PLP WK 6 Flashcards
(49 cards)
What are the three main types of leases discussed in the source?
Long-term residential leases, Assured Shorthold Tenancies (ASTs), and Commercial Leases.
What is a key characteristic of long-term residential leases?
They typically have terms like 99 or 999 years with low rent.
What are ASTs typically used for?
Short-term (6-12 months) residential property lets.
What distinguishes commercial leases from ASTs in terms of focus?
While both involve rent payments, commercial leases differ in key aspects beyond rent.
What types of properties are commonly leased under commercial leases?
Offices, factories, warehouses, and shops.
What is a primary advantage of leasing for tenants, especially new businesses?
Capital conservation, as it avoids large upfront investments in buying property.
How does leasing provide flexibility for tenants?
It allows businesses to relocate as their needs change without being tied to property ownership.
Why might leasing be the only option for tenants seeking certain properties?
Some properties, particularly in prime locations like shopping centers, are only available as leaseholds.
What are the two main categories of commercial landlords?
Private investors and institutional investors.
What are some examples of private investors in commercial property?
Individuals, companies, and even small-scale shop owners who rent out premises.
What types of institutions are typically involved as institutional investors in commercial property?
Pension funds and life assurance companies.
Why do institutional investors view property as a stable investment?
It provides consistent rental income and potential for capital growth.
What type of lease structure do institutional investors often prefer?
Full Repairing and Insuring (FRI) leases, as they provide clear rental income without property-related costs.
What is covenant strength in the context of commercial leases?
The tenant’s financial capacity to fulfill their lease obligations.
Why is covenant strength crucial for landlords?
It assures landlords of rent payment and responsible property management.
How do landlords assess the covenant strength of new businesses?
They may require guarantors or rent deposits to mitigate risk.
What are some post-pandemic trends that might impact the commercial property market?
Remote work trends could affect demand for office spaces and influence rental rates.
What are some key aspects of asset management in commercial property that involve legal work?
Granting new leases, handling tenant applications, advising on lease breaches, and dealing with lease-end issues.
What are some examples of tenant applications that landlords need to manage?
Requests for property alterations or subletting.
What are some examples of lease breaches that solicitors advise on?
Non-payment of rent or failure to maintain the property in good repair.
What legal support is required at the end of a lease term?
Solicitors advise on exit procedures or lease renewal negotiations.
According to Woodfall’s Law of Landlord and Tenant, what defines a lease?
The grant of exclusive possession of land for a fixed term, less than the grantor’s interest.
What is a key distinction between a lease and a license?
Exclusive possession, giving the tenant the right to exclude others, including the landlord (except for specific rights of entry).
What is a reversion in a leasehold context?
The landlord’s retained interest in the property, meaning it reverts to them at the end of the lease term.