SGS 9 Flashcards
The four L’s?
lease
law
landlord’s title
local authority
Landlord’s title?
check official copies for any restrictive covenants in the landlord’s title
lender required to consent?
What is an absolute covenant?
One in which landlord does not even need to consider giving consent nor act reasonably.
‘The tenant shall not do X’
What is a qualified covenant?
One in which landlord must consider giving consent but there is no obligation to act reasonably.
E.g. ‘not to make any non-structural alterations unless consent of landlord obtained.’
What is a fully qualified covenant?
One in which landlord has to act reasonably in deciding whether to grant consent,
E.g. not to make any non-structural alterations unless consent of landlord obtained, (such consent not to be unreasonably withheld.)
What does s.19(2) LTA 1927 apply to?
qualified covenants in relation to ‘improvements’
Upgrades them into fully qualified.
What is an improvement?
Lambert v Woolworth: improvement is seen through the eyes of the tenant.
Assumed all tenant alterations are improvements (wouldn’t suggest alterations if did not consider them to be improvements).
What does s.19(3) LTA 1927 apply to?
Qualified covenants involving change of use.
Prevents landlord charging a premium for consent unless change of use also requires a STRUCTURAL ALTERATION.
Landlord can charge for costs and expenses involved in application for consent and a reasonable sum in respect of any damage to or diminution in value of the premises
Under both s.19(2) and (3) LTA 1927 what CAN the landlord charge for?
Both:
Compensation for loss in value to the reversion caused by alterations
Landlord’s expenses in giving consent (e.g. surveyors fees solicitors drawing up Licence for Alterations.)
19(2) only:
Reinstatement of the premises if reasonable (at end of lease term)
What type of covenant is this:
‘The Tenant shall not use the Premises for any use other than the Permitted Use’?
Cannot tell as do not know if the “Permitted Use” contains the requirement for Landlord’s consent.
How could one document consent to works?
Licence to alter (a deed)
T submits detailed plans and surveyor (fees paid by tenant) reviews plans.
T covenants to carry out ‘Works’ to a good standard, use good materials, obtain all APPROVALS, pay all L’s fees, reinstate premises at end of term.
Tenant ensures that alterations and improvements that result are disregarded for the purpose of reviewing rent - only relevant on open market rent review leases
If licence contains qualified covenant to change use within B2 or B8, what would you need to change to A?
What is a material change of use?
There is an absolute prohibition so needs deed of Variation to permanently vary user clause OR can get one off consent by way of licence.
Change from one use class to another.
What are the consequences of a deed of variation to alter the extent of the demise or length of the lease?
Surrender and re-grant
SDLT consequences.
Have to inform LR (if previous lease registered there), so existing lease could be closed and a new one opened.
If original lease contracted out of LTA 1954 security of tenure provisions, this would not apply to the re-granted lease.
What is the best course of action if attempting to alter the extent of the demise or the length of the lease?
Grant a separate lease of additional land on same terms as current lease for a contemporaneous term of years as existing lease.
Grant a “reversionary” lease. Takes effect at end of the term of the current lease (provided the term of the reversionary lease commences no later than 21 years from the date it was granted).
First four pre-completion steps?
Change agreement for lease
Completion and undertakings form to landlord’s solicitor.
OS2 / Company search against landlord
Tenant signs counterpart, LL signs original lease.
