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APC Spring 2024 > Landlord & Tenant > Flashcards

Landlord & Tenant Flashcards

1
Q

Information required from the client at the commencement of instruction (4)

A
  • Agreed terms of engagement
  • Understanding client’s strategy and objectives
  • Any pertinent documents (e.g. lease, plans, licences, rent review memos)
  • Contact details to arrange inspection
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2
Q

What is the latest update on the Law Commission Review of the Landlord & Tenant Act 1954?

A
  • As of January 2024, the next steps are stated to be “The Commission aims to publish a consultation paper as soon as possible in 2024”
  • The aim is to ensure that Part 2 of the act works for today’s leasehold market and is to make the system easier to understand and more transparent in the hope of attracting more investment into UK commercial property
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3
Q

What must be agreed prior? (4)

A
  • Competent
  • No conflict of interests
  • That you refer to the standard Terms of Business that will apply alongside Terms of Engagement
  • Terms of Engagement written and signed
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4
Q

What types of fees can apply for LRs or RRs? (4)

A
  • Fixed fee
  • Fixed stages
  • Incentivised fee (e.g. percentage of uplift or savings)
  • Hourly rate
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5
Q

What does Without Prejudice mean?

A

Means that during the negotiations, the opposing party cannot subsequently rely upon any document or discussions held which are labelled ‘without prejudice’

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6
Q

What is a licence? (4)

A
  • A right to enter a property
  • A personal arrangement between the licensor and licensee
  • Licensee acquires no interest in the property
  • Merely a personal right which can be terminated by either party
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7
Q

What are the requirements of a lease? (4)

A
  • Exclusive occupation
  • Payment of rent
  • Duration for a specified term
  • If more than 3 years, the terms must be in writing, signed as a deed
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8
Q

What are the main differences between a lease and a licence? (3)

A
  • A lease provides an occupier with an estate in the relevant land, whereas a licence is a permission to make it lawful for them to use the land
  • A lease can be assigned, a licence is a personal right that cannot be assigned
  • A lease cannot be terminated until it expires (unless a break clause), a licence can usually be revoked at any time
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9
Q

What is the case law for a lease vs a licence?

A

Street vs Mountford (1985) - set out the difference between a lease or a licence

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10
Q

What is a tenancy at will? (2)

A
  • Form of licence created by written agreement for an unspecified time where the Landlord may evict the tenant at any time.
  • Not a legal interest in the land with no renewal right
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11
Q

When is a tenancy at will typically used?

A

When in negotiations for a proper lease - if the tenant is wanting to go in early to begin fit outs for example

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12
Q

What is a wayleave? (4)

A
  • A temporary right, which receives an annual payment.
  • Personal to the company and cannot be automatically transferred to a new owner
  • Not compulsorily registrable
  • Example is an electricity company to install and retain their apparatus
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13
Q

What is an easement? (3)

A
  • A permanent right, which receives a capital payment
  • Capable of being registered at the Land Registry
  • Allows a right enjoyed by one party over land of another
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14
Q

What is a permissive right of way? (2)

A
  • It is a right that can be granted by a landowner to allow access over the land.
  • However, this is different to a public right of way, as the landowner can withdraw this at any point
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15
Q

Can a prescriptive right of way be given?

A

Yes, if continuous and uninterrupted use being proven over a period of 20 years or more

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16
Q

What is adverse possession and what are the timings surrounding this? (4)

A
  • Process by which a person who is not the legal owner of the land can become the legal owner through possession of the land for a specified period of time, without the owner’s permission
  • If the land is registered and a squatter has clocked up 12 years of possession before the Land Registration Act came into effect in 2003, the claim can be successful.
  • If after 2003, 10 years of occupation is required
  • If land is not registered, the 12 year rule applies
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17
Q

What are the basis of valuation for a rent review? (5)

A
  • Whether upwards only
  • Indexation such as open market, CPI, RPI
  • Turnover rents
  • Stepped increases
  • Whether time is of the essence
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18
Q

What are the usual assumptions for a rent review? (4)

A
  1. Property available to let on open market by willing tenant to a willing landlord for a term of years as stated (notional or hypothetical term)
  2. Property is fit and available for immediate occupation and use
  3. All covenants observed by landlord and tenant
  4. Property may be used for purpose set out in the lease
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19
Q

What are the usual disregards for a rent review? (4)

A
  1. Any effect of goodwill on the tenant’s occupation
  2. Ignore goodwill attached to the property
  3. Tenant’s improvement if landlord consent has been granted for the works
  4. Some modern leases provide additional assumption to disregard a fit out rent free period (typically 3 months)
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20
Q

What is the case law for time of the essence?

A

United Scientific Holdings v Burnley Borough Council (1978) - provided that the general presumption is that time is not of the essence

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21
Q

What is time of the essence?

