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SQE1 FLK 2 > Property > Flashcards

Property Flashcards

Limited, based on review videos only

1
Q

What do you need to do before you agree to act on a clients sale or purchase?

A

ID checks (entitled to deal with property?)

Instructed properly by the client (e.g., a couple, is 1 person speaking for both?)

Check conflicts of interest

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2
Q

What points should the buyers solicitor raise with their clients?

A

Timescale expectations

Costs

Co-Ownership Advice

Survey

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3
Q

What are the types of survey

A

Basic Valuation (major obvious defects, minimum for a mortgage)

Homebuyers report (for property in reasonable condition, less than 150 years old)

Full structural survey (listed, extensive renovations done or planned $$)

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4
Q

What checks should you do when being instructed by a company?

A

If small company with 1 director – fine

Otherwise, check for a board resolution

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5
Q

Should a buyers solicitor read the survey? Why/why not?

A

Yes

There is a section specifically written for a solicitors attention that require legal investigation

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6
Q

What types of finance are available for residential purchasers?

A

Cash

Money

Mortgage

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7
Q

What types of finance are available for commercial purchasers?

A

Syndicated loan (from a number of different lenders)

Equity finance

Development finance (lender can step in to complete development if borrower doesn’t)

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8
Q

What taxes are more relevant to property transactions?

A

Stamp (Land transaction in Wales)

Capital Gains

VAT

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9
Q

Who pays CGT on properties?

A

Only individuals

Corporations pay corporation tax

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10
Q

For which type of property, is CGT exempt for individuals?

A

Main homes

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11
Q

What is caveat emptor and its relevance to property transactions?

A

The expectation of refunds for defaults

Not allowed in land, you buy it and you’re done

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12
Q

Which solicitor provides the title and draft contract?

A

Seller

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13
Q

What are the buyers solicitors duties in the pre-exchange phase?

A

Send enquiries/review standard replies/raise additional

Investigate title

Do searches

Report on title to the buyer

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14
Q

At what point are the parties legally obligated to purchase?

A

Contract exchange

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15
Q

What is the date of completion?

A

Date that property and money changes hands

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16
Q

What must a seller obtain before marketing a property?

A

Energy Performance Certificate

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17
Q

What is a memorandum of sale?

A

A document which outlines agreement
between the parties (price) and will detail the solicitors who will be acting in
relation to the conveyance

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18
Q

What are the pre-contract steps for the sellers solicitor?

A

Obtain copies of title/title deeds
- If mortgaged, could be held by the lender… give undertaking that you have docs pending mortgage discharge

Draft and send contract package

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19
Q

What is included in the contract package prepared by the sellers solicitor?

A

The draft contract in duplicate

The completed Property Information Form (PIF)
and Fittings and Contents Form (F&C)

A copy of the Seller’s title/epitome of title for
unregistered land and title plan

Other relevant documents, if any

Guarantees, if any

AND

Planning permission, if any.

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20
Q

What does the buyer gain after contract exchange?

A

An equitable interest

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21
Q

What is the name of the process that both solicitors do during title investigation?

A

Sellers: deduces title

Buyers: investigates title

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22
Q

What 3 things does the BS have to check for when investigating title?

A
  • checking that the seller is able to sell the property;
  • identifying the extent of the property; and
  • any rights that benefit or burden the property
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23
Q

What does it mean that covenants/easements have been abstracted?

A

They are added to the official copies at the Land Registry

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24
Q

What is on the property register?

A

freehold or leasehold

postal address or a description of the property,

refers to the title plan (usually the land edged red)

and sets out any rights benefitting the property.

Exclusions on the property

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25
Q

What rights should you look for in the property register when investigating?

A

Access (unless its a house from the road)

Public water supplies and drains or private ones that connect to public ones

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26
Q

What 4 issues should be considered after identifying rights on the property register?

A

Adequacy (wide enough driveway for car?)

Maintenance (might be required if there are private rights)

Burden registered (make sure the burden is properly registered on the servient land VIA index map search)

Adoption (if adopted, frontagers might need to ‘bring it up to adoptable standard)

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27
Q

What type of search shows you access to public water supplies and drains?

A

water and drainage search

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28
Q

What search shows you whether an owners land is registered?

A

Index map search

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29
Q

What happens if the servient land hasn’t been registered?

A

Make a caution against first registration so that the burden will definitely be registered at the time of first registration

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30
Q

What is an ‘exclusion’ on a property

A

E.G., rights that belong to other people on your property

Mining/minerals, hunting/fishing

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31
Q

What is on the proprietorship register?

A

class of title

registered proprietor

and if applicable, restrictions and the indemnity covenant.

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32
Q

What identifying info about an owner is on the proprietorship register?

A

Full name/address

Company number

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33
Q

If there is more than 1 registered proprietor, what do you need to make sure of regarding execution of the transfer?

A

That they all sign

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34
Q

What has to happen when you buy if there was 2 people on the proprietorship register, and 1 died, and they hold as beneficial tenants in common?

A

A second trustee need to be appointed on transfer so that you an overreach their beneficial interest which removes the restriction

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35
Q

What is the wording of a restriction on the proprietorship register indicating tenancy in common?

A

no disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.

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36
Q

What is the wording of a restriction on the proprietorship register indicating a mortgage?

A

RESTRICTION: Except under an order of the Registrar no disposition by the proprietor of the land is to be registered without the consent of the proprietor of the charge dated 17 June 2005 in favour of Redminster Building Society referred to in the Charges Register.

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37
Q

How do you know if there is an indemnity covenant chain on the property?

A

There will be a note on the proprietorship register

(1 July 2005) The Transfer to the Proprietors contains a covenant to observe and perform the covenants referred to in the charges register and of indemnity in respect thereof.

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38
Q

What is contained on the charges register?

A

charges

restrictive and positive covenants that burden the property

registered leases

and easements over the property

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39
Q

What 2 entries are made on the registers for mortgages usually?

A

1 on the charges

1 on the proprietorship preventing the sale

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40
Q

What is the wording of a typical mortgage charge?

A

(1 July 2005)REGISTERED CHARGE dated 17 June 2005 registered on 1 July 2005 to secure the monies including the further advances therein mentioned. (1 July 2005) Proprietor: Redminster Building Society of 28 High Street, Redminster RD6 9AR.

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41
Q

What is the important (and basic) point you must make sure of if there is a mortgage?

A

That the seller is agreeing to release the mortgage on completion

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42
Q

Where do the benefits of covenants appear on the register?

A

Property

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43
Q

What approach should you take if you find a burden of a restrictive covenant on the charges register to determine if it is binding?

A

Assume it binds the property

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44
Q

What approach should you take if you find a burden of a POSITIVE covenant on the charges register to determine if it is binding?

