Leasing & Letting Flashcards
(131 cards)
1
Q
What is a licence?
A
A licence is simply the permission to do something on another’s property, it passes no interest on land.
2
Q
What are the 4 requirements of a lease?
A
1) Exlusive occupation
2) Payment of rent
3) Duration for a specified term
4) If more than 3 years, the terms must be in writing, signed and registered as a deed
3
Q
What are the 3 main differences between a lease and a licence?
A
- A lease provides an occupier with an estate in the relevant land; a licence is a permission to make it lawful for them to use the land
- A lease can be assigned; a licence is normally a personal right that cannot be assigned
- A lease cannot be terminated until it expires (unless there is a break clause)
4
Q
What is an assignment?
A
The transfer of a legal interest from one party to another
5
Q
What does it mean to sublet a property?
A
Existing tenant continues to hold the lease and pay rent to the landlord but sublets the space to another party who pays their rent to the sublessor
6
Q
What are the reasons to sub let a lease and not assign?
A
- It is a requirement within the lease to sub let and not assign
- For part of the demise and not the whole
- If the Market Rent is higher than the passing rent, there is a profit rent
- If the tenant wants to reoccupy in the future
- The new party is of lesser covenant strength
7
Q
When does the Estate Agents Act 1979 apply?
A
It applies when someone acts dishonestly and/or does not provide clarity to the terms of engagement or discloses a personal interest. Also applies when not telling the client about the offers received.
8
Q
When does the Estate Agents Act 1979 apply?
A
During the sale or purchase of freehold or leasehold properties with a capital value
9
Q
What can non-compliance in the Estate Agents Act 1979 result in?
A
A warning order or prohibition order and/or fine
10
Q
What are the 6 key principles of the Estate Agents Act 1979?
A
- Clarity as to the terms of agency (section 18)
- Honesty and accuracy
- Agreement and liability for costs
- Openness regarding personal interests (section 21)
- Absence of discrimination
- Legal obligation to tell the client about the offers received
- Keep client’s money separate
11
Q
How does Section 18 of the Estate Agents Act apply to your letting practice?
A
Sets out the terms of business within terms of engagement. These set out scope of work and fee structures.
12
Q
What is the Misrepresentation Act 1967 about?
A
The Act relates to a misrepresentation of fact made by a party during pre-contractual enquiries, which has the effect of inducing a party to purchase
13
Q
What is the key RICS Professional Statement on leasing/letting practices?
A
RICS Code for Leasing Business Premises (2020)
14
Q
When did the RICS Code for leasing business premises, 2020 become effective?
A
1st September 2020
15
Q
What is the aim of RICS Code for leasing business premises, 2020?
A
- Improve the quality and fairness of negotiations on lease terms
- Promote the issue of comprehensive heads of terms to make the legal drafting process more efficient
16
Q
What are the FOUR sections of the RICS Code for leasing business premises, 2020?
A
Part 1: Introduction
Part 2: Mandatory requirements (Negotiations and heads of terms)
Part 3: Lease negotiation best practice
Part 4: Appendices
(Appendix A - Template heads of terms and checklist; Appendix B - Guide for landlords and tenants)
17
Q
What does the RICS Code for leasing business premises, 2020 say with regards to the negotiations of heads of terms?
A
- Must be approached in a constructive and collaborative manner
- An unrepresented party must be advised about this code and must be recommended to obtain professional advice
- The agreed terms of a lease must be recorded in written heads of terms and must summarise the position on a number of aspects
- Negotiations should produce letting terms that achieve a fair balance between the parties commercial interests
18
Q
What items must be addressed in the heads of terms according to the RICS Code for leasing business premises, 2020?
Otherwise: WHAT IS IN A HEADS OF TERMS?!
A
- Identity and extent of the premises
- Length of term and whether it is outside or inside the Landlord and Tenant Act 1954
- Options for renewal or break rights
- Requirements for a guarantor and/or rent deposit
- Amount of rent, frequency of payment and whether exclusive of business rates
- Whether the landlord intends to charge VAT on the rent
- Any rent-free period or other incentive
- Any rent reviews including frequency and basis of review
- Liability to pay service charge and/or insurance premiums
- Right to assign, sublet, charge or share the premises
- Repairing obligation
- Initial permitted use and whether any changes of use will be allowed
- Rights to make alterations and any particular reinstatement obligations
- Any initial alterations or fit-out (if known)
- Any condition of the letting, such as subject to surveys, boards approvals or planning permission
19
Q
What is contained within Appendix A of RICS Code for leasing business premises, 2020?
