LL so rent goes up)  

Question 75

What is it called when tenant is not responsible for repairs? 

Answer 75

Internal Repairing and Insuring  

Question 76

How does Rent Review impact value? 

Answer 76

Lots of Rent Reviews are more valuable to Landlord, as could review rent regularly  

Question 77

Are Rent Review or RPI more valuable in this market?

Answer 77

RPI for retail as retail isn't doing that well at the moment  

Question 78

What are the various methods of dispute resolution? 

Answer 78

Mediation, Litigation, PACT, expert determination, negotiation, arbitration

Question 79

What does PACT do?

Answer 79

It is cheaper, less time consuming, run by a property professional rather than a judge  If ran by a mediator, they help parties make a decision  

Question 80

What does 1954 Act do? 

Answer 80

It provides security of tenure to the tenant   Means tenant has rights to remain in property at termination 

Question 81

What does LL & T (Covenants) Act 1995 do? 

Answer 81

Provides Authorised Guarantee Agreements, and abolished Privity of Contract   AGA only used for assignments, not sub-lettings  

Question 82

What is the main section of the LL & T Act 1988? 

Answer 82

Consent has to be given within reasonable timeframe  

Question 83

What does Law of Property Act state? 

Answer 83

S146 - forfeiture  

Question 84

Procedure for carrying out rent review: 

Answer 84

Receive client instruction  Check competent and conflict of interest   Agree fee/terms of engagement Request information pack - lease, other legal documents, LTA's Check rent review clause   Inspect and measure the property

Question 85

If Landlord client notes lease is coming to end, what would you recommend?  

Answer 85

Ask Landlord, when does the lease come to an end?  Ask Landlord, do they want tenant to remain in occupation?   Advise they serve Friendly S25 notice  Would go to site, measure, inspect, get comparable evidence etc   Advise client that there is an uplift  

Question 86

Why can Court only grant lease of up to 15 years? 

Answer 86

Typical term for hypothetical lease as it falls in line with standard 5 yearly upward only rent reviews  

Question 87

Give Case Law example when it comes to Court deciding new lease at renewal?

Answer 87

O'May vs City of London Real Property Co Ltd (1983) - held that the court should not generally use its discretion to change lease terms: the new lease should be the same as the old lease. If a party wanted to change any terms, they must show that it is fair and reasonable.

Question 88

What if Landlord does not want to give Tenant new lease?    

Answer 88

Serve S25 Notice  Include Ground(s) of opposition from S30 

Question 89

What are owner-occupation rules? 

Answer 89

Must have been LL for 5+ years (competent landlord) 

Question 90

How long does LL have to respond to S26 request? 

Answer 90

2 months 

Question 91

If you have been doing lease renewal for some time, and gone beyond contractual lease expiry date, how do you protect client position? 

Answer 91

Call for Interim Rent - S24A 

Question 92

What are the implied Landlord covenants under a lease?

Answer 92

Quiet enjoyment for the Tenant

Question 93

What is a modern form lease?

Answer 93

A lease that reflects new legislation e.g EPCs needed for marketing so Landlord has ability to gain access to carry out EPC

Question 94

What is an old lease?

Answer 94

A lease pre 1st January 1996 with privity of contract → Landlord and Tenant Covenant Act 1995

Question 95

Are Heads of Terms legally binding?

Answer 95

→ If you put subject to contract, then no → Not legally bound unless engrossed (signed by both parties)

Question 96

Rent review types?

Answer 96

Usually upwards only: - Market rent (open market) - RPI - CPI - Stepped / fixed increase - Turnover rent

Question 97

When you conduct a rent review, what documents do you want to see?

Answer 97

→ Existing lease and any plans → Any Licence for Alterations, improvements, subletting or assignment → Any deeds of variation → Contact details for tenant → Copy of the property file for any relevant background information which could assist your negotiation

Question 98

What options are there at lease expiry?

Answer 98

Qualified tenancy continues under S.24 after expiry until terminated under the Act → same terms / holding over On lease expiry: → Tenant vacates by expiry → Landlord serves S.25 hostile and they lease by expiry (6-12 months prior) → Tenant stays after expiry and serves S.27 (3 month notice of leaving) → Tenant serves S.26 to start new lease negotiations

Question 99

What is a Tenancy at Will?

Answer 99

Grants temporary occupation of business premises

Question 100

What is the Land Registration Act 2022?

Answer 100

→ Formal documents to be executed electronically → Leases over 7 years must be registered with land registry

Question 101

Can a tenant lose their 1954 Act rights?

Answer 101

If no new lease terms have been agreed by the lease end date, or tenant hasn’t applied to court to agree terms or extension, they can lose their rights.

Question 102

What is the process for contracting out of S.24-28 of the 1954 Act?

Answer 102

Regulatory reform order 2003 simplified the process so that it rarely requires a court influence → Landlord serves health warning stating consequences of contracting out → Simple declaration if Tenant waits 14+ days → Statutory declaration if less than 14 days

Question 103

Can a Landlord serve a S.25 notice after Tenant has served S.26 notice?

