Landlord & Tenant CP

Landlord & Tenant Act 1954

Governs the rights and obligations for both landlord and tenant for occupied premises

Provide the tenant with quiet enjoyment

To pay rent 

To keep in good and substantial repair 

To maintain 

To insure

A lease that reflects new statutory and regulated activities, such as requiring an EPC when letting a property

• Identification of surveyor 
• Identification of client 
• Nature of work to be carried out 
• Fee basis 
• Marketing
• Commencement date 
• Basis of appointment 
• Termination 
• Personal interests 
• CHP 
• PII
• Signatures

• Fixed fee
• % of new rent 
• % on saving 
• Hourly rate (used for third party determinations)

A lease is a legally binding agreement between a landlord and a tenant that can provide exclusive possession

Provides an interest in the land or property

• Exclusive possession 
• Payment of rent 
• For a duration to be specified 
• If more than 3 years it must be signed and registered as a deed

A licence provides no interest in the land but only makes lawful what would otherwise be unlawful

• A right to enter a property 
• A right to use the property 
• No interest in the land 
• Can be terminated by either party

A lease provides the occupier with an estate in the land whereas a licence provides use only 

A lease can be assigned whereas a licence cannot 

A lease expires with the effluxion of time whereas a licence can be terminated usually at anytime

If the document is not drafted correctly 

If it's granted for longer than 6 months, this could grant the licensor protection under the act thus allowing them to seek renewal proceedings on the same terms

Street v Mountford

Held the licence to be a lease. Important to signify the correct wording of a licence and the restriction of including elements within the Rent Act 1977 for a licence

Section 23

• It is a tenancy 
• Premises must be used for a business 
• There must be occupation of at least part of the premises 
• Must be occupancy for more than 6 months 
• Must not be an exempted or excluded tenancy 
• Must be a competent LL

It is a form of a licence 

Provides no interest in the land or renewal rights

Granted a tenant early access to a property for fit out purposes

A temporary right and receives annual payment

An electricity company installing their mast on a building (very common)

A permanent right and receives capital payment 

Allows a right to be enjoyed by one party over the land of another

A mechanism used to adjust the tenants rent at regular intervals

Firstly, RTFL 

Check RR clause 

Recommendation to advise client to get a solicitor to trigger RR proceedings

• The review clause should be clear 
• Headline RR clauses should not be used 
• Leases must allow both the LL & T to initiate RR proceedings

• OMRV
• Indexation linked 
• Fixed increases 
• Turnover rents

• Lease 
• Lease plans 
• Licences for alterations, improvements, subletting or assignments 
• Deeds of variation 
• Contact details of tenants 
• Copy of property file 
• Stat Dec (if outside the act)

• CIT 
• Understand clients objectives 
• Inspect and measure in accordance with SS and PM 
• Search and select comparable evidence 
• Verify evidence 
• Form opinion of value having regards to terms of the lease
• Draft report 
• Finalise report and send to the client along with recommendations 
• Signify who will be serving the relevant notices 
• Open negotiations 
• Conclude negotiations 
• Complete lease proforma 
• Invoice client 
• File correctly

Property is available to let on the open market between a willing landlord and a willing tenant 

Property is available for immediate use and occupation 

All covenants observed by LL and T 

Property may be used as set out in the lease

Goodwill 

Improvements 

Occupation

• It's called the hypothetical term 
• If this is silent then assume the residual of the term left

If time is of the essence it means you need to act within the typical time scales provided

If it is silent then Time is not of the essence

Bello v Ideal View: Court held LL was able to trigger RR 13 years after review date because time was not of the essence

Term to be valued

If it is silent then it is the residual term left

Found in old leases 

If the tenant does not serve a counter notice within the specific timeframes provided, they would have deemed to have accepted the notice

Could serve a Calderbank letter

Consider third party

Last ditch attempt to settle a RR before costs escalate in court (third party) 

Needs to be served without prejudice, save as to costs

Document cannot be used as evidence in court

Yes, however they will need to be discounted 

Can be used to establish tone

Consider third party

• Calderbank (used to settle a RR) 
• - Offer is in writing offering a settlement without prejudice, save as to costs 
• - Letter is referred to when considering responsibility for costs
• - There is usually a time limit of 21 days to respond  

• Part 36 (used to settle a LR) 
• - Offer is in writing offering a settlement without prejudice, save as to costs 
• - Stricter timings and inclusions 
• - Governed by the Part 36 of the Civil Procedures Rules 1998
• - Offer is valid for 21 days, after this time period it could still get accepted but it can be withdrawn by the party who served it

Yes.

