ACP SGS 11

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For the purpose of surrenders, how can a landlord avoid being left with an empty unit?: 1. Make Agreement for Surrender and the Agreement for Lease conditional. Note: not ideal, need to be careful with drafting. Don't want to create circular situation;

2. Exchange both the A for Lease and A for Surrender on the same day.
In connection with the date for vacation vs the date the new lease will commence, in the context of surrenders, what should you note regarding the two days.: Perfectly normal to have a few days in between both days (three is fine). This allows a surveyor to inspect the property and to draw up a schedule of dilapidations (if necessary).
Does there always need to be an Agreement to Surrender?: No. Could be a legal surrender, requirements are:

1. mutually agreed; but
2. does not need to be a documented agreement.
In connection with surrender payments, what structure should you follow?: 1. leasehold transaction is exempt from VAT unless an election has been made;

2. Who is receiving the money;

3. Has that person elected for VAT?

Note: no election = no VAT payable. If elected, recipient will want VAT to be added to the premium so does not dilute.
For the purpose of a surrender, what document(s) are used?: Agreement to surrender (agreement to);
Deed of surrender (actual agreement).
How will a recipient who has elected for VAT want a surrender premium to be characterised and in what document will the same be characterised?: As exclusive of VAT

Deed of surrender.
In the context of a surrender premium, what will the individual paying VAT (if any) want to see from the person being paid?: 1. A copy of the person's election to VAT;

2. HMRC's receipt and acceptance; &

3. Valid VAT invoice.
How can the parties contract out of the security of tenure provisions of the 1954 Act?: 1. Landlord to serve warning notice on the Tenant (and any Guarantor) before surrender;

2. Tenant (and any Guarantor) has to make a declaration or statutory declaration - depending on the time frame. Must happen before entering into the agreement.
What is the purpose of the declaration or statutory declaration?: The declaration confirms that the tenant has:

1. received;
2. read; and
3. accepted

the contents of the warning notice.
In addition to following the contracting out procedure (namely, contracting out of the 1954 Act), what must the landlord ensure is included in the agreement for surrender?: An endorsement that the contracting out procedure has been followed.
Does the statutory contracting out procedure need to following on surrender if the tenant and landlord are moving straight to a deed of surrender?: No. Only need to follow the statutory contracting out procedure if you are entering into an agreement for surrender.
What leases need to be registered?: Those for a term of years absolute of more than 7 years.
If asked to consider an agreement to or deed of surrender, what should you look out for in connection with the parties?: Check that the agreement / deed details the correct payor and payee. They could be the wrong way round.
In connection with a Deed of Surrender and the parties releasing each other from their rights and obligations, what should a landlord seek to protect?: Landlord should seek to reserve its rights for breaches arising before surrender, it will do this by choosing an option that states 'whether arising on or after, but not before, the date of this Surrender'.
What will a landlord wish to do to a clause in a Deed of Surrender that purports to exclude the Deed from the terms of s. 4(1)(b) of the LPA (Miscellaneous Provisions) Act 1994?: Landlord will wish to delete. Act implies a covenant related to their being no subsisting breach of a condition or tenant's obligation that would render the lease liable to forfeiture. Landlord will want the benefit of the covenant.
Why might a Deed of Surrender potentially contain provisions related to HMLR requirements?: If the Deed is registered, it will need to be removed from the register. Tenant might be required to assist the LR with the closing of that leasehold title.
What are being used instead of Deeds of Surrender in practice?: TR1s. Land Registry will accept both.
What are the two types of break clauses that you might find?: 1. Fixed break clause;
2. Rolling breach clause (e.g. anytime after the fifth anniversary).
Can there be a landlord break if the lease has security of tenure?: No.
What must conditions of a break clause be?: As reasonable as possible.
What should a tenant be required to pay under the break clause?: Basic rent, not the service charge or the insurance premium.
In relation to breaches of covenants, shat should be excluded from the conditions of a break clause in a lease?: Minor breaches of covenants.
When might the conditions under a break notice need to be fulfilled by?: The date of the notice; or

The break date itself (under the notice).
In connection with rent or service charge payments in the context of a break clause, what clause is a tenant going to demand to be included?: A clause that entitles the T to a refund of any overpaid rent and service charge.

M&S plc v BNP Paribas:

No clause - no refund
M&S plc v BNP Paribas: Re a break clause, if a lease does NOT include a clause that entitles the tenant to a refund of overpaid rent and service charge, a tenant will NOT be entitled to a refund.
What should you note in relation to covenants entered into with individual tenants of a unit?: Covenants with other tenants could prohibit a landlord from permitting another tenant who works in the same trade to open a store on the estate?
If a tenant is doing something not permitted under the terms of the lease or is in breach of the terms, which might a landlord consider trying to obtain to stop the conduct?: A prohibitive injunction preventing the conduct.