A

Look for the indemnity covenant in the proprietorship register

If NONE

Ignore the positive covenant

IF THERE

It is binding

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45
Q

If a covenant binds a property, what should you check next?

A
  1. Covenant already breached? = seller should provide an indemnity at their cost
  2. Affects buyers proposed use? If not = inform them but probably proceed
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46
Q

What should you do if a covenant affects the buyers proposed use?

A
  1. Consider insurance
  2. Approach person with benefit for consent (they may charge)
  3. Apply to Lands Tribunal Upper Chamber (only restrictive)
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47
Q

Can you approach the person with benefit, before going for insurance?

A

No, insurance will be refused if you do that

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48
Q

What is the epitome of title?

A

Schedule of relevant deeds and documents for unregistered land

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49
Q

What is the root of title?

A

The conveyance that shows good title to the property

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50
Q

What are the requirements for a root of title to have?

A

Dated 15 years ago

Deals with both legal and beneficial title to property

Adequately describes the land being conveyed

Does not cast doubt on the sellers title

Chain of title

Other documents

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51
Q

Why must root of title be 15 years or older?

A

Because compulsory registration has existed for that long

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52
Q

Why is it annoying if the last transfer of unregistered land was a gift?

A

Because on a transfer for value, BS can be assumed to have investigated title a further 15 years back too

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53
Q

What words does the root of title have to have to show that both legal and beneficial titles were transferred?

A

‘seised in fee simple in possession’ and ‘agreeing to sell the same’ to the buyer ‘as beneficial owners’

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54
Q

When would a root of title ‘cast doubt’ on the sellers title

A

Executed under power of attorney, not clear if that power of attorney was still in force

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55
Q

What is a chain of title?

A

When the good root of title is not most recent, there is a gap and you must now establish legal ownership back to the root

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56
Q

What ‘other documents’ should be included in the epitome of title?

A

Any document under which a seller was empowered to sign a conveyance

  • executor – supply the grant of representation,
  • survivorship – death certificate
  • mortgages (root onwards) + their vacating receipts
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57
Q

What documents do you not need to include (may) in the epitome of title?

A

· Documents that only affect the beneficial interest (such as declarations of trust)

· Expired leases

· Old land charges searches are not required, but the seller’s solicitor will often provide them as they will be helpful to the buyer’s solicitor.

· There are various documents such as planning permissions, old searches, correspondence, etc that are not needed. These may, however, be relevant to replies to enquiries.

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58
Q

How does the BS investigate the unregistered title?

A

Checks the epitome and its copy documents

Ensure seller is entitled to sell

Issues that could affect the value of the property

Issues affecting buyers use of the property

Same as for registered**

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59
Q

What is ‘worth checking’ for a BS of unregistered land?

A

That is actually unregistered

Neighbouring registered titles do not encroach on its boundaries

Reveals cautions against first registration

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60
Q

What does a caution of first registration indicate?

A

That somebody believes they have an interest in the property

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61
Q

Why is checking that the formalities of deeds in a chain of title for unregistered land more complicated than checking other deed formalities?

A

Because the deed formalities rules changed and most unregistered deeds were dated before those rules

(if before 1 July 1990)

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62
Q

What are the formalities for deeds of land before 1 July 1990?

A

· Clear on its face that it is a deed

· Signed as a deed and witnessed

· Sealed

· Delivered as a deed – this usually takes place by inserting the date

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63
Q

In addition to valid execution, what other thing does each deed of unregistered land need to have?

A

A stamp, indicating that SDLT was paid

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64
Q

What stamp do deeds after 1931 need to have?

A

One that says ‘particulars delivered’ which means they were properly stamped

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65
Q

What is a Form A restriction?

A

One that prevents the property from being sold by a single owner (indicates beneficial interests)

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66
Q

What are the Land Charges Register (unregistered land) searchable by?

A

Individual and company name

Not address

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67
Q

If a sellers solicitor provides you with searches against previous owners, can you rely on those searches?

A

Yes

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68
Q

If there is no vacating receipt of a mortgage in the bundle for unregistered land, what should you do?

A

Buyer’s solicitor should elicit from enquiries that the seller intends to repay it, and make sure that this is covered by both the contract and replies to requisitions on title.

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69
Q

Which mortgages are registered for unregistered land?

A

Only second, third etc

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70
Q

If there is a pre-root document, not mentioned in the root of title, that has easements/covenants etc… does the sellers solicitor have to give it over?

A

Weirdly, no. WTF

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71
Q

When do restrictive covenants bind unregistered land?

A

Only if registered Class D land charge

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72
Q

Where do you check for positive covenants for unregistered land?

A

Deeds

Ignorable if indemnity chain is broken

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73
Q

What happens if you know there are covenants… but you don’t know what they are or where?

A

Probably get indemnity insurance

Report to buyer, lender

Probably ask the seller

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74
Q

Which solicitor does the pre-contract searches and enquiries?

A

Buyer

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75
Q

Regarding standard searches is it SHOULD or MUST?

A

SHOULD carry them out

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76
Q

What are the 2 parts to a local search?

A

LLC1 – local land charges register

CON29 – local authorities replies to enquiries

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77
Q

Can you order just one part of the local search?

A

Yes but you probably need both

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78
Q

What types of things are in LLC1 search?

A

Granted planning permissions (not refusals)

Planning enforcement notices

Article 4 Directions

Conservation areas and listed buildings

Tree preservation orders

Other misc. charges

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79
Q

What is an article 4 direction?

A

disapplies or modifies the General Permitted Development Order

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80
Q

What is a General Permitted Development Order?

A

Gives permission to carry out certain items like extensions, dormers, fences, satellite dishes without planning permission

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81
Q

Which is included in CON29 regarding planning?

A

Planning granted

Pending planning applications

Refused planning

Building regulations approvals

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82
Q

Which is included in CON29 regarding enquiry replies?

A

· details of adopted roads and pavements and public rights of way;

· land that is required for public purposes – this means that it may be compulsorily acquired by the local authority in future;

· information about contaminated land insofar as the local authority are aware, but this is limited and does not replace an environmental search.

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83
Q

What forms, and information comes from them for a drainage and waterways search?

A

The drainage and water search checks whether the property is connected to a public sewer and water supply.

Form CON29DW for residential property

Form CommercialDW for commercial property

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84
Q

What does a desktop environmental search do?

A

if the property is likely or not to be contaminated based on historic maps and records

AND

risk of flooding

Illegal stuff not findable

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85
Q

Does drainage and waterways give you flooding information?

A

No,

CON29 does

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86
Q

Why is a desktop environmental search important?

A

Because if land is contaminated, buyer probably has to pay for the remedy

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87
Q

What is a chancel repair search?

