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APC Commercial Real Estate 2021 - Technical > Landlord & Tenant > Flashcards

Landlord & Tenant Flashcards

1
Q

What are the differences between arbitration and independent expert?

A

An independent expert can use their own knowledge to come to a determination and is not limited to the parties’ submIssions. An arbitrator will act in a quasi - judicial role to arbitrate between the parties and their evidence is based solely on the cases presented. An arbitrator cannot consider external evidence but only the evidence presented, whereas an IE can.IE = determinationA = awardIE = expert is guided by the lease for costsA = has discretion on costs An independent expert can be sued for professional negligence when decision making however arbitrators are effectively immune as they are arbitrating between a range out by the parties.An independent expert may not require to review written submissions, but only the lease for low value property . An arbitrator will require the two submissions to make a decision.An arbitrator is governed by the Arbitration (Scotland) act 2010 whereas the independent expert is governed by common law.

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2
Q

What are the usual assumptions and disregards for an OMV rent review?

A

Assumptions:1) there is a willing lessor and willing lessee2) premises are vacant3) no premium is payable by any party4) to the length of the term left to run on the lease 5) tenant has fulfilled obligations 6) that the hypothetical let is on the same terms Disregards:1) any effect on rent of the tenant being in occupation2) tenants goodwill3) tenant improvements 4) the effect of any licence

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3
Q

What are the benefits of Mediation?

A

This process is a voluntary and confidential way of settling a dispute.Good for preserving the relationship between the parties.Benefits: speed and cost savings (monetary and emotional)

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4
Q

What is the difference between a lease and a licence?

A

Lease = exclusive possession, fixed duration, legal interest in the land/propertyLicence = permission to occupy and does not grant exclusive possession

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5
Q

What are the statutory obligations under common law for:A: the TenantB: the Landlord

A

Tenant:1) Must take possession, occupy and use the subjects2) use for purposes for which it was let3) take reasonable care of the property4) pay rent when it becomes due5) plenish the subjectsLandlord:1) place tenant in full possession of subject property2) not to derogate from the grant3) to provide subjects that are reasonable fit for the purpose for which they are let4) to carry out repairs

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6
Q

Can you give me an example of case law around Lease/Licence?

A

Street vs Mountford 1985 Exclusive possession was effectively granted which meant that this was not a Licence but a Lease, and appropriate notice was required for termination under lease provision.

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7
Q

Can you give me an example of case law around landlord/tenant statutory obligations?

A

Graham black vs Stevenson Hotel had shut down and the Landlord claimed damages for non-occupation. Maintenance and loss of goodwill whilst it was closed.

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8
Q

What protection is there in Scotland for shops renewing a lease?

A

There is the tenancy of shops Scotland act 1949- this deals for provision for renewing a lease of a shop where LL has served NTQ under the Lease and tenant is unable to renew satisfactory terms

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9
Q

What is the procedure under the tenancy of shops act 1949?

A

Sherrif has the power to renew the lease for another year. There are circumstances where the renewal would not be granted.Case law: Superdrug vs Network RailTime frame for application. In this case the tenant was outwits the 21 day notice period

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10
Q

What is time is of the essence?

A

This is when there is a time limit on the rent review. Always read the lease! The clause must be specific. United holdings vs burugh council case where the lease set out timescales however, time is of the essence was not specifically set out in the lease.

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11
Q

What is the purpose of a rent review?

A

To adjust the rent to reflect changes in the value of money and of property.This was expressed in the Basingstoke and Dean Borough council vs Host group Ltd (1987)

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12
Q

How do you initiate a rent review?

A

Always read the lease Some leases require rent reviews to be triggered by one party giving notice to the otherSome leases simply provide for rent to be reviewed at review dateTrigger notices should not be marked ‘STC or WP’ since this might allow the tenant to argue the notice was not legally effective

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13
Q

Why is STC and WP used?

A

To reserve the legal position of the party using the phrase

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14
Q

What are the key contents of a rent review clause?

A

Basis of valuationAssumptions and disregards Time limited/Trigger notice requirement/ how this is initiated

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15
Q

Can you talk about the process for debt recovery in your example at 3 Osborne st?

