Case Study - Anna Flashcards
(21 cards)
How did you undertake your COI?
Salesforce
Do these need to be updated for each individual job or can you use the same for all instructions?
We are already in receipt of a singed free agreement/TOE but we always send updated TOE for each instruction.
What was the eaves height that you recorded? What is the industrial institutional spec eaves height?
4.5m
8m
What is an FRI lease?
A FRI (Full Repairing and Insuring) lease is a commercial lease where the tenant is responsible for all repairs to the property and for paying the building’s insurance.
What are the timelines for serving notices?
6-12 months before the contractual expiry of the lease
What happens if you miss that deadline?
(LL missed s.25 or TT misses s.26)
If a landlord misses the s.25 deadline they cannot terminate the lease or propose new term unt de
If the tenant does not serve a S.26 in time they loose the right to initiate a renewal via s.26,
What would happen in terms of rent if your client was holding over and the new lease was agreed much past expiry?
Application for interim rent through s.24a
How would your advice change if your client was in a falling market? Tenant rep
You could hold off and wait to see if the market carries on falling.
However, for this client for business planning and budgeting purposes they like to renewal it at the contractual expiry for budgeting and forecasting purposes.
What would you do if there was no evidence in the locality?
Expand the Search Area
Use Adjusted Comparable
Market Sentient
Rely on Professional Judgement
£20 GEA but you say £21.86 GEA?
GIA - £21.86 psf
What are the principles in the Odey Asset Management v City of Westminster case (2022)?
All rent free should be incorporated in comparables for lease renewals
Rent Free incentives are a feature of the open market, especially where they are commonly offered to incoming tenants.
Even though the renewing tenant does not vacate or need time for fit-out, a rent-free period (or its monetary equivalent) must still be accounted for in the rent figure, to reflect what a new tenant would receive.
If the landlord did not offer a rent-free period, but would have done so to a new tenant, then failing to make an adjustment would unfairly benefit the landlord. The renewal tenant would end up paying more than the true market rent.
The Odey Case gives tenants strong grounds to argue for rent adjustments on renewal to reflect typical market incentives. Landlords and surveyors must incorporate rent-free periods into their comparable evidence analysis to avoid inflating rents.
If you were acting for the landlord – do you think you would want to have regard to the odey case?
No - f you were acting for the landlord, you would likely not want to rely on the Odey case — because its effect is to reduce the rent payable by the tenant at renewal under the 1954 Act. The case requires that rent-free periods typically granted in the open market (even for fit-out) are reflected as a discount in the rent determination — meaning landlords effectively receive less rent on renewal.
How did you persuade the landlord to agree to this if they were insistent against a break?
Presented Market Evidence - showing that the majority of the comparable leases in similar premises included a TBO at year 5 (market standard)
Fair Risk Allocation - Break clause doesn’t guarantee early termination, but gives the TT flexibility which means they may pay slightly higher rent
Can you give me an example of how you adhered to the RICS Rules of Conduct?
Professional Integrity - I avoided cherry picking comparables that unfairly supported a desired valuation outcome, I ensured transparency in how comparables are adjusted (e.g. time, incentive, location, spec)
Competence - I knew I was competent to complete a lease renewal because I had relevant experience, knowledge of legislation and process, training and CPD, support and supervision, and professional judgment - I therefore determined I was competent to proceed in accordance with the RICS requirement to act within my limits of competence
When serving a s.26 you must serve it to the ‘competent landlord’ how do you know who that is?
The competent landlord is usually the immediate landlord, if not it could be the superior landlord (the freeholder) - without
Can also serve a S.40 notice to check exactly who is the competent landlord. Either party must reply to the other within one month
What are some ways to check who the competent landlord is?
- Review the lease – Who is named as the current landlord?
- Check the title register (via Land Registry) – Look at superior interests.
- Enquire – You can ask the immediate landlord or managing agent to confirm.
- Check length of superior leases – If your landlord’s interest expires before the term you’re proposing, they may not be competent.
What would make a s.26 invalid?
Notice Served by the Wrong Party - If you did not serve it to the competent landlord
Incorrect Timing- The notice must propose a new lease starting between 6 and 12 months from the date of service.
Incorrect or Incomplete Information - The notice must include the correct address of the premises, proposed terms, and start date.
Why did you request licences for alterations?
You want a get licence for alterations before inspection a property to ensure you fully understand the current condition, layout and alterations made by the tenant and who is responsible for them. A license to alter confirms the landlord approved the tenant’s changes. You need to know about tenants improvements as you do not rentalise tenant’s improvements under 21 years.
What types of fees do you get in rent review and lease renewals?
Fixed or incentivised
SF - 3% of passing + 12.5% of savings
If you are working for a landlord on an incentivised fee where your fee increases when you increase the rent - is this not a conflict?
The key is integrity, clarity, and always putting your client’s interests first—without compromising professional standards. - only increase the rent to the market.
In a lease renewal if the EPC expires, who is responsible for renewing it?
Landlord is usually responsible for providing a valid EPC at renewal.
It’s best practice to have an up-to-date EPC in place, even where not strictly required, to avoid MEES breaches and ensure transparency.
