Property Law 6 - Granting a Lease

Question 1

What are the stages of a grant of lease?

Answer 1

• Pre-exchange (not common)
• exchange (not common)
• Pre completion
• Completion
• Post completion

Question 2

What are the steps required of the Landlord’s solicitor pre-exchange?

Answer 2

• Take instructions
• prepare draft lease and, if relevant, agreement for lease
• DEDUCE title and respond to any queries on title
• Answer pre-contract enquiries
• Once agreed, print the agreement for lease, obtain LL’s signature, and send counterpart to tenant’s solicitor.

Question 3

What are the steps required of the Tenant’s solicitor pre-exchange?

Answer 3

• Take instructions
• Review draft lease and agreement for lease and amend as required
• INVESTIGATE title and raise queries
• Raise pre-contract enquiries and searches
• Arrange for tenant to sign counterpart lease.

Question 4

Which enquiries will the tenant’s solicitor raise?

Answer 4

CPSE1 (as a buyer would in a commercial transaction)
CPSE3 (which are specific to a lease)

Question 5

If a contract is used, what is the process for exchange and what does the contract normally cover?

Answer 5

• LL’s Sols and T’s Sols exchange as for a freehold property (usually using Law Societ B)
• No deposit is usually payable
• The agreement will likely set out conditions to be met for the lease to start (e.g. property being built)
• agreement will normally have a draft of the lease annexed.

Question 6

What are the steps required of the Landlord’s solicitor pre-completion?

Answer 6

• Prepare original and counterpart lease, obtain LL’s signature and sent to counterpart for T’s signature.
• Prepare and send the completion statement detailing money due on completion

Question 7

What does the Code for Leasing Business Premises apply to?

Answer 7

commercial lettings except short tenancies of 6 months or less.

Question 8

What are the steps required of the Tenant’s solicitor pre-completion?

Answer 8

• arrange for T to sign counterpart lease
• Obtain funds from client needed to complete as per completion statement
• raise pre-completion searches

Question 9

What searches are carried out at the pre-completion stage?

Answer 9

• OS1 with a lease of whole,
• OS2 with lease of part.

If the lease is not registerable then:
- OS3 (this does not give priority)

Question 10

What happens on completion?

Answer 10

• T’s Sols send L’s Sols the completion monies
• LL and T’s solicitor agree to complete and then date the executed leases
• LL and T’s Sols send the completed original and counterpart to each other.

Question 11

What happens post completion?

Answer 11

• LL’s Sols sends a summary of main provisions of lease to client
• T’s Sols arrange and submit SDLT and pay
• T’s Sols registers Lease if necissary

Question 12

Where are the repairing obligations set out? And what are the types?

Answer 12

as a tenants covenant in the lease.

• They may be full - i.e. repair the whole building into a good state, or
• They may be qualified - i.e. maintain the standard the building is already in

NOTE: should also check definition of premises to see the extent of the obligation

Question 13

Who is generally responsible for the insurance of a building?

Answer 13

• the commercial LL

Question 14

Which repairing obligation is used in an FRI?

Answer 14

Always a full repairing obligation

Question 15

Who is responsible for insurance under an FRI

Answer 15

The landlord

Question 16

Who is responsible for repairing the exterior?

Answer 16

If a part of a building- LL

If a whole of a building - Tenant

Question 17

Does the Landlord recover the insurance from the Tenant?

Answer 17

Yes - through ‘insurance rent’.