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Landlord And Tenant > Level 1 > Flashcards

Level 1 Flashcards

1
Q

Methods of lease termination

A

Forfeiture
Surrender and negotiation
Break clauses
Lease expiry and servicing notices LTA 1954

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2
Q

Contracting out LTA 1954- types of declaration

A

Simple - parties have at least 14 days prior to committing to lease

Statutory- fewer than 14 days
Stat dec must be made infront independent solicitor

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3
Q

Procedure to contract out of LTA 1954

A

L required serve notice on T warning lease not protected “health warning”

T must make declaration, confirming received and accepted

Must be completed before lease signed

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4
Q

Reasons to contract out LTA

A

L flexibility
L redevelopment
L reoccupy
Requirement in head lease- subletting outside Act

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5
Q

Role of surveyor in dispute resolution proceedings

A

Roles in front of tribunal / dispute resolver

Expert witness

Advocate

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6
Q

What lease provisions impact value?

A

Alienation- restrictive would decrease value due to tenant being unable to sublet or assign

Repairing clause- FRI or IRI

Permitted use- more restrictive the less valuable

Break option- more flexible more valuable

Break penalty- less valuable

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7
Q

How would you recognise that a lease was contracted outside of LTA 1954?

A

Simple or statutory declaration annexed to the lease

Leases pre Regulatory Reform Order 2003 didn’t have declaration

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8
Q

When would the LTA 1954 act not apply?

A

Contracted out

Licences or tenancy at will

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9
Q

What is the basis of value for a rent review?

A

Market Rent including the assumptions and disregards as set out in the rent review provision

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10
Q

For a rent review what timelines would you adhere to?

A

Would review the rent review clause to see if time was of the essence

Not normally of essence United Scientific Holdings v Burnley Borough Council 1977

Also note notice provisions which could override time of the essence

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11
Q

What are the four usual assumptions?

A

Property available to let on open market - willing L&T for term yrs stated

Property fit and available immediate occupation and use

All covenants observed by L & T

Property may be used for purpose set out in lease

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12
Q

What are the three usual disregards?

A

Affect goodwill on T occupation

Ignore goodwill attached to the property

Tenants improvements if L consent granted for work

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13
Q

What is goodwill?

A

An intangible asset that accounts for the excess purchase price of another company

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14
Q

What is a deeming provision?

A

A provision which states if the Tenant does not serve the appropriate counter notice within a specified time, the tenant will have deemed to accept the new rent specified in the trigger notice

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15
Q

For a rent review, what is the heirachy of evidence ?

A

Relative weight attached to comparable evidence

Handbook of Rent Review by Fanshaw

OML’s
Lease renewals
Rent reviews
IE determinations
Arbitrator awards
LTA court determination
Hearsay
Sale and leaseback

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16
Q

What is the assumed term of the lease for a rent review

A

Unless explicitly stated- the assumed term is likely to be the unexpired residue

The Ritz Hotel v Ritz Casino

Can influence rental value

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17
Q

What would you find in a headline rent review clause and how is it different?

A

Ignored all incentives or concessions granted on a letting - fitting out, pure incentive

Difficult to achieve unless lease wording is explicit

Modern leases- fit out typically disregarded but pure incentives devalues

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18
Q

How would you decide which dispute resolution to use ?

A

Identified in lease

Usually two options- arbitrator or independent expert

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19
Q

Before appointment a dispute resolver what do you need to do?

A

Make an application to Dispute Resolution Service of RICS

Current cost application - £425

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20
Q

Arbitrator

A

Appointed DRS or agreed parties

Procedure governed by statute
Parties flexibility on procedure
Written or hearing

Decision based on evidence submitted

Arbitrator power to award costs including costs of arbitrator and parties

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21
Q

How would you appeal an arbitrators award?

A

Within 28 days of award on three grounds:

A challenge to tribunal jurisdiction

On a point of law

Serious irregularity

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22
Q

Independent Expert

A

Appointed follow application DRE but parties can agree

Procedure governed by contract - IE to agree full terms incl fees

IE detailed knowledge of market and duty to make own enquiries

No grounds to appeal determination but IE negligence

Can only determine costs for IE if lease allows

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23
Q

When may you use IE over arbitrator?

A

Where comparable evidence is scarce

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24
Q

What is an outcome of an arbitrator called?

A

Award

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25
Q

What is an outcome of an IE called?

A

Determination

26
Q

Guidance note for an arbitrator?

A

RICS Guidance Note- Surveyors acting as arbitrators in Commercial property rent reviews 2013

27
Q

Guidance note for IE

A

RICS Guidance Note- Surveyors acting as Independent Experts in Commercial property rent reviews 2014

28
Q

Within a rent review if you used without prejudice what would this mean?

A

Correspondence cannot be shows to arbitrator or independent expert.

Form of privilege against disclosure of documents

29
Q

What is an expert witness?

A

A role where a surveyor can be appointed by a party to give their professional opinion in front of a dispute resolver

30
Q

What is an advocate?

A

A role where a surveyor can be appointed by a party to give their professional opinion in front of a dispute resolver

31
Q

Before commencing an instruction, what information is required from the client?

A

Agreed terms of engagement
Client objectives
Copy of existing lease and plans
Copy of licences
Rent review memorandum
Contact details for inspections
Comparable evidence held by client

32
Q

Fee based for RR / lease renewal

A

Fixed fee

Incentivised fee - percentage uplift or saving made

Hourly rate (common for expert witness)

33
Q

For a rent review, upon agreeing ToEs what would you do?

