Landlord & Tenant (L3)

Question 1

What is the leasehold reform act for houses?

Answer 1

Leasehold Reform Act 1967

Question 2

What does the Leasehold Reform Act 1967 do?

Answer 2

Tenants of qualifying houses can to acquire their freehold (or obtain a lease extension of 50 years)

Question 3

What is leasehold reform act for flats?
(submission L1)

Answer 3

Leasehold Reform, Housing and Urban Development Act 1993

Question 4

What does the Leasehold Reform, Housing and Urban Development Act 1993 do?
(submission L1)

Answer 4

o gives tenants of flats the right to a lease extension of 90 years
o the right to acquire the freehold of their block

Question 5

What does Commonhold and Leasehold Reform Act 2002 do?

Answer 5

o amended provisions of previous Acts
o removed residency requirement
o max. 25% commercial floorspace in mixed use blocks

Question 6

Who are qualifying tenants in the 1993 Act for a lease extension?

Answer 6

• Original term of lease must be in excess of 21 years
• Claimant must have owned the flat for at least 2 years (but a claim can be assigned to new purchaser)

Question 7

What is the process of a lease extension?

Answer 7

• Tenant serves notice of claim under Section 42
• LL will respond requesting: Payment of deposit (10% of premium offered), Asking the Tenant to deduct Title
• LL must respond with Section 45 Counter Notice by date specified (at least 2 months).
• Negotiations on premium lead to settlement or First-tier Tribunal.
• Existing lease is surrendered and a new lease is granted for the extended term. (90 years with ground rent a peppercorn)
• Tenant is liable to pay LL reasonable costs under Section 60

Question 8

What is included in a Section 42 Notice?

Answer 8

o Served on all Landlords (LL)
o Full name and address of property
o Existing lease details
o Propose premium
o Specify terms of new lease
o Name person appointed by the Tenant
o Specify date when LL must serve Counter Notice under Section 45 of the Act (minimum of 2 months)

Question 9

Who are qualifying tenants in the 1993 Act for Collective Enfranchisement?

Answer 9

• “Qualifying tenants” are those with a lease with an original term of at least 21 years
• At least two thirds of the flats in the building must be held by “qualifying tenants”
• At least 50% of the tenants of all the flats in the building must participate in the claim (if only two flats in the building, both tenants must participate)
• Not more than 25% of the internal floor area may be in use for non-residential purposes (common parts are excluded from calculation)
• Tenants who own three or more flats in the building are not qualifying tenants for collective enfranchisement (but may still obtain lease extensions)

Question 10

What needs to be included in a S13 Notice?

Answer 10

1. Details of the property to be acquired, including a plan.
2. Statement of the grounds on which it is claimed that the specified premises qualify for the right of collective enfranchisement
3. Details of any leasehold interests to be acquired.
4. Price proposed
5. Full names and address of qualifying tenants
6. Name and address of the Nominee Purchaser
7. The date by which the freeholder is to provide the Counter-Notice

Question 11

What are reasonable costs under Section 60 of 1993 Act?

Answer 11

(1) valuer’s fees for negotiating the premium payable for the lease extension, and
(2) legal fees for taking instructions from the landlord on the suggested amount of the premium.

Question 12

Under what section would qualifying tenants serve the enfranchisement claim?

Answer 12

Section 13

(Freeholder responds by way of Section 21 Notice)

Question 13

Can lease extensions be granted outside of the 1993 Act?

Answer 13

Yes. The Freeholder is able to grant a surrender and new lease to the leaseholder. This can be done for a term of more than 90 years.

Question 14

Can you talk about some recent case law you have looked at?
(submission L1)

Question 15

What is the calculation of Development Hope Value?

Answer 15

You would first work out the development costs by speaking to contractors (like a development appraisal).
Determined by cases and valuer judgement rather than statute.
For example I used 70/30 in my calculation at Princess Road.

Question 16

What are the types of Development Value?

Answer 16

Development Hope Value
Development Marriage Value

Question 17

Please talk me through you instruction of the voluntary lease extension at 9a Shelley Close?
(submission L2)

Answer 17

My client instructed a voluntary lease extension of the subject property

1. I first checked my competence for the instruction, I checked for conflicts of interests and then received written confirmation from my client with the terms of engagement.
2. I inspected the property.
3. I analysed the lease terms and calculated the NPV for the loss in ground rent income and deferred reversion and marriage value.

Question 18

Please talk me through the calculation at 9a Shelley Close?
(submission L2)

Answer 18

I analysed the lease terms which allowed me to apply this to the voluntary lease extension calculation.
I used the term and revision method to calculate the Net Present Value of the ground rent income and differed reversion. I then calculated the marriage value by applying relativity using Zucconi.

Question 19

What were the lease terms in 9a Shelley Close?
(submission L2)

Answer 19

Unexpired lease term of 73.31 years
Ground rent of £50, doubling every 33 years

Question 20

What is the main Landlord & Tenant legislation?

Answer 20

Landlord & Tenant Act 1985

Question 21

What does the Landlord & Tenant Act 1985 do?

Answer 21

It sets minimum standards in tenants’ rights against their landlords.

Question 22

What are the FIVE main provisions of the Landlord & Tenant Act 1985?

Answer 22

1. Information – Landlords are obligated to disclose their identity
2. Provision of rent books
3. Fitness of human habitation
4. Repairing obligations (leases less than 7 years)
5. Service charges

Question 23

Why was the Leasehold Reform (Ground Rent) Act 2022 introduced?

Answer 23

Reputation of the leasehold system was damaged by unfair practices where leaseholders contractually obligated to pay onerous and escalating ground rents, with no clear service in return.

Question 24

What are FOUR upcoming changes to legislation regarding leasehold reform?
(submission L1)

Answer 24

Leasehold and Freehold Bill 2023-24 is currently in the House of Lords.

Changes include:
1. Cheaper and easier for leaseholders to extend lease / buy freehold
2. Increase the standard lease extension term to 990 years (ground rent to be a peppercorn)
3. Expand pool of qualifying tenants
4. Ban the granting of new leasehold houses (with some exceptions)

Question 25

Name FOUR upcoming changes to legislation regarding service charges?
(submission L1)

Answer 25

Leasehold and Freehold Bill 2023-24 is currently in the House of Lords.

Changes include:
1. Improve transparency of service charges and ensure leaseholders receive key information on a regular basis.
2. New right for leaseholders to request service charge info.
3. Improve transparency of administration charges and buildings insurance commissions.
4. Strengthen the leaseholder protections in the Building Safety Act 2022.

Question 26

What did you do in order to produce the 2023 Budget at Kings Cross?
(submission L3)

Answer 26

Checked the LEASE
Looked at expenditure from previous 2 years
Had a site visit

Question 27

How was the service charge to be demanded at Kings Cross?
(submission L3)

Answer 27

In equal quarterly periods on the usual quarter days.
(25 Dec, 25 March, 24 June, 29 September)

ALONGSIDE budget and SUMMARY OF RIGHTS AND OBLIGATIONS

Question 28

Can you name FOUR potential changes in the Renters Reform Bill?

Answer 28

1. Abolish section 21 ‘no fault’ evictions
2. New Private Rented Sector Ombudsman
3. Right for pets
4. More comprehensive possession grounds so landlords can still recover their property

Question 29

What provisions does the 1985 Act make regarding service charge recovery?
(submission L3)

Answer 29

It defines service charge, states service charge costs must be fair and reasonable and protects leaseholders from paying large sums.

Question 30

What should be included in service charge demands?
(submission L3)

Answer 30

1. Address of the property;
2. Name of leaseholder;
3. Demand date (as per the Lease);
4. Balance brought forward (if applicable);
5. The leaseholders apportionment of service charge;
6. The balance owed;
7. The landlord’s registered name and address (as per Section 47 & 48 of LTA 1987); and
8. Options to pay.

(The Summary of Tenants’ Right and Obligations attached must be separately).

Question 31

What are leaseholders rights in the Summary of Rights and Obligations?
(submission L3)

Answer 31

1. Rights to determine through the FTT
2. Right to request breakdown of costs
3. Right to inspect accounts
4. Right to request audit
5. Landlords right to forfeiture

Question 32

Under which section can you find Building Safety recoverable costs?

Answer 32

L&TA1985 Section 30(d)

Question 33

Whats your L2 example?

Answer 33

THINK VOLUNTARY.
9A SHELLEY.

Question 34

Whats your L3 example?

Answer 34

THINK BUDGET.
KINGS X.

Question 35

What are the benefits of a voluntary lease renewal?
(submission L2)

Answer 35

Speed: There is no notice procedure to follow – the negotiations with the freeholder are therefore hopefully quicker.

Costs: Legal costs are often lower.

More flexibility and control over the terms: The informal route affords a great degree of flexibility and control compared to the ‘one size fits all’ approach with statutory lease extensions.

Question 36

What are the possible benefits of a voluntary lease renewal?
(submission L2)

Answer 36

No fixed timetable A tenant will have no access to Leasehold Valuation Tribunal which can compel the landlord to adhere to a timetable, accept a reasonable offer and keep their professional fees at a reasonable level
Costs: The landlord can insist on the tenant paying their legal and valuation fees.