Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

APC > Rent Reviews COPY > Flashcards

Rent Reviews COPY Flashcards

1
Q

What does an “institutional lease” refer to?

A
  • 25 year lease
  • On full repairing and insuring terms
  • subject to 5 yearly upwards only rent reviews
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the different rent review mechanisms?

A
  • Reviewed to Market Rent
  • Linked to an indexation factor (CPI/ RPI)
  • stepped increases
  • % Turnover of tenant’s sales/ business
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the purpose of the rent review clause?

A

To provide a basis of valuation which the parties must adopt in calculating the reviewed rent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the standard assumptions and disregards of a rent review clause?

A

ASSUMPTIONS

  1. Property available to let on the OPEN MARKET btw a WILLING LL/ WILLING T, for a TERM OF YEARS AS STATED
  2. Property is fit and available for IMMEDIATE OCCUPATION and USE
  3. All COVENANTS OBSERVED BY LL/T
  4. Property may be USED FOR PURPOSE SET OUT IN LEASE

DISREGARDS

  1. Any effect of GOODWILL ON T’s OCCUPATION
  2. Any GOODWILL ON PROPERTY
  3. Any LICENSED TENANTS IMPROVEMENTS
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Where the lease is “silent” with regards to the hypothetical lease term, what must be assumed?

A

Residue term as at rent review date is the hypothetical term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the potential hypothetical terms?

A
  • Residue remaining at RR date

- Fixed term of X years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the purpose of the LTA 1954 and to whom does it apply?

A

Provides security of tenure to business tenants at the end of their tenancy by giving a statutory right to renewal subject to certain grounds upon which the renewal can be rejected by LL

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the notional term of the lease?

A

This is the length of the term to be valued at Rent Review (the hypothetical term)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is meant by a Time is of the Essence clause?

A

A time is of the essence clause requires the need for timely completion of the rent review (it specifies the timing within which the rent review must be triggered and settled)

It’s enforceability depends on its clarity, elaborateness, provision of notification etc

Time is not generally of the essence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What case law do you know in relation to time is of the essence clauses?

A

United Scientific Holdings vs Burnley Borough Council (1977)

Bello v Ideal View (2008)
This related to a lease where LL had not initiated the rent review for 13 years. It was held that time was not of the essence and the rent review could process

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are deeming provisions?

A

In older leases some RR clauses required LL to specify the new rent in the trigger notice
The clause will state that if T does not serve the appropriate counter notice within a specific time frame, T will have deemed to accept the new rent.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is a headline rent review clause?

A

This is when the basis of valuation cannot consider any incentives agreed when analysing a comparable or a letting to arrive at a NER

These are not typically agreed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the hierarchy of evidence?

A
  1. OML
  2. Lease Renewal
  3. Rent Review
  4. Independent Expert’s Determination
  5. Arbitrators Award
  6. Hearsay evidence
  7. Sale and leasebacks
  8. Surrender and Renewals
  9. Inter- company transactions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is a Calderbank offer?

A

A genuine offer to settle
Can achieve early resolution of a dispute
Prevents costs from escalating

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are Calderbank offers used as a tool for(

A

Used to influence costs and negotiations as the losing party will have to pay the other side’s recoverable costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What must be marked on a Calderbank?

A

“Without prejudice save as to costs”

17
Q

What must a Calderbank include?

A
  • Marked “without prejudice save as to costs”
  • set out all terms to settle the dispute
  • timeframe in which the other party must accept the offer (typically 21 days but can be less provided it gives the other party sufficient time to consider the offer and respond)
18
Q

What are the three RICS PS/GN relating to third party determination?

A
  • RICS PS/GN ‘Surveyors Acting as Arbitrators in Commercial Property Rent Reviews’ (2013)
  • RICS GN ‘Independent Expert Determination’ (2016)
  • RICS GN ‘Conflicts of Interest for Members Acting as Dispute Resolvers’ (2012)
19
Q

What is the cost of applying for 3rd party determination by the President of RICS?

A

£425*

20
Q

Case Law relating to Independent Expert Determination?

A

Level Properties Ltd vs. Balls Bros Ltd (2007)

Expert’s determination held not binding due to misinterpretation of RR clause

21
Q

What legislation governs Arbitration?

A

Arbitration Act 1996

22
Q

What does Section 34 of the Arbitration Act 1996 stipulate?

