Property Practice Flashcards

Question

what is excluded from the definition of development and therefore doesn't require planning permission?

Answer 1

1. any works which only affect the interior of the building + do not materially affect the external appearance - don't require PP 2. changes of use to another use, or mix of uses, within the same use class will not require planning permission

Answer 2

sui generis - one of a kind - could have adverse affect the locality i) entertainment establishments e.g. cinemas/bingo halls ii) drinking establishments e.g. pubs and wine bars iii) hot food takeaways (for consumption off the premises)

Answer 3

runs with the land forever burden the land forever

Answer 4

NOT USUALLY but IF LPA DECIDES that completion will not take place within a reasonable time, it can serve a COMPLETION NOTICE stating that the permission will cease to have effect if completion has not taken place by the expiration period stated in the notice completion notices = rare

Answer 5

no - the grant of planning permission is effective for planning purposes only may still need approval to use the land in some way and there still may be covenants on the land which cannot be breached

Answer 6

Town and Country Planning (General Permitted Development) Order 2015 (‘GDPO 2015’) + Welsh version = same but 1995 GDPO

Answer 7

by issuing an Article 4 Direction a sol should check the latest version of the GPDO to see if there have been any article 4 directions made

Answer 8

apply for a Certificate of Lawfulness of Proposed Use or Development under s 192 of the TCPO 1990

Answer 9

General Permitted Development Order Certificate of Lawfulness of Proposed Use or Development

Answer 10

can exercise a RIGHT OF ENTRY to the property or serve a PLANNING CONTRAVENTION NOTICE, which requires the recipient to provide INFORMATION about operations, use, or activities being carried out on the land and any matter relating to the conditions attached to a planning permission

Answer 11

1. enforcement notice 2. stop notice 3. breach of condition notice 4. injunction

Answer 12

- informs of breach of planning control - must be served on the owner, occupier and any other person having an interest in the land, such as a mortgagee - becomes effective 28 days after service - the notice must: i) allege the breach ii) steps to be taken to remedy iii) timescale for remedy - a person with an interest in the land can appeal the enforcement notice - enforcement warning notice > invitation to the recipient to regularise the breach by applying for a retrospective planning permissioN

Answer 13

because the enforcement notice cannot take effect until 28 days after recipient has received it, and can be suspended if appealed, a stop notice works in the interim to stop all activities in relation to the land - cannot be served by itself, enforcement notice must be served first - but can serve temporary stop notice (even if enforcement notice hasnt been served) to allow for investigation - 56 days only

Answer 14

- ACTUAL OR APPREHENDED BREACH - discretionary so LPA will need to show it is EXPEDIENT, NECCESSARY AND APPROPRIATE remedy - discretionary - time limit = 10 years

Answer 15

v similar to an enforcement notice but can only be served a condition of planning is not being met no right of appeal

Answer 16

- action can be taken after - apply to mags - planning enforcement order

Answer 17

the owner of the land - not necessarily the person who tried to obtain the PP which is why it is so important for buyers sols to check the planning history of the land at the pre-contract stage

Answer 18

regulations related to the heath and safety of construction or alteration both building control regulations and PP are usually considered together but it may be necessary to get building control consent even where the works themselves do not require planning permission

Answer 19

- the work is inspected by a building control officer - inspection (s) - after final inspection - certificate of compliance issued by BCA

Answer 20

- dont need to make separate application to the building control authority regarding building control consent - self-certify the work - relevant body sends notification to the building control authority

Answer 21

england = no time limit

Answer 22

england = within 10 years other option = injunctions if the work is unsafe - no time limit

Answer 23

buyer and lender if consent has not been given - ask the seller to obtain a regularisation certificate from the BCA detailing what works would be required to bring the property up to standard or get insurance - but wont cover personal injury or business interruption for a defective building

Answer 24

- architectural or historic interest - decided by gov. - building and any object or structure fixed to the building or within the curtilage of the building that forms part of the land and has done so since before 1 July 1948.

Answer 25

- PP + listed building consent = external alterations

Answer 26

any parts of their own area that are of SPECIAL ARCHITECTURAL OR HISTORIC INTEREST, the CHARACTER AND APPEARANCE of which it is DESIRABLE TO PRESERVE OR ENHANCE.

Answer 27

- more liekly to need PP - tree conservation area works - notify 6 weeks before

Answer 28

because if the borrower defaults on the mortgage, the lender wants to know they can sell the property for at least the value of the outstanding loan - if there has been an unsatisfactory investigation of title and there are some burdens on the land the lender wasnt originally told about, this will affect the market value of the property and thus the amount they can recoup

Answer 29

the seller promises to sell the property ‘free from incumbrances’ unless it otherwise states this is why it is also important for a seller's sols to investigate the title - they need to be aware of any encumbrances on the land before drafting the first draft of the sale contract

Answer 30

from the Land Reg : title - ' official copies ' title plan

Answer 31

- seller's obligation to prove their ownership of the property to the buyer - should be done before exchange of contracts - buyer usually prevented from raising objections to the title after the exchange of contracts - SELLER'S OWN EXPENSE to provide buyer with title and plan copies NO MORE THAN 6 MONTHS OLD - the buyer's sol will also need to investigate if there are any overriding interests

Answer 32

edition date - when the LR last updated the title

Answer 33

(a) the Property register - description of the land by postcode - freehold / leasehold - easements - if anything you would usually expect to come with the land has been excluded (e.g. right to light) (b) the Proprietorship register - identifies current owners and their address - class of title (3 classes - determined when first register freehold title) - the state guarantees the title and offers compensation if there are defects with it - may indicate price paid for the property by the current owners (but only if the land has been sold since 1 April 2000) - will show if the owners gave an indemnity covenant when purchased the land - will show chain of indemnity covenants - restrictions on the owners ability to sell (since 13 October 2003, the LR has provided only two types of entry for the protection of third party interests – notices and restrictions) (c) the Charges register - identifies any incumbrances - a sol will be looking out for: (i) covenant (ii) easements (iii) charges over the land, most commonly mortgages (iv) leases granted over the whole or part of the property (v) notices registered by third parties claiming an interest in the property - some of the above will be a problem for the buyer, others won't

Answer 34

(i) Absolute title: the most common and best class, the registered proprietor has vested in them the legal estate SUBJECT ONLY TO THE ENTRIES ON THE REGISTER, OVERRIDING INTERESTS and where the proprietor is a trustee, minor interests of which they have notice, such as the interests of the beneficiaries under the trust. (ii) Possessory title: granted where the proprietor is in possession of the property but has LOST TITLE DEEDS OR CLAIMING THROUGH ADVERSE POSSESSION, this means that the proprietor is also subject to all adverse interests existing at the date of first registration. (iii) Qualified title: granted where there is a specific identified defect which the Registrar feels cannot be overlooked or ‘cured’ by the grant of absolute title. - can upgrade from qualified to possessory - buyer concerned if not absolute title as may affect their ability to get a loan to purchase the property + may affect their ability to sell it in the future

Answer 35

1. check if there is a pending application for first registration 2. a third party may have lodged a caution against first registration (checks can be done by an Index Map search at the Land Registry, on Form SIM (Search of the Index Map) accompanied by a plan of the property 3. if no application for first registration then title is proved by deeds (copies provided to buyer's sols before exchange - originals exchanged on completion) 4. inspection of paper deeds 5. the seller’s solicitor must consider whether any transaction in the property’s history should have triggered first registration of title - if the title should've already been registered, the seller will be required to register it before any other transactions 6. find the doc = 'root of title' - begin title investigation from here (usually most recent doc that satisfies good root of title requirements) 7. where root of title found - older docs can be disregarded unless they refer to a third party right in an earlier conveyance 8. seller's sol then creates epitome of title (schedule of all the documents from and including the root up until the present day) can proceed

Answer 36

warning any person attempting to deal with the land that they have an interest in the land, such as an easement when the application for first registration is lodged, the LR will ‘warn off’ the cautioner, ie give them a limited period to establish their rights over the land and if they cannot do so, the registration will proceed and the cautioner will lose their rights

Answer 37

1. still check if there is an application for first registration 2. check if a third party has lodged a caution 3. if none of the above, title is proven by deeds: - rather than copies and then exchange of originals, if it is a partial sale: i) the seller keeps the originals and hands over certified copies on completion ii) completion = the buyer’s solicitor examines the original title deeds against the copies that they received prior to exchange of contracts to check they are the same; this process is referred to as ‘verification of title’ - a memorandum of the sale of part is marked on the original deed.

Answer 38

* deal with or show who owns the ENTIRE INTEREST (legal and equitable) that is being sold by the current owner * contain a RECOGNISABLE of the relevant land * do nothing to CAST DOUBT on the seller’s title * be at least 15 YEARS OLD (creates 'double guarantee')

Answer 39

* the chain of ownership (should be unbroken chain from root title to current seller - if owner has died, property will best in their PRs and a grant of probate identifying the PRs must also be produced) * description of the land * stamp duties * incumbrances (easements and covenants) * execution (most need to be executed as a deed s 52 LPA and for a deed to be valid - s1 LP(MP)A) * land charges searches (restrictive covenants will only bind unregistered land if they are registered at the central Land Charges Department in Plymouth) note - in investigating unregistered title, a solicitor must ensure that valid searches have been made against the names of all the estate owners revealed in the epitome of title and the attached documents, even if their period of ownership pre- dates the root of title - K15 form

Answer 40

where property is co-owned equitable interest presumed to be held: registered land = as joint tenants unless there is a restriction on the proprietorship register unregistered land = the conveyance will state whether the equitable interest is held as JTs or TICs ______________________________________________ if title investigation shows the property is jointly owned - must find out what happened to the other co-owner - may have died (need death certificate) + if alive = must be party to the contract where there is only one surviving legal owner and the equitable interest was held by the coowners as tenants in common, another legal owner (often referred to as a ‘second trustee’) needs to be appointed to overreach the equitable interest of the deceased co- owner (by deed of appointment) otherwise the equitable interest may have passed with the will / rules of intestacy = no need to appoint second trustee here

Answer 41

validly registered as a D(ii) Land Charge against the name of the original covenantor checked on the Charges register

