Property Management - End Of Lease

Question 1

How does a lease come to an end?

Answer 1

• Notice to quit must be served by either party
• 40 clear day notice required

Question 2

NTQ Case Law?

Answer 2

• The Sheriff Courts (Scotland) Acts 1907
• Tenancy at shop act (1949)

Question 3

The Sheriff Courts (Scotland) Acts 1907

Answer 3

• Specifies 40+days notice required to serve NTQ
• Lease will continue for another year at the same rent and on the same terms
• A guarantors liability does not extend past the expiry date

Question 4

Tenancy at shop act (1949)

Answer 4

• If the LL serves notice, retail and leisure tenants can apply to the courts to extend their lease for up to one year
• Must apply within 21 days

Question 5

Why is it beneficial not to serve notice?

Answer 5

• Tenant – current passing rent is below market rent
• LL – tenant is obliged to stay another year

Question 6

What is tacit relocation?

Answer 6

• Applies when neither the LL or tenant serve notice
• The lease will continue for up to a year

Question 7

What happens at the end of a lease?

Answer 7

• Either the tenant or the landlord will service notice
• Dilapidations will be agreed
• Unit handover will take place:
  o PM to meet tenant to complete key handover
  o Utility meter reads will be taken and sent to utility companies advising of the change of tenancy
  o Insurers updated to advise the unit is vacant
  o Vacant inspections will be set up to comply with insurers terms
  o Council will be notified and vacant relief applied for
  o Account system updated to ensure the landlord is billed for void service charge rate

Question 8

What is a schedule of condition?

Answer 8

• Completed by the tenant at the beginning of the lease
• Details the property’s condition prior to the lease beginning
• It is used to agree the dilapidations at the end of the lease

Question 9

What are dilapidations?

Answer 9

• Landlord will serve the dilapidations on the tenant
• Building surveyors instructed to pull a schedule together which nots the tenants obligation breaches
• The schedule of condition is referred to, as the tenant is not expected to the unit better
• The tenant will either complete the works or will pay a dilapidations settlement figure and the landlord will complete the work

Question 10

How do you serve dilaps?

Answer 10

• LL must instruct solicitors to formally serve the tenant

Question 11

What are the different types of dilapidations schedules?

Answer 11

• Interim schedule of dilapidations, issued during the course of the lease.
• Terminal schedule of dilapidations, issued during the last three years to 18 months of the lease.
• Final schedule of dilapidations issued after expiry of the lease.

Question 12

RICS publication relating to dilaps?

Answer 12

• RICS Guidance Note on Dilapidations 2016