Landlord and Tenant

Question 1

Lease renewal/ Rent review - What info is required at commencement of instruction

Answer 1

agreed terms of engagement
Understanding clients strategy and objectives
Copies of
existing lease, plans
licences - alterations, improvements, sub-letting, assignments, DOV
rent review memorandums
tenant contact details to arrange inspection

Question 2

Terms of engagement for rent review/lease renwal

Answer 2

Check competent
No COI
CHP details
Fees for rent reviews / lease renewals

Question 3

How can rent reviews or lease renewals calculated

Answer 3

% of new rent agreed
% of saving made from quoting rent
fixed fee
hourly rate
incentive fee

Question 4

What actions are required by surveyor for lease renewals/rent review

Answer 4

COI and competency check
terms of engagement
obtain client’s objectives
obtain all lease docs
Read lease pack - rent review clause, inside act 54
Is time of essence in rent review
Site inspection and measurement of property in accordance to surveying safely 2018 and Property Measurement 2018
undertake market rent valuation
prepare recommendation report
agree strategy

Question 5

What should you put during negotiations

Answer 5

Without prejudice and subject to contract - means terms can not be used in court or shown to arbitrator/ independent expert

Question 6

What is a licence

Answer 6

A right to enter a property
personal agreement
No interest in the property
A personal right that either party can end
If more than 6 months likely to be a lease

Question 7

4 requirements for a lease

Answer 7

Exclusive occupation
Payment of rent
Duration for a specified time
If more than 3 years the terms must be in writing signed and registered as a deed

Question 8

What are the differences between lease and licence

Answer 8

Lease provides occupier with an estate in the land. A licence allows them to use the land
A lease can be assigned. Licence is a personal right and cannot be assigned
A lease cannot be terminated until it expires (unless it has a break clause) Licence can any time

Question 9

What is a tenancy at will

Answer 9

form of licence
no legal interest in the land
can end at anytime
Used for early access to allow fitting out or end of the lease when tenant contracted out of L&T 54

Question 10

What is a wayleave

Answer 10

A temporary right and receives an annual payment
used to allow electricity companies to install and retain apparatus
Personal to company, cannot be transferred
Not compulsorily registrable

Question 11

What is an easement

Answer 11

Permanent right and receives a capital payment
Registered via land registry
Allows right enjoyed by one party over the land of another

Question 12

What is the contents of rent review clause

Answer 12

basis of valuation (normally upwards to market rent using standard assumptions) RPI or CPI with caps & collars, turnover rents and stepped increases. Time not usually of essence

Question 13

What are the 4 usual assumptions in rent reviews

Answer 13

Property available to let on open market between a willing landlord and willing tenant for a term of years
Property fit and available for immediate occupation and use
All covenants observed by LL and T
Property may be used as per lease

Question 14

Usual disregards in rent reviews

Answer 14

Any effect of goodwill on tenants occupation
Ignore goodwill attached to property
Tenants improvements if landlord consent has been granted for works

Question 15

What is notiontial term of the leases

Answer 15

Length of term to be valued. If silent assume remainder of lease

Question 16

Rent review hierarchy of evidence

Answer 16

Open market lettings
Rent reviews & lease renewals
Independent expert determinations
Arbitrator determinations
Court determinations
Hearsay evidence
Sale & leaseholds
Surrender & revenues
Intercompany agreements

Question 17

What is Calderbank letters

Answer 17

It can achieve early resolution of a dispute and prevent costs escalating
Letter served must have “without Prejudice save as to costs’ and not marked subject to contract
Tool used to influencing costs and negotiations in rent reviews as losing party will have to pay the other side’s recoverable costs
Letter must set out terms to settle dispute with time limit for other party to accept offer - 21 days sometimes shorter
arbitrator is obliged to make an award for costs

Question 18

What is Part 36 of the Civil procedure Rules 1998

Answer 18

Similar to Calderbank letter for lease renewals
must be made in writing
remain open for acceptance minimum of 21 days

Question 19

What is third party determination for a rent review

Answer 19

read the lease rent review clause
RICS GN Surveyors acting as arbitrators in commercial property rent reviews 2013
cost of application for president of RICS is $25
Advice on COI when acting as arbitrator = RICS GN COI for members acting as dispute resolvers 2012

