Leasing & Letting Flashcards

Question

When would an AfL commonly be used?

Answer 1

- The landlord will carry out works before the tenant takes occupation. - The tenant needs planning permission to change lawful use of the property - The landlord needs to remove an existing occupier prior to granting lease.

Answer 2

Used for comparison of retail properties – rationale that rental value of a property reduces away from street.

Answer 3

High street strategy to find big-name, high-street brands elsewhere e.g specsavers, H&B. Over water less footfall but better atmosphere and views – pub unit etc.

Answer 4

Co-star or land registry

Answer 5

Licenses tend to be for shorter periods. As the charity was a long-term stakeholder and the storage unts were not being used otherwise, a year lease deemed appropriate.

Answer 6

* Cost of living crisis = people less willing to spend discretionarily * Rising costs for businesses due to energy costs (wars), service charges etc * A risky market, in a new development that not yet matured

Answer 7

Although advising against it, I would seek to find if the client would concede on business plan ERVs etc to try and find an operator.

Answer 8

* Discussing with the client whether they’d be willing to consider an alternate long-term use, * or whether the business plan rents or incentives could be lowered to attract more interest.

Answer 9

* Agreeing repairing responsibilities for the tenant - unlikely agree FRI lease BUT internal condition schedule * Achieving listed building consents if operator wanted further changes ---->>> could request that thes undertaken by tenant

Answer 10

* Listed building consent * Bat license (protected species) * Planning Permission

Answer 11

1. **Parties Involved**: -----> Client & F&B Operator (Manager) 2. **Scope of the Temporary F&B Use**: -----> Duration, Type & hours of operation 3. **Revenue and Financial Arrangements**: -----> Payment Model (revenue sharing, payment terms etc) – i.e % of profits shared if above break even, but equally subsidies may be required. 4. **Operational Responsibilities**: -----> Who is responsible for day-to-day operations -----> Who obtains Licensing and Permits (alcohol) -----> Cleaning and Maintenance Best advantage of management agreement = offers flexibility!

Answer 12

* Would not solve the problem as essentially halfway between management agreement and lease. * License typically >6 months * Lease they would invest, management agreement we would invest, and with a license they would have a right to use but who would invest?

Answer 13

Yes liable, but only when occupied. If it is vacant, certain relief available.

Answer 14

* Market has become worse, so yields have risen, decreasing capital value for the church. * If market improved, the low price would still be locked in so the operator would be getting a great deal -----> but the power would also be in their hands not to purchase if they didn’t want to.

Answer 15

Whilst unable to control if they exercise their right to purchase, would: - demonstrate that they were serious about running this themselves - avoid the risk of them bringing in a poor standard operator, which would detract from the development. This got something in return.

Answer 16

- I applied an appropriate NIY to the BP ERV - Then I deducted incentives for rent free and capital contribution, along with purchasers’ costs to give a net investment value. -------> - However, their proposed purchase price was based HoTs rent which was under market value - The yields had moved out since the business plan, further worsening the value against business plan - Their value also didn’t account for the capital contribution of £600k, though there was a clawback if they did not purchase

Answer 17

1. Identity and extent of premises 2. Rent, frequency of payment (excl. BR?) 3. Length of term and whether in / out of 1954 Act 4. Breaks / rent review frequency 5. Rent free / cap con 6. Alienation 7. Repairing obligations ..... Full list can be found in Pt. 2 Section 1 COLBP

Answer 18

* Clearly define the premises being leased, including any structures, fixtures, and rights (like parking or data connections) * A lease plan should be provided, especially for leases over seven years.

Answer 19

* Specify the lease duration, renewal options, and any break rights. * Both parties should be clear on when they can end the lease and the conditions required for breaks to be effective.

Answer 20

* Detail any rent deposit requirements, including the amount, the purpose of the deposit, and the conditions for its return. * Also, provide specifics about any guarantees and the terms for their release.

Answer 21

* State the initial rent amount, payment frequency, and whether VAT applies. * The method for rent reviews should be clear, and any incentives or rent-free periods should be outlined.

Answer 22

* Disclose expected service charges, insurance costs, and other expenses the tenant will incur. * The lease should reflect any significant future changes that may impact service charges.

Answer 23

* The lease should allow tenants to assign or sublet the premises with the landlord’s consent (not to be unreasonably withheld). * It should also allow for sharing with related companies and provide flexibility for franchised tenants. LANDLORDS CAN IMPOSE STRICTER PROVISIONS WHERE JUSTIFIED BY PARTICULAR CIRCUMSTANCES (WHERE A TENANT'S BUSINESS OR BRAND MAY AFFECT THE CHARACTER OR VALUE OF ANY TURNOVER RENT)

Answer 24

* Specify tenant responsibilities for repairs based on the premises' condition and lease length. * If applicable, a schedule of condition should be agreed upon to outline the state of the property at the start of the lease.

Answer 25

* Define what changes of use or alterations require landlord consent. * Leases should not unreasonably restrict internal non-structural alterations, but landlords may require approval for significant changes.

