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SQE 1 > Property Law 10 > Flashcards

Property Law 10 Flashcards

1
Q

What are the methods of terminating leases?

A
  • Effluxion of time
  • Surrender
  • Notice to Quit
  • Merger
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2
Q

What is Effluxion of time

A
  • the end of the tenancy
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3
Q

What happens if a tenant stays after the lease runs out with the Landlord’s permission?

A
  • If the landlord consents to an unprotected tenant remaining in occupation, the tenant is not holding over, but would be treated as a ‘tenant at will’.
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4
Q

What happens if a tenant stays after the lease runs out with the Landlord’s permission and the Landlord accepts rent?

A
  • If the landlord accepts rent, then the tenancy at will may be converted to a periodic tenancy and, if otherwise qualify, will acquire security of tenure.
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5
Q

Notice to quit - unless the contract says otherwise, what is the period in which a notice to quit must be given?

A

Weekly – four weeks (residential) or one week (other tenancies)

Monthly – one month

Quarterly – one quarter

Yearly – six months

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6
Q

Which day must a notice to quit be for?

A

The first day or the last day of the tenancy period

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7
Q

Who can issue a notice to quit?

A

Either the landlord or tenant

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8
Q

What happens if a Landlord issues a notice to quit for a protected tenancy?

A

The notice will only end the periodic tenancy itself. The tenant will be entitled to hold over.

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9
Q

How does a Landlord gain control when issueing a notice to quit for a protected tenancy?

A

Issue a hostile s.25 notice which may also be the notice to quit

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10
Q

What is a surrender of a lease?

A

An agreement by both Landlord and tenant that the lease should come to an end. A premium may be payable by the party that wants to surrender.

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11
Q

How can a surrender by effected?

A
  • A surrender by deed
  • A surrender by operation of law
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12
Q

What is a surrender by operation of law?

A

A surrender by operation of law arises when the landlord and tenant act in way that is inconsistent with the continuation of the tenancy. For example, the landlord accepts the keys from the tenant with an understanding that the tenant is leaving the premises permanently.

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13
Q

What is a merger?

A

A merger happens when either the tenant acquires the landlord’s superior interest (the opposite to a surrender), or a third party acquires both.

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14
Q

What are the methods by which a landlord can remedy a breach by a tenant?

A
  • Damages
  • Action in debt
  • Guarantor and rent deposit
  • Commercial rent arrears recovery (CRAR)
  • Equitable remedies
  • Forfeiture
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15
Q

What are the equitable remedies by which a landlord can remedy a breach by a tenant?

A

Specific performance - order to do something

Injunction - order to stop doing something

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16
Q

What would damages achieve for the landlord?

A

Put the landlord back into the position they would have been were it not for the breach of covenant.

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17
Q

What would an Action in Debt achieve for the landlord?

A

Issue court proceedings to recover a debt. An action for debt is limited to rent due in the six years before the issue of proceedings. Any earlier outstanding rent is irrecoverable.

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18
Q

What would a Guarantor and rent deposit achieve for the landlord?

A

The landlord can rely on the contractual terms of a guarantee to claim its losses from the guarantor.

The landlord can draw on a rent deposit (usually limited, say to six months’ rent) if there are any arrears.

The tenant will be required to top up the deposit after a withdrawal.

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19
Q

Does a Guarantor and rent deposit Only apply to rent?

A

No - A guarantee will typically cover all the tenant’s obligations, so that the landlord is not limited to pursuing unpaid rent, but also any breach of the tenant’s covenants.

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20
Q

What is Commercial rent arrears recovery (CRAR)

A

A Self-help remedy that is generally cheaper and quicker than court proceedings.

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21
Q

When can Commercial rent arrears recovery (CRAR) be used?

A
  • the premises are purely commercial (it cannot be used, for example, where the premises comprise a shop and residential flat)
  • a minimum of seven days’ principal rent is owed (it can’t be used to recover service charge or any other sum reserved as ‘rent’ but does include VAT and interest)
  • the lease has not been forfeited
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22
Q

What types of arears can CRAR be used for?

A

Only includes principle rent + Interest + VAT

It can’t be used to recover service charge, ‘insurance rent’ or any other sum reserved as ‘rent’

23
Q

Who must conduct a Commercial rent arrears recovery (CRAR)?

A
  • the landlord must appoint an enforcement agent who either has the required certificate from the court or is exempt from the requirement (eg, a police officer)
24
Q

How much notice must the LL give the Tenant for CRAR if he intends to enter the premises?

A

Seven clear days’ notice must be given of the intention to enter the tenant’s premises (clear days exclude Sundays and bank holidays)

If the notice expires without repayment of the debt, the enforcement agent can enter the premises and take control of goods belonging to the tenant up to the value of the debt owed.

25
Q

What must be included in a CRAR notice?

A

The notice must include certain details, such as
- the amount of the debt and
- how to repay it,
- details of the power being used to enforce the debt, and
- contact details for the enforcement agent

26
Q

When can the LL sell the goods seized under a CRAR notice?

A

The landlord must serve a further seven clear days’ notice if it intends to sell any of the seized goods.

27
Q

What is Forfeiture?

A

The right of the landlord to re-enter the premises and take them back from the tenant.

28
Q

What is the effect of Forfeiture?

A

It brings the lease to an end before the contractual term (or during any period of holding over).

29
Q

Is Forfeiture an automatic right?

A

No, it is only permitted insofar as the lease provides for it.

30
Q

How does a Landlord start forfeiture proceedings?

A

Issues a s.146 notice.

31
Q

When does a Landlord not have to issue a section 146 notice in respect of forfeiture?

A

For non-payment of rent

32
Q

What methods are there for forfeiture to be carried out

A
  • peaceable re-entry
  • apply to the court for a an order of forfeiture
33
Q

In what circumstances can a Landlord waive his right to forfeiture

A
  • the landlord does some unequivocal act recognising the continuing existence of the lease;
  • with knowledge of the breach in question; and
  • communicates that act to the tenant.

The intention of the landlord is irrelevant.

34
Q

What are the two types of breach when considering a landlord’s waiving of his right to forfeiture and why does it matter?

A
  • Once and for all breaches - if the LL waives his right he will not be able to regain it for that breach.
  • Continuing breaches - each day that the breach continues, the landlord regains the right of forfeiture.
35
Q

What are once and for all breaches?

A
  • non-payment of rent
  • insolvency
  • an unlawful assignment or underletting
36
Q

What are continuing breaches?

A
  • failure to keep the premises in repair
  • breach of the user covenant
  • failure to comply with an insurance obligation
37
Q

From what time can the tenant apply for relief from forfeiture?

A

As soon as the landlord serves a section 146 notice or starts the process of forfeiture

38
Q

Is relief from forfeiture a discretionary remedy?

A

Yes

39
Q

Who can seek relief from forfeiture?

A
  • The tenant
  • Other parties who derive an interest from the tenant’s lease, such as a mortgagee or undertenant.
40
Q

What are the tenant’s options if he is issued a section 146 notice in respect of a repair covenant?

A

The notice must give a reasonable time to remedy the breach.

41
Q

When can a LL issue proceedings for damages in respect of a repairing obligation?

A

It must have served the section 146 notice and give the tenant 28 days to serve a counter-notice (if a protected lease applicable).

42
Q

What needs to be included in a s.146 notice (a forfeiture notice)

A
  • a notice
  • specifying breach complained of, and
  • if the breach is capable of remedy, requiring the lessee to remedy the breach
  • in any case, requiring the lessee to make compensation in money for the breach
43
Q

Does a s.146 notice have to be issued in respect of the tenant that has not paid rent in line with the tenancy agreement?

A

No

44
Q

What is the measure of damages for damages claimed in respect of a repairing covenant breach?

A

The loss of value to the landlord’s reversion

45
Q

What is required before the LL to sue for damages?

A

IF (the lease is covered by Leasehold Property (Repairs) Act1938 act if the following applies)

  • the lease is for a term of seven years or more; and
  • there are at least three years of the term left to run;

the landlord needs to serve a s.146 notice, the tenant has 28 days to serve a counter-notice. This means that the landlord must get leave from the court before proceeding.

The landlord must advise the tenant of these rights in the section 146 notice.

46
Q

What is a Jervis v Harris clause?

A

A Jervis v Harris clause will give the landlord the right to:

  • enter the property
  • carry out any repairs
  • recover the cost of doing so from the tenant.