A
Template head of terms and a checklist, which can be used should the landlord wish to use their own form of heads of terms document
20
Q
What is contained within Appendix B of RICS Code for leasing business premises, 2020?
A
- Guide for landlords and tenants
* Supplemental to the professional statement and does not hold mandatory status
21
Q
What is a lease?
A
A binding contract in law that sets out the terms and conditions of the tenancy between parties and defined their rights and obligations
22
Q
What do rental guarantees typically cover?
A
Usually make the guarantor liable for the rent and the tenant’s other obligations, including service charge payments and repairs
23
Q
Do tenants have to pay VAT on rental payments?
A
Depends if the property is ‘opted for VAT’ by the landlord
24
Q
What is an AGA?
A
- Authorised guarantee agreement
- Requires the tenant who assigns a lease to guarantee the performance of the lease obligations by the party to whom the lease is assigned
25
What provisions can there be in the lease to mean that a tenant does not require an AGA to assign a property?
* If the new tenant is financially strong enough
| * If the new tenant pays an appropriate rent deposit and/or provides suitable guarantor
26
What is a 'schedule of condition'?
* Record of the condition of the property
* Written description of the property or a set of photographs or both
* Referred to in the lease and attached to it or kept with it
- Helps to reduce an occupier's reinstatement liability at lease expiry
27
What should be the only condition on a tenant being able to exercise a break option, according to the RICS Code for leasing business premises, 2020?
Should only be conditional on the rent having been paid
28
What details with regards to the rent deposit should be included in the lease, according to the RICS Code for leasing business premises, 2020?
• Amount (including whether it will include VAT)
• Time it will be held
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
• Whether it will be security for only the rent or all the tenant's obligations under the lease
• Circumstances under which the deposit will be returned to the tenant with any accrued interest
29
What details with regards to the rent review should be included in the lease, according to the RICS Code for leasing business premises, 2020?
* Proposed frequency of rent review
* Method of rent review
* Definitions of market rent should not result in a "headline rent" being adopted
30
What details with regard to the service charge and insurance payments should the landlord provide an indication of, according to the RICS Code for leasing business premises, 2020?
Should provide an estimate of service charges and other insurance payments
31
What is said with regards to assignment in RICS Code for leasing business premises, 2020?
Leases should allow tenant to assign the whole of the premises with the landlord's consent, which is not to be unreasonably withheld or delayed
32
Depending on the prevailing market conditions and strength of the tenant covenant, what can the landlord request for additional security if there is a tenant with a weak covenant strength?
* Rent deposit
| * Guarantor/personal guarantee
33
What should the landlord do when holding a rent deposit?
- Ensure this is legally documented in a rent deposit deed, that is held separately to the lease
- Ensure this deed details the release mechanism. Deed can also include top up mechanisms for rent review uplift.
- Ensure that the money is held in a separate bank account
34
What information would you typically request from a tenant when looking to assess their suitability?
* Bank, accountant and two trade references
* Previous/existing landlord's reference
* 3 years audited accounts
* Business plan
* Credit rating
35
What test can you use to assess the financial suitability of a tenant?
Profits test: net profit for the proposed tenant's business must be 3 times the rent for 3 consecutive years
(or the net asset value of the business must be more than 5 times the rent)
36
What are the main lease terms that impact on the value of a property?
* Lease length / term certain
* Break clauses
* Alienation
* Repairing obligations
* User clauses
* Rent review pattern and mechanism
* Security of tenure provisions (whether lease is inside or outside the Landlord and Tenant Act 1954)
* Restrictive lease clauses
* Planning use
37
What are the key things to consider when it comes to break clauses in a lease?
• Whether it is mutual or in favour of one party
• Whether time is of the essence
• What the required notice period is
** Whether there is a penalty to be paid if the lease is terminated
** Whether the right to break the lease is dependent on preconditions being met
38
What are the typical conditions that are required to be met for a tenant to have the option to break their lease?
* Compliance with their covenants
* Payment of all rent and other sums due
* Vacant possession
39
When is an occupier going to be more willing to consider a pre-let?
* If there is a market shortage
| * They need specific facilities
40
What is the main advantage of a tenant pre-letting?
They can have a bespoke building designed to suit their needs
41
What is the main disadvantage of a tenant pre-letting?
There is a level of risk in the event of the developer or contractor not performing
42
When a tenant pre-lets a building, what documents would typically be attached to an Agreement to Lease?