A

Provides Arbitrator with power to order disclosure of documents by parties to the arbitration. It entitles a party to the rent review, to obtain details of all other side’s rental evidence, when ideally they would prefer to confine submissions to deals that are most favourable to their case

Can also be used to secure the attendance of witnesses

23
Q

What are the key areas in which arbitrators and independent experts differ?

A 
Evidence
Appeal 
Negligence 
Disclosure
Law
Outcome
Costs
24
Q

What are the key differences between an Arbitrator and an Independent Expert?

A

ARBITRATOR

  • Acts on evidence provided
  • Limited right of appeal to High Court (only on a point of law/serious omission/jurisdiction of Arbitrator)
  • Not liable for negligence - cannot be sued
  • Powers of disclosure (“discovery”)
  • Bound by Arbitration Act 1996 - determined conduct of proceedings (to incl. statement of agreed facts & timetable for submission)
  • “Arbitrator’s Award”
  • Power over all costs

INDEPENDENT EXPERT

  • Duty of investigation (not solely reliant on evidence provided - uses their knowledge/experience)
  • No right of appeal (unless due to misinterpretation)
  • Liable for negligence damages - can be sued
  • No powers of disclosure
  • Not bound by legislation - informal procedural timetable
  • “Expert’s Determination”
  • Power over their own costs
25
Q

How long does a party have to appeal to the High Court regarding an Arbitrator’s Award?

A

Within 28 days of receiving the award

26
Q

Under what 3 grounds can a party appeal to the High Court regarding an Arbitrator’s Award?

A

(1) A challenge to the tribunal’s jurisdiction
(2) On a point of law
(3) Serious irregularity/omission

27
Q

In a falling/rising market, which 3rd party determination might be preferred by a Landlord/Tenant?

A

In a falling market where there’s no evidence of rental growth, LL would prefer an Arbitrator since they can only rely on evidence presented to them and not employ professional scepticism having regard to the declining market (Whereas T would prefer an independent expert in this case).

In a rising market, an independent expert is preferred by the LL and an Arbitrator by T

28
Q

What is a Surveyor-Advocate?

A

An advocated represents their client at a hearing or in Court.

  • Need only disclose matters they wish to
  • Duty to client
  • Must act with integrity
29
Q

What is an Expert Witness?

A

The role of a surveyor acting as an expert witness in third party determinations is to provide unbiased expert evidence to the proceedings of any tribunal

30
Q

What are the key requirements of a Surveyor acting as an Expert Witness?

A
  1. Provide impartial and objective evidence/advice
  2. Duty to the courts (overrides any obligation to the client)
  3. Evidence must be the independent work of the Surveyor
  4. the Surveyor must believe the facts they are relying upon are complete and true, and their opinions are correct

N.B. Expert witness report must include a Statement of Truth + a declaration

31
Q

Are Expert Witnesses liable for claims of negligence?

A

Following the outcome of Jones vs. Kaney (2011), Expert Witnesses are now not protected by immunity and can be sued for negligence.

32
Q

What is in a Rent Review memorandum?

A
  1. Name of LL/T
  2. Property Address
  3. Date of Lease and Rent Review
  4. Confirmation of New Agreed Rent
  5. Signed and Dated by Both Parties
33
Q

Are Rent Review memos required?

A

A form of confirmation of new agreed rent is required. In standard RR negotiations this is typically documented by way of RR memo.

Otherwise, it can be recorded by an Independent Expert’s Determination/Arbitrator’s Award/written acceptance of a Calderbank Letter (not marked ‘subject to contract’)

34
Q

What is contained in a Heads of Terms?

A
  1. Address and Extent of Demise
  2. Any special rights granted (parking/telecom access)
  3. Lease Term
  4. Inside/Outside the Act
  5. Renewal/Break options
  6. Guarantor/Rent Deposit requirements
  7. Rent (frequency of payment and basis of review)
  8. Rent Incentives
  9. LL to charge VAT on rent ?
  10. Alienation Rights (Assignment/subletting/group sharing)
  11. Repairing obligations
  12. Alteration rights/reinstatement obligations
  13. Permitted Use (and whether any change of use is allowed)
  14. Initial alterations/fit-out
  15. Conditions of letting (e.g. subj. to surveys/board approvals/PP)
  16. Liability to pay service charge/ insurance premiums

APC (31 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions