Property Law 7* Flashcards
What is the basis for the SDLT/LTT calculation featuring a long lease (say 999 years)?
The premium
What is the basis for the SDLT/LTT calculation featuring a short lease with market rent payable
Net Present Value
Do leases of up to 3 years need to be registered?
No
Do leases of more than 3 years up to 7 years need to be registered?
Does not need to be registered. Can be noted against the landlord’s title
Do leases of over 7 years need to be registered?
Yes, must be registered at the Land Registry
What is the procedure for registering a lease?
- OS1 (lease of whole) or OS2 (lease of part) search should have been carried out before completion to give priority.
- The tenant applies to register the lease using form AP1 (if the landlord’s title is registered) or FR1 (if the landlord’s title is unregistered)
- A certified copy of the lease may be scanned and submitted electronically.
- If the landlord’s freehold title is charged, then a letter of consent from the lender will also be needed.
- On completion of the application, the tenant’s solicitor will receive two official copies (the new leasehold title and the updated landlord’s title)
Note that if the tenant is a company, then usually the lease will not be charged, and so there is no need to register the transaction at Companies House.
Commercial Leases, Alterations - what is the position if Alterations are not mentioned in the lease?
The tenant is free to carry out alterations.
The only restriction imposed by law is the doctrine of “waste” which means that the tenant cannot carry out alterations which reduce the value of the premises.
Commercial Leases, Alterations - What if there is an absolute covenant against alterations?
If the tenant wants to make an alteration covered by an absolute covenant, they can ask the landlord, but the landlord has no obligation even to consider such a request.
Commercial Leases, Alterations - What if there is a qualified covenant against alterations?
A qualified covenant against alterations means that they are only permitted with landlord’s consent.
The landlord does not have to give consent.
Commercial Leases, Alterations - What if there is a fully qualified covenant against alterations?
Alterations are only permitted with the landlord’s consent BUT the landlord must act REASONABLY in deciding to withhold consent.
Commercial Leases, Improvements - What if there is an qualified covenant against alterations but the alterations the tenant wants to make are improvements?
s19(2) LTA1927 converts it to a fully qualified covenant
insofar as T’s proposed alterations are improvements from T’s POV
If LL consents to alterations under a qualified covenant, where will the consent be documented
Licence for alterations
Commercial Leases, Improvements - What if there is an absolute covenant against alterations but the alterations the tenant wants to make are improvements?
T may be able to circumvent
Commercial Leases, Improvements - There is an qualified covenant against alterations but the alterations the tenant wants to make are improvements. Are those improvements from the point of view of the tenant or the landlord?
The Tenant
Commercial Leases, Alterations - If the Landlord consents to the alterations under a qualified covenant that consent will be documented in a licence for alterations. What’s included?
- The works consented to
- Time limit for carrying out those works
- Carry out the works in compliance with the landlord’s requirements, typically with good quality materials and a high standard of workmanship
- obtain all necessary consents, which could include planning permissions and building regulations approval
- reinstate the premises at the end of the lease term.
- pay the landlord’s costs in dealing with the tenant’s application for a licence for alterations (these will usually be the surveyor’s and solicitor’s costs)
