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PLP All Flashcards

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1
Q

O’May v City of London Real Property Co

A

Held that the terms of the current lease would be the starting point for the terms of the renewal lease. It is for the party who wishes to change the existing terms to justify the change by reference to changes of circumstances.

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2
Q

Corresponding date rule

A

6 months serve on 1 July = 1 Jan

If 31 Aug -> 31 Feb (feb obviously doesn’t have 31 days, so it would be the last day of the month)

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3
Q

From and including

A

10 years from and including 24 march, expires 23 march 2028

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4
Q

from

A

10 years from 25 march, means start date is 26th, which means expires on the 25

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5
Q

who can apply for court application?

A

either

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6
Q

Protecting court application

A

T lodge unilateral at Land Reg against L’s title (unreg land = pending land action)

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7
Q

Renewal lease terms/principles

A

parties agree otherwise the court will look to s32-54 of act to direct court as to new terms

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8
Q

Lambert v Woolworth

s19(2) LPA 1925

A

Improvements seen through the eyes of the Tenant. Thus, all improvements are alterations…

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9
Q

International Drilling

s19(1)(a) LTA 1927

A

Applies to qualified covenant relating to alienation
Upgrades Q to FQ and allows L to recover reasonable costs incurred.

Reasonable dealt within International drilling - grounds for refusal must be based on L and T relationship

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10
Q

s19(IA) applies to…?

A

Assignment only

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11
Q

s1 LTA 1988

A

Applies to ALL leases
Where a written applicaiton is made for L’s consent, L must respond in writing within a reasonable time (Dang Bang said this is 28 days).
NB: s1 does NOT upgrade a Q to FQ - it only applies to FQ covenants
Burden on L to prove refusal is unreasonable

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12
Q

s19(1)(a) cases
Law
of the four Ls with assignment

A

International Drilling
Moss Bros
Ashworth Fraser

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13
Q

International Drilling

Assignment

A

reason for refusal must pertain to actual agreement/L&T relationship and not frivolous factors e.g. not liking T

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14
Q

Moss Bros

A

Tenant mix policy = reasonable, policy stated to T and reasonable

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15
Q

Ashworth Fraser

A

L can refuse if anticipates will lead to a breach of convenant

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16
Q

Documents required for assignement of a lease

A

At least 3 (maybe more if L has imposed more conditions under Clause X)
License to Assign (entered into between L, T and A)
Deed of Assignment required between T and A
AGA (required by Clause X) entered into between L and T

NO NEW LEASE CREATED.

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17
Q

Recommendation Code 5

A

AGAs should NOT be required as a condition (unless proposed A is lower financial standing than T)

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18
Q

Registration of assignment

A

If registered - require register to change details of proprietorship
SDLT - may be charge if any premium is paid by assignee to T for lease within 30 days of completion

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19
Q

Law paragraph when doing the 4 Ls

for both assignment and alienation

A

Q: Clause X is upgraded by s19(1)(a) to FQ, this means L cannot withhold consent unreasonable.
International Drilling - reasons for refusal must pertain to agreement or L-T relationship, not frivolous
Moss bros: tenant mix policy is reasonable so long as stated and reasonable
Ashworth Fraser: can refuse if anticipates will lead to breach of covenant.

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20
Q

Crestford Ltd v Tesco

A

All preconditions have to be satisfied before L even has to consider giving consent.

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21
Q

Documentation for underletting

A

License to under let - parties to under let, L T and UT AND any guarantor of the under tenant
Under lease - executed by T and UT (refer to payment of L’s costs). Need to register if over 7 years,

NB term is always less than that of the superior lease, otherwise takes effect as an assignment.

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22
Q

Types of rent review

A

Stepped rent - rent will go up by a specific amount as set out in lease
Turnover rent - relative to turnover of Co leasing, %
Index Linked rent review - annual rent goes up by ref to agreed measure of inflation
open market rent - based on value of property and market rents of comparable property in same locality as the premises at the time of review

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23
Q

Market rents

A

based on value of property and market rents of comparable properties in same locality as the premises at time of review

  • involves PERIOD revaluation of rent based on what rent would be if premises were re let afresh at date of review
  • based on comparable
  • unusual for them to be ‘upwards only’, stay same or up
  • rent determined by valuer who looks to comparable and HYPOTHETICAL LEASE (and flexibility of ts terms).
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24
Q

SDLT payable in connection with RR?

A

(post 1 December 2003)
Yes if RR to take place within first five years of term
otherwise: only if abnormal increase in rent by 20%

25
Q

Process of Rent Review

A

If T delays in RR finalizing, will have to pay any shortfall retrospectively to L for the increased rent.
new rent documented in rent review memorandum signed by both.