A

historic right of a parish church to claim contributions to the cost to the repair of the church chancel, which is the area near the altar.

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88
Q

Why is smth so meaningless like chancel repair part of the standard?

A

the low cost of a chancel repair search and the high potential loss if there is chancel repair liability

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89
Q

What should you do if there is a chancel repair liability?

A

Explore insurance

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90
Q

What is the complication, with whether or not chancel repair is an overriding interest?

A

It was, until 13 Oct 2013

NOW

Church has to register the interest

If sale for value happens without registration, claim is extinguished

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91
Q

What 2 searches relate to title?

A

Index map

Land charges

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92
Q

In what 3 circumstances do you need an index map search?

A

Unregistered title

Number of titles being acquired

Exception of mineral rights

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93
Q

What does an index map search do?

A

Check all the registered titles within a specified boundary

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94
Q

Is the local land charges LLC1 the same search as the land charges?

A

NO

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95
Q

What does the land charges search do?

A

Identifies burdens on unregistered land

Like class D land charges

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96
Q

What are the standard searches?

A

LLC1 (charges, planning PERMISSION, conservation etc)

CON29 (all planning, public access, compulsory acquire rights)

Drainage and water

Desktop environmental

Chancel repair

Index map (unregistered or mineral rights)

Land charges (unregistered land)

Companies search

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97
Q

What are the optional searches?

A

CON90

Highways

Mining Coal

Cheshire salt

Tin/clay/limestone

Phase 1/2 survey

Floods

Utility providers

Railways

Waterway

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98
Q

What 3 things does SS do before exchange?

A

Deduces title

Answers pre-contract enquiries

Prepare draft contract

EXCHANGE

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99
Q

What 6 things does the BS do before exchange?

A

Investigate title

Pre-contract searches

Pre-contract enquiries

Report on title

Buyers mortgage

Approve draft contract

EXCHANGE

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100
Q

How does CON290 operate?

A

Usually along a CON29, you tick extra boxes for stuff you want

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101
Q

What common enquiries are in CON290?

A

Common land/town/villiage green

Private road proposals

Areas of outstanding natural beauty

Pipelines

Noise abatement zones

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102
Q

What is an environmental phase 1 search?

A

Site inspection

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103
Q

What is an environmental phase 2 search?

A

Phase 1 shows risk

Soil/water samples

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104
Q

When can you use flood search/why?

A

Shows if property flooded in the past

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105
Q

What does a waterways search show?

A

Liability for maintenance of waterways

Rights of way for banks and tow paths

Drainage/fishing

Owner liability for flooding

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106
Q

When is planning permission needed?

A

When there is development of the land

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107
Q

What are the planning permission exceptions?

A

Only interior works

Not materially affect external building

Changes of use within the same class

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108
Q

What is a sui generis?

A

A general use class

Any change of use in this class requires planning permission

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109
Q

What are the 7 most important use classes?

A

General industrial

Hotels

Residential institutions

Dwelling houses

Commercial/business and service

Learning/non-residential institutions

Local community

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110
Q

What uses are sui generis?

A

Theatres

Amusement arcades

Launderettes

Fuel stations

Pubs/nightclubs

Takeaways

Concert halls

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111
Q

What is the GDP0 2015?

A

General planning permission so you don’t need to apply

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112
Q

What to do if you don’t know if GDPO applies?

A

Apply for a crtificate of lawfulness

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113
Q

Can you need building regulations but not planning permission?

A

Yes

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114
Q

What are the 2 steps to the building regs process?

A

Full plans and specifications must be submitted to the building control department of the local authority for approval.

After completing the works, building control inspect the work and issue a certificate of compliance.

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115
Q

What is the planning permission enforcement deadlines?

A

4 years for:

· Building works carried out without planning permission; or

· Change of use to a single dwelling house.

10 years for:

· Any other change of use; or

· A breach of a condition to a planning permission.

**The local authority can take enforcement action after these deadlines if the breach has been deliberately concealed.

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116
Q

What are the building regulations deadlines?

A

· 6 months after discovering a breach to prosecute a person responsible for the works for up to two years from the date of completion of the works

· 12 months to serve an enforcement notice.

There is no time limit on their seeking an injunction through the courts

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117
Q

What should you do if there is risk of enforcement actions for planning issues?

A

· An indemnity policy to cover the financial losses caused by enforcement – this should be provided at the cost of the seller

· Retrospective planning permission

· Compliance with a condition (if this is the breach)

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118
Q

What should you do if there is risk of enforcement actions for building regs issues?

A

· An indemnity policy to cover the financial losses by enforcement.

· A regularisation certificate and remedying any non-compliant work.

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119
Q

What do indemnity policies for building regs not cover?

A

structure collapsing or personal injury or death.

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120
Q

What remedies does the local authority have for breaches of planning permission?

A

· A planning enforcement notice requires that the land be restored to the condition it was in before the unauthorised development took place.

· A stop notice can only be served with an enforcement notice and prohibits the carrying out of further activities in breach of planning control.

· A breach of condition notice is similar to a planning enforcement notice but requires compliance with conditions imposed by a planning permission.

· The local authority can also seek an injunction from the court if they consider it necessary.

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121
Q

Why is a contract important in residential transactions?

A

Sets a date for completion so you can have an effective chain, order mortgage funds, leave house etc

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122
Q

What are the key things in the standard condition of sale?

A

Address (plan of property)

Parties (seller, PR)

10% deposit by default

Deposit held as a stakeholder (default)

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123
Q

What happens if you don’t have a full 10% deposit under the standard conditions of sale?

A

You can agree 5%

But if you’re late completing, the penalty is paying the full 10%

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124
Q

Who holds the stakeholder deposit?

A

Sellers solicitor

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125
Q

What is the stakeholder exception, and does it apply to just the SCS or also the SCPC?

A

You can apply the deposit towards a new purchase e.g., to fulfil the chain

Not available commercially

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126
Q

What is a title guarantee and who confirms it?

A

Seller confirms have the right to sell the property and that it is free of all encumbrances (rights against the property) other than those disclosed in the contract, or which the seller didn’t and couldn’t have known about.

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127
Q

What is a limited title guarantee?

A

No such encumbrances have been created during the seller’s period of ownership

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128
Q

What is no title guarantee?

A

seller does not give any guarantee that the property is free of encumbrances or even that the seller has the right to sell the property.

*insurance is available

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129
Q

Who typically sells with limited guarantee?

A

Executors/PRs who have limited knowledge of the property

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130
Q

Who typically sells with no title or guarantee?

A

Administrator/liquidator

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131
Q

How is the title guarantee different from the class of title in the registry?

A

The title guarantee is a contractual guarantee given by the seller.

The class of title (such as title absolute or possessory title) is the Land Registry’s guarantee as to the quality of title.

