Lease Structure And Content Flashcards
What are the main stages in a grant of lease transaction?
The main stages are: Pre-exchange, Pre-completion, and Post-completion.
If there is no exchange, the stages are Pre-completion and Post-completion.
What tasks does the landlord’s solicitor perform during the pre-exchange stage?
The landlord’s solicitor takes instructions, prepares draft lease and agreement for lease, deduces title, answers pre-contract enquiries, and engrosses the agreement for lease.
What tasks does the tenant’s solicitor perform during the pre-exchange stage?
The tenant’s solicitor takes instructions, reviews and amends the draft lease, investigates title, raises pre-contract enquiries, and arranges for the tenant to sign the counterpart lease.
What does ‘engross’ mean in the context of lease agreements?
‘Engross’ means to print a copy for signature, typically on good quality paper and bound.
How does the landlord’s solicitor draft the lease?
The landlord’s solicitor drafts the lease based on the heads of terms, using a generic precedent lease or tailoring a part-completed lease from past lettings.
What is an agreement for lease?
An agreement for lease is a commitment to complete the lease when conditions are satisfied, often used when parties are not yet ready to complete.
What investigations does the tenant’s solicitor conduct during the pre-exchange?
The tenant’s solicitor investigates the landlord’s title, raises CPSE1 and CPSE3 enquiries, and conducts searches similar to those in a freehold purchase.
What happens during the exchange of an agreement for lease?
The solicitors exchange agreements without a deposit, setting conditions for completion and attaching a draft of the agreed lease.
What tasks does the landlord’s solicitor perform during the pre-completion stage?
The landlord’s solicitor prepares the original and counterpart lease, obtains the landlord’s signature, and sends the counterpart to the tenant.
What is included in the completion statement prepared by the landlord’s solicitor?
The completion statement details the money due on completion, including apportioned annual rent, service charge, and insurance rent.
What occurs during the completion of the lease?
The tenant’s solicitor sends completion monies, and both solicitors agree to complete and date the executed leases.
What tasks does the landlord’s solicitor perform post-completion?
The landlord’s solicitor sends a summary of the main provisions of the lease to the client.
What are the SDLT and LTT considerations for a grant of lease?
Calculating SDLT and LTT on a long residential lease is similar to a freehold, while for a commercial lease, it is more complex.
Leases of 3 years and under are not registrable.
What are alterations in the context of a lease?
Alterations are changes to the premises, such as reconfiguring internal walls or adding new features.
What is the doctrine of waste in relation to alterations?
The doctrine of waste prohibits tenants from making alterations that reduce the value of the premises.