A

If there is time of the essence in relation to a lease clause such as a break clause or rent review, and failure to exercise that clause means that you would lose that contractual right

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22
Q

What is the hierarchy of evidence according to The Handbook of Rent Review? (10)

A
  1. Open market lettings
  2. Lease renewals
  3. Rent reviews
  4. Independent expert determinations
  5. Arbitrator awards
  6. Court determinations under L&T Act 1954
  7. Hearsay evidence
  8. Sale & leasebacks
  9. Surrenders & renewals
  10. Inter-company arrangements
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23
Q

What is the purpose of calderbank offer and what are its requirements? (2+4)

A
  • An offer of settlement made by one party to another to resolve a legal dispute
  • Can also be used as an expectation management exercise
  • Must be marked ‘without prejudice save as to costs’
  • Offer must set out in clear terms the offer being made and the timescales for acceptance
  • Requires careful drafting and should have clear client approval because the terms are potentially binding if accepted by the receiving party
  • If a lease renewal, this should be drafted by a solicitor
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24
Q

What does ‘without prejudice save as to costs’ mean? (2)

A
  • Is to offer a party to a dispute some protection against the high costs of dispute resolution
  • Focussing the attention of disputing parties to achieve an agreement if the tribunal for dispute resolution has the power to award costs
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25
Q

In a falling market when acting for a tenant, is an arbitrator or independent expert more favorable?

A

Independent expert

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26
Q

In a rising market when acting for a tenant, is an arbitrator or independent expert more favourable?

A

Arbitrator

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27
Q

Characteristics of an arbitrator? (7)

A
  • Acts on the evidence provided
  • Limited rights of appeal
  • Not liable for negligence
  • Has powers of disclosure
  • Acts in accordance with the Arbitration Act 1996
  • Outcome is called an award
  • Power over all costs
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28
Q

Characteristics of an independent expert? (7)

A
  • Evidence is based on their own investigations, using their own knowledge and expertise
  • No right of appeal
  • Can be liable for negligence, albeit rarely
  • Has no powers of disclosure
  • Appointment governed by contract rather than statute
  • Outcome called a determination
  • Power over costs depends on what the lease says
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29
Q

What is included in a rent review memorandum? (5)

A
  • Name of landlord and tenant
  • Address of the property
  • Date of lease and rent review
  • Confirmation of new rent agreed
  • Signed and dated by both parties
30
Q

Section 24?

A
  • Security of tenure provisions and continuation of tenancy - holding over under the act
31
Q

Section 24a

A

Interim rent

32
Q

Section 25

A

Landlord’s notice to end the lease or seek a new lease

33
Q

Section 26

A

Tenant’s notice to seek a new lease

34
Q

Section 27

A

Tenant’s notice to end the lease

35
Q

Section 28

A

Renewal of tenancy by agreement

36
Q

Section 29

A

Order by court for a new tenancy

37
Q

Section 30

A

Landlord’s grounds for opposition of a new lease

38
Q

Section 32-35

A

Terms of the new lease

39
Q

Section 34

A

Basis of valuation for the new rent

40
Q

Section 37

A

Compensation provisions

41
Q

Section 38a

A

Contracting outside the Act

42
Q

Section 40

A

Notice requesting information about either party

43
Q

Section 44

A

Definition of a competent landlord

44
Q

What are the grounds for refusal of a new lease? (7)

A

a) Breach of repairing covenant
b) Persistent delay in paying rent
c) Other substantial breach
d) Provide suitable alternative accommodation
e) Uneconomic subdivision (compensation payable)
f) Demolition or reconstruction (compensation payable)
g) Owner occupation (compensation payable)

45
Q

What is the compensation payable for grounds e, f and g?

A
  • If occupied for 14 years or more, 2 times the rateable value
  • If occupied for less than 14 years, 1 times the rateable value
46
Q

Two types of S25 notice? (2)

A
  1. Hostile - proposed terms of the new lease, including rent, must be proposed
  2. Non-hostile - grounds for opposition must be stated
47
Q

What are the timescales associated with a S25 notice?

A
  • Must not be serviced with a date more than 12 months or less than 6 months before the date of termination (not before the contractual expiry).
48
Q

What should be included in a S25 notice? (7)

A
  • Name and address of the landlord and tenant
  • Address of the property
  • Notice of the date to end the tenancy
  • Confirmation of whether a new lease is opposed or granted
  • Confirmation of the date by which the tenant must ask the court for a new tenancy
  • Landlord’s proposal for a new tenancy or grounds for opposition
  • A strong recommendation to seek professional advice
49
Q

Timescales for S26 notice (2)

A
  • Date not more than 12 months and not less than 6 months before the proposed date
  • If Landlord opposes this, a counter notice must be served within 2 months
50
Q

What options does a tenant have if wanting to leave?