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132
Q

On what day, and how far after exchange, does completion usually happen

A

Friday

2 weeks later

Can agree whatever you want

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133
Q

Why do simultaneous exchange and completion if the contract part isn’t necessary?

A

Because you can get other contractual benefits you wouldn’t otherwise

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134
Q

If completion date is left blank, what is the default?

A

20 working days

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135
Q

What is the default completion time?

A

2pm

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136
Q

What does it mean that risk passes to the buyer at exchange?

A

After signing, even if there is a tornado, you still have to buy the property

Otherwise everything in the chain is gone

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137
Q

What are the pre-made special conditions for residential?

A

Tie contract to SCS

Amend title guarantee to limited

Included/excluded contents with property

Vacant possession

Completion time

Misrep protection (entire agreement unless fraud etc)

Occupiers consent (all 18+ consent to sale

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138
Q

What special conditions are for commercial?

A

Deposit won’t come from BS account

Terms of transfer, annexation of covs and eases

VAT: capital allowances, rights of residential tenants, service agreements

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139
Q

Which residential properties is their VAT?

A

Only newly constructed

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140
Q

What are the standard rated supplies for VAT and what is the standard rate?

A

20%

Less than 3y old commercial property

Older commercial property opted to tax

141
Q

Which properties are VAT exempt?

A

Old residential

Old commercial, opted not to tax (3y)

142
Q

What properties are 0 rated?

A

New residential

**buyer doesn’t pay VAT, but the seller can use the output to cover the input

143
Q

Which buyers won’t wanna buy opted-in VAT properties?

A

Those who can’t recover their output from input

Itll be a 20% increase in price

144
Q

What conditions are in the SCPC related to VAT?

A

Condition 2: DEFAULT is standard rated at 20%

  • Special cond 9 = “I AM MAKING AMENDMENTS”
  • Tickbox A1 = I am not paying standard rated, and am exempt from VAT

-Tickbox a2 = I AM NOT STANDARD, I AM A TOGC?

145
Q

What is a TOGC?

A

Transfer of going concern

Seller lets for income, buyer also will

**not taxable supply for VAT

146
Q

In commercial, what does standard cond 2 declare?

A

Property is standard rated

Buyer will pay 20% VAT in exchange for VAT invoice from seller

147
Q

What agreement is made from A1 tickbox?

A

Seller: property is NOT subject to VAT

Buyer: I will NOT opt to tax

148
Q

What happens under tickbox A2 for TOGC?

A

seller = promise i am letting for business

Parties: agree on matters necessary to this business exchange

149
Q

What happens during law society formula B?

A

Identify contract blanks and fill

Agree hand amendments/special conditions

Agree/write completion date in space

Agree to exchange using formula B

Agree date/time of exchange

Give each others names to write in the contract

150
Q

What undertakings does law society formula B impose?

A
  1. Hold signed contract to the other solicitors order
  2. Post signed contract to other solicitor that day first class or DX or hand
  3. BS to send deposit form of payment specified by the contract
151
Q

When do you use formula A?

A

Same solicitor holds both contracts (e.g., one solicitor is abroad)

152
Q

What is the difference between formula B and A?

A

SS does an undertaking to send their clients signed contract to the other solicitor

153
Q

What is Formula C?

A

for chains

never used, too complicated

Even in chains they use b

154
Q

What issues are there in pre-completion to address?

A

· The transfer deed

· Pre-completion searches

· Replies to requisitions

155
Q

Which solicitor drafts the transfer deed?

A

BS

sOMETIMES SELLER if they want

156
Q

Who executes the transfer deed?

A

Seller

157
Q

When does the buyer also need to execute?

A

· There is an indemnity covenant to observe positive covenants

· The buyer is giving covenants or easements over the property

· The buyer is agreeing to any other obligations

158
Q

What are the pre-completion searches for registered?

A

OS1

159
Q

What does OS1 do?

A

confirms that there are no changes to those official copies that the SS provided

160
Q

How long a period of priority does OS1 give?

A

30 working days

161
Q

What is the benefit offered by the period of priority? OS1 search

A

Provided that the buyer’s application for registration is made within that window, it will take priority over any other application, even if it dates before the buyer’s application.

162
Q

Can you extend an OS1 if you run out of time?

A

NO

163
Q

What pre-completion searches should you do for unregistered land?

A

Land charges search (K15)

Bankruptcy search (K16)

Company search

164
Q

What advantage does a clear Land charges search (K15) provide?

A

it offers priority to the buyer against any applications FOR REGISTRATION (COMPULSORY) made within the priority window.

15 working days.

165
Q

What does a Land charges search (K15) do?

A

Against the full name or names of the seller. This identifies any adverse matters against the seller that affect the property.

166
Q

Why do a bankruptcy search?

A

If the buyer’s solicitor also acts for the buyer’s mortgage lender:

Protects the mortgage lender against the mortgage advance being claimed by a trustee in bankruptcy.

Like the land charges search, this confers priority of 15 working days.

167
Q

Why do a company search?

A

If buying from a company (checked against seller):

This will check for any pending insolvency or charges against the company.

As there is no priority period for a company search, it should be carried out just before completion

168
Q

Besides pre-completion searches, what else should you get before completion?

A

Requisitions on title

they now contain procedural matters regarding completion, such as the location of keys and meter readings. Importantly, however, they contain the seller’s solicitor’s confirmation that they will adopt the Law Society Code for Completion by Post and undertake to discharge mortgages affecting the property.

169
Q

What is TR1, TP1 and TR5 forms?

A

TR1: standard transfer

TP1: transfer part of land

TR5: transfer a portfolio of titles

170
Q

How can a company execute a deed?

A

Company seal

2 directors OR 1 director + company secretary

1 director, independent witness

Senior employee, authorised under a POA

171
Q

What formula is used for completion?

A

Law society completion by post

172
Q

How does the law society completion by post operate?

A

The buyer’s solicitor is given guidance on what is required from them, and only the seller’s solicitor gives undertakings that are enforceable by the Solicitors Regulation Authority, and if necessary, by the courts.

The seller’s solicitor’s undertakings allow the buyer’s solicitor to know that it is safe to send the money to them.

173
Q

What exactly happens with completion by post?

A

BS sends money to SS

SS confirms completion, dates/signs transfer deed

SS releases keys to seller (calls agent)

SS sends money to clear mortgage

SS forwards money for chain

SS deducts fees etc

Forwards surplus to seller

174
Q

What happens if completion is delayed?

A

Interest accrues under standard conditions

175
Q

How much interest for being late completion but on the same day?

A

Treated as next working day

176
Q

How much interest if time was 2pm Friday, but paid 3.30pm Friday?

A

CALENDAR DAY

3 days interest to Monday

177
Q

What rights does the non-defaulting completion party have?

