Lease Renewals Flashcards
What are the contents of a Section 25 notice?
Name and address of L&T Address if prop Notice of date to end tenancy New lease opposed or granted L proposal of new tenancy Or grounds for opposing
What ground can a l refuse a new lease?
Section 30. 6 A) breach of repair B) delay in rent C) other breach D) provide alternative accommodation E) uneconomic subdivision F) demolition or reconstruction G) owner occupation. A-D mandatory e-G discretionary = compensation = 2x rateable value if in occupation 14 yrs+
What is classed as a business tenancy under the 54 Act?
Business tenancy:
- Tenancy
- Used for business
- Occupation at least part
- More than 6 months
- Exclusive possession
- Competent landlord
Who serves a Section 26 notice
Tenant requesting new tenancy.
What typical terms would you expect for a tenancy renewal/new tenancy under the 54 act?
- Section 32-35.
- 15 year max if post June 2004.
- Market rent
- Date of valuation stated in notice
- Ignore previous occupation, goodwill or improvements.
What changes occurred to the 54 act in June 2004? 6
- Either party can apply to court for an interim rent.
- Contracting out - no need to go to court
- Health warning must be served 14 days prior to lease for contacting out
- Max term 15 years
- Stat dec is within 14 days
- L must set out proposed terms in section 25 notice.
What are the ways to terminate a lease? 8
- Forefeiture
- Effluxion of time
- Surrender
- Merger
- Break clause
- Lease expiry
- Serve notice under 54 Act
- Negotiations
What is the first thing you check when receiving a section 25 notice
Check validity
When does the Landlord and tenant act 1954 Part II, as amended apply? 6
(definition in Section 23):
- There must be a tenancy for the purpose of the occupier’s business…
- There must be occupation of at least part of the premises, by the tenant
- There must be occupancy of > 6 months
- It is not an exempted or excluded tenancy (e.g. tenancy at will)
- A competent landlord must be in place. This is a freeholder or superior leaseholder with more than 14 months to run. As defined in S.44.
What notices are there under the 54 Act in regard to a lease renewal? 3
S.25 (Landlords Notice)
S.26 (Tenant’s Notice) and
S.27 (Notice to Quit)
Can you serve a S 26 over a S25 notice?
You cannot serve a s.26 notice over a s.25 notice, unless the s.25 notice has been served incorrectly, for example it is not in the prescribed form.
When can a landlord oppose a new lease? 7
Section 30 When there has been:
A: Breach of covenant
B: Persistent delay in the payment of rent
C: Other substantial breach of the tenant’s obligations
D: Provision of suitable alternative accommodation
E: Uneconomic subdivision (that is that the landlord needs to be in possession of a subdivision of the property in order to let the whole property)
F: Demolition and reconstruction
G: Owner occupation
when is compensation payable?
Under Section 37
Payable when the tenant is not at fault. Therefore under E, F, and G. The letters from within the Act are commonly used.
how much compensation is payable?
If occupation has been for more than 14 years, compensation is 2 x the Rateable Value (that is, the one on the VOA) of the property. If less, then it is 1 x the RV.
Talk me through the process of contracting out?
The parties can agree to contract out of sections 24 to 28 of the Act. Which means that none of the above applies. To contract out, you must:
Serve a health warning at least 14 days before the lease commences. There is a prescribed form for this, which includes
a simple declaration for the tenant to sign.
Otherwise, if there is not 14 days notice, the tenant can sign a statutory declaration, sworn in front of an independent solicitor.
What is Security of Tenure?
Security unless specifically contract out s. 24-28 of Landlord and Tenant 1954
Landlord serve health warning 14 days before the beginning of the lease – tenant sign a simple declaration accepting consequences of notice.
If 14 days is not forthcoming then tenant has to sign statutory declaration in front of an independent solicitor
Regulatory Reform (Business Tenancies) Order 2003 simplified the contracting out process – court not needed anymore
What types of lease covenant are there?
Positive – can do something
Negative – cannot do something
Absolute – cannot do anything
Qualified – can do something with landlord consent
Fully qualified – can do something, with landlord consent, not to be unreasonably withheld
Pre Landlord and Tenant (Covenants) Act 1995, Landlord and Tenant Act 1927 means all qualified alienation/assignment clauses become fully qualified. After 1996 assume qualified is fully qualified unless expressly stated in the lease. Does not apply to user clause.
What are the main differences between a lease and a licence?
- Lease is an interest in land, a licence makes legal what would otherwise be illegal
- Term certain
- Exclusive possession
- Rent
- Demise…specific
- Street v Mountford and Clear Channel v Manchester City Council
- Lease often assignable, licence personal
What is the leading case on lease v licences
Street v Mountford and Clear Channel v Manchester City Council
What is the valuation date for a lease renewal?
It is set by when you apply to court, otherwise you’d value on the day after lease end.
What sections of Landlord and Tenant Act 1954 are there?
23 – meaning of business tenancy 24 – continuation tenancy unless terminated (security of tenure) 24a – interim rent 25 – landlord to terminate or renew 26 – tenant to renew 27 – tenant notice to quit (3 months) 28 – freedom to agree new lease 29 – courts application 30 – landlord grounds of opposition 32 – demise 33 – term 34 – rent 35 – any other terms 37 – disturbance compensation 38 – contracting out 40 – request for information 43 – excluded business tenancies 44 – competent landlord 64 – new lease start date
What are the main differences between a lease and a licence?
- Lease is an interest in land, a licence makes legal what would otherwise be illegal
- Term certain
- Exclusive possession
- Rent
- Demise…specific
- Street v Mountford and Clear Channel v Manchester City Council
- Lease often assignable, licence personal
What is the leading case on lease v licences
Street v Mountford and Clear Channel v Manchester City Council
What is the valuation date for a lease renewal?
It is set by when you apply to court, otherwise you’d value on the day after lease end.