A
  • Simply vacate by the contractual expiry date of the original lease
  • Serve a S27(1) notice on the landlord giving at least 3 months’ notice, expiring at lease end, saying they intend to vacate
  • Serve a S27 (2) notice if holding over following the expiry of the lease term giving at least 3 months’ notice
51
Q

What is the maximum term a court can grant?

A

15 years

52
Q

What four matters should be disregarded when assessing the rental? (4)

A
  1. Any effect on rent of the tenant’s occupation
  2. Any goodwill in the tenant’s business attaching to the premises
  3. Any effect on rent of improvements carried out by the tenant - unless works were undertaken as an obligation to the landlord or completed more than 21 years before date of application
  4. In the case of licensed premises, any effect on rent of additional value because of a license
53
Q

Interim rent

A

Rent payable after the expiry of the contractual term of a 1954 act-protected lease and before a formal lease renewal has been completed

54
Q

What is a competent landlord?

A

The person/body upon whom a notice should be served or who should serve the notice
Must be a freeholder or superior tenant with an unexpired term of over 14 months

55
Q

Options for third party for a lease renewal (2)

A
  • County court
  • PACT
56
Q

What tests are there to determine whether something is a lease or not, irrespective of whether it has been documented? (3)

A
  • Is there exclusive possession?
  • Is there a fixed or periodic term?
  • Are there fixed or periodic payments?
57
Q

What is a S146 notice?

A

A notice a landlord can serve that warns a tenant who is in breach of its lease of the landlord’s intention to forfeit the lease

58
Q

How long must a landlord have been an owner to be able to use owner occupation as a reason for eviction?

A

5 years

59
Q

What would interim rent start?

A

The earliest time that the rent could have been specified in a S25/S26. E.g. 6 months time or lease expiry

60
Q

What are the options for third party determination for a lease renewal? (2)

A
  • County Court
  • PACT (Professional Arbitration on Court Terms)
61
Q

Why are the advantages of using PACT over county court? (4)

A
  • Faster
  • Cost savings due to barrister’s fees
  • PACT will be decided by specialist surveyor
  • Greater control and flexibility over procedure
62
Q

What is the process of County Court for lease renewal? (10)

A
  1. Make application
  2. Request a date for Case Management Conference for court
  3. On CMC, the court decides what the timetable should be
  4. Draft lease sent between the parties
  5. Witness statements: summary of outstanding points
  6. Expert report date - valuers state the rents and why
  7. Each parties’ surveyors meet to narrow the issues
  8. Questions to experts on reports
  9. Experts put out a statement on what has already been agreed
  10. Trial
63
Q

What is a Part 36?

A

It is a form of offer used in lease renewals to encourage parties to settle their disputes by setting out the costs consequences of offers to settle if made in accordance with a Part 36

64
Q

What are typical conditions associated with a break date? (5)

A
  • Tenant has paid all rents due
  • Vacant possession
  • Break penalty
  • Reinstatement of alterations
  • Yield up
65
Q

What does Force Majeure mean in a contract?

A

A clause that relates to an ‘Act of God’, an event for which no party can be held accountable.

66
Q

What is the relevance of the Landlord & Tenant Covenants Act 1995? (4)

A
  • Relates to the assignment of leases
  • Brought in the idea of ‘new leases’
  • Abolished privity of contracts for new leases
  • Introduced AGAs
67
Q

What is an AGA?

A
  • Authorised Guarantee Agreement
  • Ensures an assignor guarantees the lease obligations of the immediate assignee if they fail to meet their lease obligations
68
Q

How does a landlord enforce an AGA?

A
  • They must serve a Section 17 notice upon a guarantor within 6 months of the tenant defaulting, requiring the former tenant to pay the arrears
69
Q

Why sublet over assign? (5)

A
  • Requirement of the lease
  • If only wanting to get rid of part of the premise
  • If the market rent is higher than the passing rent, then there may be a profit rent
  • If wanting to re-occupy in the future
  • If the new party has a worse covenant strength
70
Q

Why assignment over subletting?

A
  • Assignor becomes no longer liable under the lease and transfers the obligations onto the assignee
71
Q

What is a Section 146 notice? (2)

A
  • Part of the Law of Property Act 1925
  • A notice a landlord will serve to a tenant notifying them of their breach of a covenants and their intentions to forfeiture proceedings
72
Q

What does the Landlord and Tenant Act 1927 show?

A
  • States that if a lease prohibits improvements being made to a property without the landlord’s consent, Section 19 of the Act imposes a provision that such consent cannot be unreasonably withheld

APC Spring 2024 (17 decks)

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