Leasehold Flashcards
(17 cards)
How to determine market rent
- Size of property
- Location of property
- Terms of lease (flexible or restrictive)
- Assumptions (T complied with covenants / good repair / vacant)
- Disregards (improvements T has made)
Operation of absolute covenant
LL does not have to even consider request nor act reasonably.
If Alterations covenant though. T can request permission in writing. LL must respond within 3 months.
- If LL fails to respond: T can make alterations
- If LL refuses: T can apply to court
- if LL consents + offers to carry out works LL can increase rent and T cannot object.
Operation of qualified covenant (cannot without LL consent)
Alterations: automatically upgraded provided alteration is an improvement from T’s perspective
User: NOT upgraded. But, LL cannot require payment or increase rent unless requires structural alterations
Subletting/ assignment: automatically upgraded. Must respond within 28 days in writing with reasons. Conditions and grounds for refusal must be reasonable. Automatically reasonable if in lease.
Key provisions in licence to underlet
- Between all three parties
- UT covenants with LL to observe and perform covenants in headlease
- LL permits underletting within reasonable time to specific UT
- T covenants to pay LL costs
- UT covenants to notify LL on completion
Key provisions in licence to assign
Between all 3 parties
- LL consents to assignment within set time to specified A
- T covenants to pay LL’s reasonable costs
- A covenants to notify LL on completion
- A covenants with LL to observe and perform covenants in lease for remainder of term
- A indemnifies T if T is sued for A’s breach
- T covenants with LL to enter AGA (only if new lease)
Liability on covenants in new and old leases
Old lease (pre 1996)
- OT remains liable for ALL covenants for duration of lease
- New T is only liable for real covenants whilst vested (unless direct covenant)
New lease (1996 onward)
- OT only liable whilst lease is vested in them (unless gives an AGA)
- New T is only liable for real covenants whilst vested (unless direct covenant)
When does security of tenure apply?
- Lease (not licence - fixed term over 6 months)
- T occupies all or part
- Business purposes
NOT
- contracted out (LL warns T, T enters declaration (stat if 14 days), recorded in lease)
- agricultural / service / mining
- 6 months or less
When can a s26 / s25 notice be served (earliest)
12 months before CED
Holding over
T has a right to remain in premises on same terms as original lease
S26 notice (tenant) - contents
- PCD is between 6-12 months after date of notice (no earlier than CED)
- Sets out proposals for new lease
+ no other notice served
Effect of s26 notice
- extends existing lease to PCD - 1.
- LL must respond within 2 months. If wishes to refuse must serve a counternotice.
- if no agreement can be reached within 2 months, apply to court.
s27 notice
must give LL 3 months notice of intention to leave
s25 notice - requirements
- DOT must be 6 -12 months after date of notice
- contains proposals or reasons for ending
Grounds LL can oppose s26 notice or send hostile s25 notice
Mandatory:
- demolish or reconstruct all or substantial part + firm and settled intention
- LL wishes to occupy for own purposes (freehold for 5 yars + firm and setteled intention)
- LL offers T alternative accomodation
Discretionary
- T is in breach of tenant covenant (persistant and serious)
- T is UT of whole adn LL needs possession of whole
LL compensation
if LL ends holding over, will ahve to pay T compensation of 1 x rateable value (unless offers alternative accomodation or T is in breach of cov)
2 x if T has occupied for 14 years or more
Could be less than 1x if in lease + occupation under 5 years
Court power to determine interim rent - holding over
Court may require T to pay market rent from date 6 months after notice served. (if LL is refusing, then market rent - 10%).