A

1) Read lease and Identify non-payment of rent quickly and try to resolve with tenant (could be that they missed an invoice?)2) try to arrange a meeting to discuss, if there were cash flow issues perhaps advise of an informal payment plan3) no contact - send formal demand requiring rent to be paid by (14 days) or seek termination of lease/legal recovery4) if no payment, serve another 7 day demand and the consider legal proceedings 5) in this case, pre irritably was served, which also allowed remedy for the tenant. There was continued non payment of rent therefor irritably was served with immediate effect. In this case vacant possession was given as the tenant vacated the property. Statutory demand was attempted to be served by sheriff officers which required 21 day payment in full. In this case the company was in liquidation and guaruntor was being pursued for payment, sheriff officers could not confirm that the notice was being served to correct address and neighbours weren’t particularly forthcoming. Continued expense would have brought the claim down to about 5,200. My clients policy is to write this off as the cost of further legal action makes this not economical.In this case we would have had to obtain a decree because the lease wasn’t registered, and I would have sought legal advice for financially effective option.

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16
Q

What is included in the pre-irritancy notice?

A

Must comply with provisions under Law Reform (Miscellaneous Provisions) (Scotland) Act 1985Clear and concise.Must accurately specify the rental arrears and interest clearly.Must specify time period for payment (minimum of 14 days however RTL)

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17
Q

Why register a lease?

A

Confers a real right in the premises Makes debt recovery proceedings easier - registered under books of council of sessions effectively gives the lease the status of a court decree with respect of rent

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18
Q

Why would you go to mediation rather than arbitration?

A

Gives my client more control over the processReputational benefit should it not go in my clients favourPreserving relationship with a long standing tenantCost and time saving Mediation not legally binding *

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19
Q

What would an alienation clause look like in a lease?

A

The clause could be absolute or qualified.Absolute precludes the tenant from landlords consent.Qualified puts certain restrictions in place and is usually held ‘subject to landlord consent and not to be unreasonably withheld or delayed’.

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20
Q

What are the grounds for refusal under the tenancy of shops act?

A

• Breach of lease• landlord has offered to sell the premises• alternative premises have been offered that are reasonable• tenant notice to quit - landlord has then leased or offered to sell premises and would cause hardship or be seriously prejudiced•hardship•reasonableness

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21
Q

What is a keep open clause

A

A keep open clause effectively obliges a tenant to keep their premises open for trading. They are most commonly found in the retail sector.Safeway case - Scottish position is that keep open clauses are enforceable

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22
Q

What are the different types of rent reviews?

A

Turnover and base rentRPI linkedOpen market and upwards onlyCPI linkedFixed uplifts / stepped

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23
Q

Section 23

A

The criteria to be eligible for security of tenure:- must be used for business purposes- must be a tenancy- must not be a serviced tenancy or TAW- T must occupy at lease part of the property- tenancy must be at least 6 months- must be a competent LL with at least 14 months interest

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24
Q

Section 24

A

Tenant has right to stay in occupation under same terms when contract ends (holding over) until one party serves notice

