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PM - Summary of Experience - APC > Landlord & Tenant - Summary of Experience > Flashcards

Landlord & Tenant - Summary of Experience Flashcards

1
Q

Why is a good Landlord and Tenant relationship important?

A

It is essential for effective property management

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2
Q

Tell me about your understanding of the Landlord and Tenant Act 1927

A

Sections 1-3 give a tenant who has made improvements during the tenancy the right to compensation

Section 18 limits/defines the amount of damages the Landlord is able to recover for breach of the tenant repairing covenant

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2
Q

Tell me about your understanding of the Landlord and Tenant Act 1927

A

Sections 1-3 give a tenant who has made improvements during the tenancy the right to compensation

Section 18 limits/defines the amount of damages the Landlord is able to recover for breach of the tenant repairing covenant

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3
Q

What does section 18 mean in relation to the Landlord and Tenant Act 1927?

A

Section 18 limits/defines the amount of damages the Landlord is able to recover for breach of the tenant repairing covenant

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4
Q

What does the landlord and Tenant Act 1988 say?

A

Imposes new statutory duties on landlords in connection with covenants to assign and underlet
-> serve notice of decision within a reasonable period

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5
Q

Can you use a drop in capital value as a reason to refuse an assignment?

A

No -> Landlord and Tenant Act 1988 -> respond within reasonable period

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6
Q

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

A

Yes -> section 1-3 of the Landlord & Tenant Act 1927

  • Compensation if value is added as a result of improvement
  • Usually off-set against dilaps
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7
Q

What is a modern form lease?

A

Lease entered into after Landlord & Tenant (Covenants) Act 1995
- Introduces AGA and removed privity of contract
- Also includes modern clauses such as MEES and CRAR

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8
Q

What is a modern form lease?

A

Lease entered into after Landlord & Tenant (Covenants) Act 1995
- Introduces AGA and removed privity of contract
- Also includes modern clauses such as MEES and CRAR

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9
Q

Tell me about your understandnig of the Landlord and Tenant (Covenants) Act 1995

A

Introduces AGA -> removes privity of contract
- Cannot hold previous tenant liable for incoming tenant in assignment unless AGA

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10
Q

Explain the legislation that needs to be considered in an assignment of a lease

A
  • Landlord and Tenant (Covenants) Act 1995
  • Landlord and Tenant Act 1954
  • Landlord and Tenant Act 1988
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11
Q

What does the Jervis v Harris clause mean to you?

A

Clause in a lease that allows the landlord to serve notice on a tenant to carry out repairs -> may enter and carry out the works themselves and recover the costs if not complete

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12
Q

How are damages assessed when a tenant is in breach of repair covenant?

A

Section 18 Landlord & tenant Act 1927

  • Damaged limited to the loss in value only, as a direct result of the breach in repair
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13
Q

How are damages assessd when a landlord is in breach of repair covenant?

A

Restore the tenant to the position they would have been if there was no breach
- Difference in value to renant at the current date compared to if repairs has been undertaken

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14
Q

You are managing a property for your landlord Client and have recieved a request from a tenant to carry out improvements. The tenant has requested that improvement work is registered under the 1927 Act. What advice would you give to your Client?

A

For improvements to qualify for compensation under the act:
- Tenant must serve notice before works start with details and plans
- Landlord can object and has 3 months to do so (only if reasonable)
- Landlord can offer to do works himself -> 3 months to do so
- Otherwise, Tenant can proceed and complete works in specified period -> entitled to compensation at tenant end
- - Would recommend off-setting against dilaps

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15
Q

What lease terms are implied under section 19 of the Landlord and Tenant Act 1927?

A

Turns qualified covenants into fully qualified covenants for alienation
-> Consent not to be unreasonable withheld

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16
Q

What is the basic difference between a lease renewal and a rent review?