A

Read lease licences, check is contracted out security of tenure provisions LTA 1954 s.24-28, Declaration annexed to lease,
If silent- lease inside Act

Check if time is of essence
Site inspection
Market rent valuation
Prepare report

Conclude negotiations and document in rent review memorandum

34
Q

For a lease renewal, what actions are required by the surveyor?

A

Read lease licences, check is contracted out security of tenure provisions LTA 1954 s.24-28, Declaration annexed to lease,
If silent- lease inside Act

Check if time is of essence
Site inspection
Market rent valuation
Prepare report

Serve notices/ check validity

Conclude negotiations and document in rent review memorandum

35
Q

What is a licence ?

A

A personal agreement between the licensor and licensee, giving right to enter a property

Licensee has no interest in the property and can be terminated at any time

E.g pop up shop in shopping centre

36
Q

Four requirements of a lease

A

Exclusive occupation

Payment of rent

Duration for specified term

If more three years, terms must be in writing and signed as a deed

37
Q

Differences between a lease and licence?

A

Lease provides occupier with an estate in relevant land, licence is permission to use land

Lease can be assigned, licence cannot

Lease cannot be terminated until expiry or break clause, licence revoked at any time

38
Q

Case law for lease v licence

A

Street v Mountford 1985

If exclusive possession granted of defined area over 6 months- likely to be lease

39
Q

Tenancy at will

A

Form of licence

Written agreement for unspecified time

Not legal interest and no renewal right- can evict T at any time

Allows T early entry for fit out work or whilst T agreeing new contracted out lease

40
Q

Wayleave

A

Temporary right and revived annual payment

Outlined in lease

Cannot be transferred to new owner

41
Q

Easement

A

Permanent right and receives capital payment

Registered in Land Reg

Signage in place to confirm

Prescriptive - 20yrs uninterrupted

42
Q

Adverse possession

A

Process person not legal owner can become legal owner though possession of specified time without permission

Squatter- 12yrs before LRA 2003, or 10 after. If not registered 10 yrs

43
Q

Case law for Abitrator

A

Arbitration Act 1996

44
Q

Contents of rent review memorandum

A

Name L& T
Address property
Date of lease and rent review
Confirmation new rent agreed
Signed and dated both parties

Or IE determination / arbitrators award / acceptance Calderbank

45
Q

What is a Calderbank?

A

Stemmed from Calderbank v Calderbank 1975

Following rent review dispute, it is a settlement proposal which safeguards its position on costs (without prejudice save as to costs)

46
Q

What is important about a Calderbank

A

Potentially binding if accepted

Offer must set out clear terms, clear offer being made, capable of unconditional acceptance and timescales for acceptance

47
Q

If a lease was protected and stayed in occupation would it renew?

A

Automatically continue on same terms known as holding over under s.24 LTA 1954

48
Q

If Landlord wanted T to vacate what would they have to do?

A

Serve s.25 hostile notice

Not more 12 months and not less than 6 before lease termination date

Must be given by competent L, state date for termination, prescribed form, grounds of opposition stated

49
Q

If acted on behalf of T and you are close to the date for a new lease and wanted to renew, what would this mean?

A

Lose security of tenure unless

New lease in place
Either party applied to court
Agree extension of deadline to apply to court

50
Q

Contents of s.25 notice

A

Name and address L & T
Property address
Date of tenancy end
Confirmation if new lease opposed or granted
Deadline to apply to court
Strong recommendation seek professional advice

L proposals for new tenancy if friendly notice

Grounds of opposition if hostile

51
Q

If you granted a new lease inside the act, what basis of value?

A

Must be at market rent

S.32-35 of LTA 1954

Ignore occupation, goodwill and tenant improvements last 21 years

52
Q

If T wanted to make any changes to the new lease, what principles apply?

A

Under O’May v City of London Real Property

Must be fair and reasonable e.g modernisation

Burden of changing terms on party proposing change

53
Q

Rent agreed under new tenancy

A

S.34 LTA - Rent under new tenancy

Rent should be open market rent by a willing lessor having regard to assumptions and disregards within the lease

54
Q

Interim rent

A

S.24A

Rent payable after expiry of contractual term and before lease renewal completed

Often same rent as agreed for new tenancy if demise doesn’t change

55
Q

S.40 LTA

A

Check competent Landlord

Check if tenant has protection

Breach of statutory duty if not provide info

56
Q

Competent landlord

A

S.44

Freeholder or superior tenant with unexpired 14 months +

57
Q

Dispute resolution options for lease renewals

A

Default- County Court

Professional Arbitration on Court Terms (PACT)

58
Q

What constitutes a code compliant break clause?

A

As per Code for Leasing Business Premises 2020

Vacant possession
Pay outstanding rent
Free of any continuing tenancies e.g licence
Paid break penalties

59
Q

Provisions of a rent review

A

As stated in 2.4 within Code of Leasing Business Premises 2020

Date of rent review

Basis- if upwards only, RPI or cap and collar

Disregards

Assumptions

60
Q

Difference Part 36 Offer and Calderbank

A

Part 36- served by lawyers whereas Calderbank served by surveyors

36 is more prescriptive and greater cost

61
Q

Legislation for new terms of lease renewal

A

O’May v City of London

Tenant entitled to same terms subject to reasonable modernisation

Eg- rent in line with RPI

62
Q

For PACT, which despite resolver is used?

A

Independent Expert or Arbitrator decided on agreement

In practice - IE used

Landlord And Tenant (3 decks)

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