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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
What is an outcome of an IE called?
Determination
26
Guidance note for an arbitrator?
RICS Guidance Note- Surveyors acting as arbitrators in Commercial property rent reviews 2013
27
Guidance note for IE
RICS Guidance Note- Surveyors acting as Independent Experts in Commercial property rent reviews 2014
28
Within a rent review if you used without prejudice what would this mean?
Correspondence cannot be shows to arbitrator or independent expert. Form of privilege against disclosure of documents
29
What is an expert witness?
A role where a surveyor can be appointed by a party to give their professional opinion in front of a dispute resolver
30
What is an advocate?
A role where a surveyor can be appointed by a party to give their professional opinion in front of a dispute resolver
31
Before commencing an instruction, what information is required from the client?
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
Fee based for RR / lease renewal
Fixed fee Incentivised fee - percentage uplift or saving made Hourly rate (common for expert witness)
33
For a rent review, upon agreeing ToEs what would you do?
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
For a lease renewal, what actions are required by the surveyor?
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
What is a licence ?
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
Four requirements of a lease
Exclusive occupation Payment of rent Duration for specified term If more three years, terms must be in writing and signed as a deed
37
Differences between a lease and licence?
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
Case law for lease v licence
Street v Mountford 1985 If exclusive possession granted of defined area over 6 months- likely to be lease
39
Tenancy at will
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
Wayleave
Temporary right and revived annual payment Outlined in lease Cannot be transferred to new owner
41
Easement
Permanent right and receives capital payment Registered in Land Reg Signage in place to confirm Prescriptive - 20yrs uninterrupted
42
Adverse possession
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
Case law for Abitrator
Arbitration Act 1996
44
Contents of rent review memorandum
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
What is a Calderbank?
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
What is important about a Calderbank
Potentially binding if accepted Offer must set out clear terms, clear offer being made, capable of unconditional acceptance and timescales for acceptance
47
If a lease was protected and stayed in occupation would it renew?
Automatically continue on same terms known as holding over under s.24 LTA 1954
48
If Landlord wanted T to vacate what would they have to do?
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
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?
Lose security of tenure unless New lease in place Either party applied to court Agree extension of deadline to apply to court
50
Contents of s.25 notice
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
If you granted a new lease inside the act, what basis of value?
Must be at market rent S.32-35 of LTA 1954 Ignore occupation, goodwill and tenant improvements last 21 years
52
If T wanted to make any changes to the new lease, what principles apply?
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
Rent agreed under new tenancy
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
Interim rent
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
S.40 LTA
Check competent Landlord Check if tenant has protection Breach of statutory duty if not provide info
56
Competent landlord
S.44 Freeholder or superior tenant with unexpired 14 months +
57
Dispute resolution options for lease renewals
Default- County Court Professional Arbitration on Court Terms (PACT)
58
What constitutes a code compliant break clause?
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
Provisions of a rent review
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
Difference Part 36 Offer and Calderbank
Part 36- served by lawyers whereas Calderbank served by surveyors 36 is more prescriptive and greater cost
61
Legislation for new terms of lease renewal
O’May v City of London Tenant entitled to same terms subject to reasonable modernisation Eg- rent in line with RPI
62
For PACT, which despite resolver is used?
Independent Expert or Arbitrator decided on agreement In practice - IE used

Landlord And Tenant (3 decks)

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