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25
Section 25
CHECK VALIDITYLL serving notice on T- must be in prescribed form and inform tenant of rights (strongly suggest legal advice)- 6-12 months notice- date of notice termination and required response date- ll and tenant address and property address- parties can extend time limit by agreement (if you are undertaking agreements and pass date for new lease as per s.25/26, tenant loses security of tenure unless new lease in place, one party has applied to court or parties have agreed in writing an extension of statutory period (stay)- maximum term of 15 years can be granted by the CourtFriendly - proposed terms and rentHostile - grounds under section 30 for opposition
26
Section 26
CHECK VALIDITYT notice to renew- prescribed form- proposed terms- 6-12 months notice (LL has 2 months to serve counter notice)
27
Section 27
CHECK VALIDITYT notice of termination- prescribed form- 3 months notice at anytime- if tenant vacates before contracted end, no notice needed (PEARL ASSURANCE VS ESSELTE 1997)
28
Section 30
Grounds for opposition:a. Repair breachb. Rent breachc. Other substantial breachd. Alternate accommodatione. Uneconomicf. Developmentg. Owner occupya-e up to court, f & g mandatoryFor development must prove intention, funnding, planning, substantial work & necessity for vacant possession Re-occupation LL must have owned property for 5 years and prove intention to occupyCASE LAWS:FRANCES V CAVENDISH 2018 - Supreme court, acid testBETTYS CAFES V PHILLIPS 1958 / VIVIENNE WESTWOOD V CONDUIT STREET DEVELOPMENTS 2017- a,b,c count on day of court hearingKELES V PATEL 2009- must actually owner occupy (newsagents, retirement)HUMBER OIL V BAP 2012- change to license due to expensiveness to moveFROZEN VALUE V HERON FOODS 2012- competant LL of 5 continuous years
29
Section 31
Courts right to dismiss renewal
30
Section 32
The property
31
Section 33
Duration Post 1st June 2004 Regulatory Reform for Business Tenancies Order 2003 states maximum 15 year term
32
Section 34
RentAssumptions- Terms - willing LL and T- VP- L&T Covenants 1995Disregards- current occupation- goodwill- improvements unless LL obligation or over 21 years ago- any licenses
33
Section 37
CompensationIf after 1st April 1990 and LL opposes, compensation if no lease breach, and under s.30 e/f/g1 x RV if 14 years or under2 x RV over 14 yearsRV is the RV in force at the date of hostile 25 or counter s26Compensation may be liable for improvements under LTA 1927
34
Section 35
Other termsO'May V City of London 1982- intro of s/c for external/structural would have massive burden, more than reduction in rent4 principles for varying terms:1. LL must have valid reason from estate mgmt grounds2. changes must be capable of being compensated by rent change3. change must not adversely affect T's security of tenure4. must be reasonableConcept of modernisation accepted to reflect current market practice, e.g. AGAs, VAT etcEdwards & Walkden V City of London 2012- Smithfields tenants originally paid S/C and rent but became inclusive rent temporarily during building works- T's wanted inclusive again, court said they should pay s/c
35
Section 24a
Interim rent - LL or T can apply to court to determine rent from end of old tenancy until start of newPost 1st June 2004 LTA 1954 reforms- Once one party has applied, the other cannot (important in failing market)- Earliest date to serve is date of S25/S26- Latest date is 6m after termination of tenancy - Rent assumes annual tenancy and market rent- rent to be paid from end of fixed term until new rent starts- interim rent can be subject to adjustment if market conditions change significantly over interim period- can be decided using PACT proceedings- if no notice served, there is no interim rent
36
Third Party Determinations for Lease Renewals
COUNTY COURT - Following Civil Procedures 1998- Pre-action protocols- Laws for anticipated / on-going court proceedings- Part 36 offer is similar to procedure as a Calderbank offer to induce the other party to settle- Offer only open for 21 days, after this it can be still accepted but it is possible for offer to be withdrawn by party who made itPROFESSIONAL ARBITRATION ON COURT TERMS- Launched by RICS and Law Society 1997- RICS encourages as an alternative dispute resolution service to court- In-court PACT is designed to be used for an unopposed new tenancy where one party has already made an application to the court to fix terms of new tenancy- Out-of-court PACT to be used when no court application has been made by either party, and parties agree to a postponement of such application pending an out-of-court PACT resolution- Normal services of notices must take place and necessary applications to Court made- Court needs to give consent order binding on both parties- Arbitrator nominated by President of RICS or Law SocietyAdvantages: faster, full court hearing avoided, greater flexibility and control, less expensive, decision by surveyor acting as arbitrator rather than judge
37
Section 40
Notice requesting information from either landlord and tenant, so LL/T can check exactly who the competent LL/T is with statutory protection- either party can serve S.40 notice during the last 2 years of tenancy requesting details as to the name and registered address of the other party who has to provide the information within one month (failure to do so can be taken as a breach of statutory duty- not limited to one request, LL could serve another notice just prior to serving S25 notice to check the tenant is still the same occupier
38
Section 44
Competent LL / the person or body who a notice should be served or should serve the noticeMust be a freeholder or superior tenant with unexpired term of over 14 months
39
Section 38A