A

Claim reasonable expenses e.g., hotel

178
Q

If completion was delayed can you walk away from the contract?

A

No

*unless time is of the essence is written into the contract

179
Q

What should the non-defaulting party do if completion is delayed?

A

Serve notice to complete

180
Q

What does the notice to complete do?

A

Makes time of essence

Gives 10 working days to complete counting from first day after notice was given

Binding on both parties for that new date

181
Q

What happens if buyer fails to comply with notice to complete?

A

Seller can rescind

Forfeit and keep deposit + interest

Resell

Claim damages

182
Q

What happens if seller fails to comply with notice to complete?

A

Buyer rescind

Get back deposit + interest

Damages from breach of contract

183
Q

What is the post-completion admin?

A

SDLT/LTT

Companies house

Land registration

Closing the file

184
Q

Who pays the SDLT?

A

BS submits form and pays

185
Q

sdlt payment deadline?

A

14 days of completion for SDLT and 30 days LTT to avoid penalty

186
Q

What is the companies house post-completion steps?

A

Buyer is a company

Company taking loan by legal charge

Charge must be registered with CH in 21 calendar days

187
Q

What happens if you miss the CH registration?

A

Charge can only be registered by court order

188
Q

If you need to amend a CH charge registration, is the 21 days extended?

A

No

189
Q

Whats the deal with timings regarding registering land post-completion?

A

You can do it whenever for registered
2 MONTH DEADLINE UNREGISTERED

At your peril for the OS1 search 30 day priority window

Or unregistered 15 day land charge window

190
Q

What happens if you don’t register unregistered land within 2mo?

A

Transaction is void

191
Q

Can land registrar extend deadline for registering unregistered land?

A

Yes

192
Q

What is an FRI lease?

A

Tenant pays to keep full repair of property (NOT common parts)

Landlord pays insurance, tenant pays them back

Tenant pays service charges

All costs during lease lifetime are for tenant

Tight alienation control

Only upwards rent reviews

192
Q

What marks the end of the transaction?

A

Sending official copies from land registry to client

193
Q

What is an anchor tenant?

A

A commercial tenant that is a big draw for other commercial tenants

They have strong negotiating power

194
Q

What is convenant strength in an FRI lease?

A

Ability of the tenant to pay rent and comply with obligations

195
Q

What additional safeguards will a LL want if a tenant has bad covenant strength?

A

Rent deposit (3-6MO)

Guarantor (from directors or parent comp)

196
Q

Who agrees the terms of the lease usually?

A

Property agents

197
Q

Who sends heads of terms for lease?

A

Property agents to the solicitors

198
Q

Who does the first draft lease?

A

LL sol

199
Q

What is used to make lease drafting easier?

A

Precedent leases previously used on the property

200
Q

Do commercial transactions for leases have agreements for lease (contracts to lease)?

A

No usually unless theres a special reason

E.G., renting in 2y time when the building is built

201
Q

What does the tenants solicitor do?

A
  • Help get lease in favour of tenant
  • Make obligations under lease known e,g, covenants
  • Searches/enquiries
  • SDLT
202
Q

What is the smallest piece a commercial tenants rent is likely to be apportioned to?

A

The latest quarter

203
Q

What is the original and counterpart leases?

A

OG = executed by LL

Counter = executed by tenant

204
Q

How is completion of leases effected?

A

LL Sol acknowledges they have the completion money

Sols agree to date and swap the OG and counterpart leases

205
Q

What are the post-completion steps with leases FOR THE LL SOL?

A

LL sol sends money to the LL or agents

Institutional investors want summary/report

Raise bill

206
Q

What are the post-completion steps with leases for the tenants SOL?

A

SDLT

Register the lease

207
Q

What is the demise in a lease?

A

The demise is the extent of the property that is being let

208
Q

What are the standard lease terms for commercial?

A

5 years, 10 years, 15 years

Multiples of 5

209
Q

What obligations does the tenant usually have to exercise a break clause?

A

6mo notice

Up to date on rent

210
Q

Should you allow a LL to say no break clause can be exercised if in breach of covenants?

A

No

Cause trivial breaches can then prevent break

211
Q

How often is rent usually payable for a commercial lease?

A

Quarterly

212
Q

Does a commercial tenant usually pay a premium before moving in?

A

No

Actually sometimes there is a 3 month rent free period for time to fit out premises

213
Q

What is a premium in a long residential lease?

A

Usually the price of the house/flat

And then small ground rent each year

214
Q

What is an upwards only rent review?

A

This means that the rent will be increased if open market rents have increased, but will stay the same if open market rents have decreased.

215
Q

When is the typical rent review for commercial?

A

5y

multiples of 5

216
Q

How do the tenant and LL come to agree new rent after a review?

A

Try and agree

IF NOT

Refer to a valuer they agree on

IF NOT

Will be appointed by the president of the Royal Institute of Chartered Surveyors

217
Q

What is the basis on which the valuation will be made?

A

The hypothetical lease

218
Q

What BASIC assumptions go into the hypothetical lease?

A

Premises are vacant and available

There is a willing landlord and tenant

219
Q

What COMMON disregards go into the hypothetical lease?

A
  1. Tenant upgrades, anything else the tenant did voluntarily
  2. Effect of tenant occupation on rent
  3. Goodwill attached to tenant business
220
Q

What COMMON assumptions go into the hypothetical lease?

A

Tenant complied with all covenants

Landlord complied with all covenants

Terms of hypothetical lease are same as terms of actual lease other than rent payable

Term of the hypothetical lease is the same as the term remaining on the actual lease

Premises have been repaired and rebuilt (if they had been damaged)

221
Q

In a full repairing obligation, if the tenant moves into a broken place, do they have to repair it?

A

Yes

222
Q

What should a tenant considering taking on a full repairing obligation do?

A

Get a survey

223
Q

What should the tenant sol try and negotiate if the landlord tries to say ‘good and substantial repair’

A

argue down to just ‘in repair’

224
Q

If the repairing obligation is qualified, e.g., no greater repair than start of lease.. is it an FRI?

A

No

225
Q

What is a latent/inherent defect?

A

problems that emerge from a newly built building and are due to errors of design or workmanship

226
Q

Does an FRI tenant have to fix latent/inherent defects?

A

No

+ LL can claim from contractor, warranties etc

227
Q

For FRI, who bears brunt of insurance shortfalls (excess, exclusions, conditions)

A

Tenant

228
Q

Who pays for the valuation for insurance purposes?

A

Tenant

229
Q

What is the minimum amount of money and FRI should be insured for?

A

The insurance should provide for the full costs of reinstatement (ie, rebuilding) of the premises

230
Q

What things are standard for insurance in an FRI?