Answer 26

* Define what changes of use or alterations require landlord consent. * Leases should not unreasonably restrict internal non-structural alterations, but landlords may require approval for significant changes.

Answer 27

* Landlords should insure the property and provide the tenant with details. * Rent should be suspended if the premises are damaged, and either party should be allowed to terminate the lease if the property becomes unusable due to damage.

Answer 28

Encourage cooperation between the landlord and tenant to improve operational efficiencies, possibly including "green" provisions to promote sustainability.

Answer 29

The lease should clarify which party is responsible for obtaining any necessary EPCs and ensure the process is handled reasonably.

Answer 30

The landlord is responsible for ensuring they have the necessary authority to grant the lease and must act in accordance with any covenants that affect the property.

Answer 31

- perosnal to the client - Interest to the tenant - top up mechanism for rental uplifts - typically 2 references, previous LL reference, 3 years audited accounts

Answer 32

Alienation refers to the transfer of a tenant's interest in the leased property to another party. This can include: underletting/sub-letting and assigning.

Answer 33

Outlines the tenant's obligations regarding the physical state of the leased property, particularly at the end of the lease term Importance: At the end of the lease, the landlord may issue a schedule of dilapidations to request repairs. If the tenant has not fulfilled their obligations, they may be required to pay for the repairs.

Answer 34

Refers to the tenant’s obligation to return the property to the landlord in a specified condition at the end of the lease

Answer 35

* The permitted use clause defines what type of business or activity the tenant can conduct in the leased premises. * It may specify a certain type of business, such as a retail shop, office, or restaurant. * This clause ensures that the tenant's use of the property aligns with the landlord's intentions, as well as with zoning and planning laws.

Answer 36

Gives the landlord the right to terminate the lease if the tenant breaches certain terms, such as not paying rent or failing to maintain the property.

Answer 37

Guarantees the tenant’s right to use and enjoy the property without interference from the landlord or third parties.

Answer 38

* Permanent right and receives capital payment * 'Right of way' * Can be obtained following continuous and uninterrupted use <20 years

Answer 39

* Temporary right with annual payment (e.g electricity)

Answer 40

Rent Reviews * Normally UURR to market rent * Or, can be indexed Assumes: * Property available to let on open market * Property is fit and available for immediate occupation and use * All covenants observed by L&T * Property may be used for purpose set out in lease

Answer 41

Headline = rent as stipulated in lease Effective rent = accounts for incentives

Answer 42

tenant is responsible for all repairs and insurance costs of the property, including the structure, exterior, and interior

Answer 43

Commercial Property Standard Enquiries Set of standardised questions used in UK commercial property transactions to gather information about the property from the seller to the buyer - Fire Safety - Physical Condition - Defects E.g "are there any known defects int he property?"

Answer 44

Private tenancy agreement in England and Wales, where a landlord can regain possession of the property after a set period/fixed terms LL can give 3 months notice to evict Renters Rights Bill (2025) will: 1. Abolish s21 (no fault) eviction notices - 2 month 2. Improve pet rights in rented households 3. Offer more protection regarding rent increase

Answer 45

**Law of Property Act 1925** Governs how leases are created, assigned, and enforced in England and Wales. **Landlord and Tenant (Covenants) Act 1995** Governs the transfer of lease obligations when a lease is assigned (e.g. new tenant takes on liabilities unless the lease says otherwise).

Answer 46

Aims to improve quality and fairness of negotiations on lease terms and to promote the issue of comprehensive heads of terms that should make the legal drafting process more efficient

Answer 47

Governed by the lease, however, typically: Responsibility of landlord to arrange and recharge tenant (BRVA).

Answer 48

- Tell BI insurers it is empty - Tell LPA for rates - Undertake H&S assessment

Answer 49

Rent paid quarterly in advance of quarter days with demand set out in notice

Answer 50

Money owed that hasn’t been paid

Answer 51

1. Serve repair notice 2. Forfeit the lease 3. Serve interim schedule 4. Do the works and charge the tenant

Answer 52

Applies to leases granted for term of 7 years or more & more than 3 years until lease expiry – protects tenants against onerous interim schedules of dilaps

Answer 53

- Limit the tenant’s repairing obligation in respect of the agreed items of disrepair for duration of the lease - Agreed by negotiation between tenant and landlord prior to lease - Must be carefully recorded

Answer 54

- Relate to planning use of the property and/or how it can be used - Restrictive user clause can depress market rent (i.e restriction on hours of working for offices)

Answer 55

- **Section 25 = Notice served by landlord** -----> requires landlords to serve notice if they wish to terminate the tenancy (on statutory grounds s30) or offer new terms for renewal -----> 6-12 months prior to expiry - **Section 26 = Notice served by tenant** -----> tenants can serve notice requesting a new tenancy, along with their proposed terms for the new lease. - **Section 27 = tenant does not wish to renew tenancy**