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Property Management APC 2.0 > Landlord & Tenant 2.0 > Flashcards

Landlord & Tenant 2.0 Flashcards

1
Q

What are the implied Landlord covenants under a lease?

A

Quiet enjoyment for the Tenant

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2
Q

What is a modern form lease?

A

A lease that reflects new legislation

e.g EPCs needed for marketing so Landlord has ability to gain access to carry out EPC

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3
Q

What is an old lease?

A

A lease pre 1st January 1996 with privity of contract

→ Landlord and Tenant Covenant Act 1995

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4
Q

Are Heads of Terms legally binding?

A

→ If you put subject to contract, then no

→ Not legally bound unless engrossed (signed by both parties)

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5
Q

Rent review types?

A
  • OMRV - Open Market Rental Value
  • RPI
    • Turnover rent
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6
Q

When you conduct a rent review, what documents do you want to see?

A

→ Existing lease and any plans

→ Any Licence for Alterations, improvements, subletting or assignment

→ Any deeds of variation

→ Contact details for tenant

→ Copy of the property file for any relevant background information which could assist your negotiation

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7
Q

When you conduct a rent review, what documents do you want to see?

A

→ Existing lease and any plans

→ Any Licence for Alterations, improvements, subletting or assignment

→ Any deeds of variation

→ Contact details for tenant

→ Copy of the property file for any relevant background information which could assist your negotiation

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8
Q

How can you tell if time is of the essence?

A

United Scientific Holdings v Burnley Borough Council

→ Time is of the essence if expressly stated in the lease

AI Saloom v Shirley James Travel

→ Connected lease event. E.g break clause can make time of the essence

Deeming provision → such as need to respond to a notice by a certain time

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9
Q

What is a deeming provision?

A

Assumption of acceptance

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10
Q

What is the hypothetical term?

A

The length of term to be valued

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11
Q

What case law is there with respect to the hypothetical term?

A

Basingstoke and Deane v The Host Group

→ Ambiguity of hypothetical term → therefore, residual term

Canary Wharf v Telegraph (2003) → “from grant thereof” → if silent, presume residue of term

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12
Q

What are the standard assumptions in a Rent Review?

A

Vacant possession

Available for immediate occupation and use

Covenants in lease have been observed

WIlling tenant and willing Landlord

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13
Q

What are the standard disregards in a Rent Review

A

Goodwill

Improvements → if no disregard, value what you see

Occupation

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14
Q

What would happen if you had a rent review you couldn’t agree?

A

→ Serve a Calderbank letter

→ 3rd Party determination (IE or Arbitrator)

→ no point in servicing Calderbank letter if lease states IE and they do not have the power to award costs

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15
Q

What should you include within a Calderbank letter

A

→ Without prejdice save as to costs

→ Unconditional offer to settle

→ Time frame

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16
Q

When would you use a Calderbank?

A
  • Genuine offer to settle
  • Use at any stage of negotiation, usually once other avenues exhausted and considering 3rd party
    • An offer to settle → aim to prompt settlement from other side and protect Client from costs
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17
Q

What would you do if a tenant did not respond to a rent review?

A

Serve Calderbank letter of instruct 3rd party

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18
Q

How do you appoint an Arbitrator?

A

Apply to president of RICS → £369

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19
Q

How would you adjust for a restrictive clause?

A
  • Rent reductions
    • Depends on state of the Market → look to comparable evidence
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20
Q

How do you adjust rent if you have a longer rent review pattern than 5 years?

A

Need higher rent at start of rent review period to recoup inflation → add 1% to rent for each extra year

→ advantageous to Tenant to have longer rent review period

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21
Q

What options are there at lease expiry?

A

Qualified tenancy continues under S.24 after expiry until terminated under the Act → same terms / holding over

On lease expiry:

→ Tenant vacates by expiry

→ Landlord serves S.25 hostile and they lease by expiry (6-12 months prior)

→ Tenant stays after expiry and serves S.27 (3 month notice of leaving)

→ Tenant serves S.26 to start new lease negotiations

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22
Q

What is a Tenancy at Will?

A

Grants temporary occupation of business premises

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23
Q

What is the Land Registration Act 2022?

