Procedural Steps For Grant Of Lease Of Underlease Flashcards
What is an agreement for lease?
Contract, useful where there is going to be a DELAY between agreeing the lease and actually granting it.
Examples where an agreement for leaes may be used?
Landlord is in process of constructing
Landlord is carrying out works of repair
Tenant is carrying our major works
Landlord requires consent of lender
Landlord is negotiation surrnet from current tenant
Tenant needs to obtain planning permission for proposed use
What deduction and investigation of title should be done for a leaes/underlease?
Deduce title to freehold interest. Unless freehold is already registered, the absence of it will usually prevent tenant from obtaining an absolute leasehold title on the registration of the leaes.
What can the tenant ask for when deducting the title for a lease?
General law, a tenant is NOT entitled to call for deduction of freehold title, unless the transaction is the grant of a lease for a term of MORE THAN 7 yYEARS.
If unregistered, what must the tenant find for deduction of title for a lease?
General law entitles undertenant to call for headlease and all subsequent assignments which headlease have held for last 15 years
Under genearl law, undertenant is ONLy entitled to call for deduction of freehold title, where the transaciton is the grant of a lease for a term of MORE THAN 7 YEARS
What are pre-contract enquiries and searches that the landlords solicitor should provide the tenants solicitor with?
Draft agreement of lease
Drat lease/underlease
Evidence f freehold/headlease title
Copies of any relevant planning consents
Evidence of lenders CONSENT to grant the leaes/underlease (if mortgage)
What is the licence to underlet?
Most head-landlords will require formal consent o underletting to be given.
Must be given or by on completion of the underletting, OTHERWISE headtenant is in breach of alienation covenant in leaes
What are pre-completion formalities for a lease/underlease?
2 parts - lease and counterpart.
Lease is executed by landlrod and counterpart by tenant.
On completion, these are exchanged and signed.
Lease is a legal estate in land, therefore must have right formalities.
What are completion steps to grant a lease/underlease?
All matters in a freehold transaction, as well as additional:
Landord receive:
- counterpart leaes
- Any premium payable for rant
- an apportioned sum representing rent payable
Landlod should give to tenant:
- lease executed by landlord
- properly marked copies of freehold title deeds (for unregistered)
- certified copy of CONSENT of landlords lender to transaction
What SDLT/LTT is needed on grant of a lease?
HMRC in the usual way.
SDLT is potentially chargeable BOTH on capital su being paid, and the amount of rent.
Non-residential prperty - SDLT payable on ANY PREMIUM.
Complex formally used to calculate new present value, and SDLT is calculated.
What is NPV
Net present value
What does NPV do?
A complex formula is used eto calculated NPV, and SDLT is then calculated using THIS FIGURE.
It works out how much rent is payable in total over the term, and then DISCOUNTS rental payments to be made in future years.
what are the present SDLT rate on teh NPV?
0-150,000 = 0%
150,001 - 5,000,000 + 1%
Above 5,000,000 = 2%
How do you calculate the LLT payable on an grant of a lease?
Similar to SDLT, o n premium and on rental element using NPV.
What are the rates of LTT for an grant of a lease
0-225,000 0%
225,000 - 2,000,000 1%
2,000,000 2%
