3.2 Development Issues Flashcards by Annie wood

What will L likely opt to use in A4L to ensure T completes on time, or A4L terminates if fails to do so

Notice to complete procedure - making time of the essence

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Why allow for long-stop date for delays

If issue does not resolve itself, parties should be able to walk away

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If defect in L’s retained premises, who is liable and who will pay

L liable, but will recover through service charge

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If defect inside T’s premises, who is liable and under what

T under repairing Os

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Who drafts A4L

L’s S

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What method is commonly used for Completion Statement

Surveyor’s method

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Why disregard T’s works at RR

Artificially inflates hypothetical lease - only benefits L

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If T carried out works but L requires reinstatement under A4L, what should you ensure it says

Such as L may reasonably require

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If T in strong position, what could you negotiate for in terms of T’s A’s defect notice

Require L’s A to act reasonably in considering DN, and take reasonable action necessary to temedy

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Why should you try to ensure T keeps control if L does depart from plans

Ensures premises remain appropriate for occupation + delay is not excessive

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Kilmartin v Safeway said what

‘Usable’ area is for sensible purpose in connection w/ proposed occupation - included entrance ramp but not fire exits or lift

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What kind of notice for A4L is more vulnerable

Unilateral

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Two things to check for A4L + lease, prior to completion

Prepare engrossments + annexures, and ensure both sides have signed

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When do CWs become important

When DLP runs out

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What is the nature of A4L and what does that mean - personal or tied to land?

Personal, so T cannot require L to grant to 3rd, and L’s Os cannot be enforced against successor L

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T’s payment obligations if supply of services to L

T accounts to HMRC for VAT on inducement

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If L is to carry out works, how to deal w/ T’s supervision?

Surveyors to enter at 3 points - sufficiently complete for occupation, practical completion + final completion. Can also state ‘at reasonable times’ w/ no limit. T to give reasonable written notice.

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Provisions for T to carry out works in A4L are the same as in what doc, done after completion as part of property management

Licence to Alter

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Why deal w/ delay provisions through force majeure + LADs if L to carry out work

Some issues not within L’s control so no damages, but should pay damages if within control.

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What are the four ‘Quarter Days’

25 March, 24 June, 29 September, 25 December

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If land is multi-let, who keeps the CDM Regs folder

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Who must be joined to A4L or not bound to give guarantee on completion

Guarantor

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Why ensure that T can supervise L’s works?

Constant supervision of work ensures keeping w/ agreement + verified by agent of T (rather than of L)

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Why should premises be measured by independent party

To avoid disputes

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What will L want to get if has to pay VAT on inducement given to T

VAT invoice

What is the procedure under 38(1) LTA if 14 day gap before T bound

Warning notice served on T (+ G) + T (+G) signs simple declaration

When is Completion Statement prepared

After exchange of A4L, prior to completion.

Two differences between agreed and unilateral notices

Agreed is public (unless Exempt Info), and requires consent of proprietor

When is A4L negotiated

W/ lease

What is the surveyor's method

Take yearly rent (separating out each charge in 'Rents'), add any VAT, divide by 365, then times by number of days to next QD

What should measuring provision state if parties cannot resolve their differences

Explicitly set out independent party to go to

Is there a tolerance level under Kilmartin/6th edition RICS

No - below or above the limits = no tenancy, or capped rent

Round to how many decimal places for each stage in surveyor's method

Two

Why deal w/ measuring provisions through 6th edition RICS

Certainty

In what two circumstances will L want to terminate A4L

If T insolvent, or if T fails to complete on agreed date

How to avoid A4L being public on LR

EX1 + EX1A for Exempt Info

How to define 'Access Date' when T to carry out works

Architect to verify stage when T can enter - Premises completed to reasonable satisfaction of architect

Two possible definitions for 'Term' in A4L

From lease being granted, or when T occupies

In surveyor's method, when do you count from and to

Include completion but exclude next QD

What can be obtained to avoid T being liable for construction defects

CWs from whole Professional Team + architect

If L is to carry out works, how to define standard of construction

Good and workmanlike manner, w/ good quality materials or such other materials as are substantially similar

What is T granted to carry out works before lease completed

Mere licence w/o ability to trade

If T is required to reinstate, what should you ensure regarding RR

Provision is considered at RR

What two things could be explicitly stated to help w/ measuring under Kilmartin + 6th edition RICS

State use contemplated + 'Internal Area'

How can you reg A4L at LR - for reg and unreg

C(iv) if unregistered, or notice if reg

Why must A4L be registered

Gives interest in land

Why should L insure premises after CoPC

In case anything happens prior to T entering into occupation - unlikely to be T's fault if before this point

How does T become only client under CDM Regs

Make declaration to H&S Executive

Why make sure reinstatement clause considered at RR

Absence of reinstatement clause makes hypothetical lease more attractive

What obligations will T have to neighbours if carrying out works

Not to cause nuisance, and to tidy up premises

By when should T get CWs from Professional Team + architect

Before practical completion

When is A4L exchanged

Before lease

Why define standard of construction

T ensures good end product, and L ensures not subject to high and costly burden

Why would you want to define 'Works' if L carrying out works

Ensure clarity over L's Os

Who insures works if T to carry out works

Two kinds of notice for registered land

Agreed and unilateral

Why ensure that architect acts reasonably when determining if T can enter to carry out works

To ensure other deadlines are not triggered too early, e.g. when to complete works by, and when to start trading

Insurance provision under A4L if L to carry out works

BC to insure until CpOC, and L insures until completion, and after continues to insure but collects from T

Form for unilateral notice for A4L

UN1

For VAT inducements, does it matter if T/L have opted to tax

Why is an agreed notice not private

Have to provide evidence, which means the A4L is then not private

Four reasons why A4L may be used

Financing, anchor T, possible alterations or for conditionality

When will L have to pay VAT on inducement given to T

If lease requires L to pay 'plus VAT'

Why not oblige L to use 'high' quality materials?