26
Q

Why have an agreement for lease?

A

Usually becomes useful when either party have something to do

  • Parties agreed to grant lease condition upon PP
  • where L building premises from scratch and wants certainty T is moving in.
  • where T carrying out substantial work, L wants prior approval before
  • L may need 3P consent before granting lease (e.g. mortgage, superior L, PWB)
  • where L needs to secure T moving out before T moves in.
  • where both parties need certainty about date when lease is to complete
27
Q

Agreements for Lease

Agreed form lease

A

negotiated and attached to AoL. If Premises being built from scratch, then final plans may also need to be produced to define boundaries

28
Q

Agreements for Lease

Conditions

A

May be conditioned on another event occurring e.g. obtaining PP or carrying out environmental clean up or surrender of premises.

29
Q

Agreements for Lease

Term

A

could be any of the below:

  • term commences on day lease granted
  • commences on the day T occupies Premises (if prior to grant of Lease)
  • commences on specified date (e.g. quarter day prior to the grant of Lease).
30
Q

Agreements for Lease

Deposit on Exchanged

A

if a premium being paid, need decision if paid on exchange

31
Q

Agreements for Lease

Registration

A

AOL = estate contract which can be protected by C(iv) Charge against L’s name or by way of notice on charges register.
Can be done by:
- ANI - agreed notice: LR will approve if application is registered proprietor or if registered proprietor consents to entry of notice or satisfied of validity
- UNI - Unilateral notice - does NOT require registering proprietors consent (but less secure) . More conditional as no need to doge document.
- Exempt Information Document

32
Q

Agreements for Lease
Registration
Exemption Information Document

A

Want confidentiality.
Application made by submitting a form EXI (app for Registration to designate a document known as EID and form EXIA which sets out the reason supporting the application
EXI and EXIA must have an edited version of document supplied with them that is certified save the deleted information. Editing should only be to the extent that it is necessary to protect confidentiality
e.g. level of rent, break options, delineation provisions.

Exemption status = PERSONAL to applicant, therefore, change of ownership requires a new application.

33
Q

Agreements for Lease

Gurantor

A

If L insisted, a guarantor must be party to the lease to be bound

34
Q

Agreements for Lease

Security of Tenure

A

If agreed contracting out, procedure must be followed:

  • L serve notice on T 14 days before T bound to enter lease
  • T sign simple declaration: received notice, accepted consequences
  • Agreement of lease must contain wording that parties have agree to exclude SoT and reference the notice and declaration
  • statutory declaration if time is short (solicitor needed)
  • if grantor, they TOO should be served with the notice.
35
Q

Agreements for Lease

Money payable on completion of the lease

A

L may have to collect rent due from period until next payment day and collect apportionment of serve charge, insurance rent and VAT
- Quarter days:
25 March, 24 June, 29 September, 25 December

Surveyor’s method:
Daily rate = yearly rent/365
Number of days left in quarter? e.g. 10 October to 24 December = 76. Daily rate x no. of days = rent payable on completion.

36
Q

Agreements for Lease

SDLT

A

due 30 days from effective date. the effective date is take to the the date of the grant of lease unless ‘substantial performance’ has taken place beforehand. As agreement allows for early access/occupation to carry out works, payable within 30 days of access

37
Q

Agreements for Lease

VAT

A

payable under lease/AOL should be expressed to be EXCLUSIVE of VAT.
there should then be a covenant in the lease that T is to pay VAT where properly chargeable on any sums payable under the lease. L should take care to may its application to opt to tax before it makes any chargeable supplies because may not be able to make the option after it has made any supply

38
Q

Agreements for Lease

Termination

A

Usual. See delay for termination in post completion - stop date.

39
Q

Agreements for Lease

L Carrying out Works

A

Define works - attach a full set of plans and specification to the AoL
(same plans in any building contracts). May come with a condition to get PP.

Also measurement - relevant when building from scratch

40
Q

Agreements for Lease
L carrying out works
Departing from plans/specification

A

L needs some flexibility as economic and possible architectural grounds
in drafting ‘minor variations’ allowed without T consultation

41
Q

Agreements for Lease
L carrying out works
Standard

A

good and workmanlike manner in accordance with all applicable statutory approvals (e.g. PP and BRs)

42
Q

Agreements for lease
L carrying out works
Supervision of works

A

certified by L’s architect. T will want surveyor. In relation to certified L’s works = complete, three dates of significance:

  1. Date L’s works sufficiently complete in order for T to enter and fit out
  2. Date certified by architect /agent as ‘practically complete’
  3. Date when snagging items (minor works) which do not prevent occupation are finalized and ‘officially complete’

L will want it ASAP so can collect rent ASAP
T’s concern = architect owe duty to both L and T, certify collectively.