A

→ Formal documents to be executed electronically

→ Leases over 7 years must be registered with land registry

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24
Q

What determines terms for a new lease?

A

Sections 32-35 Landlord and Tenant Act 1954

S.32 - Demise (same property as before)

S.33 - Term (max 15 years)

S.34 - Consider disregards

S.35 - Any other terms

O’May v City of London (1983) → tests to be satisfied before ammending terms of old lease

Justifiable reasoning?

Adequate compensation?

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25
Q

What sections of the Landlord and Tenant 1954 Act are there?

A

S.23 - Meaning of business tenancy

S.24 - Continuation tenancy unless terminated (security of tenure)

S.24a - Interim rent

S.25 - Landlord to terminate or review

S.26 - Tenant to review

S.27 - Tenant notice to vacate (3 months)

S.28 - Freedom to agree new lease

S.29 - Court applications

S.30 - Landlord grounds for opposition

S.37 - Disturbence compensation

S.38 - Contracting out

26
Q

What is the valuation date for a lease renewal?

A

set by when you apply to court

otherwise, the day after lease end

27
Q

On what grounds can a 1954 Act protected lease be terminated ?

A

Section 30, grounds A-G

A- breach of repair covenant

B- Persistent delay in rent payment

C- Other substatial breach

D- Suitable alternative accomodation

E- Uneconomic subdivision

F- Redevlopment

G- Owner occupation

28
Q

Can a tenant lose their 1954 Act rights?

A

If no new lease terms have been agreed by the lease end date, or tenant hasn’t applied to court to agree terms or extension, they can lose their rights

29
Q

What is the process for contracting out of S.24-28 of the 1954 Act?

A

Regulatory reform order 2003 simplified the process so that it rarely requires a court influence

→ Landlord serves health warning stating consequences of contracting out

→ Simple declaration if Tenant waits 14+ days

→ Statutory declaration if less than 14 days

30
Q

You served a S.25 notice - what would you find in the notice?

A
  • Name and address of Landlord and Tenant
  • Property address
  • Notice of date to end tenancy
  • Confirmation as to whether a new lease is granted (favourable or hostile)
  • Landlords proposal for new tenancy or grounds for opposition
  • Strong recommendation for Tenant to seek professional advice
    • Signed by Landlord representative
31
Q

When is the date of receipt of a S.25 notice?

A

Posted and recieved same day - statutory notices

32
Q

Can a Landlord serve a S.25 notice after Tenant has served S.26 notice?

A

No, they are mutually exclusive

33
Q

Where might S.25 notices go wrong?

A

Wrong name,

not signed,

not dated

34
Q

What is the Tenant objects to the terms in the notice?

A

Serve counter notice → negotiate / through court

35
Q

What if the tenant wants to renew but it gets to date of new tenancy and terms have not been agreed?

A

→ Extend time if agreed by both parties

→ Application made to court

36
Q

If the Tenant wanted to vacate lease halfway through negotiations, what would they need to do?

A

Serve S.27 and give 3 months notice

If already in Court, withdraw application and negotiate notice period with Landlord and back rent

37
Q

What is an interim rent?

A

Rent the tenant pays while the tenancy is continued under S.24

38
Q

How would you calculate the Interim Rent?

A

Same as new rent → court may vary this if there is substantial difference between the Market Rent at the date of the new tenancy and date of Interim Date being payable

39
Q

Who is the competant landlord?

A

Party that is entitled to serve notice on tenants

S.44 → Freeholder or superior tenant with unexpired term in excess of 14 months

40
Q

What is a S.40 notice?

A

Requests information from either Landlord or Tenant

41
Q

If acting for an external Client, how would you have acted differently for a lease renewal?

A

Conflicts of Interest Check

Served formal Terms of Engagement, agreeing fees etc

42
Q

If a tenant approaches you 18 months before lease expiry, what can you advise them?

A

→ Establish needs of Client

→ Check if contracted out

→ Can wait until lease expiry and hand back keys with vacant possession

→ Serve S.27 notice giving 3 month notice to vacate

→ Serve S.26 if over-rented 6/12 months prior

→ Under-rented do nothing - continuation tenancy created under S.24

→ Do nothing and wait for hostile S.25 notice → Risky but may get compensation

43
Q

When can the value of improvements be captured?