Too burdensome + costly

What is the procedure under 38(1) LTA if LESS than 14 day gap before T bound

Warning notice served on T (+ G) + T (+G) signs statutory declaration

Why will L want to terminate if T becomes insolvent

Covenant strength is vital

Why is T only granted a mere licence prior to completion of lease to carry out works

To ensure not granted tenancy at will through early possession

If L is to carry out works, how to deal with delay

No compensation if force majeure, but LADs if within control. Both subject to long-stop date.

How to deal w/ measuring the premises for occupation of T if L to carry out works

Lower + upper limit cap depending on size, to be measured by independent party

Why should you define standard of construction if T to carry out works

L ensures good end product + T ensures not subject to high (and costly) burden - works do not need to be perfectly completed

What to do if T's works extend beyond 'Demise'

Extend lease covenants to alterations outside

Why should T be able to enter to supervise L's works more than once?

There is more than one phase, so able to enter at least once per phase

What inducements might L offer to T to take premises

Rent-free period or contribution to T's work

What supply of services might T make to L on taking lease

E.g. marketing as anchor tenant, or carrying out works on behalf of L

Why should T have Os to neighbours when carrying out works

To protect the rest of the land and its occupiers

If L carrying out works, how to deal with T wanting L to depart from plans

L to agree to reasonable requests of T, but subject to T paying costs + extending long-stop date

What must applicant show for Exempt Info app to be successful

Prejudicial to commercial interests for A4L to be public

What should L ensure if under A4L/lease L is obliged to pay LADs for delay within L's control

Ensure LADs also in BC

What is it usual to provide for in A4L if T to carry out works w/ regard to CDM Regs

T only client, appoints Principal Designer, and keeps folder if land is SINGLE LET

Why does the A4L being a personal contract mean value of reversionary interest is not affected

Successor to L cannot be tied to L's Os in A4L

When is the surveyor's method relevant?

If gap between completion and next QD - to work out rent

What does the principal designer do

Advises until end of construction

Use what edition for measuring premises

6th edition of RICS code

What case does 6th edition of RICS Code codify

Kilmartin v Safeway

What has to be supplied w/ AN1 for agreed notice

Evidence (A4L)

When will there be no supply from T to L for VAT purposes - what entity might T be

Exempt - bank/BS

When might T have to pay VAT to HMRC for taking lease

If L is paying T an inducement

If A4L being used, by when must contracting out procedure be done

Before A4L exchanged - A4L = bound to enter

Standard of construction if T to carry out works

Good and workmanlike manner, good quality materials or such other substantially similar materials

A4L is what kind of contract

Estate contract

If L is to carry out works, how should you deal w/ L's ability to depart from plans

L can make minor reasonable variations, or T can require L to seek its approval/veto/T can terminate if can't agree (acting reasonably)

Who considers if T's works are completed, and how must they act

Architect - must act reasonably, determining if completed to its satisfaction in all material respects

Is there VAT payable if there is no supply for the inducement given to T

When is SDLT payable by

Within 14 days of the '**effective date**' which = '*substantial performance*'

What key term in A4L is it important to define

'Term'

Why might T have to pay VAT to HMRC for taking lease

If supply of services from T to L

Why might L want to be able to make minor variations to plans

To comply w/ PP

If L is to carry out works, how should you define works

Attach spec/plans (+ check BC is the same). Define PP if relevant

When might there be SDLT implications when using A4L

May be 'substantial performance' from entering to e.g. fit out, so payable within 14 days

What is it normal to provide for in terms of L considering T's A's defect notice

Only to pay 'due regard'

'usable' = sensible purpose

Kilmartin v Safeway

What common annexure is there to A4L

Agreed form rent deposit deed if deposit to be paid

Who might also have to sign A4L/lease

Guarantor

What will T have to pay VAT on if inducement = rent-free period, and supply was marketing their presence

VAT on value fo rent-free period

What obligation should T NOT have to neighbours when carrying out works

Not to cause annoyance - too subjective

Kilmartin key

'usable' = sensible purpose

What kind of notice for A4L does not require registered proprietor's consent nor evidence

Unilateral

Under what provision of what statute is security of tenure procedure

38(1) LTA '54

What to ensure about RR if T to carry out works

Works disregarded at RR

App for agreed notice

AN1

When is a Principal Designer required

30+ workers for 20+ days, or 500+ working person days

What **3 stages** should T's A be able to enter to supervise?

Sufficiently complete to occupy, practical completion and final completion