Answer 42

rc = binds the buyer, as runs with the land pc = need to ask whether the burden binds the seller because the burden doesn't automatically run with the land if the seller is the original covenantor or if the seller gave an an indemnity covenant to their seller when they purchased the property, thus creating or continuing a chain of indemnity - this can be checked on the proprietorship register

Answer 43

This is where each successive buyer gives an indemnity to the previous owner to bear the cost of complying with the covenant. This contractual mechanism is a simple means of passing the burden of positive covenants to successors in title

Answer 44

because usually the seller will use the proceeds of sale to discharge the mortgage The buyer’s solicitor should check that the contract states that the seller is selling the property free of the mortgage and that the seller’s solicitor gives an undertaking to discharge the mortgage immediately on completion

Answer 45

- acts as a warning that a third partycould have an interest in the property - does not guarantee that the interest it is valid or that it even exists - merely serves to ensure that the priority of the interest referred to in the notice is protected against any subsequent interests. - can usually just ask the seller to get the notice removed off the charges register but if the notice is for a valid interest e.g. contract for a lease to a third party = more concern

Answer 46

1. ask the seller if they know who has the benefit of the covenant and try to come to an agreement to get it released 2. obtain a restrictive covenant insurance policy for the proposed breach of covenant - not appropriate where person with the benefit of the covenant knows they have it and are likely to object to an alternative use of the land 3. apply to the Upper Tribunal (Lands Chamber) for modification or discharge of the covenant under s 84 Law of Property Act 1925 - argue the covenant is obsolete and the loss of it can be compensated in money some of the above may be mutually exclusive - generally not able to obtain insurance where you have also approached the person to alert them to their right If the covenant is old, the successor in title to the property with the benefit may not be aware of it, so an approach to them may not be in the client’s best interests

Answer 47

registered land - seller supplies official copies and title plan + searches/enquiries re any charges which may not be on the registers unregistered land - epitome of title which begins with a good root of title + Index Map search and central land charges searches

Answer 48

6 in total a) survey and personal inspection (by buyer's sol): - valuation (lender will always require - borrower will have to pay) - structural survey (only if required e.g. concerns or wants to carry out alterations) - 'homebuyers valuation and survey' (less detailed than structural survey but still contains advice on necessary repairs and maintenance) b) local land charges search + optional searches - form LLC1 - financial charges or restrictions iimposed by public authorities via statute - e.g. planning consents, TPOs, conservation area designation orders - standard enquiry form = CON29 - optional enquiries = CON29O c) water and drainage search - made to water company (not local authority) - CON29DW (residential properties) - CommercialDW (commercial properties) - if the property does drain into the public sewer = buyer will be liable for the costs of maintaining the drains and sewers and may be liable for the costs of bringing them up to adoption standard if the water authority decides to adopt them d) pre-contract enquiries of the seller - any disputes relating to the property - any third parties occupying the property - compliance with any covenants in the title - boundary maintenance - (for comm prop) the VAT status of the transaction e) environmental searches - costs of clean ups can be with the owner of the land (not the polluter) - desktop searches = carried out by environmental search company - specialist environmental surveyor if necessary f) flood search - where the property is close to a river or the coast - Government- backed reinsurance scheme known as ‘Flood Re’ (n/a for comm prop)

Answer 49

1. chancel repairs search - no liability will exist where the property is registered and the previous transfer for value occurred after 13 October 2013 - insurance 2. mining searches (affected areas = Devon, Cornwall, Somerset, West Midlands, Cheshire) 3. canal and river trust search - liability for repairs to the maintenance of the waterways, banks and tow paths - also risk of flooding 4. commons search - properties on green- field sites or adjoining an open space such as a village green - optional enquiry 22 in the CON29O form in the local search 5. Railways - any obligations to maintain the boundary features separating the property from the railway line - whether there are any restrictions on carrying out building work next to the line - Network Rail wont answer these enquiries - the reply to enquiry 22 in the CON29 form in the local search will reveal if the property might be affected by a proposed rail scheme 6. Highways - enquiry 2 in CON29 form = some info - if not a public highway = no automatic right to use it and may also not be maintained at public's expense - developments = can send plan to highways authority asking the boundaries of the publicly maintainable highways to be marked on 7. Unregistered Land - An Index Map Search (‘SIM’) and a Land Charges Department search against the seller and previous estate owners 8. Company search - if seller = company - confirms identity of current officers (check you're dealing with the correct people) - any fixed or floating charges secured on the property that will need to be discharged on completion - check needs to be redone just before completion to check for insolvency issues - unregistered land = company searches should also be carried out against any corporate estate owners revealed in the epitome of title

Answer 50

- bankruptcy/ insolvency search against the buyer / borrower - where the buyer / borrower is an individual = K16 form to the Land Charges department in Plymouth - company = company search

Answer 51

- will present as a local land charge in the LLC1 result - criminal offence to lop or fell a tree subject to a TPO without the consent of LPA - pre- contract enquiries = buyer's sols to obtain a copy of the TPO from the seller, establish the location of the protected tree(s) and check the TPO has been complied with

Answer 52

- regulation that limits the types of fuel that can be burned in certain areas of the UK to improve air quality - will show as local land charge in the LLC1 result - may be a problem where buyer has open fireplace which they intend to use

Answer 53

LLC1or CON29

Answer 54

1. Standard Conditions of Sale: - all residential transactions + some simple commercial transactions 2. The Standard Commercial Property Conditions - high value commercial properties

Answer 55

- particulars of sale - financial terms of the transaction: 1. who the buyer is 2. fixtures/chattels 3. price + the deposit 4. information about the seller that should be cross-referenced to: - registered land > proprietorship register - unregistered land > title deeds - registered property = need title number + class of title - unregistered property = need to reference to the root of title + specified incumbrances - if these are specified > could be in breach of SC 3.1.1

Answer 56

1. They have the right to dispose of the land 2. They will do all they reasonably can to transfer the title 3. In the case of leasehold land, the lease is subsisting at the time of disposal and there is no breach of covenant making the lease liable to forfeiture. AND WITH FULL TITLE GUARANTEE... - seller is impliedly covenanting that the land is disposed of free from incumbrances other than those the seller does not know about and could not reasonably know about - s. 6 LP(MP)A limits this covenant to exclude anything the buyer new about or was entered on the registers - but this still remains a wider covenant than that provided under limited title LIMITED TITLE GUARANTEE... - the seller has not incumbered the property and is not aware anyone else has done so since the last disposition for value (so a seller is only covenanting that incumbrances have not been created since they purchased the property)

Answer 57

- rate of interest that will be charged if a party is late in completing - must be high enough to incentivise a potentially defaulting party - Law Society's interest rate from time to time - the SCs and SCPCs already provide for the above rate - so if the parties are happy to use this rate, it is not necessary to fill in the gap on the front page of the contract, but it is common practice to do so - if not filled in = compensation will be calculated at The Law Society’s interest rate from time to time in force - can be otherwise negotiated - 2-4% being the normal range remember this is on top of the Barclays Base rate, so if the base rate if 5% you add the 4% (or otherwise agreed rate) so the contract rate will be 9%

Answer 58

- both = if the buyer fails to complete the seller may forfeit and keep the deposit - both = deposit of 10% of the purchase price is payable on exchange of contracts and is paid to the seller’s solicitor as ‘stakeholder’ - (this means that the seller’s solicitor cannot hand it over to the seller until completion) - can vary amount + to agent (via special conditions) - agent = the deposit is released to the seller immediately after exchange of contract (risk if doesnt complete = not returned + risk of insolvency) SCs - allows the seller to use the deposit as a deposit on a related purchase of a house for the seller - payment = electronic means OR cheque drawn from the conveyancer's client account SCPCs - electronic means of payment only (in both cases the funds must come from the conveyancer's bank account)

Answer 59

- exclusion of fixtures from the sale - property subject to vacant possession or subject to lease/tenancy - altering date for completion - parties should not rely on any representations that have not been made in writing - if there is a non-owning occupier > they vacate on completion - appointment of second trustee for the purposes of transfer - restrictive covenant insurance - disclosing a defect in title - a seller selling with limited or no title guarantee - inclusion of indemnity covenants (although this is usually covered in the standard conditions)

Answer 60

- after exchange of contracts = buyer liable - means that the buyer must complete the purchase even if the property is damaged or destroyed between exchange and completion - where the buyer is financing the purchase with a mortgage the lender may insure the property on being requested to do by the buyer’s solicitor, but if not, the buyer will have to take out a new insurance policy - buyers with several properties may already have a ‘block policy’ to which the new property can be added - both standard conditions = the seller is under no obligation to insure a freehold property unless required to do so by a special condition in the contract

Answer 61

- where the parties agree the risk should remain with the seller, eg on a new build property in the course of construction - if this is agreed, then both standard conditions require the seller to maintain the policy until completion and if the property suffers damage prior to completion, to hand the insurance proceeds over to the buyer or assign to the buyer all the seller’s rights under the policy.

Answer 62

(a) The purchase price is exclusive of VAT and VAT will be added on top. (this is SCPCs standard) (b) The purchase price is inclusive of VAT so that VAT, if any, cannot be added on top. (SC but would need to be added as special condition in SCPC) (c) The purchase price is exclusive of VAT, so VAT can be added on top in the unlikely event that the law changes to make an exempt supply chargeable at the standard rate, but the seller is contractually obliged not to opt to tax. (use SCPC contract but incorporate one of the optional standard conditions and disapply the first option)

Answer 63

- certificate of title - confirms to the lender: * there are no legal problems with the property (it has a ‘good and marketable title’) so the lender can safely lend against it * who will own the property once the sale is completed * the completion date when the funds are needed. commercial transaction: - City of London Law Society certificate (more detailed) - special type of report on title which is set out in a series of statements which cannot be altered - if a statement cannot be agreed with, the solicitor makes a disclosure against the statement which sets out how the statement does not apply to the property. - the certificate is prepared by buyers sol - if the information on the certificate is wrong = the lender can sue the firm

Answer 64

(a) Report to client (in writing) - results of title investigation - searches and enquiries - the terms of the contract - mortgage offer (b) Report to lender (c) Ensure deposit funds are available (d) Check the mortgage offer is in place and that the client has sufficient funds to complete (e) Ensure arrangements are in place for insurance immediately following exchange (f) Contract signed - wet ink - electronic signature provided the person signing the document intends to authenticate it and any execution formalities are satisfied - solicitor can sign the contract on their client’s behalf if they have the client’s express authority to do so. (g) Completion date

Answer 65

- authority to exchange - in writing - make note on file - if done without authorisation > negligence

Answer 66

1. In person, by one solicitor attending the other’s office and handing the contract over. 2. By post, with each solicitor sending their client’s part of the contract by post to the other solicitor’s office. 3. Over the telephone.

