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Property Law & Practice > SGS 7 - Commercial Security of Tenure > Flashcards

SGS 7 - Commercial Security of Tenure Flashcards

1. analyse if tenancy is protected by Part 2 of Landlord and Tenant Act 1954 2. advise on how protected tenancies may be terminated and renewed via service of statutory notices 3. understand and apply a landlord's s30(1) 1954 Act grounds of opposition and to the grant of renewal lease 4. advise a tenant on availability of compensation at the end of its protected tenancy

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1
Q

What protection is given by the Landlord and Tenant Act 1954?

A
  • Section 24(1)
  • 2 principal layers of protection
    1. Tenancy will continue after lease CED, until terminated
    2. Tenant has right to apply for new tenancy
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2
Q

Which type of tenancies protected by 1954 act?

A
  • S23(1)

- Tenancy, occupied, for the purposes of a business

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3
Q

What is the tenancy requirement of 23(1)?

A
  • Street v mountford criteria

- Incl. periodic/ fixed term tenancies, oral and written tenancies

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4
Q

Which statute excludes some tenancies from protection of the act?

A
  • S43 of the 1954 Act
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5
Q

What is definition of “occupation” for 23(1) tenant act?

A
  • Tenant has to occupy at least part of premises to get protection
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6
Q

Where are some tenancies excluded from the s23(1) scope?

A
  • In s43 subsections
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7
Q

What are “contracted out” Tenancies?

A
  • In s38A
  • LL and T can agree to exclude lease from protection of 1954 act
  • Before lease is granted
  • Typical for short term lettings
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8
Q

What are the requirements for s38A “contracted out” tenancies?

A
  1. LL serve warning notice on tenant at least 14 days before tenant is bound to enter the lease.
  2. T signs simple declaration
  3. Lease: wording that parties have agreed, reference to point 1 and 2.
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9
Q

Can the 14 day period of the LL warning notice ever be waived?

A
  • Yes
  • Where time is short
  • This is via a statutory declaration instead
  • In front of an independent solicitor
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10
Q

How can a tenancy be terminated under the 1954 act?

A
  • S24
  • Protected tenancy can only be terminated in one of the ways specified by the 1954 act
  • Service of notice
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11
Q

What are the 3 services of notice through which protected tenancies can be terminated?

A

1) Landlord notice - s25
2) Tenant request for new tenancy - s26
3) Notice by tenant terminating tenancy - s27

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12
Q

What are the requirements for:

Landlord notice - s25

A
  • Notice served LL to Tenant
  • Terminates current tenancy. Friendly or hostile
  • Has to be in statutory prescribed form
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13
Q

What are the requirements for:

Tenant request for new tenancy - s26

A
  • Notice served from Tenant to LL
  • Terminates current tenancy. Requests new tenancy and specifies key terms
  • S26 request in statutory prescribed form
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14
Q

What are the requirements for:

Tenant request for new tenancy - s26

A
  • Tenants notice&raquo_space; served on LL
  • To simply terminate the current tenancy without renewing it
  • Only necessary to serve this if tenant does not plan to vacate the premises by the CED
  • S27(1)
  • Does not have to be in statutory prescribed form
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15
Q

What is the LL notice of s25? Describe the HOSTILE notice?

A
  • Served by LL&raquo_space; Tenant setting out date on which LL wants lease to end, this is called Specified Termination Date - STD.
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16
Q

When can hostile s25 notice be served?

A
  • Before or after the CED:
  • STD must not be less than 6 months & not more than 12 months from date that notice is served.
  • STD must not precede CED.
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17
Q

What is the STD?

A
  • Also when the s25 notice expires.

- Aka “notice expiry date”

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18
Q

Where are the LL grounds of opposition for refusal to grant a new lease found?

A

S30(1) (a) - (f)
ABCE = discretionary. court can grant a new lease even if the ground of opposition is made out.

DFG = mandatory. If shown, court MUST allow the LL opposition

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19
Q

What happens after the LL serves hostile s25 notice?

A
  • Application made to court
  • Proceedings start in High Court and more commonly dealt w/ by County Court
  • App made by LL (termination) or Tenant (wants to apply for new lease)
20
Q

When can application to court be made after a hostile LL service of s25 notice?

A
  • Any time after service of s25 notice
  • Must be made by the specified termination date - 29A
  • Deadline can be extended by agreement in writing bw parties - s29B
  • Once application to court is made, other party cannot serve a further application
  • Failure to apply to court before the STD - means tenant loses right to apply for a new lease.
21
Q

What is a friendly s25 notice?

A
  • Where LL willing to allow tenant to remain in premises
  • Might want to bring old lease to an end and grant a new one
  • For peace of mind / market rent may have increased, rent review.
22
Q

What is the difference re service of a friendly s25 notice versus hostile?

A
  • With friendly, the notice states that a new lease will not be opposed
  • Includes proposals for any new lease.
  • Mostly tenants concern to make sure court application is made - fairly to apply before the STD means that tenant loses right to apply for new lease
23
Q

What is the form of hostile / friendly notices?

A
  • Prescribed form
  • If this is omitted, s25 notice may be held to be invalid.
  • Court looks at whether it is misleading at all
24
Q

What is the tenants s26 request / notice?

A
  • Served by the tenant on LL
  • To terminate its current tenancy
  • And request new tenancy, starting on date specified in the notice.
25
Q

When should the s26 notice be served?