A

Rent Review → usually disregarded. May be rentalised if works were a condition of Landlord granting the lease

→ If disregarded, disregard whether works were licences or not

Lease renewal:

→ Can never capture value of improvements at first lease renewal (L&T Act 1954)

→ 21 year rule applies on subsequent renewals (if undertaken more than 21 years ago)

44
Q

Can you capture improvements done in 1948?

A

Yes, as this is before the Landlord and Tenant Act 1954

45
Q

Might a tenant receive compensation for improvements if the lease renewal is opposed?

A

Yes → governed by the Landlord and Tenant Act 1927, Section 1

Improvements must add value to the property at termination → compensation if the value added as a result of improvements

→ usually offset against dilaps

46
Q

What are the main issues of Landlord and Tenant Act 1927?

A

S.19 Alienation, assignment → turns qualified covenants into fully qualified covenants

47
Q

How would you know if the lease was contracted in?

A

BOPET

Business - occupied for the purpose of business

Occupation - Part of the premises occupied for 6 months +

Premises - must be defined premises

Excluded - excluded business?

Tenancy - must be a lease

48
Q

If tenant has contracted in lease but you find out they aren’t in occupation for business purposes, what do you do?

A

They have no security of tenure, so no renewal rights

49
Q

What type of break clauses are there?

A

Tenant only

Landlord only

Mutual

Rolling

Fixed

Linked to otehr clauses

50
Q

If you want to insert a landlord break for redevelopment, can you contract inside the act?

A

Yes, but you have to serve S.30 and break on grounds

→ Tenant entitled to compensation

51
Q

What is administration?

A

Ad administrator is appointed to rescue an insolvent company protecting it from any legal action

→ creates period of protection for administrator to deal with assets and achieve best returns for creditors before going into liquidation

52
Q

What is re-pack administration?

A

Allows the directors of a company to buy out and retain elements of the business which are trading well and placing the remainder in administration

E.g habitat sold London stores to Homebase

53
Q

What is receivership?

A

Receiver is appointed by creditors to realise assets and to repay debt whilst administrators are being appointed by court

→ occurs when a company defaults on payments to a lender who has chage over all or most of the assets of a company

54
Q

What is Company Voluntary Arrangement?

A

Contract between company and its creditors for when a ocompany is insolvent but the directors believe it has a viable future

→ Creates agreement to pay back debt over period of time

→ Insolvency practicioner overseas implementation strategy

→ Must be approved by at least 75% of creditors in terms of value of debt

55
Q

What is liquidation?

A

Company brought to an end → assets sold and distributed to creditors → winding up

Compulsory → creditors liquidation

Voluntary → Tenants liquidation

56
Q

What is bankruptcy?

A

Court procedure for an individual

57
Q

What does the Landlord & Tenant Covenants Act 1995 say?

A

→ Act abolishes privity of contract for new leases automatically → ends liability of Tenant once lease is assigned

→ Includes AGA

58
Q

What does Landlord and Tenant Act 1988 say?

A

Must demonstrate refusal of consent or consent with conditions is reasonable

→ Burden of proof for reasonableness is on Landlord

59
Q

Can you use a drop in Capital Value as a reason to refuse assignment?

A

No, proof would take too long → landlord and Tenant Act 1988 says respond in a reasonable time for applications to assign/sublet

→ Blockbuster v Barnsdale Properties

→ Dong Bang Minerva vs Davina

60
Q

When would you recommend assignment and when a sublet?

A

Depemds on Clients interests

→ Sublet if they wish to keep interest and reoccupy or occupy part

→ Assignment if in financial difficulty and struggle with payment → Note AGA may be requested

61
Q

What types of breach are there?

A

Continuing breach: failure to repair, illegal use

Once and for all: Non-payment of rent / SC, failure to carry out works in a specific period

62
Q

How can you remedy a breach?

A

Peaceable re-entry

→ Don’t demand rent etc

→ consider relief from forfeiture

Court proceedings

→ longer, expensive, but safer

→ don’t demand rent

Property Management APC 2.0 (15 decks)

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