Contracting outside the ActReasons: LL wants to re-occupy in due course, LL wants to develop at lease end, rent lower, flexibility, requirement of headlease to grant subletting outside of Act- T has no statutory right to stay at end of lease or compensation right- TAW required if new lease is being renegotiated at lease end to ensure tenant cant claim statutory protection- no rent should be collected until new lease completed as this could lead to new protected tenancy- 'health warning' LL serve notice on prospective tenant to warn new tenancy will not be protected, proposed tenant must then make delcaration in response confirming he recieved notice and accepts (simple dec given when parties have over 14 prior to committing to lease, stat dec when parties have less than 14 days and must be made before an independant solicitor)- procedure must be completed before lease can be signed
40
Various ways of lease termination
- forfeiture- surrender- merger- disclaimer (due to insolvency)- break clause- lease expiry- service of notice under LTA 1954- negotation
41
Key Case Law
CHILTERN RAILWAYS V PATEL 2008- Tenant said declaration should have been simple not stat, court said bordering on absurd as stat dec more officialINCLUSIVE TECHNOLOGY V WILLIAMSON 2009- this case is a warning to all LLs that silent when intentions change can amount to misrepresentation - LL served S25 hostile notice under development grounds- LL didnt intend to carry out redevelopment but as a result of changing market conditions, decided not to- LL didnt tell T of change and marketed property to be let- before marketing property the tenant found alternative accommodation at higher rent not knowing existing property was being marketed- the tenant sued the LL for misrepresentation claiming damages amounting to the difference between rent he would pay for new premises and rent he would have had to pay for his existing premises- the court held that the LL should have informed the tenant when he decided not to redevelopSOMERFIELD STORES V SPRING SUTTON COLDFIELD 2009- T could process with application for new tenancy even though LL went into administration- 2010 T attempted to overcome the LL opposition to a new tenancy, Court held that the LL may not be able to prove intention until the date of the full trail, tenant cannot reduce the time available by seeking summary judgement- a tenants right to continue lease renewal proceedings against a LL in administration outweighs the benefit to the LLs bank of delaying proceedings to work up a redevelopment schemeBARCLAYS WEALTH TRUSTEE V ERIMUS HOUSING 2013- t staying in occupation at end of contracted outside the At tenancy - the t wished to vacate but was laible for 13 months rent as it was held that a new periodic tenancy had been created
42
Section 28
Renewal of tenancy by agreement
43
Section 29
Order by Court for a new tenancy
44
Information required from client at commencement of instruction
agreed terms of engagement- understanding of clients strategy and objectives- a copy and existing lease and any plans attached to the lease of deeds of variation- copies of any licences eg alterations improvements, subletting, assignments, deed or variation- copy of any rent review memorandums- contact details for tenant to arrange property inspection/ LL details- confirmation which party is responsible for service of notices- copy of property mgmt file to see if any historic rental evidence on file or relevant background info for negotiations- details of comparable rental evidence held by client
45
Terms of Engagement Protocol
check you are competent, no conflict of interest, include complaints handling procedure detailsFees for RRs/leases renewals can be based on:% of new rent, % of saving made from quoting rent, fixed fee, hourly rate (usually for 3rd party determinations, incentive feeActions- undertake conflict of interest/competency check- agree terms of engagement with client- understand clients objective- check if inside of coutside act- read lease clauses- check if time is of essence for RRs- undertake site inspection and measure property in accordance with RICS Surveying Safely 2018 and RICS Property Measurement 2018- undertake market rent valuation, having regard to lease terms- prepare client report with recommendations- agree strategy with client and who is serving relevant notices (always instruct lawyer for 1954 act renewal notices)- upon receipt of instruction open negoations, once correct notices served (check all notices are valid)- conclude negotiations and document the rent review in rent review memorandum- for lease renewal instruct solicitors to prepare new lease in accordance with heads of terms prepared for new lease
46
Without Prejudice / Subject to Contract
without prejudice means during period of negotiations the opposing party can't rely on these documents/discussions, it is priveledge and cannot be used as evidence against the party sending it- in RRs, corresponsdence cant be shown to arbitrator / independant export to show how negotiations have been conducted- subject to contract means subject to contract lol
47
What is a licence
'passes no interest in the land but only makes lawful what would otherwise be unlawful' - Murdoch 1998- a right to enter a property- a personal arrangement between licensee and licensor- lincensee acquires no interst in the property- it is a personal right which can be terminated by either party
48
Requirements of a lease
1. exclusive occupation2. payment of rent3. duration for a specified term4. if more than 3 years, terms must be in writing, signed and registered as a deed
49
Tenancy at Will
- form of licence created by written agreement for unspecified time in which landlord may evict tenant at any time (no legal interest in land with no renewal right)- used for allowing tenant early entry for fit out works whilst tenant agreeing new contract out of 1954 Act lease after lease expiry