A
  • The proposed commencement date should not be less than 6 months or more than 12 months from date that notice is served
  • Proposed commencement date in notice should not precede CED
26
Q

Post service of the s26 request, what does the counter notice include?

A
  • w/in 2 months of the tenant serving the s26 request
  • LL should serve counter notice if it wants to oppose
  • LL should state which statutory grounds of opposition it wants to rely on
  • If CN not within 2 months&raquo_space; LL cannot object to a new lease
27
Q

Explain the court application after the service of a s26 request?

A
  • T or LL should apply to court
  • Tenant - applies for new lease
  • LL may apply for new lease / for order that no new lease granted.
  • 2nd option only if CN is served
28
Q

When can a court application be made after a s26 request is made?

A
  • At any time after LL has served CN

- If LL does not serve counter notice, one two months have passed after service of s26 request

29
Q

What is the deadline for the court application after the s26 request is made?

A
  • The day BEFORE the proposed commencement date that has been set out in the s26 notice
  • Deadline may be extended via written agreement
  • Fail to apply for court within this deadline&raquo_space; tenant loses right to apply for a new lease
30
Q

What form should s26 notice be in?

A
  • Prescribed notice

- Found in s26(3): description of premises, proposed rent, other terms of new lease

31
Q

Why would tenant want to serve a s26 request?

A
  1. Rental negotiation
  2. Pre-emptive strike if rents are rapidly rising - if s26 request is made before LL s25 notice
  3. Improvements to the premises
  4. Possible assignment
32
Q

What are the rules regarding the service of s25 and s26 notices?

A

Once LL serves s25 notice, tenant cannot serve s26 notice

When tenant has served s26 request, LL cannot serve s25 notice

33
Q

How is a competent landlord designed?

A
  • Under s44
  • Important that correct landlord found for service of ss.25/26/27 notices
  • This is issue where LL is the not the freeholder and is a tenant
  • Correct LL = competent
34
Q

What was established in the case of Mannai Investment Company v Eagle Star Life Assurance Company?

A
  • Court will consider whether notice is sufficiently clear
  • To leave a reasonable recipient in no reasonable doubt as to terms of notice
  • E.g. a slight error in property address would probably not confuse most reasonable recipients
35
Q

What is the “corresponding date” rule, for calculating the expiry of a notice period?

A
  • Notice expires on same date on which it was served
  • 6 month notice served on 1 Jan 2018&raquo_space; Expires 1 July 2018
  • If its is on 31 July&raquo_space; Expires 28 or 29 February if example of when different months have different numbers of days
36
Q

What are the “near miss” scenarios in the grounds of opposition?

A
  • Based around the s30(1) grounds of opposition for LL
  • If LL cannot prove grounds DEF - bu the counrt can show that they could have prove the ground if the termination date in s25 or s26 notice had been up to 12 months later the court must refuse the tenants application for new lease
  • Under s31(2)
37
Q

What is the application to court after the service of a s25 notice or a s26 request?

A
  • S25 notice
  • S26 request PLUS LL counter notice (or the 2 months after service of s26 request where the LL could have served counter notice could have expired)
  • Application to court should be made by LL
  • T loses right to apply for new lease
  • Parties can make agreements in writing before deadline expires
38
Q

Explain compensation for failure to gain a new tenancy?

A
  • This is under s37, compensation is available to the tenant if LL cites these grounds.
  • If LL cites E F G
  • LL wants to succeed on a no compensation ground
  • If LL successfully opposes lease renewal on any of those no compensation grounds, tenant will not be entitled to statutory compensation
39
Q

What happens if a compensation and no compensation ground is proven?

A
  • Then no compensation is available

- LTA part 2 notices

40
Q

When else might compensation be available?

A
  • Where LL falsely relies on a ground which does not apply to his situation
  • Court refuses new lease or tenant does not make application to court at all
  • Or withdraws application
41
Q

Where in the statute are the principal terms of a new lease found?

A
  • ss 32-34
  • Premises - holding at the date of court order
  • Rent - valuation formula in the Act
  • Commencement date - when current lease comes to an end
42
Q

What was held in the case of O’May v City of London?

A
  • Case of how court will determine other terms under s35 where parties cannot agree
  • Held: starting point is the current tenancy
  • Court will consider the proposed amendments
  • Will decide the terms of the new lease according to justice and fairness
  • Court should not try to freeze the terms of the current lease
  • Some terms might be out of date / unsuitable
43
Q

What is a section 27 notice?

A
  • Final principal notice that can be used to terminate lease
  • Tenant wants to end lease without requesting renewal lease
  • No requirement for the notice to be in prescribed form
44
Q

When is the only time it is necessary to serve a s27 notice?

A
  • If tenant does not plan to vacate premises, by the CED

- S27(1A)

45
Q

What happens if the tenant is planning to vacate on / before the CED of lease?

A
  • Tenants obligations under lease e.g. paying rent
  • Will END on the CED
  • As the s23 requirement for occupation = not satisfied
  • So tenant is not protected by the Act
46
Q

What does the tenant have to do if they are not vacating by the CED?

A
  • Serve s27 notice
  • At lease 3 months before date they want to leave
  • Obligations end = on expiry of the notice
  • If T has served s27 notice, cannot serve s26 request
47
Q

Explain the expiry of the “contracted out” leases?

A
  • T who enters into contracted out / excluded tenancy

- Has NO RIGHTS under the 1954 act when lease expires

Property Law & Practice (6 decks)

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