Question 20

Independent expert - rent reviews

Answer 20

GN Independent Expert Determination 2016
detailed knowledge of market as a valuer
appointed by president of RICS but not bound by judicial rules
can make own investigations and have own opinion of market rent
Bound by terms of lease
No judicial function
No appeal against their decision but can be sued for negligence

Question 21

Arbitrator - rent review

Answer 21

1996 Arbitration act
can be appointed by RICS president
Format decided by arbitrator to include agreed statement of facts and timetable for submission
includes lease terms floor areas and comparable evidence
will provide reasoned advice
immunity from negligence and can order disclosure

Question 22

what is included in a rent review memorandum

Answer 22

name of LL and T
Address of property
Date of the lease and rent review
signed and dated by both parties

Question 23

6 basic elements to be protected under landlord and tenant act 1954

Answer 23

Section 23 states 6 elements
must be a tenancy
used for business
occupation of at least part of premises
occupancy of more than 6 months
cannot be TAW - exempted tenancy
must be a competent LL

Question 24

What is Section 24 of L&T act

Answer 24

Security of tenure provisions and continuation of tenancy
A lease doesn’t end, if no notice served then the tenant is holding over.
LL or tenant would need to serve a notice to terminate the lease in accordance with the provisions of the act if they wish to end the lease

Question 25

What is Section 25 of L&T act

Answer 25

Landlords notice to end the tenancy served no more than 12 months and no less than 6 months before date of termination

Question 26

A Section 25 must:

Answer 26

given by competent LL and served to competent T Relate to whole of property occupied date of termination In prescribed form and inform the tenant of their rights If LL prepared to grant new lease proposed terms included If LL opposes new lease then must state why parties can extend time limit Max of 15 years granted If you pass the date of the new lease/termination the tenant loses security of tenure unless new lease in place either party applied to court the parties agreed in writing to an extension of their statutory period

Question 27

Contents of section 25

Answer 27

name and address of LL and T Address of property Notice of the date to end the tenancy Confirmation if new lease granted or opposed confirmation of the date of response required LL proposals for a new tenancy to include proposed rent (friendly notice) The grounds for opposition must be stated (hostile notice)

Question 28

What is Section 26 of L&T act

Answer 28

Serve notice requesting new tenancy no more than 12 months or less than 6 if landlord opposes then counter notice must be served within 2 months

Question 29

What is Section 27 of L&T act

Answer 29

Tenant notice to end lease served at anytime if they want to leave with a 3 month notice after lease expiry date If tenant leaves prior to expiry no notice to be served

Question 30

What is Section 30 of L&T act

Answer 30

This is the 7 grounds for opposition from the LL A. Breach of repairing covenant B. Persistent delay in paying rent C. Other substantial breach D. Provide other suitable accommodation E. Uneconomic subdivision (compensation payable) F. Demolition or reconstruction (compensation payable) - LL must prove G. Owner occupation (compensation payable) - Prove and owned for 5 years A-E discretionary and court will decide if reasonable F-G are mandatory

Question 31

What compensation is due

Answer 31

Under section 37 14 years + RV x2 Less than 14 years RV x1 Could also get compensation for improvements under Part 1 of the L&T act 27 RV is the one in force when section 25/26 issued

Question 32

Section 32 - 35 of L&T act

Answer 32

terms of new lease 15 year max at market rent Ignore previous occupation, goodwill and any LL approved improvements carried out within last 21 years

Question 33

How to contract out of L&T act

Answer 33

section 38a sets out procedure reasons outside act include LL want to occupy property in due course LL wishes to redevelop the property at the end of the lease the rent is lower the landlord wants future flexibility

Question 34

Key facts of contracting out

Answer 34

cannot accept rent after lease expiry as would then could lead to protected new tenancy Can put a TAW in place if new lease discussions ongoing Ll must serve a notice declaring outside the act which must be signed and sent back before new lease in place Simple declaration - given when parties have 14 days or more prior to committing to the lease Stat dec - given when less than 14 days - must be made before independent solicitor

Question 35

How to terminate a lease

Answer 35

forfeiture surrender and negotiation merger disclaimer (due to insolvency) Break clauses Lease expiry and service of notices under L&T act 54