Answer 67

- via telephone - in each, sol gives undertaking to comply Formula A: - ONE sol holds BOTH parts of the contract (which has been signed by buyer + seller) - telephone call effects exchange - the sol dates both docs - sends the part signed by their client to the other sol Formula B: - EACH sol holds their client's signed contract - telephone call to effect exchange - each sol dates - each sol sends their client's signed + dated doc to the other Formula C - mainly residential chain transactions - complex

Answer 68

The seller retains the legal title in the property until completion, but holds the beneficial interest on behalf of the buyer.

Answer 69

- deed - sale contract does not transfer the land - just gives the buyer a beneficial interest

Answer 70

- buyer may have right to rescind + damages

Answer 71

an executor or trustee as they have limited knowledge of the property

Answer 72

middle - standard conditions - these terms will govern the transaction unless the parties have expressly agreed something else - these aren't amended back page - special conditions - drafted to meet the particular requirements of this transaction

Answer 73

if there is a restriction on the register = tenants in common

Answer 74

- if there are any fixtures that are being removed - when they are to be removed - indemnify the new buyer for any damage caused from removals

Answer 75

- 2pm on the allocated day - can be amended via special condition

Answer 76

- both sets of standard conditions provide where the seller has an ongoing liability in relation to the property > indemnity covenant - no need to insert - most sols include a special condition regardless

Answer 77

- remember residential property = no VAT - SC 1.4 purchase price = inclusive of VAT (because it is expected that no VAT will be charged or paid).

Answer 78

you would need to vary the formula a typical example of this is where the parties want to use the formula to buy comm prop. the SCPC only provide for payment via electronic means so the formula must be varied to allow for this

Answer 79

- B is quicker - formula A, one sol has to send via post to the other sol > then exchange takes place - whereas B, both sols have the signed versions from their clients already > exchange takes place > then post to one another

Answer 80

Personal exchange is the safest method, postal exchange is the least safe method.

Answer 81

sometimes = buyer and lender sometimes just the lender

Answer 82

* Preparation of the transfer deed * Pre- completion searches * Making practical arrangements for completion * Ensuring the finances are in order for completion

Answer 83

- s52 LPA states that the transfer of a legal estate in land must be by deed - for a deed to be valid in law it must: 1. writing 2. make it clear that it is a deed 3. signed by the parties 4. delivered

Answer 84

1. using the company seal in accordance with the articles of association 2. having it signed by a director and the secretary, or by two directors of the company, provided that the deed is expressed to be executed by the company 3. having it signed by a single director in the presence of a witness who then attests that signature

Answer 85

if the buyer is entering into an obligation or making a declaration in the TR1, such as giving an indemnity covenant or declaring a beneficial interest under a trust.

Answer 86

it will be subject to first registration so the sols will often use a LR Transfer form or alternatively, a conveyance can be used

Answer 87

usually the buyer's sol sends it to the seller's sol for agreement immediately after exchange of contracts

Answer 88

no - the transfer deed should only be completed upon completion

Answer 89

the buyer's sol

Answer 90

as soon to completion as is possible

Answer 91

- to check nothing has changed since investigation of title e.g. no further incumbrances, no liquidation - to gain priority for the buyer (and lender)

Answer 92

REGISTERED: - OS1 (OS1R = form) - search against title number - 30 days priority UREGISTERED: - K15 - search against each owner's name for the duration they owned the land - if any doubt regarding how long they owned for > search back to 1926 - charge for each search - 15 days priority

Answer 93

- it provides protection to the applicant against any subsequent entries which may be placed on the register after the date of the search but before the buyer is registered as proprietor - the buyer will take free from any such entries, provided that they submit their application for registration by 12 noon on the last day of the priority period.

Answer 94

- OS1 should be made in the name of the lender - means the results will confer priority on both the buyer and the lender

Answer 95

- for a buyer of registered land from an individual seller - where no notice or restriction relating to the bankruptcy appears on the registered title, a buyer for value acting in good faith without notice of the bankruptcy petition or adjudication will take good title from the bankrupt seller, even though legal title to the land has vested in the trustee in bankruptcy - if buyer is concerned or transaction of high value > could do individual bankruptcy search on K16

Answer 96

- as close to completion as possible because there is no priority period - transaction of high value or concerns re solvency > telephone search > Registry of Winding Up Petitions at the Companies Court on the day of completion.

Answer 97

- completion information form - buyer's sol sends to seller to complete - most commonly used > TA12 Completion Information and Undertakings

Answer 98

asks the seller: * handing over the keys * place and method of completion * the documents to be handed over at completion * the exact amount payable by the buyer on completion - undertaking from seller's sol > redeem the mortgage out of the completion money on completion - usually also ask to send evidence of discharge to the buyer’s solicitor as soon as it is received from the lender

Answer 99

1. a CERTIFICATE OF TITLE to confirm that the property is adequate security for the loan being advanced 2. a SOLVENCY SEARCH against the borrowers 3. a clear OS1R in the name of the lender 4. an executed but not completed MORTGAGE DEED

Answer 100

Financial Statement: - the amount that should be forwarded by the buyer to its sol - the balance of the purchase price - any SDLT/ LTT due - registration fee - the amount outstanding for any other disbursements, - the solicitor’s fees - any other amount owing, eg a restrictive covenant insurance policy premium

Answer 101

the mortgage advance from the lender + the balance of the purchase price from the buyer

Answer 102

paid by direct transfer/ electronic means in cleared funds from an account held in the name of a conveyancer at a clearing bank

Answer 103

- sellers sol dates the TR1 - lender's sol dates the mortgage deed

Answer 104

Law Society Code for Completion by Post - involves the SELLER'S SOL ACTING AS AN AGENT of the buyer’s solicitor for the purpose of carrying out the completion procedure (at no cost to the buyer) - the buyer's sol should set out in WRITING what the seller's sol should do on their behalf - the buyer's sol is asking the seller's sol to do whatever they would've done if they had attended the completion in person - so on receipt of completion monies, the seller's sol will carry out the buyer's instructions and complete the transaction - the seller's sol should then contact the buyer's sol and let them know completion has taken place + the docs that go to the buyer's sol will be placed in first class post or DX NOTE: under the Code the seller’s solicitor gives an IMPLIED UNDERTAKING to carry out the buyer’s solicitor’s instructions

Answer 105

REGISTERED LAND: - legal title does not pass to the buyer until the buyer is registered at the Land Registry as proprietor of the land - NOTE this is why it is so important to use a LR charges search which confers a period of priority (because it protects the buyer from the creation of adverse third party rights in the intervening ‘registration gap’) UNREGISTERED LAND: - legal title passes to the buyer on completion

Answer 106

1. discharge of the seller's mortgage 2. SDLT/LTT 3. Registration of the new charge at LR 4. Land Registry Application

Answer 107

* complete DS1 > send to seller's sol > send to buyer's sol * submit an e- DS1 electronic discharge through the Land Registry portal; or * use the Electronic Discharge (ED) system, sending an electronic message to the Land Registry which automatically removes the charge from the register. note - for the latter two, the seller's sol just notifies the buyer's sol that notice of discharge has been given to the LR (just via electronic means)

Answer 108

- 21 days from completion - gives constructive notice of the mortgage charge to other creditors of the company - time limit cannot be extended without a court order - failure to register = charge void against a liquidator or administrator of the borrower and the borrower’s other creditors - massive effect on lender's security

Answer 109

the buyer's sol

Answer 110

- on LR form AP1 - if the seller had a mortgage which has been electronically discharged, the charges on the register protecting the mortgage will automatically be removed - but if DS1 used = buyer’s sol must apply for the mortgage to be discharged (can be done via AP1 form) - along with the AP1 should be: 1. certified copy of the transfer 2. the fee 3. SDLT/LTT certificate 4. DS1 (if used) 5. form DI setting out any overriding interests that burden the title (once they are on the register they cease to be overriding) if the buyer has created a new mortgage, the following should also be included: i) certified copy of the mortgage deed ii) if the buyer is a company, certified copy of the certificate of registration issued by CH iii) if the buyer is a company, the solicitor’s / lender’s written confirmation that the enclosed certified copy mortgage deed is the same as the one filed at Companies House and to which the certificate of registration relates. - application should be made within the priority period of the OS1 form

Answer 111

- first registration - within 2 months of completion - form FR1 - docs accompanying app > listed in chronological order on form DL - estimate for registration provided - LR needs to investigate title so it can give the title a class - docs included in the application: 1. all docs which formed the evidence of title supplied by the seller’s solicitor 2. all the buyer’s pre- contract searches and enquiries relating to the title with their replies 3. the contract 4. requisitions on title with their replies 5. all pre- completion search certificates 6. the transfer deed 7. the seller’s mortgage, duly receipted 8. SDLT/ LTT certificate 9. Form DI (overriding interests) if new mortgage: 10. certified copy of the mortgage deed 11. if the buyer is a company, certified copy of the certificate of registration issued by Companies House 12. if the buyer is a company, the solicitor’s / lender’s written confirmation that the enclosed certified copy mortgage deed is the same as the one filed at Companies House and to which the certificate of registration relates.

