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Landlord and Tenant > Rent Reviews > Flashcards

Rent Reviews Flashcards

1
Q

What is the usual type of rent review?

A

Upwards only to market rent

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2
Q

Is time normally of the essence?

A

No

United Scientific Holdings v Burnley Borough Council (1977)

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3
Q

What are the 4 usual assumptions for a rent review?

A
  1. Property available to let on open market by willing tenant and willing landlord for term of years as stated.
  2. Property fit and available for immediate occupation and use.
  3. All covenants observed by landlord and tenant.
  4. Property may be used for purpose set out in lease.
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4
Q

What are the 3 usual disregards in a rent review?

A
  1. Any effect of goodwill on tenant’s occupation.
  2. Ignore goodwill attached to property.
  3. Tenant’s improvements if landlord consent had been granted.
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5
Q

What is the notional/hypothetical term of the lease?

A

The length of term to be value.

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6
Q

If the lease is silent on the notional/hypothetical term what should be valued?

A

The residue of the term.

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7
Q

What happens if there is a deeming provision within the lease which requires the landlord to specify the rent in a trigger notice, with the tenant being deemed to accept the new rent if they do not serve the appropriate counter-notice within a specified time?

A

Deeming provisions.

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8
Q

What evidence is at the top of the hierarchy when determining market rent?

A

Open market lettings

Then:
Rent reviews and lease renewals
Independent expert determinations
Arbitrator determinations
Court determinations under LTA 1954
Hearsay evidence
Sale and leasebacks
Surrender and renewals
Inter-company arrangements
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9
Q

What can be used to achieve an early resolution of a dispute and save on costs?

A

Calderbank letter

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10
Q

How must a Calderbank letter be headed?

A

‘Without prejudice save as to costs’

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11
Q

What does the losing party have to pay?

A

The other sides’s recoverable costs

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12
Q

What must the letter set out?

A

All of the terms to settle the dispute and a time limit in which the other party must accept the offer.

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13
Q

What is the usual Calderbank offer time limit?

A

21 days

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14
Q

A Calderbank letter must be a genuine offer to settle and not simply used as a mechanism to _____ costs or pressure the other party.

A

Influence

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15
Q

Who is obliged to make an award for costs?

A

The arbitrator

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16
Q

What is the similar mechanism to Calderbank for lease renewals?

A

Under Part 36 of the Civil Procedure Rules

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17
Q

What four recommendations for rent reviews does the Code for Leasing Business Premises 2007 set out?

A
  1. RR clause should be clear.
  2. Headline RR clauses should not be used (where valuation cannot take into account any incentives agreed to arrive at a net effective rent).
  3. Landlords should on request offer alternatives to their proposed option for RRs based on a risk-adjusted basis.
  4. Leases should allow both parties to start the RR process.
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18
Q

How is the method of determination established for a rent review?

A

Read the clause in the lease.

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19
Q

An independent expert has detailed _____ of the market as a valuer.

A

Knowledge

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20
Q

An independent expert is appointed by who?

A

President of RICS by Dispute Resolution Service

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21
Q

An independent expert is not bound by what?

A

Judicial rules

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22
Q

An independent expert can have his own opinion as to the _______ _____.

A

Market rent

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23
Q

An independent expert is bound by the terms of the _____.

A

Lease

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24
Q

The decision of an independent expert cannot be _____ against but they can be sued for _______.

A

Appealed, Negligence

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25
Q

How is an independent expert involved?

A

Via a hearing or written representation

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26
Q

An independent expert is good when there is a lack of _____ _________ and need to be up to date.

A

Market comparables

27
Q

Does an independent expert have the power to order disclosure?

A

No

28
Q

An independent expert orders ____ as set out in the lease.

A

Costs

29
Q

In which case was an expert’s determination of a rent review not held to be binding due to his decision being based upon an incorrect interpretation of the rent review clause?

A

Level Properties Ltd v Balls Brothers Ltd (2007)

30
Q

Who appoints an Arbitrator?