Note: costly.

Potentially send a letter before action which may have the desired impact.
What should you advise a landlord to do if rents are outstanding for a considerable period of time?: i) Use the rent deposit to recover the outstanding rent (if any)

ii) Commence or threaten to commence winding up proceedings.

iii) Take court action to secure payment of the outstanding rent.
What should you note in relation to a clause that states that the tenant must pay rent 'without deduction or set off'?: Tenant cannot deduct sums from the rent owing to the landlord's breach of covenants.
Lee Parker v Izzet: Provided a tenant notifies the landlord that it is in breach of covenant, and allows a reasonable opportunity to for the landlord to perform the covenant, the T could carry out the repairs and charge the L.

Note might not be able to deduct from rent if rent is to be paid 'without deduction or set off'.
Provided a tenant notifies the landlord that it is in breach of covenant, and allows a reasonable opportunity to for the landlord to perform the covenant, the T could carry out the repairs and charge the L.: Lee Parker v Izzet
If a former tenant calls for an overriding lease, what impact will this have?: The former tenant will become the the current tenant's immediate landlord.

Gives former tenant more control.

Former tenant could forfeit the lease and re-let the property to a more reliable tenant.
What document governs a rent deposit?: Rent deposit deed.
In connection with a landlord putting the sums of the rent deposit towards rent that has not been paid, what do rent deposit deeds commonly contain?: Obligation on T to reinstate the amount of the deposit to the full amount.

Failure to reinstate will be deemed to be a breach of the terms of the lease, entitling the landlord to forfeit the lease.
Commercially, what should you note in relation to forfeiture?: 1. Extremely effective method to get a
tenant to pay up

2. Tenant's premises locks changed.

3. Causes maximum embarrassment and can damage the tenantâ€™s reputation.
What is the cut off date for new and old leases?: Old leases - before 1 Jan 1996

New leases - on or after 1 Jan 1996
Landlord's remedies for non-payment of rent?: 1. Action against guarantor (AGA);
2. Use rent deposit;
3. Commercial Rent Arrears Recovery;
4. Action in debt;
5. Forfeiture;
6. Claim interest; and
7. Bankruptcy/winding up petition - £750.00 plus.
Landlord's remedies for breach of repairing covenant?: 1. Action for damages;
2. Self help - Jervis v Harris;
3. Specific performance; and
4. Forfeiture.
Tenant's remedies for landlord's breach of repairing covenants?: 1. Action for damages - consequential losses recoverable (s. 18 LTA does not apply)

2. Self Help - Lee-Parker v Izzet

3. Specific performance

4. Appoint a Receiver - Daiches v Bluelake Investments
Lee-Parker v Izzet: Tenant's right to self help. No need to reserve the right in the lease.
Tenant's right to self help. No need to reserve the right in the lease.: Lee-Parker v Izzet
Daiches v Bluelake Investments: Court's power to appoint a receiver where the landlord has abandoned the property or failed to carry out urgently needed repairs.
Court's power to appoint a receiver where the landlord has abandoned the property or failed to carry out urgently needed repairs.: Daiches v Bluelake Investments
Non-derogation from grant - implied covenant. Landlord failing to step in when one tenant's actions adversely affect another tenant.: Chartered Trusts plc v Davies
Chartered Trusts plc v Davies: Non-derogation from grant - implied covenant. Landlord failing to step in when one tenant's actions adversely affect another tenant.
Owen v Gadd: Implied covenant re quiet enjoyment: Erecting scaffolding blocking access to tenant's shop.
Implied covenant re quiet enjoyment: Erecting scaffolding blocking access to tenant's shop.: Owen v Gadd
Implied covenant re quiet enjoyment: Flooding caused by landlord's failure to maintain.: Booth v Thomas
Booth v Thomas: Implied covenant re quiet enjoyment: Flooding caused by landlord's failure to maintain.
Implied covenant re quiet enjoyment: Landlord's building works causing prolonged dust, noise, dirt and the deterioration of the common parts.: Mira v Aylmer
Mira v Aylmer: Implied covenant re quiet enjoyment: Landlord's building works causing prolonged dust, noise, dirt and the deterioration of the common parts.
Tab colours?: Leases - Purple
Development - Yellow
Drafting - Blue
Assignments - Pink
Alterations - Red

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Deck Info

Number of cards 52

Created By shughes1990