There is no need for the landlord to serve a section 146 notice (and therefore no opportunity for the tenant to serve a counter-notice).

The cost of carrying out the repairs is treated as a debt to the landlord, not damages, and therefore it can be recovered in full.

47
Q

Choice of remedy – non-payment of rent

A

Debt action

· Advantages – reasonably simple, amount of debt is clear if rent has not been paid, can separate debt from ongoing landlord/tenant relationship

· Disadvantages – court action which is potentially costly and time consuming

· Use/limitations – any sum owed under the lease, whether principal rent or, eg, service charge

Commercial Rent Arrears Recovery (CRAR)

· Advantages – quick and efficient, no need to involve court

· Disadvantages – care must be taken to observe proper procedure

· Use/limitations – limited to principal rent, not other sums treated as rent

Forfeiture (specifically for non-payment of rent)

· Advantages – quick and efficient, no need to involve court. Threat of forfeiture might be sufficient.

· Disadvantages – risk that tenant will not comply and may lose tenant (whether this is a problem will depend on the market)

· Use/limitations – depending on the lease, may extend to other sums treated as rent

48
Q

Choice of remedy – all other breaches

A

Damages

· Advantages – may be helpful in separating issue whilst preserving landlord/tenant relationship

· Disadvantages – may be protracted and costly, no guarantee of recovering costs

· Use/limitations – any breach that can be compensated in financial terms

Forfeiture

· Advantages – may be effective in persuading tenant to comply with obligations

· Disadvantages – section 146 notice required, risk of losing tenant

· Use/limitations – probably not appropriate for minor breaches

Specific performance

· Advantages – not limited to financial, eg, obliged tenant to comply with obligation

· Disadvantages – discretionary remedy, difficulty to persuade court to grant it

· Use/limitations – cannot be used for continuing obligations (eg, an obligation to keep shop premises open each day)

Injunction

· Advantages – not limited to financial, ie, may stop tenant from proposed breach

· Disadvantages – discretionary remedy – difficult to persuade court to grant it

· Use/limitations – might be used for an intended breach of user clause, or an intended assignment or underletting

Example – choice of remedy – other breaches

A tenant has applied for consent to assign to a tenant of poor covenant strength who is offering no guarantor or rent deposit. The landlord has reasonably withheld consent, but has found out that the tenant intends to proceed with the assignment in any case.

The landlord cannot seek damages nor start the process of forfeiture, as nothing has yet happened. If the landlord wants to act, then it may however apply for an injunction to prevent the tenant from proceeding with the unlawful assignment.

49
Q

Remedies involving security arrangements

A

Guarantor

· Advantages – guarantor may have better means to comply with obligations

· Disadvantages – may end up in certain instances with guarantor taking overriding lease and becoming tenant (may be a disadvantage or advantage depending on circumstances)

· Use/limitations – there must be a guarantor!

Former tenant

· Advantages – former tenant may be in better position to comply with obligations

· Disadvantages – as with guarantor

· Use/limitations – there must be a former tenant with an old lease or a new lease and authorised guarantee agreement

Rent deposit deed

· Advantages – quick and efficient. Can help ride over tenant cash flow problems

· Disadvantages – limited to certain number of months’ rent. Relies on tenant topping up rent deposit once used

· Use/limitations – generally only covers rent

50
Q

When is the contractual expiry date of a term of 10 years from and including 29 September 2010?

A

28 September 2020

51
Q

When is the contractual expiry date of a term of 6 months from and including 31 December 2010

A

30 June 2010 (there are only 30 days in June - so runs to end of the month).

52
Q

When is the contractual expiry date of a term of 1 month from 30 January 2021 (not a leap year)

A

28 February (goes to the end of the following month)

53
Q

What are the tenants options if served with a s.146 notice for a breach of repair covenant and the lease is protected?

A

IF (the lease is covered by Leasehold Property (Repairs) Act1938 act if the following applies)

  • the lease is for a term of seven years or more; and
  • there are at least three years of the term left to run;

the tenant has 28 days to serve a counter-notice. This means that the landlord must get leave from the court before proceeding.

The landlord must advise the tenant of these rights in the section 146 notice.

SQE 1 (149 decks)

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