Level 3 - Topps Watford Flashcards
Who were the occupiers on the estate?
Screwfix, Toolstation, City Plumbing Supplies
What was the key piece of evidence?
Key evidence: Screwfix – Rent Review 2022 agreed at £16.30 (10.094 sq ft)
How would you know if a lease was outside the Act? What is the process of taking a lease from being inside the act to outside?
Check the lease agreement:
* Look for a clause explicitly stating the lease is excluded from the security of tenure provisions
* Check the appendix of the lease for a Statutory/Simple declaration
What is included in a section 26 notice?
S.26 - Formal written notice seved by TT requesting a new leaese
Notice must include:
- ‘Without Prejudice’
* Tenant’s name
* Property details
* Proposed Start date
* Proposed lease terms (rent, duration, repair obligations)
What would make a s.26 invalid?
Incorrect timing - serving too early or lates (must be 6-12 months before the proposed start date of the new lease)
Served to wrong person - must be served to the competent landlord (person with the power to grant a new lease)
Improper Service - if the lease specifies a method of service (e.g. via recorded post), the notice must be served that way
Tenant is not in occupation - only tenants in occupation for business purposes can serve a Section 26 request
You said you served your client with a Section 26 notice; how does it protect their position?
- Secures the tenant’s right to stay – The landlord cannot evict them arbitrarily.
- Forces the landlord to engage – The landlord must accept or oppose renewal.
- Prevents uncertainty – Fixes a renewal date and terms for negotiation.
- Avoids rent disadvantages – Protects the tenant from excessive increases.
What adjustments do you make for assumed term?
Assumed Term – 1% a year term certain however market norm is 0.5% per term certain
What adjustments do you make for size?
For trade counter typically no adjustments for size unless over 12,000 sq ft.
What adjustments do you make for inside vs outside the act?
Inside vs Outside Act – 1 – 5% negligible
What adjustments do you make for specification?
Specification – negligible if on the same estate
Spec – Grade A vs B can be 5 – 10% (7.5% typically)
What key terms did you include in the Heads of Terms (HoTs) to align with your client’s objectives?
The HOTs included: SUBJECT TO CONTRACT
NEW RENT based on market evidence
LEASE LENGTH & BREAK OPTIONS to provide flexibility
REPAIRING OBLIGATIONS, ensuring a fair liability
RENT REVIEW PROVISIONS, negotiating upward-only restrictions if necessary.
Why did you advise your client to serve a Section 26 notice, and what are the key benefits of doing so?
I advised my client to serve a S.26 notice to formally initiate the lease renewal process and set out proposed terms, giving them control over the negotiations. This also protected their position in a rising rental market, ensuring the landlord could not delay negotiations to benefit from further rental growth.
What are the key protections for tenants under the Landlord and Tenant Act 1954?
The Act provides security of tenure, allowing tenants to renew their lease unless the landlord can oppose renewal under one of the statutory grounds in Section 30(1).
What are the potential risks in this scenario of not serving a Section 26 notice in a lease renewal?
The LL could DELAY NEGOTIATIONS, leading to higher rent increase.
The tenant might be forced into a statutory periodic tenancy, causing uncertainty.
The LL could serve a Section 25 notice with TERMS, LESS FAVOURABLE to the tenant.
What are the key differences between an open-market lease renewal and a renewal under the 1954 Act?
Open-market renewal: No statutory protection; terms entirely negotiable.
1954 Act renewal: Tenant has the right to renew unless opposed under Section 30(1).
Please can you take me through this example?
Appointed to act on behalf of an occupier for an upcoming lease renewal of an industrial unit.
Confirmed the lease was protected by the Landlord and Tenant Act 1954.
Advised client that the current rent was significantly below market level and a rental increase was likely on renewal.
Provided advice on the potential rental range.
Recommended serving a Section 26 notice to initiate renewal discussions and protect against further rental increases.
Advised on dispute resolution options in case negotiations became prolonged.
Negotiated and secured an ‘in principle’ agreement with the landlord, including a modest rental uplift and lease terms aligned with the client’s objectives.
Advised client to accept the agreement and was instructed to finalise Heads of Terms.
Lease was subsequently drafted by solicitors.
In a lease renewal, if negotiations become protracted, what can you do?
Serve a CB or a Part 36 Offer
When can you serve a CB in lease renewals?
You can serve a CB in lease renewals for PROTECTED TENANCIES. However it is best drafted by solicitors because the terms being offered are rent and non-rent terms.
Explain Part 36 offers.
Alternatively for LR’s which are inside the LTA 1954, ‘without prejudice save as to costs’ offer could take the form of a Part 36 offer under Part 36 of the Civil Procedure Rules. Legal advice should be sought over which offer might be more appropriate, and Part 36 Offers should be drafted and served by solicitors because they are more prescriptive and potentially carry greater cost sanctions than a Claderbank offer.