A

Lease renewal is a statutory procedure and rent review is a contractual procedure

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17
Q

Name the tenancies to which the 1954 Act does not apply

A
  • Agricultural holdings
  • Mining leases
  • Residential tenancies
  • Tenancies granted as a condition of employment
  • Tenancies not exceeding 6 months
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18
Q

What action should the Landlord take if he/she requires possession of a property at the end of a lease?

A

Serve section 25 hostile and ground for opposing new lease under section 30

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19
Q

What action should the Landlord take if he/she requires possession of a property at the end of a lease?

A

Serve section 25 hostile and ground for opposing new lease under section 30

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20
Q

In what circumstances is a tenant entitled ti compensation when a landlord successfully opposed a new lease under the 1954 Act?

A

Under grounds E, F and G (no fault grounds) of Section 30

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21
Q

How is tenants compensation assessed under the 1954 Act?

A

In the form of a rateable value multiplier

  • 2x RV for occupatio of 14+ years
  • 1x RV for occupation of less than 14 years
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22
Q

Tell me about your understanding of the Landlord and Tenant Act 1954

A

Provides business tenancies with security of tenure

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23
Q

Tell me about the Landlord and Tenant Act 1954 in relation to contracting out

A

Section 38 - introduced in 2003

Landlord serves health warning, statutory if within 14 days of new lease start date, or simple if more than 14 days

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24
Q

When would you recommend that a Landlord serves notice in a L&T Act 1954 renewal

A

If property is under-rented or if we want to pre-empt a tenants section 26 notice

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25
Q

When would you recommend that a tenant serves notice in a L&T Act 1954

A

If they wish to vacate after the lease expiry or if the property is over-rented and they wish to remain

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26
Q

What does section 40 of the 1954 Act say

A

Landlord or tenant request for information
Information on the others interests in the property
e.g to understand who the comtant landlord is

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27
Q

What does section 40 of the 1954 Act say

A

Landlord or tenant request for information
Information on the others interests in the property
e.g to understand who the comtant landlord is

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28
Q

When can the value of improvements be captured?

A

Rent review:
- if improvements are obligation of lease
- usually disregarded

Lease renewal:
- Can never capture improvements at first renewal (L&T ACt 1954)
- 21 year rule applies on subsequent renewals (if undertaken more than 21 years ago)

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29
Q

What tenancies are covered by the 1954 act?

A

Business tenancies

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30
Q

What is a competant landlord?

A

Landlord who serves notice or has notice served upon

S.44 Freeholder or superior tenant with 14+ months unexpired term

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31
Q

Tell me about terms of a new lease in relation to a contracted in lease renewal (e.g lease length)

A

Sections 32-35 of Landlord and Tenant Act 1954

S.32 - Demise (same as before)
S.33 Term (Max 15 years)
S.34 - Disregards
S.35 - Other terms

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

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32
Q

What is the valuation date for a lease renewal?

A
  • Set by when you apply to court
  • Otherwise, the day after lease end
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33
Q

Can a tenant lose their 1954 Act rights?

A

Yes, if negotiations are not complete by the deadline and the tenant fails to agree extension with the Landlord or apply to court

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34
Q

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

A

S.38
Landlord serves health warning
- Statutory is within 14 days of new lease start
- Simple if more than 14 days

tenant respons accepting they have understood what it means to be contracted out

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35
Q

What is section 23 of L&T Act 1954?

A

Meaning of business tenancy

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36
Q

What is section 24 of L&T Act 1954?

A

Continuation tenancy and Interim rent

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37
Q

What is section 25 notice?

A

Landlord friendly or hostile notice (served 6-12 months prior to lease expiry or suggested lease end date)

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38
Q

What is section 25 notice?

A

Landlord friendly or hostile notice (served 6-12 months prior to lease expiry or suggested lease end date)

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39
Q

What is a section 26 notice?

A

tenant request for new lease -> 6-12 months prior

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40
Q

What is section 27 notice?

A

Tenant notice to vacate -> 3 months notice

41
Q

What is section 28 of the L&T Act 1954?