Answer 103

No, they are mutually exclusive

Question 104

Where might S.25 notices go wrong?

Answer 104

Wrong name not signed not dated

Question 105

What if the Tenant objects to the terms in the notice?

Answer 105

Serve counter notice → negotiate / through court What if the tenant wants to renew but it gets to date of new tenancy and terms have not been agreed? → Extend time if agreed by both parties → Application made to court

Question 106

Who is the competent landlord?

Answer 106

A 'competent landlord' is a landlord that has at least 14 months unexpired interest in the property so is in a position to grant or oppose renewal of occupational tenancy

Question 107

If acting for an external Client, how would you have acted differently for a lease renewal?

Answer 107

Conflicts of Interest Check Served formal Terms of Engagement, agreeing fees etc

Question 108

If tenant has contracted in lease but you find out they aren’t in occupation for business purposes, what do you do?

Answer 108

They have no security of tenure, so no renewal rights

Question 109

What type of break clauses are there?

Answer 109

Tenant only Landlord only Mutual Rolling Fixed Linked to other clauses

Question 110

What is administration?

Answer 110

Administration occurs when a business can no longer meet its debt obligations. A licensed insolvency practitioner is appointed to either restructure the business and come to an arrangement with creditors or to sell off assets, pay off creditors and liquidate the business.

Question 111

What is pre-pack administration?

Answer 111

Allows the directors of a company to buy out and retain elements of the business which are trading well and placing the remainder in administration

Question 112

What is Company Voluntary Arrangement?

Answer 112

Contract between company and its creditors for when a company is insolvent but the directors believe it has a viable future → Creates an agreement to pay back debt over period of time → Insolvency practitioner oversees implementation strategy → Must be approved by at least 75% of creditors in terms of value of debt

Question 113

What is liquidation?

Answer 113

Company is brought to an end. The process of selling off assets and using the proceeds to pay off creditors and shareholders.

Question 114

What is bankruptcy?

Answer 114

Court procedure for an individual

Question 115

Tell me about a key lease clause you are aware of?

Answer 115

Break clause Service charge / rent Covenants to repair and maintain Rent Review Assignment / Alienation

Question 116

What is Alienation?

Answer 116

'Alienation' is the right granted in a lease for a tenant to assign, sublet, or share occupation of their property. 

Question 117

Tell me about your understanding of the Code for Leasing Business Premises?

Answer 117

Code for leasing business premises 2020 - professional statement Objective is to improve the quality and fairness in negotiating lease terms Promote the issue of comprehensive HOTs making legal drafting process more efficient

Question 118

What is the Regulatory Reform (Business Tenancies) (England & Wales) order 2003?

Answer 118

Amends part 2 of the Landlord and Tenant Act 1954 and alters the procedures for renewal and termination of business tenancies also introduced new procedures for contracting out of sections 24-28

Question 119

How much does it cost to submit an RICS Dispute resolution service application?

Answer 119

£425+VAT

Question 120

What does without prejudice mean?

Answer 120

Offers / words cannot be used against them in court if negotiations fail

Question 121

What is a turnover rent?

Answer 121

Tenants rent is determined in part, or entirely, by the actual turnover generated by the tenants business operating out of the premises

Question 122

Talk me through your understanding of the RICS guidance on dilapidations?

Answer 122

RICS Dilapidations in England and Wales, 7th Edition, 2016 -> Guidance note Provides practical guidance to RICS members when instructed in connection with dilapidation matters

Question 123

What is the dilapidations protocol?

Answer 123

Pre-action protocol for claims for damages in relation to the physical state of commercial property at the termination of a tenancy (applicable to terminal dilapidation disputes)

Question 124

What timings apply to a dilapidations claim?

Answer 124

Schedule of Dilapidations served any time -> response expected within reasonable time or 56 days 12 year limit on bringing a dilapidations claim

Question 125

What is diminution valuations?

Answer 125

A valuation prepared in order to calculate the diminution in value of a Landlords property incurred as a result of alleged breaches -> document is usually prepared by a specialist valuation surveyor

Question 126

What would you find in a Schedule of Dilapidations?

Answer 126

relevant lease / tenancy obligations Alleged breach of those obligations Remedial works that have been completed or are proposed to rectify breach The estimated or actual cost incurred in rectifying those breaches

Question 127

What remedies exist for dilapidations during the lease term?

Answer 127

Damages Forfeiture Specific performance Entry to carry out works

Question 128

What is supersession?

Answer 128

Undefined legal concept -> Landlord should not claim for remedy of a tenants breach if they are proposing to do something else to the building which would supersede the need for the tenant to remedy the breach

Question 129

How can you settle a dilapidations dispute?

Answer 129

Ideal: negotiation (settled privately) Through ADR: - Independent expert determination - Mediation - Arbitration - Early neutral evaluation

Question 130

What is an offer to settle?

Answer 130

Part 36 offer Civil Procedure Rules (CPR) Unconditional, genuine offer to settle

Question 131

Tell me about an instance when you have reflected market conditions on rental value?

Answer 131

-> Open market review and therefore my Market Rent ascertained reflected market conditions through comparable evidence analysed