* The Lease in a pre-agreed form, which shall be executed once the developer has fulfilled its obligations - usually Practical Completion of the work
* Licence for Alterations - to allow the tenant to undertake fitting out works
* Specification and plans of the proposed scheme
* Developer's guarantee/bond if dealing with a weak covenant
* Warranties - any tenant taking an FRI lease will want collateral warranties from the professional team, main contractor and any sub contractors
43
If a landlord is seeking to limit a tenant making changes to the property, what will they typically require?
Licence to Alter
44
What did the changes in 2020 to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations require letting agents to do?
* Letting agents have to register with HMRC within 12 months of May 2020 if they let individual properties for more than the equivalent of €10,000 per month
* Where they undertake lettings of properties for more than €10,000 per month, they will have to undertake CDD check on landlords and tenants on any new letting or subletting
* EDD will have to be undertaken when any red flags occur
45
Why might a freeholder not be supportive of a tenant subletting the property?
* If they let it below Market Rent, it could set a new rental tone for the area. Leaseholder is simply trying to reduce their liability and so may accept below market rent
* Sub-tenant may not perform the covenants of the lease e.g. repairing obligations
46
What different types of alienation provisions can there be in the lease?
Assignment: transfer the lease
Sublet: under-let the premises
Sharing occupation: share occupation of the premises with a third party e.g. concession stand within a retail store
Charging: charging the lease to a lender i.e. used as security for a debtor
47
When calculating what a property should be let for, would you do this on a headline basis or net effective basis?
Typically would calculate it on a headline basis but having regard to the tenant incentive granted
48
On what grounds can a landlord reasonably refuse permission for a tenant to sublet or assign their interest?
* Landlord must be satisfied that the assignee is able to pay the rent and comply with the lease covenants in the case of an assignment
* Where a landlord owns numerous units, they are entitled to consider the type of business of the proposed tenant and whether it complies with their tenant mix policy
* A landlord can refuse consent if the tenant will adversely affect the landlord's existing rights and interest in the property
49
After you have instructed solicitors, is there anything you would do to ensure that the leasing completes?
• Ensure that conditions are met e.g. planning permission
• Offer firms other services e.g. a building surveyor to conduct a schedule of condition
• Answer any queries which the solicitor may have
eg: Commercial Property Standard Enquiries (CPSE's)
- These are standard set of inquiries usually raised by a buyer's solicitor
50
What is an engrossment?
An engrossment is the final printed version of a lease that is then executed by the parties
51
What typically occurs with the engrossment of the lease?
There will an engrossment of the lease and an engrossment of the counterpart lease. The tenant ends up with the lease executed by the landlord and the landlord ends up with the counterpart executed by the tenant
52
What happens if there isn't an alienation clause in the lease?
If a lease contains no provision dealing with alienation, the tenant will be free to deal with it as it wishes. This is rare.
53
What is the significance of the L&T Act 1954?
- Sections 24-28 relate directly to the security of tenure and whether your lease is inside or outside the Act.
- If the lease is silent on security of tenure, then it is inside the Act.
54
What does Section 24 of the L&T Act refer to?
A business tenancy only expires when one party serves notice, until then the lease is ‘holding over’
55
What does Section 25 of the L&T Act refer to?
Landlord’s notice served no more than 12 months and not less than 6 months before the date for the termination of the tenancy to be specified
56
What does Section 26 of the L&T Act refer to?
Tenant can serve notice requesting a new tenancy beginning with a date not more than 12 months and not less than 6 months after making the request
57
What does Section 27 of the L&T Act refer to?
Notice to be served by the tenant anytime if they want to leave with a 3-month notice after the lease expiry date
58
What is a Shell and Core fit out?
Where the common parts of the building are completed, and the office floor areas are left as a shell ready for fit out by the occupier.
59
What is a CAT A fit out?
The basic finishing of a space to a ‘blank canvas’, this fit out includes the installation of a building’s mechanical and electrical services. Includes lighting, air con, toilets, raised access flooring, basic fire detection systems.
60
What is a CAT A + fit out?
This fit out has all the elements of CAT A with the added features of a modest CAT B fit out. ‘Ready to go’ fully fitted space, new trend.
61
What is a CAT B fit out?
A Cat B fit-out comprises partitions, breakout space, tea points, furniture, graphic details involving branding, air conditioning, etc. Cat B is traditionally a designed office that is fitted out for the tenant
62
If you were to install marketing boards, what regs would you have to comply with?