A

Freedom to agree new lease

42
Q

What are the grounds for opposition under section 30?

A

a) Breah of repair covenant
b) Persistent delay in rent payment
c) Other substantial breach
d) uneconomic subdivision
f) Redevelopment
g) owner occupation

43
Q

What is a lease

A

Binding contract that passes interest in land for an agreed period in exchange for rent

44
Q

What is a licence?

A

Licence passes no interest inland but makes lawful what would otherwise be unlawful

45
Q

What is the key case law in the discussion of lease or licence?

A

Street v Mountford (1985)

licence to occupy a furnished room -> exclusive possession at a rent -> House of lords rules this agreement = tenancy

46
Q

What is the key case law in the discussion of lease or licence?

A

Street v Mountford (1985)

licence to occupy a furnished room -> exclusive possession at a rent -> House of lords rules this agreement = tenancy

47
Q

What are the different rent review mechanisms

A
  • Open market
  • RPI / CPI / Index linked
  • Stepped / fixed increase
  • Turnover rent
48
Q

Tell me about the role of third parties in a rent review

A

Stated in lease -> agreed to prior to signing lease

Either Arbitrator or Independent expert

49
Q

What if parties cannot agree on a third party in a rent review?

A

President of RICS will appoint

50
Q

What is an Arbitrator?

A

Independent person or body goverened by the Arbitration Act 1996, appointed to settle disputes

51
Q

What is an independent expert?

A

Surveyor who is a specialist in subject field and appointed to settle dispute using their expertise

52
Q

What is the difference between an Arbitrator and independent expert?

A
  • Arbitrators must rely on evidence and not own expertise
  • Arbitrator cannot delegate duties
  • Arbitrator is goverened by Arbitration Act 1996
  • Arbitrator is not liable for negligence
53
Q

When does notice need to be served at rent review?

A

Stated in the lease
-> usually requires landlord trigger notice
-> is time of the essence? this will affect

54
Q

What is a rent review assumption?

A

Used to find real open market value:
- Willing landlord & willing tenant
- Property available for immediate occupation
- Property is vacant
- Hypothetical term
- Covenants complied with
- Premises used for purpose set out in lease

55
Q

What is a rent review disregard?

A

Find real open market value:

  • Occupation
  • Goodwill
  • Incentives/ rent review period
56
Q

Tell me about rent review case law you are aware of

A

NULIS v BRB
Norwich Life Insurance Society vs British Railway Board (1987)

  • Wider than usual repairing liability resulted in arbitrators discounting rent by 27.5%
  • -> more onerous than usual repairing liability
56
Q

Tell me about rent review case law you are aware of

A

NULIS v BRB
Norwich Life Insurance Society vs British Railway Board (1987)

  • Wider than usual repairing liability resulted in arbitrators discounting rent by 27.5%
  • -> more onerous than usual repairing liability
57
Q

How would you deal with post-dated rent review evidence?

A
  • Weight it accordingly
  • If unforseeable, don’t take into account
  • If forseeable, then it’s releavnt
58
Q

How do you treat tenants improvements at rent review?

A

In lease:
- usually disregard
- If unauthorised, may be able to rentalise

59
Q

Tell me about an instance where you have reflected market conditions on rental value?

A

During rent review and lease renewal of Unit 24 Bourne and Compass House

Used comparables (market evidence) to ascertain estimated rental value and yield - confiemd with letting agents who agreed

60
Q

What is the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003?

A

alters procedures for renewal and termination of business tenancies

Introduces new procedures for contracting out

61
Q

*What is the difference between a hypothetical lease at rent review and hypothtical lease at lease renewal?

A

Assumptions and disregards may differ?*****

62
Q

What is PACT?

A

Professional Arbitration on Court Terms

63
Q

Tell me about your understanding of the court procedure at lease renewal?

A
  • Application to court to direct terms of new tenancy or decide whether opposition grounds are reasonable
  • Can also extend time frames for negotiation
64
Q

What is a Calderbank offer?