Answer 112

- Title Information Document (or ‘TID’) - not a document of title - but evidence the buyer is the new owner - sols for buyer + lender should check it to ensure it has been properly registered

Answer 113

20 working days

Answer 114

2pm parties can agree to vary this in the contract

Answer 115

1. time is not of the essence of the contract UNLESS a NOTICE TO COMPLETE has been served - there is no immediate right for the non-defaulting party to terminate or rescind 2. COMPENSATION paid for late completion

Answer 116

- both sets of standard conditions provide for compensation to be paid DISTINCTION - SCs = both the buyer and the seller can be asked to pay this compensation (SC 7.2) - SCPCs = only the buyer can be required to pay compensation (SCPC 10.3)

Answer 117

- contract rate specified in the contract - charged on the balance of the purchase price - (less any deposit if the defaulting buyer was the buyer) - period between contractual completion date and actual - calculated at daily rate - if the non-paying party was also responsible for some of the delay = those days are ignored - compensation is payable on completion - remember to divide the amount by 365 to calculate one day then times that by the amount of defaulting days

Answer 118

- putting the claimant in the position it would have been in had the contract been correctly performed - damages for loss naturally flowing from the breach + any reasonably foreseeable consequential losses - e.g. wasted legal costs, putting furniture into storage, the cost of renting another property, the cost of bridging finance and any rebooking removal costs can claim for both contractual compensation and contractual damages BUT NOTE the contractual compensation the innocent party receives will be deducted from the contractual damages

Answer 119

- party who is ready and willing to complete can serve - can only be served after the contractual date for completion - once served = gives the other party 10 working days to complete - if no completion within 10 working days = can rescind contract (but is not obliged to) - if rescinded and the defaulting party was the buyer, the seller is able to forfeit the deposit - if defaulting party was the seller, then the seller must repay the deposit to the buyer

Answer 120

- where the SC / SCPC are incorporated, recission is available in certain circumstances e.g. a) where a party has failed to comply with a notice to complete b) misrepresentation by the seller in a plan or statement in the contract, or in the negotiations leading up to the contract only where: - seller’s error or omission results from fraud or recklessness - the buyer would be obliged to accept a property differing substantially (in quantity, quality or tenure) from what the error or omission had led them to expect note = less serious misrepresentations = just damages

Answer 121

yes - just dont pay any still need SDLT5 form

Answer 122

buyer's sol - SC 4.3.2

Answer 123

the end of the priority period (30 working days from search date)

Answer 124

the company will have to pay SDLT on the purchase price PLUS VAT within 14 days of completion.

Answer 125

if the buyers want to be co-owners holding the property as tenants in common

Answer 126

from a tenants pov: - depreciating asset - landlord specifies what the tenant can and cant do - there will probably be repair obligations in the lease which will involve expenditure by the tenant from a landlords pov: - tenant may not pay the rent - tenant may not look after the property (which could result in depreciation of the landlord's investment) - the income and capital are not guaranteed and are dependent on the market advantages: - it is important for multiple occupancy buildings to have enforceable positive covenants especially regarding repairs (this is difficult to achieve with freehold land) - if the lease is properly drafted, the landlord will be able to recover all expenditure for maintenance and repair from the tenant by way of a service charge paid by the tenant - retains an asset at the end of the lease

Answer 127

- also known as rolling tenancy - continues indefinitely - rolling over automatically at the end of each rental period (e.g., month-to-month) - runs until either party decides to terminate it by giving the other party notice - the notice should be the length of one period of the lease e.g. one month’s notice for a monthly tenancy and one quarter’s notice for a quarterly tenancy - exception to the general rule = yearly tenancy can be terminated on six months’ notice

Answer 128

1. fixed term - lease expires after the fixed term ends 2. periodic tenancy - runs until either party decides to terminate 3. tenancy at will - tenancy may be terminated by either party at any time

Answer 129

1. absolute covenant - the tenant absolutely cannot carry out the stated action - the landlord may decide to allow it, either by way of a one- off consent or a permanent variation of the lease, but the landlord has total discretion on the matter 2. qualified covenant - allows the tenant to carry out the stated action, but only if it obtains landlord’s consent first 3. fully qualified covenant - allows the tenant to carry out the stated action if it obtains landlord’s consent first, but goes on to say that the landlord will not be able to withhold consent unreasonably

Answer 130

a ‘clear’ rental stream (all profit) and does not have to dip into it to pay for repairs, maintenance and insurance contributions investment quality’ or ‘institutionally acceptable’

Answer 131

tenant = non-structural parts landlord = structural parts and common areas

Answer 132

a) there MUST BE A DISREPAIR FIRST before the tenant can breach the covenant to repair b) the above may be a problem if the building is BRAND NEW and will inevitably deteriorate from its original pristine condition > the property need not be kept in perfect repair: ‘It need only be put into such a state of repair as renders it fit for the OCCUPATION OF A REASONABLY MINDED TENANT of the class likely to take it’ c) WORKS OF RENEWAL AND IMPROVEMENT go beyond repair. - question of fact and degree and the work the tenant has to carry out depends on the age of the property at the date of the lease d) A repairing covenant does not oblige the tenant to give back to the landlord a property that is ‘WHOLLY DIFFERENT’ from that leased to them, but it can oblige the tenant to remedy an inherent defect in the design and/ or construction of the building if that is the only way to effect the repair

Answer 133

means to put it into repair even if that involves the tenant putting the building into a better state of repair than when they entered into the lease for example a covenant to ‘keep the property in good condition’ is more onerous, as it can mean that the tenant is obliged to carry out some works, even though there is no actual disrepair

Answer 134

- letting of a whole building = tenant could be made solely responsible for insurance - but usually, landlord takes out the insurance, with the cost being passed on to the tenant as a separate insurance rent

Answer 135

1. a LANDLORD'S COVENANT to insure the property against defined risks (the ‘insured risks’) - INSURED RISKS = usually a list of risks in the interpretation part of the lease - in case of any new risks, the list usually end with ‘such other risks as the landlord may reasonably require’ - if the insurance isnt sufficient = liability for any shortfall in the proceeds cause by these are passed on to the tenant in the repairing covenant - should be insured to its ‘full reinstatement value’ 2. A covenant by the tenant to pay for the insurance policy - the 'INSURANCE RENT' = premium for the buildings insurance policy + an associated policy covering the landlord for loss of the annual rent during any period where the tenant is unable to use the building following the occurrence of an insured risk 3. A covenant by the landlord to REINSTATE THE PROPERTY - usually this is expressed as a covenant to use the insurance proceeds to reinstate the property (rather than an absolute obligation to reinstate even if the proceeds are insufficient) 4. RENT SUSPENSION - unless express term to the contrary, rent will continue to be payable even if the property is rendered unusable - the tenant should therefore make sure the lease stipulates otherwise 5. TERMINATION - even if a building is totally destroyed, the doctrine of frustration will only apply in certain circumstances - the lease will often give the landlord the right to terminate the lease IF RESINSTATEMENT PROVES IMPOSSIBLE - the tenant should be able to terminate the lease if the property has NOT BEEN REINSTATED BY THE END OF THE RENT SUSPENSION PERIOD

Answer 136

- The property should be insured to its ‘full reinstatement value’, otherwise if the property is totally destroyed there will not be enough money to pay for its rebuilding - Full reinstatement value includes costs of demolition and site clearance, professional fees (eg architects, surveyors etc) and an allowance for inflation.

Answer 137

allows both parties to terminate so long as certain conditions are met

Answer 138

- through tenant paying for insurance alongside rent, landlord gets: i) £ from insurance company to bring property back to full reinstatement value ii) any insurance premium covered by the tenant- iii) an equivalent sum to what was the tenant's rent (tenant pays for loss of rent insurance for landlord)

Answer 139

* Alterations affecting the structure and exterior of the building (usually absolute covenants) * Non- structural interior alterations (usually qualified covenants) * Alterations affecting service media such as heating, lighting, communications systems * Demountable partitioning, such as that used to separate open plan floors into different ‘rooms’

Answer 140

- s 3 LTA > enable to carry out ‘improvements’ (even where absolute prohibition) - serve a notice on the landlord detailing its proposals - the landlord has 3 months within which to object - if objects, the tenant has the right to apply to the court - the court can authorise the improvements if they : i) ADD to the LETTING VALUE of the property ii) are REASONABLE AND SUITABLE TO THE CHARACTER of the property iii) DO NOT DIMINISH THE VALUE OF ANY OF THE OTHER PROPERTY of the landlord - a landlord can offer to carry out the works itself in return for a reasonable increase in the rent - tenant = under no obligation to accept an offer - if tenant doesnt want to accept > can withdraw the notice - if withdrawn > landlord has no right to carry out the works and increase the rent - if the tenant rejects the landlord’s offer = court cannot give the tenant authority to do the works itself - if the landlord does not offer to carry out the works itself, or object to the improvements within three months (or if the court authorises the work) = tenant may lawfully carry them out - S 1 LTA 1927 > tenant can claim compensation for improvements that ‘add to the letting value of the holding’

Answer 141

a separate document from the lease containing the consent to make alterations and the conditions for the alterations

Answer 142

works that increase the VALUE OR USEFULNESS of the property to the tenant (even if the improvements will result in the reduction in the value of the landlord’s reversionary interest)

Answer 143

- landlord may impose a tenant's covenant to keep a property for a single use (or in a use class) - landlord’s consent can unreasonably withheld for user covenants - the landlord cannot charge a fine or an increased rent as a condition of giving consent (provided no structural alteration is involved - see s3 LTA)

Answer 144

- tenant transfers their leasehold interest to a third party - covenant to prevent this - landlord chose existing tenant because of their 'strength of covenant' alienation includes: * assignment * underletting (also known as subletting) * charging (also known as mortgaging) * sharing occupation (allowing a third party in while continuing to occupy, perhaps under a licence or concession arrangement) * parting with possession (a catch- all term which covers assignment and underletting but also includes informal arrangements which may be difficult to classify)

Answer 145

- the current tenant (the "assignor") transfers their entire legal interest in a property to a new tenant (the "assignee") - with the landlord's consent - the assignee takes over the lease and becomes responsible for all obligations

Answer 146

19(1)(a) LTA 1927 - qualified covenant > fully qualified covenant - restricts the landlord's ability to unreasonably withhold consent to the assignment or subletting 19(1A) LTA 1927: - allows for the landlord and tenant to agree in advance conditions and circumstances in which it would not be unreasonable for the landlord to refuse consent - the effect = such pre-agreed conditions and circumstances are deemed reasonable e.g. T must give AGA as a condition of LL giving consent s. 1 LTA 1988: - where the tenant has made a written application for consent, the landlord must within a reasonable time: a) give consent, except in a case where it is reasonable not to give consent b) serve on the tenant written notice of its decision + reasons for withholding + any conditions on the consent

