Level 3 - Sidcup

Question 1

Tell me about this Property?

Answer 1

Office building - purpose built office park
Construction - Steel frame construction over ground and first
Age - 2007
Spec - solid flooring, recessed lighting, carpet, 10 parking spaces, open plan with reception
Size - 2,215 sq ft

Question 2

Did you measure the property?

Answer 2

Yes to NIA and IMPS
Used NIA for discussion due to comparables

Question 3

What is a Section 25 notice?

Answer 3

Landlords notice to terminate lease
Friendly notice with proposed terms of new lease
not more than 12 months and less than 6 months before expiry

Question 4

What is included in a S.25 notice?

Answer 4

Date of termination
Proposed terms of new lease (friendly)
Grounds for opposition of lease (Hostile)
within timeframe (12 and 6 months)
Max term of 15 years

Question 5

What was the LL proposal?

Answer 5

Friendly
15 year lease with 5th year TBO options
Rent of £50,000

Question 6

What were your clients objectives?

Answer 6

Remain in the property
15 year term with 5th yearly TBO breaks
Reduce rental increase

Question 7

What is the passing rent?

Answer 7

£40,000 pa

Question 8

Why did the LL try and revoke the S.25?

Answer 8

They were unrepresented at the start
Believed they could revoke S25 and vacate client
Did not have suitable grounds to evict

Question 9

How did you navigate the revoke of S25 with the LL?

Answer 9

I informed of my clients statutory right
I advised of grounds to to evict
I advised on the Dispute course if we could not agree rent
I advised on instructing a local surveyor

Question 10

What are valid grounds for opposition?

Answer 10

S.30 - 7 grounds
a. Breach of repairing covenant
b. Delay in rent payments
c. Other substantial breach
d. Provide suitable alternative accommodation
e. uneconomic subdivision
f. Demolition or reconstruction
g, Owner occupation

Courts can decide if a - d reasonable

Question 11

What section is grounds for opposition of new lease?

Answer 11

Section 30

Question 12

What was market evidence?

Answer 12

Nearby office comparables of a larger size
similar specification and parking provisions
OML within Sidcup
Some OML was below passing rent

Question 13

Why was the LL unwilling?

Answer 13

The LL believed that due to inflation, the rent should go up

Question 14

What is PACT?

Answer 14

Professional Arbitration on Court Terms
Parties agree to appoint an expert with market knowledge, opposed to a Court deciding
parties agree to postpone application to court to agree via PACT
Arbitrator nominated by RICS
Decision is binding

Question 15

What is the advantage of PACT?

Answer 15

Cheaper
Quicker
Full Court hearing avoided
Greater flexibility and control
Surveyor as arbitrator, rather than a judge

Question 16

Why would your client lose security of tenure after date in S.25? How do you avoid this?

Answer 16

Part of S.25
Unless - new lease in place, either party applied to court, agreed extension of time

Question 17

How did you agree an extension of time?

Answer 17

I requested my clients solicitors agree an extension of time with the LL solicitor
Agreed by both parties

Question 18

Is there a situation where date passes in Section 25 but still have statutory rights?

Answer 18

If new lease is in place
Either party has applied to court
Agreed extension of time

Question 19

What was the new rent agreed?

Answer 19

We agreed a rent of £40,000 pa

Question 20

How did you achieve a nil uplift?

Answer 20

Nearby evidence below passing rent
Wider market activity suggested offices being turned to alternative use - lack of demand
Settled for Nil, instead of pursuing reduction as some superior evidence at similar passing

Question 21

STell me about the Lease Renewal in Sidcup

Answer 21

Point 1 – The LL served a S.25 notice on my client, outlining new terms of the lease, which my client accepted and instructed me to negotiate on the rent.
Point 2 – The landlord became defensive. I advised my client if we cannot agree, we can proceed to PACT to settle dispute. However, the LL sought representation and we agreed
Point 3 – Due to delays, the date in S25 was due to expire, where my client may lose security of tenure. I agreed and extension of statutory period, whereby me and a now-represented-LL agreed a new rent

Question 22

What section tells us it is inside the Act lease?

Answer 22

Section 23