Lease Renewals Flashcards
What section of the LTA Act 1954 states that to gain protection within the Act, there has to be a business tenancy with 6 basic elements?
Section 23
What are the 6 basic principles of a business tenancy set out within LTA 1954 s23?
- It is a tenancy.
- The premises must be used for a business.
- There must be occupation of at least part of a premises by a tenant.
- There must be occupancy f more than 6 months.
- It must not be an exempted or excluded tenancy (e.g. tenancy at will).
- There must be a competent landlord (freeholder or superior tenant with more than 14 months to run).
Who usually serves notices on lease renewal?
Lawyer
Which section of the LTA 1954 relates to ‘holding over’. i.e. the business tenancy does not end by effluxion of time but only when one party serves a notice?
Section 24
Which Section of the LTA 1954 relates to a Landlord’s notice being served?
Section 25
What is the timescale for a Landlord’s notice being served in accordance with Section 25?
A date not more than 12 months and not less than 6 months before the date of termination of the tenancy.
A Section 25 notice must be given to the tenant by a __________ landlord.
Competent
A Section 25 notice must relate to the whole of the _____ comprised by the tenancy.
Property
A Section 25 notice must state the date for the _________ of the tenancy.
Termination
A Section 25 notice must be in the ________ form and inform the tenant of his _____.
Prescribed, rights
What must be stated where a Landlord is prepared to grant a new lease?
Proposed terms of new lease including new rent
What must be included when the Landlord opposes a new lease?
Ground for opposition
What notice can be served by a tenant 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?
Section 26
A Section 26 notice must be in the ________ form.
Prescribed
A Section 26 notice must state the tenant’s proposals for what?
A new lease including new rent
If a Landlord opposes A Section 26 notice, what must be done?
Serve a counter-notice within 2 months
What must be served by a tenant is he wants to leave with 3 months’ notice after the lease expiry date?
Section 27 notice
What must be served if a tenant wants to leave prior to the leased expiry?
No notice as long as the property is vacant.
What is it important to check when acting for a client in terms of the validity of a notice?
Prescribed form in accordance with the Act
Correctly named party
What is included within a Section 25 notice?
- Name and address of L & T.
- Property address.
- Notice of date to end tenancy.
- Whether new lease to be opposed/granted.
- Date of response required
- Proposals for new tenancy (including proposed rent).
- Ground for opposition if opposing.
- Strong recommendation to seek professional advice.
Should you consider serving a Section 25 notice in a falling market?
No, as new rent likely to be lower.
Which Section of the Act sets out the 7 grounds for opposition to grant a new tenancy?
Section 30
What are the 7 Section 30 grounds?
a) Breach of repairing covenant.
b) Persistent delay in paying rent.
c) Other substantial breach.
d) Provide suitable alternative accommodation.
e) Uneconomic subdivision
f) Demolition or reconstruction
g) Owner occupation
Under which grounds is compensation payable?
e, f and g
Which grounds are discretionary, with the Court deciding whether reasonable?
a to e
Which grounds are mandatory?
f and g
What must the landlord provide for ground f?
Firm intention - prove funding and planning, substantial work and necessity to gain vacant possession.
What must the landlord prove for ground g?
Must have owned property for 5 years and prove intention to occupy and/or run business.
What should first be checked when undertaking a lease renewal?
Whether inside the 1954 Act (will state in lease if excluded).
If the lease is silent on security of tenure provisions, it is protected?
Yes
Which Section of the Act entitles the tenant to compensation for disturbances for grounds e, f and g?
Section 37
A lease must have been granted after what date for compensation to be granted?
1 April 1990
How is the level of compensation calculated?
14 years + occupation - Rateable Value x2
The tenant is only entitled to compensation under Section 37 if they have not breached what?
The terms of the lease.
If a Landlord obtains possession due to a successful Section 25 application (grounds e, f and g), the tenant may be entitled to compensation for disturbance, as well as improvements. What Act provides for this?
Landlord and Tenant Act 1927 Part 1
What Sections of the 1954 Act are relevant to the terms of a new lease?
32-35
What maximum term may be granted by the Court?
15 years (post 1st June 2004)
The new lease must be at _____ rent.
Market
The date of valuation in the notice is the date of _________ of the new tenancy.