Apply to the RICS 

Pay fee of £425.00

If acting for a landlord in a rising market, you'd prefer IE 

If acting for a landlord in a failing market, you'd prefer Arbitrator

It will state it in the Rent Review clause

• ARBITRATOR
• Disclosure: Has power of disclosure 
• Evidence: Relies only on evidence provided
• Appeal: Limited right to appeal
• Legislation: Arbitration Act 1996 
• Negligence: Cannot be sued for negligence 
• Outcome: Award
• Cost: Power over costs 

• INDEPENDANT EXPERT
• Disclosure: No power of disclosure 
• Evidence: Can rely on their own expertise and knowledge
• Appeal: No right to appeal 
• Legislation: No legislation 
• Negligence: Can be sued for negligence 
• Outcome: Determination 
• Cost: No power over costs

Surveyors acting as Arbitrators in commercial property RR

Surveyors acting as IE in commercial property RR

Search and select for comparable evidence 

Make an adjustment relative to the restriction

• ID of LL and T
• Address of property 
• Date of the lease and rent review 
• Confirmation of new rent agreed 
• Signed and dated by both parties

• Evidence provided must be impartial and objective 
• Surveyors duty is to the court 
• Evidence must be independent work of the surveyor 
• Surveyor must believe their opinions are factual and correct

• Was on behalf of tenant 
• CIT check 
• As it was a retail unit, I measured this on a NIA basis followed by zoning 
• Obtained comparable evidence and got it verified 
• Found the market hadn't moved in that pitch 
• Proceeded to a nil increase 
• LL agreed nil increase 
• RR memo completed

• Was on behalf of Landlord
• CIT check 
• As it was a retail unit, I measured this on a NIA basis followed by zoning
• Obtained comparable evidence and got it verified from agents
• Found the market hadn't moved in that pitch
• Proceeded to a nil increase
• Tenant agreed nil increase 
• RR memo completed

ALWAYS CHECK IF THE LEASE IS INSIDE OF THE ACT

• Landlord 
• 1. Section 25 (Friendly)
• - Within 6-12 months of the contractual expiry date 
• - Served to the superior tenant 
• - Requesting new lease therefore setting out terms that are contained within section 32-35 
• - State expiry of existing lease
• - Strong recommendation to seek legal advice 

• 2. Section 25 (Hostile)
• - Within 6-12 months of the contractual expiry date 
• - Served to the superior tenant
• - Requesting grounds for opposition under Section 30
• - State expiry of existing lease
• - Strong recommendation to seek legal advice

ALWAYS CHECK IF THE LEASE IS INSIDE OF THE ACT

• Tenant 
• 1. Serve no notice and leave at or before expiry 

• 2. Section 26 notice (requesting a new lease) 
• - Within 6-12 months of the contractual expiry date 
• - Served to the competent landlord 
• - Stating terms of the new lease 
• - State expiry of existing lease 
• - If landlord opposes this, they must serve counter notice within 2 months 

• 3. Section 27 notice (stating to leave) 
• - Can be served at any time providing the landlord with 3 months notice post expiry

Yes as the rent should be less than what it is

O'May v City of London Real Property Co 

• Concept of modernisation of a lease 
• Can include AGA's

• Receive instructions 
• CIT check 
• Understand clients aims and objectives 
• Receive material factors relating to property 
• CHECK IF INSIDE THE ACT
• Inspect and measure 
• Search and select comparable evidence 
• Form opinion of value 
• Draft report along with recommendations to client 
• Determine who will be serving the notices 
• Open negotiations and check if notices are valid 
• Conclude negotiations and draft HOT's, instructing sols 
• Invoice client 
• File correctly

Section 32-35 

• 32 - Demise (existing)
• 33 - Term (no longer than 15 years)
• 34 - Rent (assumptions and disregards)
• 35 - Any other terms

• 24 - Holding Over
• 24a - Interim Rent 
• 25 - LL notice for new lease or terminate existing 
• 26 - T notice requesting new lease
• 27 - T notice to leave
• 29 - Court application 
• 30 - Grounds for opposition 
• 32 - Demise 
• 33 - Term 
• 34 - Rent 
• 35 - Any other terms 
• 38a - Contracting out 
• 40 - Requesting info from other party 
• 44 - Competent landlord

It is set by when you apply to court or the day after expiration date

• a) Breach in reparing covenant 
• b) Persistent delay in paying rent 
• c) Breach in other covenant 
• d) Providing alternative accommodation 
• e) Uneconomic subdivision of property 
• f) Demolition or reconstruction of property 
• g) Owner occupation

Grounds E - G 

• If T in occupation for more than 14 years, 2 x RV
• If T in occupation for less than 14 years, 1 x RV

A - E

F & G

RTFL 

If it is silent then it is inside of the act

Yes in accordance with O'may v City of London real property, you can modernise a lease based on four terms...