Answer 147

- not entitled to refuse its consent to an assignment on GROUNDS WHICH HAVE NOTHING TO DO with the relationship of landlord and tenant in regard to the subject matter of the lease - it is UNNCESSARY for the landlord to prove that the conclusions which led it to refuse to consent were JUSTIFIED, if they were conclusions which might be reached by a reasonable person in the circumstances - may be reasonable for the landlord to refuse its consent to an assignment on the ground of the PURPOSE FOR WHICH THE PROPOSED ASSIGNEE INTENDS TO USE THE PREMISES, even though that purpose is not forbidden by the lease - a landlord is bound to consider only its own relevant interests when deciding whether to refuse consent to an assignment - however, it would be unreasonable for a landlord not to CONSIDER THE DETRIMENT which would be suffered by the tenant if consent were to be refused, if that detriment would be EXTREME AND DISPROPORTIONATE in relation to the benefit gained by the landlord. - is a question of fact

Answer 148

yes all unreasonable

Answer 149

- a lease created by someone who is already a tenant - landlord's consent > licence to underlet tripartite doc (head landlord, head tenant, sub tenant) - there are two leases in existence in relation to the same property = a headlease and an underlease - an underlease is an estate in land - an underlease must be for a shorter term than the headlease out of which it is created, even if just by one day - otherwise the transaction is an assignment of the headlease rather than the creation of a new underlease - usually obligation in the licence to underlet, that the head tenant will pay the head landlord's costs for the underletting process

Answer 150

- if the tenant would like to get the property back again at some time in the future - if the tenant only wants to dispose of part of the property - also more suitable where the landlord has concerns about about the financial strength of the proposed new occupier, so will not give consent for an assignment of the headlease NOTE - it may be that the tenant would prefer to assign the lease, but cannot find anyone willing to take it. - e.g rent levels have been dropping and the rent reserved by the tenant’s lease is too high - take underlease at lower rent - at least some income + other property-related costs (insurance) are off- loaded onto the undertenant.

Answer 151

Although legally the headtenant will remain liable to the landlord for the performance of the tenant’s covenants under the lease, in reality it is the undertenant who will be in occupation and who will have physical control of the property.

Answer 152

19(1)(a) LTA1927: - turns a qualified covenant into a fully qualified covenant - restricts the landlord's ability to unreasonably withhold consent to the assignment or subletting of a lease s. 1 LTA1988: - where the tenant has made a written application for consent, the landlord must within a reasonable time: a) give consent, except in a case where it is reasonable not to give consent b) serve on the tenant written notice of its decision + reasons for withholding + any conditions

Answer 153

1. the TERMS of the underlease MIRROR those of the headlease 2. the annual RENT RESERVED by the underlease is at least as high as the annual rent reserved by the headlease and they must be reviewed at the same time 3. that any underletting must EXCLUDE s 24– 28 in Part II LTA 1954, which give business tenants the statutory right to stay on the property and renew their leases at the expiry of the contractual term 4. that the undertenant enters into a 'DIRECT COVENANT' with the landlord to perform the tenant’s covenants in the underlease and the headlease (excluding annual rent payable) - this is necessary because ordinarily there is no liability between the landlord and the undertenant - the direct covenant creates contractual relationship (means landlord can sue them)

Answer 154

if the lease is silent > rent in arrears (meaning after the rent period has elapsed)

Answer 155

1. fixed increase - at various intervals in the term, rent increases by fixed amounts - simplicity - but not often used > difficult to predict rental levels in future 2. index-linked - linked to external index e.g. Retail Price Index - allows rent to be altered in line with inflation - but doesn't track the property market specifically - usually have 'a cap and a collar' = limits % increase + ensures min. increase 3. tenant's receipts - from use of the property - turnover, profits, how much they make from subletting - tracks the tenant's actual financial health - incentivises LL to do all it can to increase tenant's trade - business may be failing 4. open market rent review - rent adjusted at regular intervals - usually every 3-5 years - in reference to the open market rental value of the premises

Answer 156

the physical property and the terms of the lease itself

Answer 157

- not always easy to assess the reality of the situation - e.g. if the premises are dilapidated and run- down, the tenant might expect the rental value be assessed accordingly - however, if the premises are dilapidated and run- down because the tenant is in breach of its repairing obligations under the lease, it would not be fair that the rent should be reduced because then the tenant would be profiting from its breach

Answer 158

a) level of rent - the rent review clause may be (and often is) upwards- only, meaning that rent will either stay the same on review, or increase b) frequency of review - typically set every three or five years, on the anniversary of the commencement of the lease c) instigation of review d) independent determination - whichever method is used to instigate the review (formal or informal), should the parties fail to agree the revised rent, the lease should make provision for the matter to be referred to an independent third party, usually appointed through the Royal Institute of Chartered Surveyors

Answer 159

- either party can instigate the review - time is not usually of the essence - where the reviewed rent is agreed or determined after the relevant review date, the lease will provide that the tenant continues to pay rent at the old rate and pays any additional amount to the landlord together with interest (at a nonpunitive rate) to compensate the landlord for the delay

Answer 160

RICS Code for leasing business premises justifiable good reason examples of mandatory requirements under the code: 1. Lease negotiations must be approached in a constructive and collaborative manner. 2. Any party not represented by an RICS member or other property professional must be advised of the existence of the code and must be recommended to obtain professional advice. 3. Transaction terms must be recorded in writing, subject to contract and must summarise specified details as a minimum.

Answer 161

* references from a previous landlord * guarantee obtained from the parent company, a bank involved in financing the transaction or from one or more of the directors * a rent deposit (a sum of money deposited with the landlord on terms which enable the landlord to withdraw sums if rent due under lease is unpaid).

Answer 162

it is likely that the headlease requires that the terms of the underlease mirrors the terms of the headlease

Answer 163

- a legally binding contract between a landlord and a tenant that outlines the intention to enter into a lease agreement in the future - useful where there is going to be a delay between agreeing the lease/ underlease and actually granting it but one (or both) of the parties requires the other to be bound into the transaction e.g. the landlord is in the process of constructing the property and wants to know that the tenant is bound to take the lease on completion of the works so that there will be rental income to help offset the building costs

Answer 164

- by the landlord’s solicitor (like in the sale of freehold land) - the final agreed lease should be attached to the agreement for lease with an obligation in the agreement for the tenant to take a lease/underlease in that form on the date of completion - must be provided to the tenant AT LEAST 5 WORKING DAYS BEFORE COMPLETION DATE - incumbrances should be disclosed - the attached lease/underlease should contain an indemnity in respect of future breaches of any covenants affecting the title

Answer 165

- ensure the landlord's title - where the property is subject to an existing mortgage, the mortgage will frequently contain a prohibition or restriction on the borrower/ landlord’s ability to grant a lease of the property so the lender must be contacted and its permission obtained before the transaction proceeds

Answer 166

1. investigation of title - done in same way as for freehold property 2. deduction of title - NOTE > although most landlords are happy to deduce their title, under the general law a tenant is not entitled to call for deduction of the freehold title UNLESS the transaction is the grant of a lease for a term of MORE THAN 7 years - where this is the case and there is to be an agreement for lease, SC 8.2.4 (SCPC 11.2.4) requires the landlord to deduce such title as would enable the tenant to obtain registration with an absolute title at the Land Registry - dont need to check title, but still check headlease itself and the official copies for the headlease Where the headlease is unregistered: * the general law ENTITLES the undertenant to call for the headlease and all subsequent assignments under which the headlease has been held for the last 15 years * under the general law, the undertenant is only entitled to call for deduction of the freehold title where the transaction is the grant of a lease for a term of MORE THAN 7 YEARS NOTE - If unable to comply, the headtenant will need to exclude this requirement by a special condition in the contract

Answer 167

- normally prepared in two identical parts = lease (executed by the landlord) and counterpart (executed by the tenant) - landlord's sol drafts the lease so: 1) landlord signs lease in readiness for completion 2) counterpart should be sent to tenants sol at least five working days before contractual completion date if SC 8.2.5 or SCPC 11.2.5 apply - on completion > signed copies of lease + counterpart are exchanged - lease = legal estate in land so needs to comply with the relevant authorities (execute a deed)

Answer 168

the landlord should receive from the tenant: (a) the counterpart lease/ underlease executed by the tenant/ undertenant; (b) any premium payable for the grant (less any deposit paid on exchange of contracts); (c) an apportioned sum representing rent payable in advance under the lease/ underlease. the landlord should give to the tenant: (a) the lease/ underlease executed by the landlord; (b) if not already done, properly marked or certified copies of the freehold title deeds (unregistered land only); (c) where relevant, a certified copy of the consent of the landlord’s lender to the transaction. note - on the grant of an underlease = need licence to underlet

Answer 169

- land transaction return must be filed with HMRC - SDLT payable on premium paid + any rent reserved - SDLT charged on the premium as it would be in com prop - Net Present Value formula just for the rental element - how much is payable for the duration of the lease (plus VAT) - discount factor of 3.5% - reflects the fact that future rent received will have a lower value than if it was received today

Answer 170

1. A legal lease for 7 YRS OR LESS is NOT CAPABLE of being registered with its own title at the LR - will take effect as an overriding interest - in unreg land a legal lease is binding on all subsequent owners of the land, irrespective of notice 2. A lease for OVER 7 YRS MUST be registered with its own separate title, regardless of whether the landlord’s title is registered. 3. It is possible to NOTE LEASES OF OVER 3 YRS against the landlord’s title voluntarily (3yrs or less = cannot be noted on the landlord's title) - must be made within the priority period conferred by the OSR1 search - if unregistered = app for first registration and must be made within 2 months of the grant of the lease

Answer 171

- contractual remedy for the landlord - allowing the landlord to recover the cost of repairs as A DEBT and not a damages claim - this way the the landlord is able to avoid the statutory limitations on pursuing damages claims imposed by the 1927 and 1938 Acts - allows the landlord to enter the property to check compliance with the tenant’s repair covenant - if breach > landlord serve NOTICE specifying the works required to remedy the breach - if the tenant fails to start the work within a specified period after service of the landlord’s notice, or is not proceeding diligently with those works, the landlord may enter, carry out the works and RECOVER ALL COSTS from the tenant as a debt.