- Planning consent is required for non-residential boards over 2 sq m (flat) and 2.3 sq m (v board) - only one board per building as per the Town and County Regulations 2007
63
What is an effective FRI lease
- Tenant has responsibility for internal non-structural repairs
- Landlord takes on the responsibility for the repairs to the structure and outside parts of the building but recovers costs of doing so from the tenant
- Landlord will also maintain insurance and recover cost of premium from the tenant
Effective FRI leases are usually in multi let buildings
64
What would a landlord have to do to terminate a tenancy if the lease is inside the 1954 Act?
Would have to issue tenant with a Section 25 notice no more than 12 months and no less than 6 months before the date for the termination of the tenancy.
65
If a lease is inside the Act, what grounds would the landlord have to refuse a new lease from the tenant?
Section 30 states that there are 7 grounds for opposition to grant a new tenancy:
Breach of repairing covenant
Persistent delay in paying rent
Other substantial breach
Provide suitable alternative accommodation
Uneconomic subdivision ie: landlord could get more from renting out a property as a whole
Demolition or reconstruction
Owner occupation
66
What is the Assured Shorthold Tenancy (AST) agreement?
An AST allows a landlord to let out a property to a tenant while retaining the right to repossess the property at the end of the term of the tenancy. However, the landlord will need to give the tenant at least 2 months notice of any reoccupation.
67
How would you obtain VP under the AST agreement?
Evict tenant through a section 21 notice, have to provide at least 2 months’ notice. Issued at the end of a fixed term tenancy or during a tenancy when there is no fixed end date.
68
What is your understanding of covenant strength?
The assessment of a tenant’s ability to perform the covenants in the lease ie rent, service charge and repairing covenants.
69
Who do the Consumer Protection from Unfair Trading Regulations (CPRs) 2008 relate to?
Business to Consumer activities
70
Who is owed a duty of care under the CPRs / BPRs?
Potential buyers and vendors, potential clients, viewers and actual buyers
71
What must agents do to ensure compliance with the CPRs / BPRs?
* Declare everything known about a property - good and bad
* Not exert undue pressure on potential buyers
* Undertake full due diligence for all new instructions
* Pass any information discovered during the agency process onto all interested parties
72
Who polices the CPRs / BPRs?
Trading Standards Office
73
Give an example of some occupiers who cannot register for VAT?
* Financial institutions
* Charities
* Medical practitioners
74
Why may a landlord elect a property to charge VAT?
To be able to recover VAT on costs expended
75
What happens when a landlord elects a property to charge VAT?
Rent and any service charge is subject to VAT. This will have implications for occupiers who cannot be VAT registered
76
What type of clauses can leases have re: alienation/subletting?
Open (allows alienation)
Restrictive (subject to some conditions)
Absolute (no alienation)
77
What should you always do when checking about alienation?
Read The Lease
78
What's the important RICS material re: alterations?
RICS Guidance Note Licence for Alterations, 2013
79
What's the important RICS material re: dilapidations?
RICS Guidance Note on Dilapidations, 2016. This aims to reduce claims between landlords and tenants.
80
What are the 3 forms of dilapidation schedules?
Interim schedule - served by the landlord or tenant during the lease, with at least 3 years remaining
Terminal schedule - served normally in last 3 years of the lease
Final schedule - served at expiry/break when the tenant is out of occupation and the landlord wants to agree a claim for damages.
81
What must be served during dilapidations as part of a notice to repair?
Section 146 notice must be served in accordance with the 1925 Law of Property Act.
82
What does a dilapidations schedule look like?
- outline repairing obligations
- state the remedy and cost of the breach
- loss of rent, if appropriate, over period to do the works
- fees+VAT for the claim for surveyors and lawyers
- negotiations conducted on a without prejudice basis until agreement reached
- if agreement not reached, landlord's surveyor may be required to prepare a Scott Schedule for the Court/ADR
83
Whose responsibility is building insurance and what does it usually cover?
Usually the responsiblity of the Landlord to arrange and then re-charge to the tenant
Covers a range of perils including, fire, storm, floors, subsidence, loss of rent, theft, terrorism
84
What are the four main options available to a landlord to deal with a tenant who is not repairing their property?
1) Serve a repair notice (section 146)
2) Forfeit the lease (must be a forfeiture clause in lease)
3) Serve an interim schedule of dilapidations
4) Do the works and charge the tenant
85
What is a sinking fund?