• - LL must have a valid reason on estate management grounds
• - Change must be compensated in the rent 
• - Change must not affect security of tenure 
• - Must be reasonable

Introduction of an AGA for example

The date of the commencement of the new lease, usually the day after the expiry of existing lease

If it goes to court then it will be 3 months and 2 weeks from the date of the hearing

• Assumptions
• - Vacant possession 
• - Willing LL and willing T 
• - Regard to the terms of the new lease 
• - If there is any modernisation to the lease then this needs to be reflected in the rent  

• Disregards
• - Goodwill 
• - Improvement (Unless if improvement was made more than 21 years ago and captured as part of the LL request) 
• - Tenants existing occupation

Section 40 

Request can be made at anytime within 2 years of the contractual expiry 

Details need to be provided within 1 month of S40

Yes if there is no agreement by lease expiry 

T can apply to court for an extension or

REGULATORY REFORM ORDER 2003 

Simplified the process 

• LL serves a health warning to the tenant stating consequences of contracting outside of the act 
• Stat Dec is signed in front of a independent solicitor

• Because he may be accepting a lower rent 
• Flexibility 
• May want to redevelop the property in the future

• Wrong dates 
• Not in prescribed form 
• Wrong tenant / landlord details 
• If it states that the notices are to be served on red paper then they need to be served on red paper

• Forfeiture 
• Surrender 
• Break clauses
• Lease expiry

PACT 

County Court

Professional Arbitration on Court Terms 

Launched by the RICS and Law Society as an alternative dispute resolution service to court

To help determine unapposed lease renewals

• Faster 
• Full court hearing is avoided therefore cheaper 
• Decision is carried out by a surveyor rather than a judge

Rent paid under S24 (holding over)

Freeholder or superior tenant with more than 14 months left on the term

• Someone who represents their client in court by providing evidence during RR proceedings 
• Can disclose as much info as they want to support their clients case 
• Surveyors acting as Advocates 2008 (prof statement)

If it is in line with market evidence then no reason it cannot be used 

If not then perhaps apply a discount

Authorised Guarantee Agreement 

Under the L&T Covenants Act 1995, when a lease is assigned, the outgoing tenant is released from liability 

LL may require their tenant to enter into an AGA which provides protection for the LL

Yes

Landlord and Tenant Act 1927

• Must add letting value to the property 
• LL must have approved works 
• In reality, compensation is offset against dilaps works

• Over 21 years in occupation - No compensation
• 3 - 21 years in occupation - Compensation 
• 0 - 3 years in occupation - No compensation

Any lease granted for longer than 7 years needs to be registered with land reg

Patel v Keles 

• Court dismissed the landlords objection of a new lease issued by the tenant based on owner occupation ground
• Court held that the landlord (Patel) most probably wouldn't run the news agents himself due to his age and the fact he sold a number of businesses in recent years

It is a notice served under section 146 of the Law of Property Act 1925 by a landlord to their tenant to terminate a lease early due to a breach by the tenant of the terms of the lease.

Breach in a tenants covenant such as failure to maintain or repair property

Law of Property Act 1925

Recover sums from Guarantor / AGA 

Rent Deposit

Landlord needs to prove a firm and settled intention to carry out redevelopment works

Privity of Contract refers to relationship between the parties to a contract which allows them to sue each other but prevents a third party from doing s

Bello v Ideal View 

Court held that because Time was not of the essence, the RR could be triggered even after 13 years

Jones v Kaney 

Court held the expert negligent

S. Frances v The Cavendish Hotel 

Supreme court held in favour of the tenant, meaning the landlord needs to show intention of redevelopment which can include paying deposit for works, plans drawn out, funding arrangements in place.

Patel v Keales

Court held in tenants favour as the courts didn't believe the LL wanted to take owner occupation as he was well into his 60's and sold commercial assets off therefore planning retirement