Landlord & Tenant Flashcards
What kind of law is L&T law?
Law:
Criminal law /
Civil Law >
Law of Tort (liability for loss or harm) /
Law of Contract (enforce agreements) /
Land Law (real property rights) >
LL&T Law
- sources:
statute (written law passed by legislative body)
case law (past legal decisions, precedent, common law)
Law of Property Act 1925
Rights in land =
Ownership rights > Legal Estates > Freehold / Leasehold
3rd Party rights > Legal Interests: e.g. easements / Equitable Interests e.g. restrictive covenants
Only 2 types of tenure:
freehold and leasehold
and only 5 types of legal interests:
- easement or right over land
- rentcharge
- charge or mortgage
- other charge
- right of entry
- intended to modernise the English law of real property
- principally deals with the transfer of FH or LH land by deed
s196:
notices sufficiently served if left at last-known place of abode or business in UK by post in registered letter
s146:
notice if a breach other than payment of rent to notify LL intends to forfeit lease, must state breach and allow T to remedy it
L&T Act 1927 s1
Improvements:
- if a T wants to carry out, can serve notice with spec and plan
- LL has 3 months to object
- if refuse, court can award consent if reasonable
- LL can agree to carry out in return for increase in rent
- LL obliged at end of term to compensate T
L&T Act 1927 s18
Dilapidations:
- a claim generated by a LL relating to repairs at end of tenancy
- first limb assumes hypothetical sale, loss of value = value - cost of repairs
- second limb assumes LL’s intention, can’t recover if demolish/alterations
L&T Act 1954 Part 2
s23: defines tenancy to which Act applies
s24: gives security of tenure
s24a: application to court for an interim rent
s25: LL’s termination/renewal notice
s26: T’s request for a new tenancy
s27: T’s notice of termination
s28: “by agreement”
s29: timescales for application to court
s30: 7 grounds upon which LL may object to new tenancy
s31-36: court procedures for determining new tenancy
s37: compensation where new tenancy not granted
s38: contracting out s24-28
s40: duty to give info
s43: defines tenancy to which Act doesn’t apply
L&T Act 1988
LL consents:
- places statutory duties upon the LL in relation to granting consent for assignment, underletting etc.
- reasonable only to withhold consent if LL can prove
- LL to prove dealt with in reasonable time, any conditions reasonable
- applies when tenancy states T not to assign etc. without consent not to be unreasonably withheld
L&T Act 1995
Authorised Guarantee Agreement:
- where a T assigns a “new” lease (post-1995), the outgoing T is released from liability, as is any guarantor
- an AGA is required to extend the T’s liability
- the code for leasing business premises recommends AGA only if new T is of lower financial standing or registered overseas and for smaller Ts to accept deposit instead
- a T’s guarantor cannot agree to give a guarantee for the assignee
- a T’s guarantor can guarantee the outgoing T’s obligations under an AGA
- a T cannot assign a lease to its guarantor
Difference between lease and licence
- a leasehold interest is a collection of rights in the land itself
- “natural rights” inc exclusive possession, enjoyment, alienation
- a licence is simply permission to do something unlawful; creates personal rights between parties but not the land itself
- test case = Street vs Mountford 1985
What constitutes a business tenancy?
- where premises occupied by a T for purpose of a business
- business = a trade, profession or employment and inc any activity carried on by a body of persons whether corporate or unincorporate
- tenancy = an estate in land, fixed term of periodic, with exclusive use in exchange for a rent
- can contract out LTA 54 s24-28 if LL serves “health warning” notice 14 days prior to lease start (simple dec) or if less than 14 days must swear in front of sol (stat dec)
(Business Tenancies Order 2003) - doesn’t apply to tenancies not exceeding 6 months unless have already been in occupation for 12 months
How would you deal with a lease renewal?
- conflict of interest/money laundering checks on client
- agree ToE
- read lease, contracted out?
- inspection, measure (breach? tenant improvements?)
- valuation, approval
- HoTs and/or s25 notice, diarise timescales
- agree, approval, instruct solicitors
- liaise with Legal to complete
- update records, diarise next milestone
What are the procedures for lease renewal?
- is business tenancy, T can remain in occupation until terminated in accordance with Act
- s25 served between 6 and 12 months prior to end date stating property comprised, rent, other terms
- if hostile, must state grounds for possession
- a s26 served between 6-12 months prior to end (commencement date any time up to 12 months after notice):
LL may serve counter-notice within 2 months;
failure to serve counter-notice lose right to objection but not terms;
T court application by notice expiry (can extend by agreement) - s27 at least 3 months to expire
- s28 by agreement
- s40 within last 2 years of term, must provide info within 1 month
What are the grounds on which a LL can refuse a new lease?
s30
a) T has failed to carry out repairs
b) T has persistently delayed paying rent
c) T is in substantial breach of some other covenant
d) LL offers suitable alternative accommodation
e) where tenancy was created by a sub-tenancy and the building let as whole would produce a higher rent
f) LL intends to demolish or substantially reconstruct premises and cannot do so without obtaining possession
g) LL intends to occupy for own purposes (LL for 5 years)
- compensation e-g:
1 x RV for term less than 14 years
2 x RV for term 14 years or more
How would you deal with a rent review?
- conflict of interest/money laundering checks on client
- agree ToE
- read lease
- time of the essence? diarise timescale
- note disregards and assumptions
- inspection and measure (breach? tenant improvements?)
- valuation, approval
- serve notice, follow up
- negotiate
- ADR if necessary
- agree, obtain approval, record via memo
- update records, diarise next review
Procedure for rent reviews
- usual for LL to serve trigger notice
- failure to adhere to timetable could result in T stuck with new rent/LL missing review (“deeming provisions”)
- but usually time not of the essence
- time only of essence where lease explicitly says so/lease makes clear time limits strict (i.e. related to break option)
- basis of valuation usually MR
- usually an unexpired term or hypothetical term
- usually property vacant and to let on terms of existing lease
Usual assumptions for rent reviews
- subject premises fit for immediate use and occupation
- MR payable after expiry of any rent-free period or T’s fitting out works
- no work has been carried our by T that has reduced rental value
- if premises have been destroyed or damages, they have been reinstated
- T has complied with its covenants in existing lease