A set amount of money set aside to deal with more serious repairs to a property.
Common with leasehold properties, sinking funds are managed via the service charge associated with the property, which each leaseholder is liable to pay. The cost of the contribution to the sinking fund is typically calculated as a fixed percentage of the total service charge.
86
Key RICS reference material re: Service Charges?
RICS Professional Statement Service Charges in Commercial Property 2018
87
What is a tenancy at will?
A licence that allows a tenant early entry into their property to undertake fit out works
88
What is an easement?
A permanent right and receives a capital payment. Allows a right enjoyed by one party over the land of another. DIFFERENT to public right of way.
89
Name the ways in which rent can be reviewed?
- open market
- turnover rent
- indexation linked
- stepped increases
90
3 Rent review disregards?
- Any effect of goodwill (business value)on tenant's occupation
- Ignore goodwill attached to the property
- Tenant's improvements if landlord consent has been granted for the works
91
Can you give me some of the principles of the RICS Professional Statement Real Estate Management, 2016?
- act in an honest and transparent way
- carry out work with due skill and diligence
- do the utmost to avoid conflicts of interest
- all advertising and marketing material is honest and truthful
92
What are the 3 types of alienation clauses that exist?
Open - allow alienation
Qualified - subject to some condition
Absolute - not allowing alienation
93
What does the Landlord & Tenant Act 1988 set out?
The aim of the legislation is to ensure that a statutory duty exists on the landlord to deal with consents diligently and not to unreasonably withhold or delay consent
94
What does the Landlord & Tenant (Covenants) Act 1995 set out and when was it effective?
Effective 1st January 1996
- gave landlords more scope for setting conditions regarding the approval of an assignee
- introduced AGA's
- sets out section 17 regarding assignor picking up assignee's arrears in the event of default
95
What are the two useful functions of a Licence for Alterations?
1) Protect parties at rent review
| 2) Protect parties at dilapidations at end of the lease
96
What is the format of a dilapidations schedule?
- Outlines repairing obligations
- States the remedy and cost of the breach
- Loss of rent, if appropriate, over period to do the works
- Fees+VAT for the claim for surveyors & lawyers
- Negotiations conducted on a without prejudice basis until agreement reached
- If agreement not reached, landlord's surveyor may be required to prepare a Scott Schedule for the Court/ADR, setting out a summary of the landlord's and tenant's position
97
What is the aim of the RICS Guidance Note on Dilapidations 2016?
To reduce the number of claims between landlords and tenants
98
What is important to consider as a property manager of an empty building?
- Building insurance
- Maintaining the fabric of the building
- Obtaining an EPC
- Clearing the building of combustible material
- Health and safety & risk assessment
ETC.
99
What are the typical rent payment days in England?
Rent to be paid quarterly in advance on usual English, Welsh and Irish quarter days:
25th March
24th June
29th September
25th December
100
What are the four main options open to a Landlord dealing with a tenant who is not repairing their property?
1) Service a repair notice (Section 146)
2) Forfeit the lease
3) Serve an interim schedule of dilapidations
4) Do the works and charge the tenant
101
Is there any RICS reference material for service charge payments?
RICS Professional Statement, Service Charges in Commercial Property, 2018
102
Can you tell me some of the principles of the Professional Statement on Service Charge 2018?
- Owners must seek to recover no more than 100% of the proper and actual costs of the provision or supply of the services
- Owners must ensure that service charge budgets are issued annually to all tenants
- Owners must ensure that a service charge apportionment matrix for their property is provided annually to all tenants
103
What is an example of a 'restrictive user clause'?
A restriction on the hours of working for an office building
104
What are the three types of insolvency?
1) Administration
2) Receivership
3) Company Voluntary Agreements
105
Can you give me some of the key principles of the RICS Professional Statement - Real Estate Management (2016)
- Act in a transparent, fair and honest manner
- Carry out work with due skill and diligence
- Do the utmost to avoid conflicts of interest
- All advertising and marketing material is honest and truthful
106
What is the Land Registration Act, 2002?
The Act provides a framework for electronic property conveyancing, by allowing formal documents to be executed electronically
107
What are some of the requirements of the Land Registration Act 2002?
- All freeholds and new leases over 7 years or assignments/sublets with over 7 years to run must now be registered with the Land Registry with a compliant lease plan.
108
What are Capital allowances?
These are an important form of tax relief upon capital expenditure for the construction or purchase of commercial property or business assets.
They can generate significant tax savings/relief on the value of plant and machinery fixtures such as air con and lifts.