50
Wayleave
temporary right and recieves annual payment (e.g. right for electricity company to install and retain apparatus)- personal to the company and cannot be automatically transferred to new owner- not compulsorily registrable
51
Easement
- permanent right and recieves capital payment- capable for being registered at land registry- allows a right enjoyed by one party over the land of another- a prescriptive right of way or prescriptive easement can be obtained because of continuous and interrupted use being proven over a period of not less than 20 years- permissive right can be granted by landowner to allow access over the land, not public rights of way and public dont have rights to use them, usually signage to confirm it is permissive right of way
52
Adverse Possession
- process in which person who isnt legal owner of land can become legal owner through possession of land for specified period of time without owners permission- if land is registered and squatter has 12 years of possible before Land Registation Act 2003 then claim can be successful, if after 2003 10 years occupation required- if land is not registered 12 year rule applies
53
Basis of rent review valuation
- usually upwards only to market rent - other bases include indexation (often RPI or CPI with caps and collars), turnover rents and stepped increases- time not usually of the essence (united scientific holdings ltd burnley borough council 1977)ASSUMPTIONS1. property available to let on open market by willing L & T2. property fit and available for immediate occupation and use3. all covenants observed by L & T4. property may be used for purpose set out in leaseDISREGARDS1. effect of goodwill on occupation2. ignore goodwill attached to the property3. tenants improvements if landlord consent granted for the worksBRITISH GAS V UNIVERSITIES SUPERANNUATION 1986
54
RRs - the notional term of the lease
The length of term to be valued (the hypothetical term). If silent, assume the residue of the term (Basingstoke and Deane Borough Council v Host Group 1987)CANARY WHARF INVESTMENTS V TELEGRAPH LTD 2003- judge held that where rent review clause is silent on term for rental valuation, it is normally residual term- lease assumes 25 year term with no commencement date so lease ran from rent review data, wording is KEY and decision may differ depending on circumstances of case
55
RRs - Time of the Essence
UNITED SCIENTIFIC HOLDINGS LTD v BURNLEY COROUGH COUNCIL 1977- time not normally of the essenceBELLO V IDEAL VIEW 2008- landlord had not initiated RR in 13 years, court held time not of essence and could proceed
56
RRs - Deeming Provisions
some rent reviews clasues in older leases require landlord to specify the rent in trigger notice- clause will state that if tenant does not serve appropriate counter-notice within a specified time, tenant will have deemed to accept new rent
57
RRs - Post-dated evidence
- courts have held that this is admissible provided it supports circumstances which could have been known about at the effective rent (e.g. it's fine in a flat market but not in rapidly changing market)SEGAMA NV V PENNY LE ROY 1983
58
RRs - Headline RR Clauses
this is when the basis of valuation consider any incentives agreed when analysing a comparable of a letting to arrive at a net effective rent(usually not agreed now)
59
RRs - Hierarchy of Evidence
The relative weight attached to comparable evidence (according to The Handbook of Rent Review, Reynolds and Bernstein)Common weighting is:- open market lettings- rent reviews and lease renewals- independent expert determinations- arbitrator determinations- Court determinations under LTA 1954- Hearsay evidence- Sale and leasebacks- Surrender and renewals- Inter-company arrangements
60
Calderbank Letters
CALDERBANK V CALDERBANK 1975- use of calderbank offer can achieve early resolution of dispute and prevent costs from escalating- letter must be headed 'without prejudice and save as to costs' and not marked 'subject to contract'- tool for influencing costs and negotiations in rent reviews as losing party has to pay other sides recoverable costs- letter must set out all terms to settle dispute and time limit in which other party must accept offer (often 21 days but sometimes reduced provided the period gives party sufficient time to consider offer and respond)- must be genuine offer to settle and not simply used as mechanism to influence costs/pressure the party- arbitrator obliged to make an award for costs- for lease renewals there is a similar mechanism (Part 36 of Civil Procedure Rules 1998), must be made in writing and remain open for acceptance for minimum 21 days
61
RRs - Code for Leasing Business Premises, 2007
4 recommendations for rent reviews:1. review clause should be clear2. healine rent review clauses should not be used3. landlords should on request offer alternatives to proposed option for rent reviews based on risk-adjusted basis. Where landlord is unable to offer alternatives, reason should be given4. leases should allow both L&T to start RR process
62
Third Party Determination for Rent Review
- read the lease to establish method of determination within RR clause- RICS Guidance Note - 'Surveyors acting as arbitrators in commercial property rent reviews' 2013 clarifies how to deal with conflicts and duty of arbitrator- cost of application for 3rd party determination by President of RICS is currently £425- RICS Guidance Note Conflicts of Interest for Members Acting as Dispute Resolvers 2012 gives advice on how to deal with conflicts of interest when acting as arbitrator or independent expert- slect method of determination- options open for third party determinations are agreed before the lease is signed and set out in the lease- if acting for LL, in falling market = arbitrator / rising market = expert
