Level 3 Flashcards
(52 cards)
How can consent for alterations be granted?
automatically by lease (no consent)
formal licence deed
simpler letter licence (less complex, no solicitor required)
RICS Licence for Alterations Guidance Note (2013)
sets out advice for surveyors dealing with applications for alterations
states importance of avoiding delay and ensuring licence is completed to protect both parties
licence must clearly document agreed works
What works can a tenant complete without the need for an LtA?
depends on what lease says
usually non structural alterations so long as LL consent granted
painting, adding wallpaper, adding furniture or pictures or other decorative items that can be removed without damage
Steps for Licence to Alter
Read lease
Ask for plans and specifications (review with BM, building surveyor, planners or insurers)
Obtain undertaking for costs
Obtain client consent
Instruct client lawyer to prepare LtA
Inspect completed works
Highways Act 1980, the Public Right of Way
legal rights that individuals have to pass and repass along certain paths or routes. These public rights of way can be classified into several categories and are protected by law to ensure access for the public to certain areas.
Highways Act 1980, the Public Right of Way - how can this impact the development at Aztect?
Creation of Public Right of Way:
Prescriptive Right: If the public uses the land for 20+ years without interruption, they may establish a legal right of way.
Definitive Map: The path could be added to the official record (Definitive Map) as a legal public right of way.
Development Impact:
Obstruction of Development: A public right of way across the land can limit the landlord’s ability to build or develop freely.
Planning Permission Issues: Local authorities may require the right of way to be preserved or diverted before approving development.
Diverting Path: Landlords may need to apply for a diversion order to reroute the public path, causing potential delays and costs.
Potential Consequences:
Development plans may need to be adjusted to accommodate the right of way.
Legal procedures for diverting or modifying rights of way can slow down the development process.
What to do if Tenant becomes insolvent?
Tell LL
consider legal action
see if guarantor or rent deposit
make early contact with Administrator/Receiver and register claim for arrears
ensure property is insured and inform insurers if become vacant
ensure property secure
prepare schedule of dilapidations
deduct funds from rent deposit if there is one
forfeit lease or seek Court order to terminate lease
consent to assignment of lease if an option
Note: do NOT accept keys - would constitute surrender!
What are the different types of insolvency?
Administration - administrator appointed by company, creditors or bank. Directors remain in office but have no power. LL can claim amount equal to rent from administrator. Administrator may negotiate CVA so company can keep trading, or may seek to assign lease
CVA - if business has future, administrator/insolvency practitioner proposes payment schedule that creditors vote on. If 75% agree, CVA is approved (contract between company and creditors)
Receivership - court-appointed tool that ensures lenders recover funds owed to them. Receiver is appointed under Law of Property Act 1925 to sell assets in order to pay debts
LL&T (Covenants) Act 1995
abolished Privity of Contract
new leases from 1 January 1996
introduced Authorised Guarantee Agreements
LL & T (Covenants) Act 1995
relates to assignment of leases
abolished Privity of Contract
commenced 1 January 1996
introduced Authorised Guarantee Agreements
s17 notice can be served on guarantor within 6 months of tenant failing to pay rent and guarantor must pay arrears and can then take overriding lease
can only be one AGA in place at one time
Note: if 6 months passed and s17 not served then guarantor does not have to pay
Authorised Guarantee Agreement
brought in under LL & T Covenants Act 1995 to protect LL
if lease silent, may be unable to get AGA
outgoing tenant guarantees performance of incoming tenant
in place until end of term or until assignee assigns to third party
Note: if inside 1954 Act, AGA remains until lease terminated in accordance with Act
Assign leasing at Templars,
Read lease (alienation clause)
Request undertaking for costs
Check if proposed rent same as passing rent
Check new T covenant strength
Check if new T will pay rent deposit
Check if reasonable grounds for withholding consent
Check effect on investment value
Provide recommendation to client and obtain consent
Licence to Assign / Sub-let required
Note: if subletting will need to see sublease!
Recommended an AGA because of tenant strength weaker
Benefit of LtA
LL - reinstated at lease end
T - protected at rent review
What are principles of Code of Practice for Service Charge?
There are 9 key principles:
1. Recover expenditure as per lease
2. Recover no more than 100% of actual costs
3. Issue budget and explanatory notes annually
4. Issue apportionment matrix annually
5. Issue approved set of accounts annually
6. Service charge monies to be held in discrete account(s)
7. Interest to be credited to service charge after appropriate deductions
8. Tenant to only withhold sum that reflects dispute
9. If sum raised incorrectly, should be rectified without delay
What are updates of new Code of Practice for Service Charge (Service Charges in Commercial Property)
old version was guidance note, this version is mandatory
aims to reduce cause of disputes via 9 mandatory principles
also includes 26 core principles that essentially state we want fair, transparent and good quality services that provide value for money
What are the different types of insolvency?
a
Administration - administrator appointed by company, creditors or bank. Directors remain in office but have no power. LL can claim amount equal to rent from administrator. Administrator may negotiate CVA so company can keep trading, or may seek to assign lease
CVA - if business has future, administrator/insolvency practitioner proposes payment schedule that creditors vote on. If 75% agree, CVA is approved (contract between company and creditors)
Receivership - court-appointed tool that ensures lenders recover funds owed to them. Receiver is appointed under Law of Property Act 1925 to sell assets in order to pay debts
How is service charge apportioned?
a
floor area
fixed percentages
rateable value (difficult if RV changes/is disputed and doesn’t consider common areas)
weighted floor area (common in shopping centres)
Steps for Licence to Alter
Read lease
Ask for plans and specifications (review with BM, building surveyor, planners or insurers)
Obtain undertaking for costs
Obtain client consent
Instruct client lawyer to prepare LtA
Inspect completed works
How can consent for alterations be granted?
automatically by lease (no consent)
formal licence deed
simpler letter licence (less complex, no solicitor required)
Guarantor
anyone who has agreed to guarantee performance of tenant
section 17 of LL&T Covenants Act 1995 allows LL to claim within 6 months of funds becoming due
guarantor entitled to take overriding lease if they settle arrears
Commercial Rent Arrears Recovery (CRAR)
a
introduced in 2014 to replace Law of Distress for rent
recover rent, VAT and interest
7 days rent due as minimum
LL serves Notice of Enforcement via email/post/hand-delivered which states address, T type, due date of most recent funds and any notes
Notice of Enforcement gives 7 days notice
on day 8, enforcement agent enters and takes inventory and ‘takes control of goods’
enforcement agents waits 7 days before selling goods
T charged £75 for service
Note: cannot take goods that are on purchase agreements or belong to 3rd parties, anything that will breach the peace, work tools or perishable goods
Jervis v Harris
l eading case in respect of LL right to re-enter property to do repairs and then claim cost from tenant as debt
claim for debt, not a claim for damages (T just needs to reimburse LL)
means LL can ensure premises remain in good condition
Used for the following: T is solvent
LL wants lease to continue
LL wants to do works themself
threat of entry may compel T to do works
Service Charges in Commercial Property (2018)
a
effective April 2019
promote best practice, fairness, uniformity and transparency
ensure timely issue of budgets and YE certificates
reduce disputes and provide guidance on resolution
9 mandatory principles
What are the 11 subsections of Services Charges in Commercial Property (2018)?
Service costs
Allocation and apportionment
Communication and consultation
Duty of care
Financial competence
Occupier responsibilities
Right to challenge
Alternative dispute resolution
Timeliness
Transparency
Value for money