43
Q

Agreements for Lease
L carry out works
Delay

A

Force majeur clause usual in AFL. But if reason for delay not usual force majuer reason, but because taken longer than expected, T will be compensated - calsue providing for liquidated (pre-calculated) damages.
Long stop date: T insist on clause which allows T to terminate fi agreed LSD is exceeded

44
Q

Agreement for lease
L carry out works
Insurance

A

L will insure premise and L will make sure it remains L’s risk until competition of lease.
once complete, L will insure in normal way, and T reimburse L via insurance premium
If T carrying out works, then T will get own insurance

45
Q

Agreements for lease
L carrying out works
Defects after completion

A

who responsible depend on on numerous f factors. Is it covered by T repair obligations and collateral warranty?
T can insist of collateral warranty cover to protect itself

46
Q

Agreements for Lease
T carrying out works
Access
Standard

A

T may want access to fit out - not that this could be counted as effective date for SDLT purposes
L careful to allow T no more than license to enter for works (this license will not usually allow trading)

Standard: good and workmanlike manner and in accordance with statutory approvals. L may wish all obligations relating to T’s work be incorporated into a license for alteration. Draft license for act attached to lease with obligations for license for alteration to be complete simultaneously with grant of lease.

47
Q

Agreements for Lease

VAT and SDLT in Leasehold transactions

A

Grant of lease = EXEMPT from VAT unless L opts to tax, which means he can recover tax incurred on development costs
- where T pays is dependent on what lease says and when opt to tax
- if L opts to tax, must account to HMRC for VAT on rent
- most leases will expressly provide for rent to be exclusive of VAT (this increase flexible on future sale of property)
If a a lease makes no reference to the payment of VAT, position under s19(2) VAT applies and consideration is deem to be inclusive of all amounts in respect of VAT arising from it.

48
Q

Agreements for Lease

VAT on inducements paid on grant of lease

A

Especially in depress rental markets, L may follow T various forms of inducement
- reverse premium (where L pays T to take a lese)
- contribution to works to be carried out by T on premises
0- rent free period
Is there a supply? By T in return for inducement?
- Interest in land, falls within schedule 9 VATA 1994 and is EXEMPT unless option to tax made by person making supple
(e..g grant of a lease is a supply of an interest in land from L) or services other than interest in land. In which case it is a taxable at standard rate unless nature of supply falls within exemptions

49
Q

Agreements for lease
inducements
retn free period

A

T not doing anything in return, PURE inducement thus outside scope of VAT

50
Q

Agreements for lease

examples of standard rate supplies

A
  • carrying out building works to improve property by undertaking necessary repairs or upgrading the L’s property
  • carrying out fitting out or refurbishments work for which L has responsibility and is paying the T to undertake (this is more than just contributions toward T’s ordinary fitting)
  • Acting as anchor tenant
    An anchor tenant may receive inducement from L in return for providing an advertising role for L., e.g. promoting a shopping center and having a positive impact on footfall
51
Q

Standard rated or not?

A

Inducement to enter lease (outside scope of VAT) or whether some degree of benefit to L
Payment of reverse premium NOT normally taxable

Q: is T providing something that will benefit T over and above taking lease

52
Q

Agreements for lease

SDLT

A 
must submit SDLT return SDLT1 to LR within 30 days
Failure = strict penalty by HMRC 
Calculating SDLT
0 - 150 = 0%
150-250 = 2%
250+ = 5%

SDLT is charged on both premium and SDLT (note an assignment of a lease SDLT is generally not payable unless premium is paid)

53
Q

Formula B

A
  • cleared funds
  • someone authorised by firm
  • holding part of the contract in agreed form (check identical to seller’s part) and signed by buyer
  • agree completion date with seller’s solicitor which is acceptable to buyer and insert into contract
  • professional undertakings O(11.2)
54
Q

Box 11 additional things

A

A person who is not party to this transfer will not have any rights under or in connection with it by virtue of the Contracts (Right of Third Parties) Act 1999,

Indemnity

Proprietorship registers?

55
Q

Gordon v Sellico

A

Seller must avoid misrepresentation, must not conceal defects.

but caveat emptor for physical defects
PCR - if seller asks solicitor to mislead or misrepresent

56
Q

Cottingham

A

risk of negligence

re Building works

57
Q

10 year limits

A
  • breach of condition of planning permission from date of breach
  • material change of use without pp from date of change
58
Q

4 year limits

A
  • carrying out building works without pp

- material change of use in single dwelling hour from date of change

Property Law (4 decks)

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