Property Law 6 - The Code

Question 1

What is the purpose of the Code for Leasing Business Premises?

Answer 1

“improve the quality and fairness of negotiations on lease terms”
AND
“promote the issue of comprehensive heads of terms that should make the legal drafting process more efficient”

Question 2

Who does the Code for Leasing Business Premises apply to?

Answer 2

RICS regulated individuals

Question 3

What are the mandatory requirements of the Code for Leasing Business Premises?

Answer 3

• Lease negotiations must be approached in a constructive and collaborative manner.
• An unrepresented party must be advised of the existence of the code.
• The landlord is responsible for ensuring that the heads of terms compliant with the code are agreed before the draft lease is circulated

Question 4

What areas MUST be covered by the heads of terms under the Code for Leasing Business Premises?

Answer 4

• extent of the premises
• length of term and break rights
• rent and rent review
  .
• permitted use of the property
• rights to assign or underlet the lease
  .
• repairing obligation
• rights to alter the property and obligation to put the property back in its original state.

Question 5

What areas are GOOD PRACTICE to cover in the heads of terms under the Code for Leasing Business Premises?

Answer 5

• all the rights the tenant will need for its use of the premises
• when rent is payable.
• How rent will be reviewed
• limits to repairing obligation
• Suspend rent if buidling is damaged

Question 6

When can a RICS member depart from the GOOD PRACTICE elements of the Code for Leasing Business Premises?

Answer 6

A strong reason to do so.