Commencement
What is ignored when setting the terms of the new lease?
Previous occupation
Goodwill
Landlord’s approved improvements carried out by tenant in last 21 years
What is the valuation date?
The date of commencement of the new lease as stated on the notice.
What is the date of commencement of a new tenancy if the lease renewal goes to Court?
3 months and 2 weeks from the date of the hearing at which the new rent is set and order for the new tenancy made.
What does the Court use to assess the new rent?
Best available evidence on day of hearing.
What is the rent payable by a business tenant under the 1954 Act for the period of occupation between the termination of the former tenancy and the commencement of the new lease?
Interim rent.
Who may apply for an interim rent?
Either party (but once one has, the other may not).
What is the earliest date that an interim rent can be served?
Date of Section 25 or Section 26 notice.
What is the latest date that an interim rent can be served?
6 months after lease expiry date.
The interim rent assumes an ______ tenancy and _____ rent.
Interim, market.
The interim rent can be divided using _____ proceedings.
PACT
Where is the basis of valuation set out for a lease renewal?
Landlord and Tenant Act 1954/
What is the valuation date for a lease renewal?
Date of commencement of new lease set out in notice.
When proposing a contracted out lease what must the landlord serve?
A health warning at least 14 days before the start.
What must a tenant do to confirm agreement to a contracted out lease?
Sign a declaration.
Can the time limits be extended regarding notices?
By agreement by both parties.
What notice can be served to request information from either the Landlord or the tenant to check who is the competent landlord or tenant with statutory protraction?
Section 40
Who can serve a Section 40 notice during the last 2 years of a tenancy?
Either party.
What are the two third party determination choices for lease renewals?
County Court following the Civil Procedure Rules 1998
PACT (Professional Arbitration on Court Terms)
________ is designed to be used for an unopposed new tenancy where one of the parties has already made an application to court to fix the terms of a new tenancy.
In-court PACT
_______ is used when no court application has been made by either party, and the parties agree to a postponement of such application.
Out-of-court PACT
The normal ______ of notices has to take place and the necessary applications to _____ made for PACT.
Service, Court
Who nominates the PACT arbitrator?
President or RICS or Law Society
PACT is advantageous as it is faster, less expensive, offers greater flexibility and _____ and avoids a full ____ _______.
Control, Court Hearing
A decision using PACT is made by a ______ rather than a ______.
Surveyor, Judge
Which section of the Act sets lout the procedure which must be followed for the Landlord to contract out of the Act?
Section 38A
Why might a Landlord want to contract out of the Act?
Intention to re-occupy or redevelop in future.
Head lease requires subletting to be outside Act.
If a lease is contracted out of the Act, a tenant has no statutory right to _____ or seek ______ for leaving.
Remain, compensation.
What does the Landlord have to do at the end of the tenancy?
Ensure premises vacant or new lease in place.
What needs to be done where the landlord is happy to grant a new lease but it has not been finaliised?
A tenancy at will (acceptance of rent could lead to protected new tenancy)
What ate the 9 ways in which a lease is terminated?
- Forfeiture
- Effluxion of time
- Surrender
- Merger
- Disclaimer (due to insolvency)
- Break clauses
- Lease expiry
- Service of notice under LTA 1954
- Negotiation
Section 23 of the LTA 1954 relates to application of _____ ______.
The Act
Section 24 of the 1954 At relates to what provisions?
Security of tenure (holding over)
Section 24A of the Act relates to ____ ____.
Interim rent
Section 25 relates to a _____ notice to end the lease or seek a new lease.
Landlord’s
Section 26 relates to a ____ notice to seek a new lease.
Tenant’s
Section 28 relates to renewal of a tenancy by _______.
Agreement
Section 29 relates to order by ______ for a new tenancy.
Court
Section 30 relates to the Landlord’s _______ for opposition of a new lease.
Grounds
Sections 32-35 relate to the ____ of the new lease.
Terms
Section 34 relates to the basis of valuation for the ___ ______.
New rent
Section 37 relates to ______ provisions.
Compensation
Section 38A relates to _____ outside the Act.
Contracting
Section 40 relates to notices requesting _____ about either party.
Information
Section 44 covers the definition of what?
A competent landlord