A

fire, explosion, lightning, earthquake etc.

231
Q

What extra insurance risk should the tenants sol negotiate coverage for in FRI lease?

A

Terrorism

232
Q

What types of things does the lease provide for if damaged or destroyed by an insured risk?

A

· Tenant doesn’t pay damage or destruction by an insured risk (unless the insurance is not payable because tenant fucked up)

· If the tenant is unable to occupy the premises, then the rent is suspended for a period (usually up to three years) until the damage has been repaired.

· The landlord covenants to use the insurance monies to repair the premises.

· If the landlord reasonably considers that it is impossible or impractical to reinstate the premises, then the landlord may give notice to end the lease.

· If the premises have not been repaired by the end of the rent suspension period, then the tenant may give notice to end the lease.

233
Q

If lease is silent, what alterations and change of use are allowed?

A

Free to alter

Can’t reduce value of premises

234
Q

What is an absolute covenant?

A

tenant cannot carry out those alterations at all.

235
Q

What is a qualified covenant?

A

tenant can carry out alterations with consent. On the face of it, this means that alterations are at the complete discretion of the landlord.

236
Q

When are qualified covenants (sorta) downgraded to have the effect of fully qualified covenants?

A

if the tenant’s proposed alterations amount to improvements, then it is implied ((under section 19(2) of the Landlord and Tenant Act 1927) that the landlord cannot unreasonably withhold consent.

237
Q

What is the definition of an ‘improvement’

A

the premises become more useful or valuable to the tenant, even if the landlord’s interest is diminished in value.

238
Q

What is a fully qualified covenant?

A

the landlord’s consent cannot be unreasonably withheld. Therefore the tenant does not have to prove the alteration is an improvement.

239
Q

What should the tenant try and include regarding getting consent for things from the LL?

A

not to be unreasonably delayed (AFTER ASKED PERMISSION)

240
Q

What types of property changes are usually covenanted against commercially?

A

that affect the exterior or the structure of the premises

241
Q

What covenants to landlords typically want regarding changes of use in a commercial lease?

A

Absolute or qualified covenant

242
Q

Can LL increase rent if they agree to change use of property?

A

NO

243
Q

Does LL have to be reasonable when considering a change of use request?

A

No

244
Q

What is the Code for Leasing Business Premises?

A

it is aimed at the negotiation process rather than the legal process

245
Q

Who does Code for Leasing Business Premises apply to?

A

Surveyors from RICS institute

*usually the property agents are members

246
Q

What are MANDATORY requirements under Code for Leasing Business Premises?

A

· Lease negotiations must be constructive and collaborative manner.

· A party not represented by an RICS member or other property professional must be advised about the existence of the code AND must be recommended to obtain professional advice

· terms of the lease agreement must be recorded in written heads of terms

247
Q

What are GOOD PRACTICE requirements under Code for Leasing Business Premises?

A

· Unless agreed stricter conditions in the heads of terms, a tenant’s break should be conditional only upon the tenant paying all basic rent (ie, not insurance or service charge), giving up occupation, giving up occupation and leaving no-one in occupation.

· Repairing obligations should be appropriate to the length of the term, the condition of the premises and the financial terms.

· If the tenant’s repairing obligations are limited to the initial condition of the premises, a schedule of condition should be prepared.

· The tenant’s repairing obligation should exclude inherent construction defects for newly built property.

· In a lease of a whole building, the landlord should not normally prohibit or require consent for internal non-structural alterations.

· The lease should provide that terrorism will be covered in the landlord’s insurance policy provided that it is available at reasonable rates.

248
Q

What is alienation?

A

the ability of the tenant to pass any interest in its lease to a third party

249
Q

What is assignment?

A

find someone who is interested in taking over the lease.

250
Q

What is underletting?

A

tenant granting a lease to a subtenant.

251
Q

Why in FRI leases do they not like alienation?

A

Because they like to maintain covenant strengths of their tenants

252
Q

What do FRI leases usually allow in terms of assignment?

A

Of whole premises not part

253
Q

What do FRI leases usually allow in terms of UNDERLETTING?

A

underletting of the whole, and may allow underletting of part

(particularly if, as in our office example, the tenant has taken two or more floors or units which are capable of being let separately).

254
Q

What type of covenants are alienation usually in FRI leases?

A

absolute, qualified or fully qualified.

255
Q

What types of qualified covenants in leases will be converted to fully qualified covenants?

A

Assignment

Underletting

NOT alienation

256
Q

Regarding qualified covenants for assignment and underletting, is it automatic that the LL can’t delay unreasonably in giving consent?

A

Yes

257
Q

How is consent for assignment/underletting usually sought? Whats the procedure?

A

Formal written application from solicitors

LL sol requests undertaking for LL legal and surveyors costs

Surveyor assesses covenant strength of proposed assignee or undertenant

258
Q

What are reasonable grounds for refusing an assignee or under tenant?

A

· Assignee or undertenant is of unsatisfactory covenant strength.

· The assignee or undertenant’s proposed use of the premises would be a breach of the lease.

· The assignee or undertenant are in a business that competes with the landlord’s and would affect nearby business of the landlord.

· Where the landlord has a policy on the different uses of different units (eg in a shopping centre) and the proposed assignee’s or undertenant’s use would conflict with that policy.

259
Q

What are not reasonable grounds for withholding consent for a new assignee or undertenant?

A

· The landlord has a personal grievance against the proposed assignee or undertenant.

· The landlord is withholding consent as leverage for trying to get something out of the tenant.

· The tenant has minor breaches of the repairing covenant.

260
Q

How is consent/license to assign or underlet formally given?

A

Formal license deed

261
Q

Why get a formal license deed for consent/license to assign or underlet?

A

It formalises the landlord’s consent.

It creates privity of contract between the landlord and the assignee or undertenant.

262
Q

What is the privity of contract note for licenses to assign and underlet?

A

Not necessary for assignments of leases after 1 January 1996

Act automatically binds incoming tenants to the terms of the lease

263
Q

After 1 Jan 1996, who is bound under the terms of the lease automatically?

A

Only assignees

Not underletters

264
Q

What features do both a license to assign AND underlet have to have?

A

· The landlord gives formal consent to the proposed dealing

· The assignment or underletting must take place within a prescribed time (usually 3 months)

· The consent is specific to that particular dealing – it does not allow the tenant to assign or underlet to another party other than that mentioned, or in any terms other than those specified

· The tenant covenants to pay the landlord’s professional costs (although this is not usually strictly necessary as there will be an undertaking to pay them anyway)

265
Q

What features are specific to the license to assign?

A

· Unless the assignment is of an old lease (before 1 January 1996), it will usually require an authorised guarantee agreement from the outgoing tenant. This means that the outgoing tenant guarantees the obligations of the incoming tenant. This guarantee only lasts as long as the incoming tenant is the tenant.

