Landord and Tenant

Question 1

What is a lease?

Answer 1

A contract between two or more parties that creates a legal interest (a leasehold) in land and buildings.

Question 2

What are the essential requirements for a lease?

Answer 2

It must be for a certain time, grant exclusive possession, and be at a rent.

Question 3

List the key features of a lease.

Answer 3

• Demise
• Parties
• Lease term
• Rent
• Rent review clause
• Repairing liability
• User clause
• Alienation
• And more

Question 4

What is a Tenancy at will?

Answer 4

A tenancy where neither party has a legal interest, and either party can terminate at will.

Question 5

What was demonstrated in the Cricket v Shaftsbury case regarding Tenancy at Will?

Answer 5

There was no security of tenure under a tenancy at will even if occupation lasted over 12 months.

Question 6

What is a contractual licence?

Answer 6

A right to occupy granted for a particular purpose but without exclusive possession, usually non-transferable.

Question 7

What is a rent review?

Answer 7

An agreed lease event that allows the parties to reconsider the rent payable at pre-agreed dates.

Question 8

What does ‘traditionally upwards only’ mean in the context of rent reviews?

Answer 8

It refers to rent reviews that can only result in an increase in rent.

Question 9

Before starting a rent review, what should you consider?

Answer 9

• You should carry out conflict of interest checks and you should read the lease to ascertain the below:
• The mechanism for activating the review
• The basis and method
• The method of dispute resolution

Question 10

What are the steps to carry out a rent review?

Answer 10

• Read the lease to understand the review mechanism and basis of value
• Inspect and measure the property
• Undertake market research of comparable rental transactions and based upon this and the basis of valuation within the relevant clause produce your rental valuation to determine the new rent
• Trigger the rent review if deemed worthwhile
• Negotiate and document the revised rent by way of a rent review memorandum

Question 11

What are some mechanisms for rent reviews?

Answer 11

• Review to market rent
• Linked to RPI or CPI
• Fixed stepped increases
• Percentage of turnover of the tenant’s sales/business

Question 12

What should the rent review clause detail?

Answer 12

• The property to be valued
• The willing landlord and willing tenant
• Assumed to be vacant
• Any licensed improvements disregarded
• Goodwill disregarded
• Hypothetical lease term for reviewed rent
• Provision for third-party appointment if no agreement

Question 13

What happens if the rent review cannot be agreed?

Answer 13

You should check the lease, however it will be likely that it will go to an independent expert or arbitrator to decide, however governed by the clause in the lease.

Question 14

What does the Landlord & Tenant Act 1954 provide for business tenants?

Answer 14

It provides security of tenure by giving qualifying business tenants a statutory right to renew their lease.

Question 15

What conditions must be met for tenancies to be protected under the LTA 1954?

Answer 15

• It must be a business tenancy
• The tenant must have occupied for more than 12 months
• The lease must not be contracted out of security of tenure provisions

Question 16

What is included within Section 23 of the LTA 1954?

Answer 16

Tenancies to which Part 2 applies. It must be a business tenancy – a tenancy of a premises and part of the premises is occupied bythe tenant and occupation must be for the purpose of the business

Question 17

What does Section 24 of the LTA 1954 provide?

Answer 17

It provides for the statutory continuation of the qualifying lease unless a party seeks to bring the tenancy to an end.

Question 18

What is Section 24A of the LTA 1954?

Answer 18

It covers interim rent

Question 19

What is a friendly notice and a hostile notice as per Section 25 of the LTA 1954?

Answer 19

A friendly notice to terminate the current lease but not opposing a new lease on the terms stated. If it is hostile, it will oppose a new lease.

Question 20

What is a section 26 notice under the LTA 1954?

Answer 20

Tenants request for a new tenancy. It must be sent to the competent landlord and set out the tenant proposal for the new lease

Question 21

What does section 27 of the LTA 1954 cover?

Answer 21

Termination of the tenancy by the tenant for a fixed term. Contains the provision for the tenant to cease the current lease by not less that 3 months notice and not seek a new lease

Question 22

What is Section 28 LTA 1954?

Answer 22

Renewal of tenancies by agreement

Question 23

What is section 29 LTA 1954?

Answer 23

Order by court for grant of a new tenancy. Memorandum of agreement to extend the statutory deadline that each party can make an application to court

Question 24

What are the ground of opposition under Section 30 LTA 1954?

