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EHAPC > PE L&T > Flashcards

PE L&T Flashcards

1
Q

What is a lease?

A

Grant of a right to exclusive possession of land for a determinable period of time?

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2
Q

What is a licence?

A

Personal right to use a property in a certain way

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3
Q

What is a tenancy at will?

A

A tenancy with exclusive possession but not for a term of years certain

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4
Q

What is the key legal case relating to the lease vs. licence distinction?

A

Street v Mountford

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5
Q

What are the key requirements of a lease in this legal case?

A
  1. Exclusive Posession
  2. Fixed or periodic term
  3. Reserves a specified rent
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6
Q

What types of rent review basis exist?

A
  1. Fixed uplift
  2. Index linked
  3. Upward only
  4. Upward/downward
  5. Infinite possibilities - whatever the parties agree on
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7
Q

What legal case relates to time being of the essence?

A

United Scientific Holdings v Burnley Borough Council

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8
Q

When might time be of the essence?

A
  1. Express provision in the lease
  2. Emphatic language
  3. Contraindiction in the rent review clause or the lease
  4. Provision for consequences of non-compliance within a specified time limit
  5. Rent review clause linked to a break option
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9
Q

Why is it important to establish whether time is of the essence?

A

Getting it wrong may mean that the right to review is lost

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10
Q

What does without prejudice mean?

A

Cannot be disclosed to a third party/tribunal/Court if it is genuinely aimed at settling a dispute

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11
Q

What does subject to contract mean?

A

That the parties do not intend to be legally bound until a formal contract is executed

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12
Q

What does without prejudice save as to costs mean?

A

That the matter can only be brought before a third party/tribunal/Court on the matter of costs (providing it is a genuine attempt to settle)

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13
Q

What type of offer would have ‘without prejudice save as to costs’ on it?

A

A Calderbank offer

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14
Q

How do you know the valuation basis in a rent review scenario?

A

Assess the hypothetical lease terms, starting with the presumption of reality

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15
Q

What typical assumptions are in a rent review clause?

A

> Willing tenant
Willing landlord
Covenants observed by the landlord and tenant
Let as a whole
Let in parts
Tenant has already had the benefit of a rent free for fitting out
Anything else the parties agree on in the rent review clause

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16
Q

How does the valuation basis for a rent review differ from that for a lease renewal?

A

> The basis for a lease renewal is prescribed by the 1954 Act, not the lease

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17
Q

Would you apply a discount if a rent review clause had a restrictive user clause?

A

Yes - see Plinth Properties v Mott Hay & Anderson (-30% discount in this case - but will be assessed on a case-by-case basis)

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18
Q

Which of these are typical disregards you might find in a rent review clause?

A

> Goodwill
Tenant’s occupation
Tenant’s improvements
Anything that the parties agree on in the review clause

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19
Q

What is the top of the hierarchy of evidence?

A

> Open market letting

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20
Q

What is the highest out of:

  • Rent review
  • Lease renewal
  • Sale & Leaseback
  • Arbitration Award
A

Lease renewal

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21
Q

What are the differences between an Arbitrator and Expert?

A

> Arbitration is governed by the Arbitration Act 1996, an Expert by the lease

> An Arbitrator always has discretion on costs, an Expert only has power if the lease reserves this

> An Arbitrator is not liable for negligence if they acted in good faith, an Expert can be liable in damages for losses sustained through negligence

> An Arbitrator must refer to the parties’ evidence, submissions aren’t always required for Expert Determination

VS

> An Expert has a duty of investigation, an Arbitrator acts only on the evidence submitted by the parties (whilst also drawing their attention to matters they may not be aware of)

> There is no right of appeal for an Expert (although the Court may set aside the Determination in limited circumstances), an Award can be challenged under the 1996 Act

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22
Q

Can an arbitrator require disclosure by the parties?

A

Yes

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23
Q

How would you seek a third party appointment?

A

> Apply using an RICS DRS1 form
Mutual agreement

24
Q

What is the difference between an interim and a final Arbitator’s Award?

A

An Interim Award is final in all respects except as to costs

25
Q

What is the purpose of Calderbank offer?

A

> Protection on costs
Genuine attempt to encourage settlement by negotiation

26
Q

What is a Barclays Bank letter?