Answer 172

1. effluxion of time: - when a fixed-term lease ends (not notice is required) 2. notice to quit 3. surrender 3. merger

Answer 173

- periodic tenancies - serve notice to quit - yearly tenancy = 6 months notice at the end of a completed year of the tenancy - all other = one full period’s notice (ie one quarter, month, etc) expiring at the end of a completed period of the tenancy - where premises wholly or partly occupied as dwelling > not less than 4 weeks - e.g. if a tenant has a monthly tenancy which starts on the first of each month and the landlord wants to serve a notice to quit on 14 August, the earliest date the landlord can specify for expiry of the notice is 30 September

Answer 174

- where the tenant yields up the lease to the landlord who accepts the surrender - a surrender can only be achieved if BOTH the landlord and the tenant AGREE TO IT - on surrender, the lease is said to merge in the landlord’s reversion and is extinguished - to be legal, surrender MUST BE BY DEED (LPA 1925, s 52).

Answer 175

- It is the opposite of surrender - This occurs where the tenant acquires the immediate reversion to the lease (ie acquires the landlord’s estate in land) - It can also occur where a third party acquires both the lease and the reversion. - once the lease and the reversion are with the tenant or third party, the lease automatically merges with the reversion and is extinguished (unless the tenant/ third party expressly preserves the lease in the documentation)

Answer 176

A tenancy protected by the 1954 Act may continue until it is terminated in accordance with the provisions of the Act. So, a fixed term business lease will not necessarily end at the expiration of the fixed term and a periodic business lease will not necessarily be determined by service of a notice to quit (i.e a common law method of termination)

Answer 177

1. must be a tenancy (not a licence) 2. of a property which is occupied by the tenant (personally, or through the medium of an agent or manager) 3. for business purposes

Answer 178

1. tenancies at will 2. Fixed- term tenancies not exceeding six months - but the Act will apply where there has been a succession of sixth month tenancies - doesnt apply where only two six month tenancies with no right to renew - tenant cant have been in occupation for more than 12 months at the end 3. certain types of business lease such as tenancies of agricultural holdings, farm business tenancies and mining leases 4. where the landlord and tenant have agreed to contract out of its protections - statutory notice procedure must be strictly followed before the start of the lease in order for it to be effective

Answer 179

- landlord must give the tenant notice in a prescribed form - warns the tenant that they are agreeing to a lease without security of tenure - advises them to obtain professional advice - tenant must then make a declaration in a prescribed form that they have received the notice and agree that the lease should be contracted out - if the tenant is given the notice less than 14 days before the grant of the lease, the tenant’s declaration must be made in the form of a statutory declaration before an independent solicitor - a reference to the service of the notice and the tenant’s declaration must be contained or endorsed on the lease itself 14 DAYS FROM NOTICE BEING GIVEN (NOT MAKING DECLARATION)

Answer 180

The 1954 Act provides for only seven methods of termination: 1) by the service of a landlord’s notice under s 25 2) by the service of a tenant’s request for a new tenancy under s 26 3) forfeiture 4) surrender 5) in the case of a periodic tenancy, by the tenant giving the landlord a notice to quit 6) in the case of a fixed- term lease, by the tenant serving three months’ written notice on the landlord under s 27, so long as the notice does not expire before the contractual expiry date 7) in the case of a fixed- term lease, by the tenant ceasing to be in occupation for business purposes at the end of the lease under s 27(1A) (effluxion of time)

Answer 181

Security of tenure under the 1954 Act means the right for the tenant to stay in the property after the expiry of the contractual term and to apply for a new tenancy, which can only be denied on certain limited statutory grounds set out in s 30 of the 1954 Act.

Answer 182

that the landlord will agree to the assignment in principle

Answer 183

- landlord's sol usually requires an undertaking from the assignor's (buyer's) sols to pay the legal / prof services costs - the undertaking should be limited to reasonable costs incurred + a cap on costs should also be sought

Answer 184

guarantor authorised guarantee agreement

Answer 185

- either party may rescind the contract by notice if : i) the landlord's consent has not been given 3 working days before the completion date or ii) if, by that time, consent has been given subject to a condition to which the buyer reasonably objects - technically the above allows exchange of contracts without having obtained the landlord's consent to assignment - but where timing of completion of the transaction is v important it is safest not to exchange until the landlord's consent has been obtained

Answer 186

- if the landlord’s consent has not been obtained by the completion date, completion is postponed until 5 working days after the assignor notifies the buyer that consent has been given [check this in the book] - the contract may not be rescinded until 6 months have passed since the original completion date - either party can then rescind by serving notice on one another - if timing of completion is important, it is safest not to exchange until the landlord’s consent has been obtained

Answer 187

- for the landlord to give consent to the assignment - otherwise breach of alienation covenant

Answer 188

- landlord's sol - landlord executes original licence + assignor executes counterpart - needs to be a deed if covenants entered into

Answer 189

- If the assignor and assignee are to enter into covenants in the licence then all three (ie landlord, assignor and assignee) will be parties to the licence, which must be in the form of a deed - often the licence is prepared in triplicate - any guarantors of the assignee or assignee will be required to join in

Answer 190

(a) The landlord grants consent to the assignor to assign the lease to the assignee - Often this consent will be time- limited (eg three months) because the landlord has no control over when the assignment takes place and the assignee’s financial position can change in a short time (b) If the lease was granted on or after 1 January 1996, the assignor will typically give an AGA to the landlord (c) If the lease was granted before 1 January 1996, a direct covenant by the assignee to the landlord to observe and perform the covenants in the lease for the remainder of the term (d) the assignor agrees to pay the landlord’s legal and professional costs

Answer 191

(a) guaranteeing that the assignee will perform the tenant’s covenants in the lease, including the covenant to pay rent (b) promising to perform such covenants if the assignee does not (c) indemnifying the landlord for the assignee’s failure to pay rent or to observe the other covenants (d) promising to take a new lease if the liability of the assignee is disclaimed on insolvency.

Answer 192

1. the superior freehold title 2. the leasehold title 3. any covenants or easements affecting the freehold (as these will also bind the leasehold) - the assignor's sol should always provide the assignee’s solicitor with a copy of the lease and any licence permitting assignment to the current and previous tenants

Answer 193

1. REGISTERED WITH ABSOLUTE TITLE: - the title to the lease is already guaranteed by the LR = no need to investigate the title to the freehold 2. REGISTERED WITH GOOD LEASEHOLD TITLE: - no guarantee to the soundness of the freehold title - the assignee will try to insist for the deduction of the freehold title (although not entitled under law to do so) - if the freehold is registered either party could make a search under the open register rules - if unregistered, same method for the deduction in freehold land NOTE - neither set of standard conditions require the assignor to deduce the freehold title, so this must be added as a special condition 3. ASSIGNOR'S LEASE IS UNREGISTERED: - where unregistered, the assignee is entitled to call for the lease and all assignments under which that lease has been held during the last 15 years, but not for evidence of the freehold title - Without deduction of the freehold title, unless the freehold is already registered with absolute title, the assignee will only obtain a good leasehold title on registration of the lease at the Land Registry following completion, which may be unacceptable to the assignee and/ or any lender

Answer 194

the assignee's sol should ask to see the: 1. insurance policy relating to the property 2. a copy of a receipt for the last payment of annual rent due under the lease - checking the assignor is not in breach of the lease; if there are any outstanding breaches the landlord will be able to enforce the breach against the assignee NOTE - where the lease has only a short period left unexpired, that the buyer may choose not to carry out some or all searches, as the risk does not justify the cost involved

Answer 195

- prepared by the assignee's solicitor a) assignment of a registered lease (irrespective of how long it has left to run) = TR1 b) assignment of unregistered lease: - a lease exceeding 7 years will trigger compulsory first registration, so TR1 is used - a lease for 7 years or less = deed of assignment (will not trigger first registration)

Answer 196

a) registered lease = OS1 - 30 days priority b) unregistered lease = - K15 land charges search - against the name of the assignor - checking no adverse entries have been made since the pre- exchange land charges search - priority period of 15 days c) same rules apply re company searches as do in freehold property

Answer 197

- assignor will usually have paid rent in advance - unless completion takes place on a day when the annual rent become due under the lease, it will be necessary for the instalment to be apportioned on completion, so that the assignee reimburses the assignor for the period from completion until the next rent day - may also be other outgoings for which the assignor wants to claim reimbursement e.g. insurance premium - the assignor should supply a completion statement which shows the amounts due and explains how they have been calculated - copies of the receipts or demands on which the apportionments are based should also be supplied with the completion statement, so that the assignee can check the apportioned sums

Answer 198

- if there is a premium to pay on the assigment (known as balance of the purchase price) - apportionment - any of the following relevant docs: (a) the lease (b) the transfer deed (TR1 or deed of assignment) (c) the licence to assign executed by the landlord (d) evidence of the freehold title in accordance with the contract (e) evidence of discharge of the assignee’s mortgage (f) copies of duplicate notices served by the assignor and its predecessors on the landlord in accordance with a covenant in the lease requiring the landlord to be notified of any dispositions (g) insurance policy (or copy if insurance is effected by the landlord) and receipt (or copy) relating to the last premium due (h) receipt for rent (and other outgoings for which the assignor wishes to claim reimbursement).

Answer 199

(a) money due in accordance with the completion statement (b) duly executed counterpart licence to assign (c) a release of deposit (only likely where the assignee is paying a premium)

Answer 200

1. SDLT/LTT - payable on the purchase price (if any), but not on the rent reserved by the lease 2. REGISTERED LEASE - the assignment must be registered at the LR within the priority period conferred by the OS1 3. UNREGISTERED LEASE - An unregistered lease which, at the date of the transfer to the assignee, still has over seven years of the term unexpired will need to be registered at the Land Registry within two months of the assignment or will be void in respect of the legal estate. - If the lease has seven years or less unexpired, it is incapable of registration with separate title.

