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SQE Property Practice > 9. Business Tenancies > Flashcards

9. Business Tenancies Flashcards

1
Q

Compared to when first enacted, the LTA 1954’s d_______ p_________ have changed but the r________ has remained the same.

A

Detailed provisions have changed but rationale has remained the same.

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2
Q

What is a disadvantage of security of tenure, from the view of the LL?

A

LL may have less control over the premises.

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3
Q
A
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4
Q

Will market rent on rent review be higher or lower for a protected tenancy?

A

security of tenure = higher market rent

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5
Q

What are the three criteria for a protected tenancy?

A
  1. Tenancy MORE THAN 6 months (or a 6mth fixed if T stayed in occupation for 12 mths)
  2. OCCUPIED by T
    3 For BUSINESS purposes
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6
Q

What type of tenancy CANNOT be protected?

A

-fixed 6mths or less
-Tenancy AT WILL

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7
Q

What is a TENANCY AT WILL?

A

Personal permission to occupy WITH exclusive possession, terminated by either party at any time.

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8
Q

How might a Tenant lose security of tenure due to an issue with occupancy?

A

-Left property vacant
-Underletting

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9
Q

-Charity shop
-Members’ only tennis club
-Resi use that furthers T’s business e.g. hosing for medical school students or lease of shop with a flat.

…are all examples of what?

A

Business of purpose attracting security of tenure.

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10
Q

-Agricultural tenancies
-Mining leases
-Service leases (as part of employment)
-Fixed Term Tenancies 6 months or less

…are all examples of what?

A

Excluded tenancies under the LTA 1954

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11
Q

Which type of tenancy CANNOT be excluded?

A

periodic tenancy

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12
Q

Which types of leases are normally contracted out?

A

Short 5yrs or less
Underleases (as typically required by T’s lease terms)

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13
Q

When acting for LL on grant of a lease, what 2 considerations might they need to make in relation to security of tenure, if they anticipate requiring T to vacate in the future?

A
  1. Would the LL’s reasons for vacating fall under the statutory grounds?
  2. Might the contracting out procedure be necessary pre-completion of lease?
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14
Q

When contracting out, what must a LL first serve?

A

A WARNING NOTICE

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15
Q

What happens if the LL’s warning notice is served 14 days or more before completion?

A

T needs to sign a simple declaration

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16
Q

What happens if the LL’s warning notice is served LESS THAN 14 days before completion?

A

T needs a stat dec

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17
Q

What must a contracted out lease refer to?

A

The notice and the declaration required.

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18
Q

What is a consequence of not following the contracting out procedure?

A

The lease may acquire security of tenure.

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19
Q

If an UNPROTECTED T stays in occupation beyond the contractual end date, T may be considered a what?

A

Trespasser

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20
Q

Can the LL forfeit a protected tenancy?

A

Yes, following the forfeiture procedure arising from a breach of T’s covenants.

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21
Q

When must a S.25 notice be served by the LL?

A

No less than 6 months and no more than 12 months before the PROPOSED Termination Date.

22
Q

What will a FRIENDLY S.25 notice contain?

A

Proposed rent and principal terms of new tenancy.

23
Q

If a LL opposes renewal under a HOSTILE S.25 notice, the notice needs to specify what?

A

On what PRESCRIBED GROUNDS the LL opposes renewal.

24
Q

Which of the prescribed grounds are MANDATORY and which are DISCRETIONARY?

a. Persistent  and serious BREACH by T of repairing obligation
b. Persistent rent delay
c. Serious and persistent other T covenant breaches
d. LL offers suitable alternative accommodation
e. (not covered)
f. LL requires possession for substantial works/reconstruction
    g. LL intends to occupy for itself
A

DISCRETIONARY
a. Persistent and serious BREACH by T of repairing obligation
b. Persistent rent delay
c. Serious and persistent other T covenant breaches

MANDATORY
d. LL offers suitable alternative accommodation
e. (not covered)
f. LL requires possession for substantial works/reconstruction
g. LL intends to occupy for itself

25
Q

What is the implication of a a mandatory or discretionary ground?

