SGS 12 (Agreement)

Question 1

three reasons an agreement for lease might be entered into?

Answer 1

preconditions

Developers wanting to ensure a tenant will take a lease on completion of works

Landlord needs consent of third party before grant of a lease.

Question 2

What is a long stop date?

Answer 2

If landlord fails to complete by such a date, tenant can walk away (landlord wants a long one)

Question 3

Is a rent free period subject to VAT?

Answer 3

No provided tenant does nothing in return for it.

Question 4

Is a contribution to landlord’s works by tenant in exchange for money subject to VAT?

Answer 4

Yes, tenant is supplying something extra and will have to account to HMRC for the tax element?

Question 5

What other situation would require a tenant to account for VAT to HMRC?

Answer 5

Anchor tenant (providing advertising / positive inducement to other tenants).

Question 6

What annexures must be attached to the agreement for lease?

Answer 6

agreed form of lease

agreed form of guarantee

certified copies of notices and stat decelerations for exclusion of LTA 1954.

Licence for alterations and copies of plans.

Question 7

When is SDLT due?

Answer 7

Within 14 days of effective date (the earlier of date of grant of lease, or substantial performance e.g. early access.)

Question 8

Three pre-exchange steps?

Answer 8

Serve LTA 1754 warning notice on tenant and guarantors.

prepare engrossments of the agreement for lease.

ensure agreement is signed by landlord, tenant and guarantors.

Question 9

What is a pre-completion step that may be required?

Answer 9

Completion statement.

Even if there is a rent free period, service charge and insurance premium may still be payable.

Question 10

How is an agreement for lease protected?

Answer 10

Agreed notice put on charges register of landlord’s title (if landlord’s interest registered).

Apply using form AN1

Question 11

Issues with AN1?

Answer 11

LR documents are available to public inspection.

Apply to registrar to make it an exempt information document.

Submit forms EX1 and EX1A (sets out reasons in support) + edited version of agreement for lease with confidential info redacted.

Question 12

What is another way one can protect an agreement for lease?

Answer 12

unilateral notice

no need for registered proprietor or LR’s consent.

But UN1 is vulnerable to application by registered proprietor for its cancellation.

Question 13

Early entry?

Answer 13

need licence to enter to carry out fitting works.