A

RICS President using Dispute Resolution Service

31
Q

An arbitrator can decide how to _____ the case and order ____.

A

Hear, Costs

32
Q

An arbitrator can only use ____ submitted by the parties, and/or from an _____ ______.

A

Evidence, Expert Witness

33
Q

Arbitrators are immune from _______.

A

Negligence

34
Q

Arbitrators can order _______.

A

Disclosure

35
Q

What happens if an Arbitrator orders disclosure of documents by the parties to the arbitration?

A

It entitles a party of obtain details of all the other side’s rental evidence (when they would prefer to confine submissions to deals most favourable to their case).

36
Q

Which Act is relevant to Arbitrators?

A

Arbitration Act 1996

37
Q

The Arbitration Act 1996 also sets out the procedures to secure the attendance of ________ or the ________ of third party documents.

A

Attendance, disclosure

38
Q

An Appeal to the High Court can be made within 28 days under what three grounds?

A
  1. A challenge to the tribunal’s jurisdiction.
  2. On a point of law.
  3. Serious irregularity.
39
Q

Who acts on the evidence provided and the arguments submitted?

A

Arbitrator

40
Q

Who has a duty of investigation to discover the facts, details or comparables and other relevant information, and does not have to just consider the evidence provided (own knowledge and expertise can be used).

A

Independent expert

41
Q

________ provides a limited right to appeal to the High Court.

A

Arbitration

42
Q

Who can be liable for damages as a result of negligence by being sued?

A

Independent expert

43
Q

Who has no powers of disclosure?

A

Independent expert

44
Q

Who acts within a formal statutory framework?

A

Arbitrator

45
Q

Who acts with an informal procedural timetable?

A

Independent expert

46
Q

Who makes an award?

A

An Arbitrator

47
Q

Who makes a decision as an outcome?

A

Independent expert

48
Q

Who would be preferable to act for a landlord in a falling market?

A

An arbitrator

49
Q

Who would be preferable to act for a landlord in a rising market?

A

An independent expert

50
Q

Who would be preferable to act for a tenant in a rising market?

A

An arbitrator

51
Q

An advocate represents his client at a ______ or in ______.

A

Hearing, court

52
Q

What is the relevant RICS Practice Statement relating to Advocates?

A

Surveyors Acting as Advocates 2008

53
Q

An Advocate’s duty is to act in the best interests of _______.

A

His client

54
Q

An Advocate must act with _______.

A

Integrity

55
Q

What is the relevant Practice Statement and Guidance Note relating to Expert Witnesses?

A

Surveyors Acting as Expert Witnesses 2014

56
Q

Surveyors Acting as Expert Witnesses applies to evidence given to ______ and ________ ______.

A

Arbitrators and Independent Experts

57
Q

Expert evidence provided by a chartered surveyor must be seen to be ________ and objective.

A

Impartial

58
Q

Who is the surveyors duty to as an Expert Witness?

A

The Court

59
Q

What must be clearly stated within the Terms of Engagement for an Expert Witness instruction.

A

Fee basis

60
Q

What does the Expert Witness have to sign at the commencement of his evidence?

A

Statement of Truth

61
Q

Can the exert witness be sued for negligence?

A

Yes, following Jones v Kaney 2011

62
Q

What are the contents of a rent review memorandum?

A

Name of L & T

Address of property

Date of lease and rent review

Confirmation of new rent agreed

Signed and dated by both parties

** Can also be recorded by an independent expert’s decision or arbitrator’s award or written acceptance of the Calderbank Offer.

63
Q

When answering any question on rent review, what should you always state?

A

You would read the rent review clause in the lease.

64
Q

What scheme is run by the RICS to have an independent surveyor settle disputed rent reviews for commercial properties with a rateable value of less than £10,000 (£15,000 in London)?

A

RICS Small Business Scheme for Rent Reviews

Landlord and Tenant (4 decks)

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