L&T brush up q's Flashcards
(17 cards)
What is included in a CB offer?
This offer includes:
The PROPOSED RENT and justification
A TIMEFRAME for acceptance
A statement that the offer was made ‘WITHOUT PREDJUDICE, SAVE AS TO COSTS’
A clear explanation that acceptable would make the agreement LEGALLY BINDING.
What is Market Rent?
The estimated amount for which an interest in real property should be leased on the VALUATION DATE between a WILLING LESSOR AND WILLING LESSEE on appropriate lease terms in an ARM’S LENGTH TRANSACTION, after PROPER MARKETING and where the parties had each acted KNOWLEDGABLY, prudently and without compulsion
Why do you take off 3 months rent free from Comps in Rent reviews?
Valuing on the basis the tenant has already had the benefit of fitting out, for example you are valuing on the assumption that the property is available for immediate occupation
What do you do if landlord won’t grant extension on s.25?
Get your solicitor to apply to court and start court proceedings
What does ‘Without Prejudice save as to costs’ means?
Gives party right to disclose offer for the purpose of influencing awards on costs
Can you backdate rent reviews?
Yes and interest can be payable
What is the assumed/hypothetical term?
Lease Term the RR is valued on
What parts of the L&T Act 1954 relate to commercial property?
Part II s.24-28 relate to security of tenure
S.25 - LL notice to terminate
S.26 - Tenant’s request for a new tenancy
S.27 - TT’s notice to quit
Section 30 – Grounds for opposing a new tenancy
Section 38A – Contracting out
When a court has determined new lease terms, what are the options for the tenant?
- Accept the new lease
- Refuse the new lease - they are no obligations to take the lease however if they choose not to proceed, they must vacate the premises and give up possession. There is no penalty, but they lose the right to remain in occupation.
How long does the new lease commence after the court date decides the new terms?
3 months and 21 days from the day of the hearing
For a lease renewal that goes to court, what is the valuation date?
Commencement date of the new lease.
To the extent that is not possible to predict rental values at a future date, the valuation date for LR is often agreed, or taken for practical purposes, as the date of the hearing/trial.
What is PACT
“If the parties cannot agree the terms of the new lease, one option is to use PACT — Professional Arbitration on Court Terms — where both parties agree to refer the matter to an independent expert or arbitrator. It can be a quicker and more cost-effective alternative to court, especially in disputes over rent or lease clauses.”
What is in the contents of a RRM?
Name of LL & TT
Address of Property
Date of the lease and RR
Confirmation of new rent agreed
Signed and Dated by both parties
What’s included in s.25? (important at the bottom)
name/address LL TT
Property address
Notice of the date to end the tenancy
(hostile / non-hostile)
Confirmation whether a new lease is opposed or granted
Confirmation of date by which TT must ask the court for a new tenancy
LL proposals if friendly notice
if LL opposed new tenancy - the grounds for opposition must be stated
A STRONG RECOMMENDATION TO SEEK PROFESSIONAL ADVICE
If the tenancy is unprotected, and the occupier remains in occupation after lease expiry, what are the implications?
“If a tenant under an excluded tenancy remains in occupation after expiry, they have no statutory right to do so. If the landlord accepts rent or allows occupation to continue, there is a risk that a periodic tenancy or tenancy at will may be implied. The landlord should act quickly and take steps to avoid unintentionally granting a new tenancy, including clear communication and possibly a written tenancy at will.”
TT could be seen as trespassing
What is included in a S26 notice?
TT’s proposals for a new lease to include the proposed rent
What were the risks and costs?
How much is an RICS application?
Risks include:
- Cost Risk - The losing party may be ordered to pay the arbitrator’s costs and part or all of the other party’s legal/surveyor fees
- Final and binding - limited rights of appeal - only possible on points of law under the Arbitration Act 1996
- Time-consuming - may take several months to reach an award, especially if submissions are extensive
Arbitrators charge on an hourly basis. Fees can range from £3-10,000 depending on complexity, location and seniority of arbitrator