Answer 201

landlord must be given notice of the assignment (this is a standard provision) the landlord should be asked to sign one copy of the notice as acknowledgement of receipt and return the receipted copy to the sender to be kept with the title deeds

Answer 202

- usually refusal on this ground alone may be considered unreasonable (unless absolute covenant)

Answer 203

references from: (a) a current landlord; (b) the assignee’s bank; (c) the assignee’s employer; (d) a professional person such as an accountant or solicitor; (e) a person or company with whom the assignee regularly trades; and (f) three years’ audited accounts in the case of a company or self- employed person or partnership.

Answer 204

- landlord wants property back - or new lease with higher rent - the landlord must indicate its proposals as to the terms of a new lease in the notice - if the landlord opposes the renewal of the tenancy, the s 25 notice must state the s 30 grounds - served between 6 and 12 months before the contractual expiry date - must state the date upon which the landlord wants the tenancy to end - cannot be earlier than the date the tenancy could have been terminated under the common law e.g. the date cannot be earlier than the expiry of a fixed term - but note it does not have to coincide with the exact date of when the fixed term expires in other words, you dont lose the ability to serve a s.25 notice if there isnt six months, the missing months just get added on

Answer 205

IF LANDLORD INDICATES IN S.25 NOTICE THEY DONT WANT TO RENEW THE LEASE: - tenant must apply to the court before the expiry of the s 25 notice, or they will lose their rights under the 1954 Act - the landlord can pre-empt the tenant’s application to court by applying for an order to terminate the lease on the grounds stated in its s 25 notice (but not if an application has already been made by the tenant asking for the lease to be renewed) IF LANDLORD INDICTES THEY WILL NOT OPPOSE THE GRANT OF A NEW LEASE: - parties will enter into negotiations for the grant of a new lease - the tenant should still apply to court within the time limit to safeguard their position - this time limit can be extended by agreement between the parties, eg where they are near to agreement on the terms of a new lease and wish to avoid the expense of court proceedings - app is usually made to the county court

Answer 206

- if a protected tenant wants to remain in the property: 1. do nothing 2. serve s.26 request - brings the current tenancy to an end and constitutes a request for a new tenancy - s 26 request must contain: i) the date on which the tenant wants the new lease to begin ii) must contain all the tenant's proposals for a new tenancy - give LL 6 and 12 months’ notice of the date they want the new tenancy to start - date of new tenancy cannot be earlier than the end of the current one

Answer 207

- if the landlord wishes to oppose the grant of a new tenancy, it must serve a COUNTER-NOTICE on the tenant - WITHIN 2 MONTHS of the service of the tenant’s s 26 request stating the s 30 ground(s) of opposition - the application must be made prior to the commencement date of the new tenancy specified in the tenant’s s 26 request, unless the landlord agrees an extension of this time limit - the landlord can pre- empt the tenant’s application to court by applying for an order to terminate the lease on the grounds stated in its counter- notice (but not if an application has already been made by the tenant asking for the lease to be renewed)

Answer 208

(a) Tenant’s failure to REPAIR (b) Tenant’s PERSISTENT delay in paying RENT (c) Tenant’s SUBSTANTIAL breach of OTHER obligations (d) Landlord has offered ALTERNATIVE ACCOMODATION (which must be suitable to the tenant’s needs and on reasonable terms) (e) Tenancy is an underletting of PART (rarely used) (f) Landlord intends to DEMOLISH OR RECONSTRUCT and could not reasonably do so without obtaining possession (g) Landlord intends to occupy the holding for its OWN BUSINESS OR AS RESIDENCE

Answer 209

(a) (b) (c) and (e) = discretionary so the court will decide whether or not to grant the tenant a new lease - note it is not sufficient for the landlord just to ESTABLISH THE GROUND, it ALSO has to show that the tenant OUGHT NOT TO BE GRANTED A NEW TENANCY in view of the facts giving rise to the ground - opposition applications to the court are expensive based on the above

Answer 210

(d) (f) and (g) landlord simply has to prove that it has offered alternative accommodation or intends to occupy itself

Answer 211

Ground (f) = landlord intends to demolish or reconstruct and could not reasonably do so without obtaining possession the landlord must show on the termination of the tenancy: i) it has a FIRM AND SETTLED INTENTION to carry out the relevant work (eg that it has obtained the necessary planning permission and the financial arrangements are in place); and ii) it intends to DEMOLISH OR RECONSTRUCT the premises (or a substantial part of them), or to CARRY OUT SUBSTANTIAL WORKS of construction on the holding or a part of it; and iii) it CANNOT reasonably carry out the work WITHOUT OBTAINING POSSESSION

Answer 212

ground (g) = landlord intends to occupy the holding for its own business or as a residence - LL must have owned their interest for at least 5 YEARS before the ending of the current tenancy - LL must have a FIRM AND SETTLED INTENTION - must demonstrate at the date of the court hearing that it has considered and taken PRACTICAL STEPS TO OCCUPY the property - must also have a REASONABLE PROSPECT of achieving its intention, although it does not have to show that its business will be a success in that location

Answer 213

- usually decided between parties - if not > court decides - likely the new terms will be v. similar to old - court considers old lease + relevant circumstances 1. tenant entitled to tenancy of 'holding' i.e. property comprised IN THE CURRENT TENANCY, but EXCLUDING any part not occupied by the tenant (those parts which the tenant has UNDERLET) 2. landlord entitled to tenancy of WHOLE of the originally demised property (including the parts the tenant has underletted) 3. DURATION must be REASONABLE BUT CANNOT EXCEED 15 YRS 4. the term of the new lease will NOT COMMENCED UNTIL 3 MONTHS AFTER the proceedings are ‘finally disposed of’ (ie when the time limit for appeal has elapsed, so four weeks after the order) - the new lease will thus commence three months and four weeks after the order 5. the rent is OPEN MARKET

Answer 214

-TENANT can APPLY for the order to be REVOKED - LANDLORD has no such right; if it is unhappy with the terms of the new lease, the only remedy is to APPEAL

Answer 215

- not be granted a new lease - but will be awarded compensation - amount of compensation will be equivalent to the RATEABLE VALUE OF THE HOLDING - if the tenant and their predecessors in the same business have been in occupation for AT LEAST 14 years, when it will be TWICE THE RATEABLE VALUE - any AGREEMENT restricting or EXCLUDING the payment of compensation is VOID if the tenant or their predecessors in the same business have been in OCCUPATION FOR 5 YRS OR MORE

Answer 216

- a protected tenant who wants to terminate the lease ON the contractual expiry date may do so by : i) CEASING TO OCCUPY for business purposes by the end of the lease or ii) serving a s 27 notice giving the landlord 3 MONTHS PRIOR WRITTEN NOTICE - a protected tenant who wants to terminate the lease AFTER the contractual expiry date can do so by: i) serving a s 27 notice giving the landlord 3 MONTHS NOTICE or ii) AGREEING A VOLUNTARY SURRENDER of the lease with the landlord

Answer 217

the correct answer is b a is wrong because continuation under the Landlord and Tenant Act 1954 will only apply once the contractual term of the lease has expired. b is correct because the lease has merged with the landlord’s reversionary interest in the property.

Answer 218

i) 'any effect on rent of the fact that the tenant has been in OCCUPATION of the property' - prevent the tenant from being unfairly penalized or benefiting from their ongoing presence (e.g., avoiding relocation costs). ii) 'any GOODWILL attached to the property by reason of any business carried out there by the tenant' e.g. regular flow of customers or good reputation iii) 'any effect on the rent attributable to any PHYSICAL IMPROVEMENT to the property carried out by the tenant with all necessary consents and not pursuant to an obligation to the landlord' - ensures that the rent isn't artificially inflated or reduced based on the tenant’s contributions to the property’s value.

Answer 219

B is the correct answer - the tenant will make an interim (apportioned) payment on the lease commencement date to take it through to the first Rent Day after the lease commences. Then a full quarterly rent payment will become due on the first Rent Day after the lease commences.

Answer 220

option B is the correct answer. The landlord’s consent DOES NOT HAVE TO BE OBTAINED PRIOR to the EXCHANGE OF CONTRACTS (although it would be preferable commercially if it had been). The landlord’s consent must be obtained in order for the assignment to proceed to completion and the landlord can withhold consent if it is reasonable to do so. The SCPC provide for COMPLETION TO BE POSTPONED until five working days after the seller notifies the buyer of the landlord’s consent or if a court declares the consent has been unreasonably withheld.

Answer 221

Option E is correct. A periodic tenancy can be brought to an end by either party serving notice to quit. The general rule is that one full period’s notice is required. In this case, each period lasts a quarter (ie 3 months). If notice to quit is served on 10 January, the earliest date on which the lease will come to an end is 23 June, being the end of the next clear period (25 March to 23 June). Option A is wrong. We are told that the company is not in breach of any leasehold covenants. There is therefore no basis for the landlord to forfeit the lease and immediately re-enter the premises. Option B is wrong. Disclaimer arises upon the liquidation of a tenant, the liquidator having the power to disclaim contracts which give rise to a liability to pay money or perform any onerous act. There is no ground on the facts for the landlord to disclaim the lease. Option C is wrong. The Protection from Eviction Act 1977 provides that landlords must give tenants at least 4 weeks’ notice before seeking possession of premises. However, the Act relates to premises let as dwelling houses where the tenant is in occupation, neither of which is the case here. In any event, the landlord in this case must give the tenant more than 4 weeks’ notice – the periods of the lease run on a quarterly basis, requiring the landlord to give the company at least 3 months’ notice. Option D is wrong. The landlord must give the company at least one full period’s notice. We are already in the period that is due to expire on 24 March. The lease cannot therefore be brought to an end on that date as that will not give the company a full period’s notice.

Answer 222

Yes, it would be reasonable for the rent review clause to assume that the tenant has fully complied with its repair obligations, otherwise the tenant could benefit from a reduced rent as a result of its own failure to repair the property.