A

Unconditional, genuine offer to settle, ‘without prejudice save as to costs’

65
Q

Can you serve a Calderbank offer at lease renewal?

A

No, you would serve a Part 36 offer under Civil Procedure Rules 1998

66
Q

What does section 34 relate to in a lease renewal?

A

Gives the court power to determine the level of rent when the parties have not been able to reach an agreement

67
Q

What time limits apply in relation to lease renewal notices?

A

S.25 & S.26 notice -> 6-12 months (S.26 counter notice within 2 months)
S.27 notice -> 3 months notice

68
Q

Tell me about one example of lease renewal case law you are aware of?

A

S.Frances v The Cavendish Hotel (2017)
- Landlord opposed tenancy under refurbishment grounds, even though he had no intention to refurbish and was solely to evict.
- Supreme court held that the Landlord must prove every intention to carry out works

O’May v City of London
- new lease should be the same as the old lease

69
Q

What does disclosure mean in a lease renewal?

A

Statement providing confirmation to the tenant less than 14 days before the lease is entered into

70
Q

Tell me about a contracted out lease renewal you have dealt with

A

The Paddocks Industrial Estate
Tenant contacted me advising they wish to extend lease, 1 year prior to expiry
- Checked lease and confirmed no security of tenure. Therefore free to arrnge renewal without constraints of Act.
- Contacted the Client to ascertain their objectives. Receieved instruction to proceeed.
- Measured and inspected unit, gathering comparables and confirming these with letting agent
- Agreed new lease on same terms as current lease but at new market rent (Unit was under-rented)

71
Q

How would you advise a tenant differently between a contracted in and out lease renewal?

A

Contracted out -> Tenant has no rights and therefore not a strong negotiating position

Contracted in -> Tenant has rights and can apply to court or PACT

72
Q

What strategy did you recommend to your Client around notices during the lease renewal at Unit 29 Bourne

A

Unit was under-rented so suggested S.25 friendly notice

73
Q

In what circumstances have you or would you consider granting a licence?

A

Licence to Alter

Tenancy at Will - allows occupation of the property temporarily -> can evict at any time

74
Q

How did you ensure the break notice at Glasshouse Yard was valid?

A
  • Reviewed the lease and confirmed conditions (i.e Served in a particular way, no less than 6 months before break date)
  • Also had solicitors review and confirm
  • On break date i inspected to check final conditions
75
Q

Explain your advice on dilapidations at 20-25 Glasshouse Yard

A

Always refer to Dilapidations in England and Wales, 2016

  • Following the break notice, i advised my Client to instruct Building Surveyors to prepare a Schedule of Dilapidations
  • I inspected with BS, providing them with all relevant documents
  • Schedule was served by solicitors and settlement of £150,000 negotiated
76
Q

What do you understand a conditional break clause to be?

A

Break clause effective only after certain conditions have been satisfied -> common

77
Q

What RICS guidance is there on Dilapidations and what status does it hold?

A

Dilapidations in England and Wales, 2016

Guidance Note

78
Q

What is a trigger notice?

A

Written notice that essentially ‘triggers’ the event

79
Q

What terms afect the rent review?

A
  • Rent review clause
  • Repairing liability
  • Insurance liability
  • Alienation
  • User clause
  • L&T Act 1954
80
Q

What are the ley elements of a rent review clause?

A
  • procedure / machinary for effecting the rent review
  • Bases of valuation
  • Means of settling dispute
81
Q

Talk me through the lease renewal procedure at 29 Bourne Industrial

A

After receiving Client instructions, i inspected and measured the unit

I spoke with the tenant who was keen to remain in the unit

Ascertained market rent using comparable method and confirmed with letting agents.

Instructed solicitors to serve S.25 friendly, with new lease terms stated.

Tenant made contact and we negoiated new lease -> HOTs drafted and solicitors instructed to document

82
Q

Did you have regard to any RICS guidance during the lease renewal at Bourne Industrial?

