Landlord & Tenant Flashcards
Level 3
Where is the hierarchy of evidence listed for Rent Reviews?
The Handbook of Rent Review, Reynolds & Bernstein
What is the hierarchy of evidence listed according to the Handbook of Rent Review?
1) Open Market Lettings
2) Rent Review & Lease Renewals
3) Independent Expert Determinations
4) Arbitrator Determinations
5) Court determinations under Landlord & Tenant Act 1954
6) Hearsay evidence
7) Sale & leasebacks
8) Surrender & Renewals
9) Inter-company arrangements
Name the usual assumptions in a Rent Review clause?
1) Property available to let in open market by willing tenant and a willing landlord for a term of years as stated (the notional or hypothetical term)
2) Property is fit and available for immediate occupation and use
3) All covenants observed by landlord and tenant
4) Property may be used for purpose set out in lease
5) Vacant Posession
Name the usual disregards in a Rent Review Clause?
1) Any effect of GOODWILL on tenant’s occupation
2) Ignore goodwill attached to the property
3) Tenant’s improvements if landlord consent has been granted for the works
What is a Calderbank Letter?
A Calderbank offer is a letter, expressed as ‘without prejudice save as to costs’, which contains an offer to the other party in the review inviting to settle without taking the arbitration further.
The letter ust set out all terms to settle the dispute, principally rent and costs. It should also contain time limit within which the other party may accept the offer.
Calderbank offers are binding offers to settle. You should ensure you have the appropriate authorisations and/or consents from your client and any other appropriate parties before such offers are made.
What is an alternate aim of a Claderbank offer?
Aims to influence costs as the losing party will have to pay the other side’s recoverable costs. Essentially, it can avoid the equal awarding of costs
What is the usual timeframe for the other party to accept the Calderbank offer?
21 days
What are the two third party options to determine a Rent Review?
Independent Expert & Arbitrator
How would the surveyor know to appoint an arbitrator or an Indpendent Expert?
Reviewing the Rent Review provisions in the Lease
What are some of the key features if a Independent Expert is to be appointed?
- Detailed knowledge of the market as a valuer
- Appointed by the President of the RICS by Dispute Resolution Service
- Can make own investigations and have own opinion as to the market rent
- Bound by terms of the Lease
- Cannot appeal but can be sued for negligence
- Can involve hearing or dealt with by written reprentations
- Good when lack of market comparables and needs to be up-to-date
- Orders costs as set out in the lease but only has power of their own costs
What is the RICS document on Independent Expert
RICS Guidance Note on Independent Expert Determination, 2016
What are some of the key features if a Arbitrator is to be appointed?
- Appointed by RICS president by Dispute Resolution Service and be a member of the Chartered Institure of Arbitrators
- Format decided by arbitrator to include an agreed statement of facts & timetable for submission
- Statement of agreed facts is summary of points agreed between both parties
- Decides how to hear he case and order costs
- Can only use evidence submitted by the parties - evidence of fact, hearsay and/or from an expert witness
- Immunity from negligance and can order disclosure
- Appeal to High Court within 28 days of award on three specific grounds: a challenge to the tribunal’s jurisdiction, on a point of law or Serious irregularity
What is the document on Arbitration?
UK Legislation - Arbitration Act 1996
What are the comparisions between Arbitrator and Indpeendent Expert?
EVIDENCE - Arb acts on the evidence provided and arguments should be submiited. IE has a duty to investigate and discover all the facts and does not rely on evidence submitted. IE can use their own knowledge and expertise to reach decision
APPEAL - Arb there is limited rights of appeal to the High Court on a point of law, serious irregularity or omission or the jurisdiction of the Arbitrator. IE there is no right of appeal.
NEGLIGENCE - Arb is not liable to negligance and cannot be sued. IE can be liable for damages because of negligance by being sued.
DISCLOSURE - Arb has powers of disclosure. IE has no powers
LAW - Arb acts within a formal statutory framework in accordance with the Arbitration Act 1996. IE has no legislation so acts on informal procedural timetable.
OUTCOME - Arb outcome is called Aware. IE outcome called Determination
COSTS - Arb has power of all costs (e.g. parties surveyors, experts and legal advisors). IE has power of their own costs.
RICS Guidance Note - Arb. RICS Guidance Note Surveyors acting as arbitrators in commercial property rent reviews, 2013. IE, RICS Guidance Note - Independent Expert determination, 2016.
Key details of Expert Witness?
1) The expert evidence provided by a chartered surveyor must be, and must be seen to be, impartial and objective
2) The duty of the surveyor is to the court and this will override any obligations to the client
3) The evidence must be independent work of the surveyor
4) The surveyor must also believe that the facts upon which they rely are complete and true and their opinions are correct
What is the RICS document on Expert Witnesses?
RICS Practice Statement and Guidance Note - Surveyors Acting as Expert Witnesses (4th edition) 2014
How is an agreed Rent Review doucmented and what information must be included?
Rent Review Memorandum
Name of landlord & tenant
Address of the property
Date of the lease and rent review
Confirmation of new rent agreed
Signed and dated by both parties
What is the name of the ‘Act’
the Landlord and Tenant Act 1954
What elements must be stated in Section 23 ‘Application of the Act’ to be protect by the Act?
- It is a tenancy
- The premises must be used for a business
- There must be occupation of at least part of the premises by the tenant
- There must be occupancy of more than 6 months
- It must not be exempted or excluded tenancy (such as a tenancy at will)
- There must be a competent Landlord
What is Section 24 of the Act?
Grants business tenants a security of tenure, meaning they have the right to remian in occupation of the premises after the lease term expires. Can only be brought to an end when one party serves notice in accordance with the provisions of the Act.
‘Holding Over’
What is a Section 25 Notice and when can it be served?
Landlord’s notice served with a date of not more than 12 months and not less than 6 months before the date for the termination of the tenancy.
Name some of the factors which must be mat for the Section 25 notice to be valid?
- Be given by a competent Landlord and given to the tenant
- Relate to the whole property comprised in the tenancy
- State the date for termination of the tenancy
- Be in prescribed form and inform the tenant of their rights
- Where the landlord is prepared to grant a new lease (a non-hostile notice), the proposed terms of the new lease must be stated to include the new rent
- Where the landlord opposes a new lease (hostile notice) the grounds for opposition (Section 30) must be stated
- If a Landlord does not object to a new lease they must set out the proposed terms including new rent
- Parties can extend time limits by agreement
- If the expiry date passes, the tenant will lose security of tenure unless:
1) There is a new lease in place
2) Either party has applied to court
3) The parties have agreed in writing to an extension of their statutory period
Name some of the contents which must be included in a Section 25 Notice?
- Name and address of the landlord and tenant
- Address of the property
- Notice of the date to end the tenancy (hostile or ‘friendly’ notice)
- Confirmation whether a new lease is to be opposed or granted
- Confirmation of the date of response required
- Landlord’s proposals for a new tenancy to include the proposed rent if non-hostile notice served
- If the landlord opposes the new tenancy (a hostile notice) the ground(s) for opposition must be stated (Section 30)
- A strong recommendation to seek professional advice.
What is a Section 26?
Tenant can service notice requesting a new tenancy beginning with a date not more than 12 months and not less than 6 months after the making of a request.
Must be in prescribed form, must state the tenant’s proposals for a new lease to include the proposed rent and if the landlord oppses this, a counter notice is to be served within 2 months.