Answer 24

a) tenants failure to repair the premises where an obligation exists
b) tenants persistent delay in paying rent
c) other identifiably substantial breach are within the discretion of the court
d) landlord offer of alternative accommodation with landlord paying for the moving costs
e) uneconomic subdivision of the property (substantially less rent) where is was originally multi let
f) landlords intention to demolish/reconstruct or new construction work where intent must be demolished
g) owner occupier requirements, but there must be 5+ years of ownership

Question 25

What is covered under S 31-37 LTA 1954?

Answer 25

* Section 31 – Dismissal of application of landlords successful opposition * Section 32 – property to be comprised in the new tenancy * Section 33 – duration of the new tenancy * Section 34 – Rent under new tenancy * Section 35 – Other terms of new tenancy * Section 36 – Carrying out of order for new tenancy * Section 37 – Compensation where new tenancy precluded by order

Question 26

What tactics are involved in the serving of notices under the LTA 1954?

Answer 26

If the current rent is too high, the tenant will be keen to bring the lease to an end and renegotiate lower rent and terms. The landlord will not seek to serve a section 25 notice if the tenant does not serve their notice. If the rent is likely to increase, the tenant will be reluctant to serve notice but the landlord will be keen to, so the serving of notice is tactical

Question 27

What follows the service of a section 25 or section 26 notice?

Answer 27

- Once the notice is served the parties will be subject to the civil procedure rules if one of the parties applies to court to determine the matter. Court application can be a tactic to focus the other party to negotiate. - Prior and after an application to court, the parties will most likely negotiate the terms of the new lease in a similar way to any letting of premises but with the statutory framework of the LTA behind discussions

Question 28

What is the purpose of a pre-action protocol?

Answer 28

To set out the expected conduct of both parties before escalating to court proceedings. It establishes a reasonable process and timetable for the exchange on information relevant to dispute and sets standards for the exchange of information relevant to a disputes

Question 29

What are Part 36 offers?

Answer 29

A written offer to settle which must specify a period of not less than 21 days for acceptance. If it is not accepted within the time period and the other party does not achieve a higher value than the one contained within the part 36 offer, there will be cost consequences for the claimant

Question 30

What are Calderbank offers?

Answer 30

Offers that provide greater flexibility than Part 36 offers because it is not governed by strict court rules and they allow creative terms for settlement. You can set a time limit for acceptance of the offer, you can withdraw it at any stage, and you are free to decide on the payment terms. Better when you want to settle a claim but don’t want to trigger the more onerous cost consequences attached to the Part 36 offer. If accepted, they create a binding contract between the parties.

Question 31

What are the tactics behind serving a Calderbank?

Answer 31

Focuses the attention of the other party to achieve an agreement if the tribunal has the power to award costs. Calderbank v Calderbank 1975

Question 32

What are the three main differences between a rent review and lease renewal?

Answer 32

- Valuation date - Third party determination - Procedure

Question 33

What was decided in Poundland v Toplain Ltd (2021)?

Answer 33

The case centred around the tenants request for the introduction of a pandemic clause in a renewal lease. Applying the O’May principles, the judgement came out in favour of the landlord and no pandemic clause was awarded.

Question 34

What happens if a lease renewal cannot be agreed?

Answer 34

Likely PACT or county court if it cant be decided. Governed by the stature (the act). PACT is professional arbitration on court terms to form part of ADR.

Question 35

What is the RICS Dispute Resolution Service?

Answer 35

It provides impartial, professional solutions for resolving disputes in the built environment. These services are known as alternative dispute resolution (ADR) methods, which help parties resolve issues efficiently, cost-effectively, and without the need for lengthy litigation in court. Rose of the surveyor – expert witness and advocate Expert witness – duty to the tribunal for independant, unbiased, with expertise experience and knowledge. Advocate brought in by the client Jones v Kaney 2011 Expert witness v independent expert EW will be adopted at third party and submit evidence to IE IE appointed by the parties and would determine the rent

Question 36

What did DLUHC commission a review of in 2023?

Answer 36

The LTA 1954. It is looking at modernisation of the terms, focussing on security of tenure, lease terms, and renewal rights

Question 37

- Compensation given under section 30 (e) (f) (g) is 1x rateable value if they have been in occupation for less than 14 years, and 2x rateable value if over 14 years.