Landlord & Tenant - Session 1 Flashcards
What is the basic difference between a lease renewal and a rent review?
A lease renewal is a statutory procedure laid down by the Landlord and Tenant Act 1954 Part II. Whereas a rent review is a contractual procedure contained within a lease
When can you opt out of the 1954 act?
Procedure for contracting out of the 1954 Act is served by the LL but initially outlining that the tenant must acknowledge that they will lose their protection under the 1954 Act.
Simple declaration and a statutory declaration.
What is a stat. demand?
A statutory declaration is a formal statement made affirming that something is true to the best knowledge of the person making the declaration.
Basic difference between lease and a license?
Lease – gives tenant exclusive right of possession. Must be fixed term and a rent payable.
Licence – gives permission to do something on the owners land that would otherwise constitute as trespass.
What is the case law for Lease / License?
Street v Mountford
If the agreement satisfies all the requirements of a tenancy, then the agreement is a tenancy.
To what tenancies does the 1954 Act apply?
Tenancies occupied for business purposes only.
When was the LL&T Act 1954 last amended?
1st June 2004
Name the tenancies to which the 1954 Act does not apply
Agricultural holdings, Mining leases, residential tenancies, tenancies granted as a condition of employment, and tenancies not exceeding 6 months.
What is a s25 notice?
A notice served by the Landlord to the Tenant so that they can terminate lease at its contractual expiry.
LL may want possession or a new tenancy
You can’t terminate the tenancy before the contractual expiry
LL would serve this notice and say a) you can have a new tenancy and these are the terms, or b) i object to you having a new lease under s30
When can a LL serve a S25 notice
This must be served between 12 and 6 months prior to:
(a) the contractual end of the tenancy, or,
(b) the date specified in the notice i.e.
➢ if a tenancy has less than 6 months to run
➢ T is holding over under Section 24
➢ the tenancy is on a periodic basis
What must a LL S25 notice contain?
Landlord, Tenant and the Property, date of notice and the date of termination of the tenancy.
What advise would you give to a Landlord in respect of a lease renewal where a property is significantly over-rented?
It would depends on the clients intentions,
- Do nothing at all- this would mean that the landlord would continue to gain rent at the overrented value but would be risky as the tenant could serve a section 27 notice providing three month notice or hand keys back upon expiry. If the property is overrented then this may indicate a depressed market with a high void risk which could result in the landlord incurring additional costs (rates, utilities etc).
Risk averse Landlord:
The landlord could serve a S25 notice to grant a tenancy which will maximise income over a fixed period. This would mean that the unit would be let at a lower rent but it would be let to a tenant with higher covenant strength resulting in a better investment.
When is the best time to serve the s25 notice: 12 months or 6 months before lease expiry?
It would depend on the market.
12 months - Falling market serve 12 months:
Gives maximum amount of time for both parties, this may result in the market rent being agreed at an earlier stage which may not be as favourable to the landlord.
Rising market 6 months - If the property is under rented then the landlord could provide 6 months’ notice to engage in tenant conversations at the earliest opportunity.
Certainty in 6 months as you are negotiating as close to the renewals date as possible.
If the property is overrented then the landlord could wait until the last possible moment (1 day before expiry) to serve a S25 notice to maximise income but then this would be risky as the tenant could vacate upon lease expiry.
Why would a LL give 12 months notice when he could give 6 months notice?
If the T rent is over-rented, you get an extra 6 months of the tenant paying extra rent. Also if you’re confident tenant is going to leave, it gives more time for finding new tenant
What action should LL take if require possession of a property at end of lease?
Serve notice under s25 to terminate tenancy and objecting to tenant having new tenancy under one of more of the grounds listed in s30.
What can the LL do if he cannot get a response from the T to his friendly S.25 notice?
The landlord can send a letter to the tenant stating that if he does not hear back from the tenant on a certain date (14 days from the date of the letter is acceptable) then the landlord will be applying to court and will be expecting the tenant to cover the legal costs.
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?
Would advise T that you can approach LL to ask if time extension can be agreed in which either party can apply to Court
LL does not have to agree to an extension
If not agreed, T would have to apply to Court for a new tenancy .
Name grounds under the s30(1) of LL & T Act 1954 under which a LL can obtain possession
A – breach of repairing covenant
B – persistent late payment of rent
C – other substantial breach
D – alternative accommodation
E – uneconomic sublet (more rent can be achieved as a whole)
F – substantial redevelopment/demolition
G – owner occupation (the landlord must be the landlord for at least 5 years - T would serve a S.40)
In what circumstances is a T entitled to compensation when a LL successfully opposes a new lease under the 1954 Act?
The last three grounds (the no-fault grounds); e, f and g as the tenant is required to leave through no fault of their own.
E – uneconomic sublet (more rent can be achieved as a whole)
F – substantial redevelopment/demolition
G – owner occupation (the landlord must be the landlord for at least 5 years S30 (2))
NOTE: if it is one of these grounds (e, f or g) AND another (a, b or c) then the tenant should not get compensation! Has to be ONLY no-fault grounds
How is T compensation assessed under 1954 Act?
Compensation is calculated using the rateable value:
Up to 14 years in continuous occupation – 1 x rateable value
Over 14 years in continuous occupation – 2 x rateable value
NOTE: 14 years on the dot is 2x rateable value.
What do you understand s34 rent to be?
S34 - rent disregarding the tenants previous occupation, any good will, certain improvements and any licence to sell intoxicating liquor if the licence belongs to the tenant.
Explain the power of the court in ordering a new lease
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
S34 = rent
S35 = other terms
S24a = interim rent
What do you understand interim rent to be?
The rent being applied to the interim period which occurs the day after the notice expires and the date before the start of the new lease.
This would be the market rent at the expiry of the lease term. Both parties would agree the market rent.
How is the Interim Rent assessed?
It is the market rent at the start of the interim period.
Alternative:
- The interim rent is the rent under the new tenancy, unless there are reasons to state otherwise.