A

> Used where only the landlord can apply for the appointment of an Expert

27
Q

What is the difference between a contracted in and out lease renewal?

A

If a lease is within the Act, the tenant has security of tenure

28
Q

Which of these refer to the correct notices?

A

> Section 25 = Landlord can be hostile or non hostile

> Section 26 = tenant to renew

> Section 27 = tenant to quit

29
Q

What is the maximum length of lease term which can be granted by the Court under the 1954 Act?

A

15 years

30
Q

Under what section of the 1954 Act can either party request information on the other?

A

40

31
Q

What are the requirements for a business tenancy under Section 23 of the 1954 Act?

A

> Occupation of at least part by the tenant
Used for business purposes
Tenancy (not a licence or excluded tenancy)

32
Q

Can you contract out of the 1954 Act?

A

Yes - by serving the required notices (Simple declaration with 14 day cooling off period or Statutory declaration if within 14 days of lease commencement)

33
Q

Why might you want to contract a lease outside the 1954 Act?

A

> Requirement of headlease
Landlord wants to redevelop or reoccupy at a future date
Tenant may be able to secure a lower rent

34
Q

What is the relevant amount of time relevant to a Section 44 competent landlord?

A

14 months - freeholder or superior lease not ending within 14 months of the freehold

35
Q

What is holding over?

A

After a lease (with security of tenure) expires until the lease is brought to an end by service of the relevant notice

36
Q

What are the relevant timescales for a Section 25 or 26 notice?

A

6-12 months

37
Q

What is the relevant timescale for a Section 27 notice?

A

3 months

38
Q

Can a tenant serve a Section 27 notice after a Section 25 notice has been served?

A

Yes

39
Q

What does a Section 30 relate to?

A

Grounds of opposition (landlord)

40
Q

What are grounds of opposition?

A
  1. Breach of repair covenant
  2. Persistent delay in paying rent
  3. Other substantial breach
  4. Suitable alternatie accommodation
  5. Uneconomic subdivision
  6. Redevelopment
  7. Own occupation
41
Q

Does a tenant have to serve a counter notice to a landlord’s Section 25?

A

No

42
Q

To what extent can lease terms be mofidied in the new lease (O’May case)?

A
  1. Landlord must have valid reason on estate management grounds
  2. Changes capable being compensated by change in rent
  3. Changes must not materially affect security of tenure
  4. Must be reasonable
43
Q

What happens if the parties don’t agree a new lease by the notice expiry date?

A
  1. Tenant loses security of tenure if they do not protect their position with a Court application
  2. Parties should consider PACT as an alternative to Court proceedings
44
Q

What type of offer might you use to try to compromise a renewal dispute?

A
  1. Part 26
  2. Calderbank
45
Q

When is interim rent payable from?

A

Earliest date specified in the Section 25 or 26

46
Q

Can an interim rent application be made after the old tenancy is terminated?

A

Yes - it can be served after a Section 25 or 26 notice is served and within 6 months of termination of the old tenancy

47
Q

How is compensation for disturbance assessed?

A

1x rateable value (Tenant in occupation for under 14 years), 2x rateable value (Tenant in occupation for over 14 years)

48
Q

Under which Section 30 grounds of opposition is compensation for disturbance payable?

A

F

49
Q

Is there any other type of compensation?

A

Yes - under S1 Landlord and Tenant Act 1927 - for improvements (where the tenant had landlord’s consent or leave of Court)

50
Q

How is compensation for improvements calculated?

A

Lower of the value (i.e. net addition as a direct result of the improvements) or the cost of carrying out the improvements at expiry (minus the cost to put into a reasonable state of repair)

51
Q

What is PACT?

A

Professional Arbitration on Court Terms (although it can be via an Arbitrator or Expert)

52
Q

What is a break option?

A

Lease clause allowing one/either party to terminate a lease early

53
Q

What happened in the M&S v BNP case?

A

The tenant couldn’t claim back overpaid rent for the remainder of the quarter after the break date (I.e. no implied apportionment provision)

54
Q

Why are break clauses contentious?

A

Getting it wrong can lead to a lease continuing to expiry

55
Q

If a lease is within the Act, does a landlord need to serve a hostile Section 25 notice to accompany a break notice?

A

Yes

EHAPC (41 decks)

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