Procedural steps for granting a least/underlease Flashcards
Who is the pre-completion contract drafted by?
Landlord
When is a tenant entitled to ask for a deduction of title?
When the lease is for more than 7 years (if for less, then not entitled to it)
If the headlease is unregistered, what proof of title can the tenant taking an underlease ask for?
The headlease and its assignments in the last 15 years
Can only call for freehold title deduction if the sublease is for over 7 years
Which searches and enquiries should be carried out?
Similar as for freehold transaction
Some extra ones, such as details of the landlord’s insurance policy
What is a licence to underlet, and who are the parties to it?
Landlord’s formal consent to underletting
The landlord, original tenant, and undertenant
3 usual terms of a licence to underlet
- landlord’s consent to underletting
- undertenant enters a direct covenant with the landlord to perform covenants in the lease and underlease
- the original tenant will pay the landlord’s costs for approving the underletting and granting the licence
Which sum/s is SDLT payable on?
Any capital sum: same rates as for freehold
Rent: calculate “net present value” (total rent due - 3.5% per annum)
SDLT rates on “net present value” of rent
Up to 150,000: 0%
150,001-5m: 1%
Above 5m: 2%
What is the deadline for paying SDLT?
14 days after completion
LTT rates on “net present value” of rent
Up to 225,000: 0%
225,001-2m: 1%
Above 2m: 2%
What is the deadline for paying LTT?
30 days after completion
Which leases must be registered?
Leases over 7 years long, whether the land is registered or not
Which case is the self-help remedy for the landlord called after?
Jervis v Harris
What is the effect of the landlord’s self-help remedy?
The landlord can recover the cost of repairs as a debt, not as a damages claim
What is the procedure for the landlord’s self-help remedy clause?
The landlord can serve a notice specifying the works required- if the tenant doesn’t start them within the specified period, the landlord can carry out the works and recover the cost from the tenant as a debt
To be legal, how must a surrender be made?
By deed
What are the 3 conditions for the LTA 1954 to apply?
- there’s a tenancy,
- tenant is in occupation,
- for business purposes
When does the LTA 1954 NOT apply?
- tenancy at will,
- tenancy for under 6 months, where the tenant hasn’t been in occupation for the past 12 months
- if the landlord and tenant contract out of it
How can the LTA 1954 be contracted out of?
The landlord must serve a notice in prescribed form, and the tenant must make a declaration in the prescribed form agreeing
If there’s less than 14 days notice to the tenant before the grant of lease, the tenant must make the declaration before an independent solicitor
What is the effect of the LTA 1954 applying?
The tenancy won’t end, unless terminated using a LTA provision
If rent is annual and split into 4 instalments, what are the 4 dates on which it’s usually paid?
25.3.
24.6.
29.9.
25.12.
What is open market rent review?
When the rent is adjusted at regular intervals (usually every 3-5 years) based on the open market rental value, taking into account the physical aspects of the property and the terms of the lease
What is commonly disregarded in open market rent reviews?
- any effect of T being in occupation (can’t increase rent for benefit of tenant not having to move)
- any goodwill attached
- any effect on rent of any improvements made by the tenant voluntarily
Can the landlord require a premium from the original tenant for allowing assignment?
No, unless the lease expressly provides for it
