Level 3 - Sidcup Flashcards
Tell me about this Property?
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
Did you measure the property?
Yes to NIA and IMPS
Used NIA for discussion due to comparables
What is a Section 25 notice?
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
What is included in a S.25 notice?
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
What was the LL proposal?
Friendly
15 year lease with 5th year TBO options
Rent of £50,000
What were your clients objectives?
Remain in the property
15 year term with 5th yearly TBO breaks
Reduce rental increase
What is the passing rent?
£40,000 pa
Why did the LL try and revoke the S.25?
They were unrepresented at the start
Believed they could revoke S25 and vacate client
Did not have suitable grounds to evict
How did you navigate the revoke of S25 with the LL?
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
What are valid grounds for opposition?
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
What section is grounds for opposition of new lease?
Section 30
What was market evidence?
Nearby office comparables of a larger size
similar specification and parking provisions
OML within Sidcup
Some OML was below passing rent
Why was the LL unwilling?
The LL believed that due to inflation, the rent should go up
What is PACT?
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
What is the advantage of PACT?
Cheaper
Quicker
Full Court hearing avoided
Greater flexibility and control
Surveyor as arbitrator, rather than a judge
Why would your client lose security of tenure after date in S.25? How do you avoid this?
Part of S.25
Unless - new lease in place, either party applied to court, agreed extension of time
How did you agree an extension of time?
I requested my clients solicitors agree an extension of time with the LL solicitor
Agreed by both parties
Is there a situation where date passes in Section 25 but still have statutory rights?
If new lease is in place
Either party has applied to court
Agreed extension of time
What was the new rent agreed?
We agreed a rent of £40,000 pa
How did you achieve a nil uplift?
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
STell me about the Lease Renewal in Sidcup
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
What section tells us it is inside the Act lease?
Section 23