63
Independent expert
RICS Guidance Note on Independent Expert Determination 2016- has detailed knowledge of the market as a valuer- appointed by the President of RICS by Dispute Resolution Service but not bound by judicial rules- can make own investigations and have own opinion as to market rent- bound by terms of lease- no judicial function- no appeal against their decision but can be sued for negligence- can involve a hearing or dealt with by written representations- good when lack of market comparables and need to be up-to-date- no power to order disclosure- orders costs as set out in lease but only has power over their own costsLEVEL PROPERTIES V BALLS BROTHERS 2007- rare example of expert determination of RR not being held as binding, due to incorrect interpretation of RR clause
64
Arbitrator
- 1996 Arbitration Act- Arbitrators can be appointed by RICS President using Dispute Resolution Service and be a member of Chartered Institute of Arbitrators- Format decided by arbitrator to include agreed statement of facts and timetable for submission- statement of agreed facts is summary of points agreed between both parties, eg relating to lease terms, floor areas, comparable evidence- can decide how to hear the case and order costs- will only provide reasoned award unless agreed otherwise with parties- can only use evidence submitted by parties- immunity from negligence and can order disclosure- Section 34 Arbitration Act 1996 arbitrator may order disclosure of documents by parties to arbitration, entitles party to the rent review to obtain details of all other sides rental evidence, when ideally they would prefer to confine submission to the deals that are most faovurable to their case- Arbitration Act 1996 sets out procedures to secure attendance of witnesses or disclosure of third party documentYou can only appeal to High Court within 28 days of award on 3 grounds: a challenge to tribunals jurisdiction, on a point of law, serious irregularity
65
Disclosure (previously known as discovery)
Entitles a party to a rent review to obtain details of other sides rental evidence by ordering disclosure of contents of file at decision of arbitrator- can be used to secure attendance of witnesses or production of documents by 3rd party- Civil Procedure Rules govern disclosure in Court- 'without prejudice' makes a document legally privileged so it is protected against disclosure
66
Comparison: arbitrator and independent expert
EVIDENCEA = acts on evidence provided/arguments submittedIE = duty of investigation to discover all facts, comparables, own knowledgeAPPEALA = limited rights (3 points)IE = no rights (v rarely Court can if misinterpreted)NEGLIGENCEA = not liable, cannot be suedIE = can be laible for damages caused because of negligence by being suedDISCLOSURE POWERSA = YIE = NLAWA = acts within statutory framework in accordance with Arbitration Act 1996IE = no relevent legislation so acts with informal procedural timetableOUTCOMEA = awardIE = determinationCOSTS A = power over all costsIE = power over own costsRICS GUIDANCE NOTEA = Surveyors acting as arbitrators in commercial property rent reviews 2013IE = Independant Expert Determination 2016
67
RR - Advocates
- advocate represents client at hearing- RICS PRactice Statement Surveyors Acting as Advocates 2008- applies to evidence given to arbitration and independent expert hearings where advocate repesents client- needs only to disclose all matters they wish to- duty to act in best interests of client- must act with integrity
68
RRs - Expert witnesses
4 main points of RICS Practice Statement and Guiance Note Surveyors Acting as Expert Witnesses 2014:1. expert evidence provided by a chartered surveyor must be impartial and objective2. duty of surveyor is to the court and overrides obligation to client3. evidence must be independent work of surveyor4. surveyor must believe the facts which they rely are complete and true- contingency (incentive fees) not allowed- fee basis must be clearly stated in terms of engagement- principles also stated in Civil Procedure Rules 1998- expert witness must sign Statement of Truth at commencement of their evidence- leading case is NATIONAL JUSTICE COMPANIA V PRUDENTIAL 1993- expert witness now not protected by immunity and can be sued for negligence following JONES V KANEY 2011
69
Contents of Rent Review Memorandum
Name of LL and T- address of property- date of lease and rent review- confirmation of new rent- signed and dated by both parties- can also be recorded by independant experts determination or arbitrators award or written acceptance of Calderbank offer or open letter
70
What actions are required by a surveyor for lease renewal?
Check CoIAgree ToEUnderstand clients objectives Get information Read information Check timeInspect and measureMR valuationPrepare reportAgree strategy/ who serves noticesOpen negsConclude negsInstruct lawyers to prepare new leaseSubmit invoice
71
What actions are required by surveyor on a rent review?
Check CoIAgree ToEUnderstand clients objectives Get information Read information Check timeInspect and measureMR valuationPrepare reportAgree strategy/ who serves noticesOpen negs(3rd party determination)Conclude negsSubmit invoice
72
What are the assumptions of a rent review?
Available on open market VPFit for immediate occupation Enjoyed period for fitting out
73
What are the usual disregards in a rent review
Goodwill on tenants occupation Goodwill attached to the property Tenant improvements if consent granted
74
What are the basis of valuation in a rent review?
Upwards onlyIn line with RPI
75
What does the code of leasing business premises say about rent reviews?
Clear clauseHeadline rent not to be usedLL or T able to start it