109
Which occupiers cannot register for VAT?
- Financial institutions
- Charities
- Medical Practitioners
110
What does a building being elected for VAT allow a Landlord to do?
Allows a landlord to recover VAT on costs expended.
111
What are some of the marketing signage requirements as per The Town & Country Planning Regulations 2007?
- Planning consent is required for non-residential boards over 2 sq.m (flat) and 2.3 sq.m (V board) - only one per building
- Different sizes for residential boards with a maximum size allowed of 0.5 sqm (flat) and 0.6 sqm (V board)
- Must not project more than 1m from the face of building & not above 4.6m from ground in a safe condition
112
How long after completion of transaction must boards be removed?
14 days
113
What other types of board do you also need planning permission for?
- Illuminated boards
- Remote boards
- Boards erected on listed buildings and in conservation areas
114
What is the purpose of the Tenant Fees Act 2019?
- The Act aims to improve transparency and affordability in the residential lettings market
- It bans various fees often charged to residential tenants for new lettings
115
What is the 'cooling off' period?
A cooling off period of up to 14 days is allowed for clients who change their minds and do not want to instruct the agent in accordance with current consumer protection regulation.
116
What are BPR's 2008?
- Relate to business to business activities and mirror CPR's.
- The regulations prohibit misleading business-to-business advertising.
- Impose restrictions on how businesses compare their products to products from other companies
117
What is The Blue Book?
RICS UK Residential Real Estate Agency Professional Statement, 2017.
- Provides a code of practice in all aspects of property marketing for residential property.
118
How are fees for rent reviews/lease renewals agreed?
- A percentage of new rent agreed
- A percentage of the saving made from the new rent agreed
- A fixed fee
- An hourly rate (most often used for third party determinations)
- Incentive fee
119
What does 'Without Prejudice' mean?
Means that during the period of negotiations, the opposing party cannot subsequently rely upon any document or discussions held which are labelled 'Without Prejudice'
120
What is a wayleave?
This is a temporary right and receives an annual payment - such as it provides a right for an electricity company to install and retain their apparatus
121
What is an easement?
- This is a permanent right and receives a capital payment
| - It allows a right enjoyed by one party over the land of another
122
What is adverse possession?
- The 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.
Eg: squatter clocking over 12 years occupation.
123
What are four usual assumptions for a rent review?
- Property available to let on open market by willing tenant and a willing landlord for a term of years as stated
- Property is fit and available for immediate occupation and use
- All covenants are observed by landlord and tenant
- Property may be used for purpose set out in lease
124
What are three usual disregards for a rent review?
- Any effect of goodwill on tenant's occupation
- Ignore goodwill attached to the property
- Tenant's improvements if landlord consent has been granted for the works
125
What is the notional term of the lease?
The length of term to be valued (hypothetical term). If this is silent, assume the residue of the term.
126
What are deeming provisions?
- Some rent review clauses in older leases require the Landlord to serve the landlord to specify the rent in the trigger notice
- The clause will state that if the tenant does not serve the appropriate counter-notice within a specified time, the tenant will have deemed to accept the new rent
ie: TENANT MUST NOT SNOOZE, OR ELSE THEY WILL LOSE!
127
What is the weighting of the heirarchy of evidence according to The Handbook of Rent Review, Reynolds & Bernstein?
- Open market lettings
- Rent reviews & lease renewals
- Independent expert determinations
- Arbitrator determinations
- Court determinations under L&T Act 1954
- Heresay evidence
- Sale & Leasebacks
- Surrender & renewals
- Inter-company arrangements
128
What is a Calderbank letter
- A Calderbank offer can achieve early resolution of a dispute and prevent costs escalating
- A tool for influencing costs and negotiations in rent reviews as the losing party will have to pay the other side's recoverable costs
- The letter must set out all the terms to settle the dispute and a time limit in which the other party must accept the offer. This is often 21 days.
129
What are the costs for third party determination for a rent review?
The cost of the application for third party determination by the President of the RICS is currently £425
130
What is disclosure?
Entitles a party involved in a rent review to obtain details of the other side's rental evidence by ordering disclosure of the contents of a file at the decision of the arbitrator.
131
What are some conditions of the Landlord serving a Section 25 notice?
- Must be given by a competent landlord and be given to a tenant
- Must relate to the whole of the property comprised in the tenancy
- Must state the date for the termination of the tenancy
- Must be in the prescribed form and inform the tenant of their rights