· The outgoing tenant is not released from any existing obligations, such as arrears of rent, breach of repairing obligations, etc.

266
Q

What does an AGA do?

A

Even though after Jan 1 1996, incoming assignees are bound by terms and OG tenant is released from liability

LL’s will want the authorised guarantee agreement to make the tenant liable for the assignees breaches

267
Q

How is an AGA still more forgiving to the outgoing tenant than the law before Jan 1 1996?

A

They are only bound to the assignee they chose, if they assign again, they are released

Before they were liable all the way down the chain

268
Q

When can you use an AGA?

A

When included in the terms of contract

Otherwise only if reasonable (e.g., reason to believe assignee can’t pay rent)

269
Q

What features are specific to a licence to underlet?

A

· The underlease must be in the form of the agreed form (a draft is annexed to the licence)

· The undertenant covenants directly with the landlord to observe and perform the covenants in the underlease and the headlease (except the covenant to pay the rent in the headlease as otherwise the undertenant would have to pay the rent twice!)

270
Q

What is a tenancy at will?

A

between a licence and a lease

tenancy lasts only as long as landlord and tenant wish, and either can bring it to an end at any time

271
Q

Does tenancy at will bind 3rd parties?

A

NO

272
Q

Does tenancy at will grant exclusive possession?

A

Yes

273
Q

What circumstances suggest there is a tenancy at will?

A

when landlord and tenant are still in the process of negotiating a formal lease, but it is in their mutual interests for the tenant to take occupation

274
Q

What can obtain security of tenure?

A

Only a lease

275
Q

What does security of tenure give you?

A

· continue in occupation past the contractual term of the lease

· apply to the court for a new tenancy to be granted.

276
Q

Why is security of tenure important to some tenants?

A

· They can invest in the property and their business knowing that the premises are likely a long term prospect.

· They know that they will be able to continue to pay a market rent. Otherwise, a landlord might take advantage of their investment in the premises to demand a higher than market rent.

· It gives tenants the confidence that they can reap the benefit of any goodwill they build up at their location.

277
Q

What conditions are there to acquire security of tenure?

A

· It must be a lease, not a licence or tenancy at will.

· The tenant must occupy at least part of the premises. If the premises are left permanently empty, then they cannot acquire security of tenure. Note also that if the tenant has underlet the whole of the premises, then the tenant does not have security of tenure.

· It must be used for the purposes of a business (a trade, profession or employment).

Purposes of a business is interpreted quite widely. Sports clubs and charities can qualify.

278
Q

What tenancies, meeting other conditions, are still disqualified from security of tenure?

A

· Tenancies of 6 months or under

· Service tenancies

· Mining tenancies

279
Q

Can you contract out security of tenure?

A

Yes

280
Q

What is the procedure to contract out security of tenure?

A

A notice must given to the tenant in prescribed form, and then the tenant must give a declaration to the effect that they understand the implications of excluding the security of tenure provisions.

281
Q

How does the procedure for contracting out change if the notice is given more and less than 14 days in advance?

A

14+ days: tenant signs an ordinary declaration

less than 14: tenant must make a statutory declaration before a solicitor

282
Q

What must the lease include, if contracting out security of tenure?

A

state that the security of tenure provisions have been excluded

and refer to the notice and declaration or statutory declaration (as appropriate).

283
Q

How can protected tenancies come to an end?

A

Tenant leaves

Tenant breaches, falls behind on rent, is insolvent – landlord can now forfeit the lease regardless of protections

284
Q

Whats it called when tenant stays in property and exercises their security of tenure?

A

Holding over

285
Q

Other than forfeiture, what 3 notices can bring a protected tenancy to an end?

A

LL s25 notice

Tenant s26 or 27 notice

286
Q

What does a friendly s25 notice do?

A

Indicates LL wants to renew the lease to start the day after termination?

287
Q

What is the difference between the date of termination and end date of tenancy?

A

end date of tenancy = IN CONTRACT

date of termination = DATE LL CHOOSES IN S25 (must be on or after date of end tenancy)

288
Q

What is the deadline to serve a s25?

A

No less than 6 mo and no more than 12mo before the date of termination

289
Q

What is a hostile s25 notice?

A

LL opposes lease renewal

290
Q

When can a LL do a hostile s25 notice?

A

Only on statutory grounds

Must specify the grounds

291
Q

Why do friendly s25 notice?

A

Peace of mind want confirm tenant to stay

Rising market, get market rent

292
Q

Are leases with market review on last day of lease upheld?

A

Term isn’t

Can’t try and raise rent in holding over period

293
Q

What are the 3 mandatory grounds for a hostile s25 notice?

A

· The landlord is making suitable alternative accommodation available to the tenant. This must be reasonable, having regard to the tenant’s business and goodwill.

· The landlord intends to demolish or reconstruct the premises or a substantial part of it, and cannot do this without obtaining possession.

· The landlord intends to occupy the premises for its own business or residence. They must show a firm and settled intention. This is subject to a five year rule, meaning that the landlord must have owned the reversion (usually the freehold) for more than five years before the date of termination.

294
Q

What are the 4 discretionary grounds for hostile s25?

A

· A serious breach by the tenant of a repairing obligation

· Persistent delay by the tenant in paying the rent – this must be serious and persistent

· Other substantial breaches by the tenant of their obligations under the lease – again, they must be serious and persistent

· In the case of an underlease of part, possession is required to let or dispose of the property as a whole

295
Q

Whats the material difference between a mandatory ground and discretionary ground in a s25 notice?

A

Mandatory ground = court MUST grant if this is proven

discretionary = court MAY grant if proven

296
Q

What is payable if LL is granted a hostile s25?

A

Compensation to the tenant unless
- ground is tenants fault
- tenant got suitable alternative accommodation

297
Q

How much compensation could the tenant get if there is a successful hostile s25?

A

= to the rateable value of the property

if occupied for 14+ years = twice the rateable value

rateable value = yearly market rent

298
Q

When can the compensation award be reduced?

A

Tenant in occupation for less than 5 y

299
Q

What happens if LL was successful in hostile s25 for misrep/concealed facts?

A

More compensation to tenant

300
Q

What is a s26 notice?

A

The tenant specifies date for proposed start of new tenancy

301
Q

On what does does the existing lease terminate if there was a s26 notice?

A

the day before the start of the new tenancy

302
Q

Can s25 and s26 lease negotiation deadlines be extended beyond the DOT?

A

Yes. by agreement

303
Q

What responses does LL have to s26 notice?

A

Negotiate new tenancy

Serve counter notice and set out grounds for opposition of new tenancy

304
Q

What is a s27 notice?