76
What’s a Calderbank Offer
Can achieve an early resolution to disputeWithout prejudice save as to costLoosing party to pay costsOffer to include time limit (usually 21 days)Must be genuine
77
What is the hierarchy of evidence in a rent review?
Open market transaction LR + RRIndependent ExpertArbitrator Court determination Hearsay Sale and leasebackSurrender and renewalInter-company arrangements
78
How is the third party determination decided?
Read the lease
79
What is the cost of a third party determination application and who do you apply through?
Apply through President of RICS£395 plus VAT
80
Tell me about arbitrators
Members of the chartered institute of arbitratorsActs on evidence submitted Has the power to disclose Right to appeal through high court on point of lawNot liable of negligence Acts in accordance with Arbitration Act 1996Outcome called Award
81
Tell me about independent experts
Has a duty to investigate Can use own knowledge Has no power to discloseNo right to appeal Can be liable Outcome called a determination
82
What is an advocate?
Represents their client in courtOnly has to disclose what they with toActs in best interest of clientMust act with integrity
83
What is an expert witness
Must be impartial Duty is to the courtEvidence must be work of the surveyors RICS Practice Statement - surveyors acting as expert witnesses 2014
84
What’s in a rent review memorandum?
Name of LL and TAddress of propertyDate of lease and RRNew agreed rentSigned and dates by both parties Can also be recorded by:Independent experts decisionArbitrators awardWritten acceptance of Calderbank offer
85
What are the surveyors fees based on for a rent review
% saved % agreedHourly Fixed Incentive
86
What are the main sections of the 1954 Act?
23 - application to T24 - security of tenure provisions and continued tenancy - holding over25 - LL Notice - end or new26 - T notice for new27 - T notice to end 28 - renewal of tenancy agreement 29 - order by court - new30 - LL ground of opposition 32-35 - terms of new lease37 - compensation 38A - contracting out40 - notice requesting info on LL/ T44 - Definition of competent LL
87
What does a tenant have to ensure in order keep protection?
Is a tenancyUsed for businessOccupy partOccupy more than 6 months Must not be exempt or excluded (tenancy at will/ services tenancy)Competent LL
88
How does a LL request new tenancy and what must the notice comply with?
Serves 6-12 month before stated exp dateGiven by competent LLFor whole premises State date of determination In proscribed form and inform T of rights Friendly - propose new termsHostile - state ground of opposition
89
What must a S25 notice include?
Name and address of LL & TAddress of propertyDate to end tenancyNew lease opposed/ grantedResponse dateNew terms/ grounds of opposition Recommend professional advice
90
How is a S.26 notice served?
6-12 months before before requested new dateIn proscribed form New terms
91
How does a protected tenant terminate lease?
Either by vacating at expiry OrServing a S.27 notice giving 3 months notice after expiry date
92
What grounds does a landlord have to oppose a new lease?
a) breach of repairing covenant b) persistent delayed payment of rentc) other substantial breachd) provide suitable alternative accommodatione) uneconomical subdivisionf) demolition or reconstruction (prove funding, planning, substantial work and necessity to gain VP)g) owner occupation (owned 5+ years)A-E decided in courtF-G mandatory
93
1954: what case heard that LL is entitled to oppose new lease or redevelopment grounds even where the redevelopment is devised solely for evicting the tenant
S. Franses LTD v The Cavendish Hotel (2017)Being appealed
94
S.Fransis v Cavendish Hotel
LL entitled to refuse new tenancy on the grounds of refurbishment even if it is solely to evict the tenant
95
1954: what case related to competent LL wanting to occupy building for own use?
Frozen Value v Heron FoodsLL must have been competent for previous 5 years otherwise clock resets
96
Under the 1954 Act, when is a T entitled to compensation?
Grounds E-G< 14 years = 1x rateable Value> 14 years = 2x rateable Value
97
How does a LL contract out of the act?
Under S.38A Serve a health warningT must then make deceleration in response confirming that he has received the notice and accepts termsSimple deceleration - at lease 14 days prior to committing tot the leaseStatutory declaration - less than 14 days (must be signed in front of independent solicitor)
98
1954: what case is about a landlord opposing to new tenancy used redevelopment grounds only to change his mind after tenant had found new space at higher rent? And what was the out come?
Inclusive Technology v Williams (2009)Court found that landlord should have informed T of decision not to redevelop and had to pay difderence in rent
99
How long a lease can court grant a new tenant?
15 years
100
What act must arbitrators follow?
Arbitration Act 1996
101
What does without prejudice mean?
Used for rent reviews During the period of negotiations, the opposing party can not rely upon any document or discussions held which are labelled with out prejudice
102
What is an easement?
A permanent right and receives capital payment Can be registered with land registryUninterrupted use over 20 yearsRight of way
103
What act deals with landlord consent to alienation not to be unreasonably withheld or delayed and what is the penalty?
Landlord and Tenant Act 1988Claim for damages
104
What is the LTA 1995?
Abolished probity of contract and introduced AGAs
105
What is the LTA 1927?
It deals with landlord consent for license for alterations S.19 imposes that consent can not be unreasonably withheld.
106
What do you serve when requesting reinstatement?
A 146 notice in accordance with the 1925 Law of Property Act
107