A

Mandatory = If proven by LL, the court MUST grant possession to LL
Discretionary= If proven by LL, STILL court’s decision

26
Q

Which category of prescribed grounds for opposing renewal are considered a T’s fault?

A

DISCRETIONARY

27
Q

Which 2 MANDATORY prescribed grounds are COMPENSATORY?

A

f. LL requires possession for substantial works/reconstruction
g. LL intends to occupy for itself

28
Q

What is required for LL to successfully rely on mandatory Prescribed Ground g (LL intends to occupy)?

A

-Firm and settled intention to occupy
-LL must have owned reversion for at least 5 yrs

29
Q

T’s compensation for the LL successfully opposing renewal on mandatory grounds F and G is based on what 2 rateable values?

A

1x RV if t occupied for LESS THAN 14 yrs
2x RV if T occupied for 14yrs+

30
Q

For T to serve a S.26 notice, still a protected tenancy is required and notice must be min 6 mths and max 12mths but WHAT ELSE?

A

Original lease term of MORE THAN 1 yr
(although doesn’t stop LL serving friendly S.25)

31
Q

When does S.26 notice expire?

A

On the proposed commencement date of new lease.

32
Q

How can LL oppose S.26 notice and what are the required timescales?

A

-Serve COUNTER NOTICE within 2 months, stating STATUTORY GROUNDS

33
Q

T’s S.27 notice must be served how many months before which date?

A

3 months before the intended termination date.

34
Q

T’s intended termination date for a S.27 notice must not be before when?

A

The contractual end date.

35
Q

The purpose of T’s S.27 notice is for T’s tenancy to end during the period of what?

A

Holding over

36
Q

Can T serve a S.26 notice after service a S.27 notice?

A

No!

37
Q
A
38
Q

When can the parties apply to the court after T serves a S.26 notice?

A

AFTER 2 months from the notice
OR
after LL’s counter notice
UNTIL
day before PCD

39
Q

When can the parties apply to the court after LL serves a S.25 notice?

A

Any time after notice UNTIL proposed termination date

40
Q

Which date is either the friendly or hostile S.25 notice concerned with?

A

The proposed termination date.

41
Q

What is the earliest date for starting INTERIM RENT?

A

From earliest PCD in T’s S.26 notice or earliest termination date in LL’s S.25 notice.

42
Q

If T is unhappy with court’s renewal terms or has simply changed their mind, what can T do and within what deadline?

A

T has 14 days to ask court to revoke order for renewal (Ct will not object). T then has no right to renew.

43
Q

How long does LL have to respond to T’s S.26 notice?

A

2 months.

44
Q

Who can apply to the court for interim rent and how might the rent change?

A

Either party and the interim rent is not solely upwards.

45
Q

a COMPETENT LL’s interest must not end in _ _ month’s time.
If it does, who is the competent LL?

A

NOT competent LL if interest ends in 14 months’ time.
Would look to next in chain of LLs.

46
Q

When does the LL need to cite Prescribed Grounds?

A

In its counternotice to T’s S.26 notice or in its hostile S.25 notice.

47
Q

For T’s S.26 notice, the PCD must be no earlier than the c__________ e_____ AND no less than _ m_____ from service of notice.

A

For T’s S.26 notice, the PCD must be no earlier than the CONTRACTUAL EXPIRY AND no less than 6 MONTHS from service of notice.

48
Q

When deciding on new lease terms, what Term can the court impose?

A

NOT over 15 years

49
Q

For interim rent, if the LL opposes, the interim rent will be…

A

10-15% lower than the market rent.

50
Q

Interim rent is normally set at which rate?

A

Market rent.

SQE Property Practice (16 decks)

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