A

used by the tenant when they just want to bring their lease to an end, and do not want a new tenancy.

305
Q

Is there a prescribed form for s26 notice?

A

Yes

306
Q

Is there a prescribed form for s27 notice?

A

No, can be just a letter

307
Q

Why do you need s27 notice? Can’t you just leave?

A

Because you were holding over, and now you want to leave

308
Q

Deadline to serve s26 notice?

A

no less than 6 months and no more than 12 months before the proposed commencement date of the new tenancy that the tenant is request

309
Q

What is the difference between the reference dates for the time deadlines for a s25 vs s26 notice?

A

S25 = Before the date of termination

S26 = Before the date of commencement of the new tenancy (existing tenancy ends a day earlier than with s25)

310
Q

Deadline to serve a s27 notice?

A

at least three months before the tenant’s CHOSEN/STATED date for the termination of the current tenancy.

311
Q

If a tenant can hold over, why would they want to renew?

A

· If it is a falling market, then it is an opportunity to get a lower rent.

· The tenant may want the certainty of a new lease term for business reasons, such as carrying out improvements

· Intending to sell a business, may want new lease to make it more attractive to buyers

312
Q

What happens if you’re still negotiating a new lease but term date has already ended?

A

Try and negotiate interim rent

OR either party apply for court order

313
Q

What does a court order for interim rent prevent?

A

Parties delaying negotiations to take advantage of their currently more advantageous rental position

314
Q

What will the court set rent at when LL is willing to grant new lease?

A

Market rent

315
Q

What will the court set rent at when LL is UNwilling to grant new lease?

A

10% - 15% lower than market rent

316
Q

What rules are there around terms for a new lease?

A

Same premises

New term cannot exceed 15 years

Rent at open market price

Other terms determined by court

**Starting point is current tenancy, but court can take all factors into account

317
Q

In what 6 ways can you terminate a lease?

A

· Effluxion of time

· Notice to quite

· Break clause

· Surrender

· Merger

· Forfeiture

318
Q

How does an implied periodic tenancy arise?

A

Tenancy effluxes

Tenant pays periodically and remains in occupancy

319
Q

What is notice to quit, when used?

A

For a periodic tenancy, the landlord may serve notice to quit on the tenant.

320
Q

What is the notice period for notice to quit?

A

Yearly tenancy – six months’ notice

Quarterly tenancy – a quarter’s notice

Monthly tenancy – a month’s notice

Weekly tenancy – a week’s notice, but for a residential tenancy, it is four weeks’ notice

321
Q

Who serves notice to quit?

A

Ten or LL

322
Q

What is a lease surrender?

A

The landlord and tenant can bring the lease to an end if they both agree.

323
Q

What is often a condition to agree to a surrender?

A

LL pays a premium to tenant

Tenant pays a premium to LL

Party who wants to leave early gets stuck with the premium

324
Q

What can accidentally happen in a surrender agreement?

A

Agreement to release liability for previous AND ongoing obligations

e.g., past unpaid rent – oops

325
Q

What is a merger?

A

If the leasehold and freehold interests are held by the same party (eg, if the tenant buys the freehold), then the interests are merged into the superior interest, and the lease is extinguished.

This can also happen if a third party buys both the freehold and leasehold.

326
Q

What are the remedies for non-payment of rent?

A

· Debt action in courts – can claim up to six years’ arrears

· Claim debt from former tenant (either by privity of contract with an old lease or AGA for new lease)

· Take money from the rent deposit

· Commercial Rent Arrears Recovery

327
Q

How much rent arrears can LL claim in debt action?

A

6y rent arrears

328
Q

What can CRAR recover?

A

Rent + VAT/Interest

No service charge
No insurance

329
Q

What conditions need to be met to claim CRAR?

A

· Must be a minimum of 7 days’ rent owing

· Maximum of 6 years’ arrears

· Must serve 7 days’ clear notice of intention – can then seize goods up to value of rent

· Cannot be used after the lease has been forfeited. Using CRAR waives the right to forfeit the lease.

330
Q

What are the remedies for breach of repairing obligation?

A

· Normal damages are limited by a statutory cap to amount by which landlord’s reversion has been reduced in value.

Therefore, if it costs £10,000 to repair the damage, but the landlord’s interest has only been reduced in value by £1,000, then the landlord can only recover £1,000

331
Q

What is a Jervis v Harris clause?

A

Self-help clause for repair breaches

· If the tenant breaches repairing obligation, then the landlord can serve notice requiring the tenant to repair, and if the tenant fails to do so by specified time, the landlord can enter the premises and make the repairs and recover the cost from the tenant as a debt

· As it is a debt, not damages, the landlord can recover the full amount from the tenant (it is not restricted by the statutory cap)

332
Q

Why is Jervis v Harris clause more advantageous to the LL than normal damages?

A

Damages have statutory cap to reduction in value of LL reversion interest

Jervis/Harris can recover full cost of repair, even if exceeds value added to interest

333
Q

What else is available for other breaches?

A

Common law damages

RARELY

specific performance/injunctions

334
Q

Can the LL forfeit if it isn’t provided for in the lease?

A

No

335
Q

How are forfeiture provisions usually triggered?

A

Payment of rent delay 21 days

Breach of repairs

Insolvency of tenant

336
Q

Does LL need to serve a formal written demand before forfeit?

A

Should

Unless contracted out in the lease

337
Q

What does the LL do when exercising forfeiture?

A

Literally re-enter

338
Q

What other rights does forfeiture also extinguish?

A

Anyone else deriving interest from lease

Mortgagee

Undertenant

339
Q

What recourse to other people with interests deriving from the lease have if there has been a forfeiture?

A

Apply to the court to bring lease back to life

340
Q

What 2 ways can LL exercise forfeit?

A

peaceable re-entry or court order

341
Q

When can you NOT use peaceable re-entry to forfeit?

A

Residential

342
Q

How can right to forfeit be waived?

A

If the landlord continues to accept rent or otherwise behaves in a way that acknowledges the existence of a continuing tenancy, then they are taken to have waived the right to forfeit the lease.

343
Q

Is forfeiture waived for accepting rent arrears?

A

No, only continuing rent

344
Q

Difference between a once and for all breach and continuing breach in terms of waiving forfeiture?

A

Once and for all = once waived, its waived

Continuing = renews every day

345
Q

What are common once and for all waives?

A

Non-pay rent

Unlawful assignment/underlet

Insolvency

346
Q

What are common continuing breaches?

A

Repair

User covenant

Failure to comply with insurance obligation

347
Q

What type of remedy is relief from forfeiture?

A

Equity

348
Q

What must the tenant (or interest holder) show to get relief from forfeiture?

A

Court why it is equitable to be granted a relief

SQE1 FLK 2 (19 decks)

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