Random bits property Flashcards
Can you act for a buyer and seller?
No, due to a conflict of interest?
Can you act for a mortgage lender and a buyer?
Yes, if:
- the mortgage lender is an institutional lender;
- The property has a valid certificate of title; and
- There is no risk of a conflict of interest occurring
If you act for the mortgage lender too, what must you be conscience of?
Informing them if there is any change with the property i.e. issues or change in price as this might impact their willingness to sell, and you also have a duty to act in their best interest.
Can you advise extensively on mortgages?
No- only that there are repayment, interest only, endowment and sharia. Need a financial adviser for specific advice.
When must a s25 notice be served?
6-12 months before lease due to expire
When must a counter response to a s26 notice be served?
within 2 months
What is forefiture?
Forfeiture is a means for a landlord to terminate a lease, in the event of some default by the tenant.
It will apply to any breach of covenant by the tenant, except that, where rent is concerned, the right to forfeit will usually only arise 14 or 21 days after the rent falls due.
A s126 notice must be served:
(a) informs the tenant of the breach of covenant,
(b) gives the tenant a reasonable time to remedy any covenant which is capable of remedy (but need not state what that reasonable time is) and
(c) requires the tenant to pay compensation for the breach, equivilant to decrease in property value
The landlord cannot forfeit until a reasonable time has elapsed from the giving of this notice without the breach having been remedied, where the breach is capable of being remedied.
However, this does not apply where the only ground for forfeiting is arrears of rent (must wait 14 or 21 days bust can then forefit).
The tenant has 28 days to serve a counter-notice
In a commercial setting, can exercise forefiture by peaceable re-entry/changing locks or court order
What is a self-help clause?
A lease that contains a properly drafted Jervis v. Harris clause grants the landlord a right to first serve notice on a tenant, specifying any breaches of covenants relating to the condition of the property.
If the tenant then fails to proceed diligently with remedying the breaches and/or to remedy the breaches identified in the notice within a specified period (as set out in the Jervis v. Harris clause, usually within 2-3 months), the clause grants a right for the landlord to enter the property to carry out the works and to then recover the costs of doing so from the tenant as a ‘debt’.
One of the key advantages of using the Jervis v. Harris clause is that it is likely to result in the necessary work being carried out. Especially if the tenant is properly informed and seeks professional advice, the property does not fall into further disrepair during the remainder of the term, which can result in more costly and difficult repairs being needed in the future.
Furthermore, the landlord is able to recover their reasonable costs incurred in undertaking the works from the tenant as a ‘debt’, rather than as a damages claim. Therefore, Section 18(1) of the Landlord and Tenant Act of 1927 does not apply to the costs incurred. This section says that a landlord can only sue for damages if a tenant does not maintain and fix up a property as agreed upon, and those damages can only be for the loss of the property’s freehold value.
Therefore, all a landlord will need to prove is that they have acted reasonably, undertaken the works, incurred costs in doing so, and are entitled to recover the costs in doing so as a ‘debt’ rather than ‘damages’. Meaning they are then entitled to recover the actual costs incurred as a simple debt due by the tenant, which is far more straightforward to pursue compared to a damages claim.
If the lease does not contain a right of the landlord to forefit the lease or a self help clause, can these still be used?
No
What is a ‘full repair obligation?’
This means that the Tenant has full responsibility for the repair of the property, at their own cost.
What type of land do overriding interests apply to?
Registered land only
Name some examples of overriding interests
A legal lease under 7 years is allowed to acheive legal status even if unregistered (provided of course there is a deed [if between 3-5yrs] or orally [if under 3 years]).
In summary, an unregistered legal easement will bind disponees if the disponee know about its existence, if its existence was objectively obvious (1)(b) (i.e. it obvious existed on inspection of the land), or if it is neither of these but the easement has been exercised within the last year
In summary, this paragraph protects proprietary interests (i.e.right in rem) belonging to those in ‘actual occupation’ of land despite non-registration. So if you are in ‘actual occupation’ of land and have an unregistered right in rem your rights may be protected through the operation of overriding interests.
Define overriding interest
Overriding interests are interests to which a registered title is subject, even though they do not appear in the register.
How does the assignment of an old lease (pre 1 Jan 1996) differ to the assignment of a new lease?
Old Lease – pre 1996:
i. Original tenant remains liable to LL to pay rent and perform obligations under Privity of Contract.
ii. New Tenant would have to covenant directly with the LL to observe T covenants.
i. New Lease – post 1996:
i. Original Tenant is released from liability upon the assignment of the lease.
ii. New tenant receives all of the tenant covenants.
Do restrictive covenants run with the land?
Yes