A

Yes, RICS Code for Leasing Business Premises 2020 (professional statement)

83
Q

What are the contents of a S.25 notice?

A
  • name and address of Landlord and Tenant
  • Address of property
  • Notice of date to end tenancy
  • Confirmation on whether new lease is offered or opposed
  • Confirmation on time scales for response
  • Landlords proposal for new tenancy (including proposed rent)
  • Landlords grounds for opposition
  • Strong recommendation to seek professional advice
84
Q

What was the Market Rent at unit 29 Bourne?

A

£13.50 psf -> £33,500

85
Q

What would you have siggested if Unit 29 Bourne was over-rented?

A
  1. Don’t serve notice -> tenancy will continue under S.24
  2. Serve notice to provide guarantee of income stream -> serve asap to secure rent now in a falling market
86
Q

What options are vailable if negoiations didn’t go as planned?

A

Arbitration or Independent Expert

-> Apply to court or PACT for extension
PACT / Court determine terms unde S.32-35

87
Q

What did you look for in your inspection at Compass House?

A
  • material matters that may impact value
  • unlicenced works
  • improvements
  • breach of repairing / decorating obligations
88
Q

What is time of the essence?

A

Statement that saus contract provision must be completted on time
- Time is material to the performance of contract provision

89
Q

How did you know time was not of the essence?

A

Reviewed lease and did not mention or state time of the essence

-> also no connected lease event or deeming provision

90
Q

What case law are you aware of in relation to time of the essence?

A

USH v BBC
United Scientific Holding v Burnley Borough Council (1977)
- Time is of the essence if expressly stated in the lease

Cheapside Land and Development v Messels Services (1977)

Bello v Ideal View (2008) -> Rent review not initiated for 13 years -> court said time not of the essence and rent review could prcoeed

90
Q

What case law are you aware of in relation to time of the essence?

A

USH v BBC
United Scientific Holding v Burnley Borough Council (1977)
- Time is of the essence if expressly stated in the lease

Cheapside Land and Development v Messels Services (1977)

Bello v Ideal View (2008) -> Rent review not initiated for 13 years -> court said time not of the essence and rent review could prcoeed

91
Q

Talk me through the rent review procedure at Compass House

A

Reviewed the lease and familiarised myself with RR clause
- clarified assumptions, disregards and mechanism

Time not of the essence and open market review, so i inspected and measured unit. Gathered comparable evidence, confirming with local letting agent
- Determined suitable market rent and contacted tenant to begin RR discussions
- Once rental level was agreed, solicitors drafted the RR memo

91
Q

Talk me through the rent review procedure at Compass House

A

Reviewed the lease and familiarised myself with RR clause
- clarified assumptions, disregards and mechanism

Time not of the essence and open market review, so i inspected and measured unit. Gathered comparable evidence, confirming with local letting agent
- Determined suitable market rent and contacted tenant to begin RR discussions
- Once rental level was agreed, solicitors drafted the RR memo

92
Q

What was the process for dispute resolution stated within the lease at Compass House?

A

indpendent Expert

93
Q

What is an Open Market review?

A

Rent adjusted to the market rent asssuming the property is available to let in the open market on the reveiw date

94
Q

What is the hierarchy of evidence?

A
  1. open market lettings
  2. lease renewals
  3. rent reviews
  4. independent expert examination
  5. arbitrators awards
95
Q

What negotiation tactic do you employ?

A

Accomodating and collaborative style

  • importance of maintaining good relation and strong cooperation
  • Honest and transparent

Will differ depending who i am negotiating with

96
Q

How did you initiate the rent review?

A

Contacted teh tenant, essentially service a trigger notice

97
Q

Tell me about your understanding of the Code for Leasing Business Premises

A

Code for Lease Business Premises 2020 (professional statement)

  • Objective is to improve quality and fiarness in negotiating lease terms
  • Promote the issue of comprehensive HOTs making the legal drafting process more efficient

PM - Summary of Experience - APC (16 decks)

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