Property Practice Flashcards
A landlord and potential tenant are negotiating the terms of a repair covenant in a lease. The landlord wants the wording of the clause to include the words: “The tenant shall make such improvements to the property as necessary throughout the term of the lease”.
What position should the tenant take in respect of this clause?
Amend so that the property is only to be kept to the same standard.
Repair covenants are usually insisted on by the landlord and are often standard. But, the tenant needs to make sure they are not obliged to make improvements to the property during the term of the lease. Otherwise, the tenant will have to incur expenditure improving the property that ultimately will fall back into the landlord’s hands.
A tenant is renting a pub from a landlord. The term of the lease is 5 years. Four years into the lease, the landlord has decided that they do not want the tenant to stay. The landlord has had enough of the pub trade – they want to convert the pub to flats and sell them off. However, the lease does not exclude the Landlord and Tenant Act 1954. The lease does, however, contain a right of re-entry. There are no break clauses in the lease.
What should the landlord do?
Send a section 25 notice to the tenant stating the ground of redevelopment and apply to court.
A solicitor is acting for the sale on the sale of a registered terraced house under the Standard Conditions of Sale (SCS). The solicitor is drafting the contract. The property contains two restrictive covenants, registered against it on the property’s charges register. The solicitor is unsure how to include these covenants in the contract, or whether they need to be included at all.
Which of the following statements is the most accurate with respect to what she should disclose?
She must disclose them as specified incumbrances.
A buyer wants to buy a house for a retirement home in England. The house contains a lot of useful furniture that the buyer wants included in the sale. The buyer and the seller therefore agree to a schedule of items that will be included as part of the conveyance of the house, and this schedule is added as a special condition in the contract.
What could the buyer do to increase the tax efficiency of the purchase of the property?
Apportion some of the purchase price of the property to the price of purchasing the furniture.
Stamp duty and land transaction tax is only payable on the price of property. One way to reduce these taxes is to apportion some of the purchase price to items in the property (the fittings).
A buyer is looking to buy a farm. The farm is unregistered. On investigation of title, the epitome contains a deed of gift from the most recent purchasers of the property (who have good root) to the seller, who is the purchasers’ niece, dated from 3 years ago.
What check should the buyer’s solicitor do?
A bankruptcy search against the purchasers and the deed of gift validity.
A bankruptcy search should be done against an individual seller before completion. This is because there is a risk that, if the seller is bankrupt but makes a sale or gift of the property, the trustee in bankruptcy could seek to recover that property as a clawback action.
A solicitor is acting for the tenant of a café. The tenant has 7 months left until the expiry of the lease. The landlord and the tenant have been in discussions about the tenant’s future plans after the lease comes to an end. The tenant has told the landlord that they intend to stay and run the café. The lease does not exclude the Landlord and Tenant Act 1954, Part II. In response, the landlord has served on the tenant a “hostile” section 25 notice. In the notice, the landlord has stated that they intend to redevelop the café into a residential house (subject to planning permission). Given the rest of the street is being converted into housing and the local authority is keen for housing to be expanded, it is very likely the landlord will get such permission. The landlord has made an application to court and the tenant has made a counterapplication. The court hearing is soon but the tenant’s solicitor is certain that the court will not grant the tenant a new tenancy based on the landlord’s ground of opposition.
What could the tenant’s solicitor tell the tenant at this stage?
The tenant will be entitled to compensation from the landlord.
If after a section 25 or section 26 notice the court does not grant a new tenancy based on one or more grounds of opposition that are no-fault of the tenant (such as L wants to occupy the premises themselves), then T is entitled to compensation from the landlord.
A buyer is looking to purchase a freehold house. The seller has informed the buyer that they entered into a covenant to maintain and repair the well adjoining the property that sits in the neighbour’s land. The seller will therefore require the buyer to enter into an indemnity in respect of this covenant and the buyer has agreed to do so. The two parties have exchanged contracts. The buyer is now drafting the transfer deed.
What effect will the positive covenant have on the drafting of the transfer deed (TR1)?
The indemnity will be inserted into the transfer deed.
If the buyer will enter into an indemnity with the seller because the seller is bound by a positive (or negative) covenant or an indemnity themselves, the parties use a special condition in the contract under which they agree to enter the indemnity in the TR1 and in the TR1 the indemnity wording is included.
A tenant wants to make improvements to the premises that they rent, including installing solar panels and a heat pump to improve the efficiency of the building. The premises are not listed or in a conservation area so no permissions from the local authority are needed to carry out these works. However, on consulting the lease, the tenant realises it contains the following clause:
“The Tenant has no rights to carry out any alterations, works or installations to the Premises whatsoever under any conditions”.
What should the tenant do?
Submit the alterations with a specification and plan to the landlord. If the landlord objects within 3 months, apply to court.
If the tenant wants to make improvements to the Premises and there is an absolute prohibition to make alterations under the lease, the tenant should serve a specification and plan for the improvements on the landlord. If the landlord fails to object within 3 months, T can carry out the works. If L does object within 3 months, T can apply to court for permission to make the improvements.
A building development company buys disused agricultural land and converts it to residential developments, selling the homes off to buyers themselves. Under the company’s written standard terms and conditions which are incorporated into the exchange contracts signed by the buyers, there is a restrictive covenant which severely restricts each buyer’s use of the garden of their homes within the development. The homeowner is not allowed to use the garden during certain hours of the day to prevent disturbance to neighbours and the use of barbecues, the playing of sport and sunbathing are prohibited. The covenant is always validly registered by the company after completion against the charges registry of each property. The building company retains strips of land surrounding each house and the roads and access points in the development.
What will be the likely legal effect of the development company’s written standard terms?
The covenant will likely be invalid.
Remember that contract law applies to exchange contracts in property law. That means that you should particularly watch out for contracts of exchange between a company (such as a development company) and a consumer, because the CRA 2015 will apply to the terms of such contracts, meaning any “unfair” terms are likely to be void.