How is Interim Rent assessed?

Assessed on the basis that the terms of the old tenancy continue.

Generally the rent under the new lease unless either party can show either:

  • different valuation dates
  • different terms of old and new tenancy
108

What is the hypothetical term?

A rent review is on the basis it is to be let for all the other term of the lease except the rent.

109

Is the hypothetical term more advantageous to the landlord or to the tenant?

Depends upon the length of the hypotheticla term and the length of the term.

  • The shorter the term is advantageous to the landlord.
  • The longer term is advantagoeous to the tenant.
110

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

  1. Forfeiture under Section 146 of Law of Property Act 1925
  2. Sue the tenant for damages.
  3. Action for specific performance.
  4. Re-enter premises and carry out the repairs and recoup the cost only if the lease states it.
111

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

  1. Tenant can sue for damages
  2. Tenant can go to court for specific performance.
  3. Tenant can get authorisation to carry out repairs and deduct from the rent via the Courts.
  4. Set off against rent.
112

What is a Scott Schedule?

  • A scott Schedule is the form in which a Dilapidations case should be presented to the court as per RICS Guidance Note on Dilapidaitons.
113

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

  • To protect Value.
114

What do you understand a conditional break clause to be?

  • A tenant can only break if certain conditions are satisfied.
115

What conditions are usually attached to break clauses?

  • The tenant must comply with all the terms of the lease up to the expiry of the break clause.
  • If the tenant wishes to break they must pay a fine/premium.
116

Can you give two examples of situations where it was held in Court that a break notice was invalid/ineffective?

  • Osborne Asssets Ltd v Britannia Life Ltd
  • Tenant covenanted to decorate using 3 coats of good quality paint.
  • Invoice stated only two coats had been applied.
  • Held that the break clause was ineffective.

 

  • NYK Logisticks (UK) Ltd v Ibend Estates BV (2011)
  • Tenant gave a break notice whaich all parties accepted to be valid.
  • Lease required the Tenant to give vacant possession at expiry of the notice.
  • Landlord had served a Terminal Schedule of Dilapidations.
  • Tenant had not completed the works at expiry of the notice and its workmen remained in the property for another week.
  • Held the Tenant had not exercised the break clause.
117
A tenancy must be made deed when it is
More than 3 years

APC Commercial Real Estate 2021 - Technical (4 decks)

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