Answer 223

- UK = within 10 years of breach - 4 years if... a) breaches involving operational development (such as building works) OR b) changing the use of a building to use as a single dwelling house that took place before 25 April 2024 WALES: - breaches involving operational development (such as building works) or changing the use of a building to use as a single dwelling house = 4 years - all other breaches = 10 years

Answer 224

FULL TITLE - covenanting that land is disposed free from incumbrances other than those the seller does not know about and could not reasonably know about - this is a wider covenant than provided w. limited title LIMITED TITLE - seller has not incumbered the property and is not aware that anyone else has done so since the last disposition for value - (so a seller who purchased the land for value will only be covenanting that incumbrances have not been created since they acquired the property)

Answer 225

full title = entire legal and equitable title to the property limited title = seller has limited knowledge of the property, eg where the seller is an executor or trustee no title guarantee = eg where the seller is a person appointed following the insolvency of the owner

Answer 226

full title - so if selling with limited or no title > need to amend the standard conditions

Answer 227

Where there are two policies in place on the same property, there is a danger that when a claim is made, the buyer’s insurer will reduce the proceeds because another policy exists. Standard conditions therefore provide that if this happens and the buyer is unable to recover the full amount of the proceeds, the purchase price is reduced accordingly.

Answer 228

- where the assignor sells with full or limited title, the covenants for title include a promise that the assignor has complied with the tenant's covenants in the lease (including repair) - however, the principle of caveat emptor makes it the assignee's responsibility to check the physical state of the premises - solution = modify the covenants to exclude references to repair - this is covered by both standard conditions - BUT there must also be an express modification pf the implied covenants for title IN THE TRANSFER DEED ITSELF - amend to something like "the covenants set out in s.4 LP(MP)A will not extend to any breach of the tenant's covenants relating to the physical state of the property"

Answer 229

classes of title: - LRs confidence in establishing ownership at registration - each class indicates the degree of certainty or completeness regarding the ownership of the land - absolute, qualified + possessory title guarantees: - assurance provided by the seller regarding their right to sell and the property's title - full, limited, no

Answer 230

Option B is the correct answer. A post 1925 restrictive covenant will bind in unregistered land if it is registered against the relevant estate owner as a land charge (in this case Colin Bligh). The solicitor should be concerned as no land charges search has been carried out against Coin Bligh. If the restrictive covenant is registered against Colin Bligh’s name it will bind. Option A is incorrect because the covenant would be registered as a land charge against the party who originally gave the covenant- Colin Bligh.

Answer 231

Option B is correct. The disregards all favour the tenant. This is because: If the effect of the tenant being in occupation was not disregarded it would increase the rent as a tenant would pay a higher rent to stay where they are, rather than have to move. If the effect of any goodwill was not disregarded this would increase the rent as a tenant would pay an increased rent to benefit from the goodwill attached to the premises. If the tenant’s improvements were not disregarded, the tenant would be paying an increased rent as a result of improvements they had paid for and would effectively be penalised financially for improving the property. The assumption that the tenant’s covenants have been complied with favours the landlord because if the tenant’s covenants have not been complied with and for example the property was in a state of disrepair, this would decrease the rent and the tenant would benefit from its non-compliance.

Answer 232

Option B is correct. On the facts, the two grounds that are potentially available to the landlord are (b) and (g). Ground (b) is discretionary and ground (g) is mandatory. Ground (b) is available where there has been a persistent failure by the tenant to pay rent. The tenant has only missed one rent payment and so it is unlikely that the landlord could rely upon it. Options B, D and E are, therefore, not the best advice. Option B is also misconceived as it would not be better to rely on a discretionary ground where a mandatory ground is available. Option D is correct that ground (b) is a non-compensatory ground and this might have been a reason for choosing it had it been available. Ground (g) is available where, at the termination of the lease, the landlord intends to occupy the premises as its business or residence. This is not available if the landlord acquired its interest in the property within five years of the ending of the current tenancy. This will be the termination date specified in the s 25 notice. Although the landlord has not yet owned its interest in the property for five years on the date of service of the s 25 notice, it will have done so by the termination date specified in the s 25 notice and so will not be barred from relying on ground (g). Option A is therefore wrong.

Answer 233

Option A is correct. The buyer will have an express right to use the driveway but will be required to contribute towards the maintenance of the driveway if it wants to exercise the right in accordance with the rule in Halsall v Brizell. The rule in Halsall v Brizell circumvents the general position that a positive covenant is not binding on successors in title. The right of way has been registered against the title therefore the buyer will automatically benefit from the right upon purchase of the property. The right of way has been registered therefore it is an express right.

Answer 234

Option B is correct as there is a risk that there could be a chancel liability in these circumstances as the last disposition was prior to 13 October 2013 (when chancel repair liabilities lost their overriding status). The client could still be bound if an application to protect chancel repair liabilities was made after the client has completed their title investigation but prior to registration of his transfer, so the solicitor might still undertake a chancel repair screening search to check for liability.

Answer 235

just estate owners - unless there is some indication the lender had possession of the property at some point

Answer 236

The tenant will have to pay SDLT on the VAT-inclusive amounts of the rent and the premium. On the grant of a lease, SDLT is potentially payable both on any premium charged by the landlord and the rent reserved by the lease. Where VAT is chargeable (because the landlord has opted to tax the property before the grant of the lease), SDLT is charged on the VAT-inclusive amounts. SDLT will be charged on the rent (which is open market so more than nominal) and the premium as the VAT-inclusive amount of the premium is £180,000 (£150,000 + £30,000 VAT). The applicable rate for consideration exceeding £150,000 is 2%.

Answer 237

true - and the standard conditions entitle the assignor to insert an indemnity in such circumstances

Answer 238

CON29 - standard enquiries - planning permissions - Article 4 directions - whether the land has been designated as contaminated - liability for road repair CON29O - optional enquiries - wide range of searches - environmental + pollution notices - rights over common land

Answer 239

- CON29 + CON29O only search in respect of the property - not the adjoining land - so would need to check for any proposed developments on the adjoining land

Answer 240

- they are enquiries with local authorities - just give different results

Answer 241

- certainty > sols physically receive the contract - sols don't usually have the time > could send agent > additional cost

Answer 242

- title plan = depicts the boundaries of the property - title copy = reproduces the register of title

Answer 243

GRANTING A LEASE: - SC provide for deduction of freehold title if > 7 years - underleases > headlease is unregistered > entitled to call for headlease + subsequent assignments within last 15 years ASSIGNMENT: - entitled to call for lease + any assignments within last 15 years - not entitled to call for deduction of freehold title

Answer 244

- undertenant enters into direct covenant with head landlord to perform the covenants in both the lease + underlease (only to extent they relate to underlet property) - excludes headlease covenants to pay rent (otherwise there would be double rent) - this direct covenant creates contractual relationship between head landlord + sub tenant > can sue for any breaches (other than for non-payment of rent > rent will be paid by sub tenant to head-tenant)

Answer 245

1. landlord's consent 2. direct covenant from sub-tenant to head landlord 3. head-tenant pays head landlord's costs for licence

Answer 246

- LSU + CLL - residential > Law Society and UK Finance - com prop > City of London Law Society

Answer 247

1. 'by willing landlord to a willing tenant' - without them the hypothetical letting would not take place at all 2. 'with vacant possession' - the hypothetical tenant wouldn't make an offer unless the property was empty 3. 'on the terms of this lease other than as to the amount of annual rent, but including the provisions for review of annual rent' - provisions of hypothetical lease = same as real lease - except rent (which is likely to change) - would not be fair for the hypothetical lease to have more generous terms as this would artificially increase the rent 4.'for a term of X years' - the lease should specify the term of the hypothetical lease - difficult > may be effected by market conditions e.g if there is a recession > tenants want greater flexibility + thus shorter terms > so a 15 year hypothetical lease would depress the rent term - potential solution: term equal to the unexpired residue of the actual term 5. 'on the assumption that the tenant has fully complied with their obligations in this lease' - tenant should not profit from its failure to repair the property 6. 'on the assumption that if the property has been destroyed or damaged, it has been fully restored' - if property damaged a week before rent review > wouldnt be fair to review rent on the state of the property when the LL wouldnt have had chance to reinstate

Answer 248

OLD LEASE: - liability lasts for the duration of the lease - original tenant bound by privity of contract - current tenant bound by privity of estate - may even sue intervening tenants > common for LL to require direct covenant on each assignment NEW LEASE: - liability only lasts whilst lease is vested in T (so released from liability on assignment) - to compensate for this the LL is able to stipulate requirement of consent + AGA: i) tenant bound whilst there are an assignee ii) will be bound following assignment if AGA iii) AGA only binds them whist the new assignee remains tenant

Answer 249

1. action in debt 2. CRAR 3. pursing guarantors 4. pursuing former tenants 5. deducting from the rent deposit 6. forfeiture

Answer 250

1. action for damages (against current + former tenants + their guarantors) 2. specific performance 3. self-help clause 4. forfeiture

Answer 251

1. action in DAMAGES (against current + former tenants + their respective guarantors) 2. INJUNCTION - equitable + discretionary - for breach of user covenant - to prevent assignment 3. SPECIFIC PERFORMANCE - equitable + discretionary - positive obligation - performance sufficiently precedes - supervision over a period of time not required - damages not adequate remedy 4. FORFEITURE 5. DEDUCTION FROM RDD - provided RDD provides for deductions in such circumstances

Answer 252

forfeiture

Answer 253

- non payment of rent = debt - can be recovered through HC or CC - Limitation Act > 6 years

Answer 254

- commercial rent arrears recovery - 7 days rent must be outstanding - only for rent for possession of property (not insurance rent) - enforcement agency enters property (on behalf of LL) + seizes goods - must give 7 days notice of intention to enter - items up to £1350 necessary for tenant's business cannot be removed - can take property tenant has an interest in e.g. co-owned or mortgage - cant take leased or hire purchase property - if tenant doesnt pay the arrears > sell - sold at public auction - tenant given 7 clears days' notice of sale

Answer 255

- LL will have required guarantor if reservations about Ts financial stability - e.g. newly formed PLC or unknown new co. - guarantee must be in writing - the guarantee will: 1) oblige the guarantor to pay the rent + any other sums due 2) to remedy or indemnify the LL against any loss suffered as a result of the breach

Answer 256

OLD LEASE: - liability of a guarantor likely to extend throughout assignments NEW LEASE: - liability of guarantor released on assignment - cant ask outgoing tenant's guarantor to guarantee new tenant - any attempt to do so = likely to be void - but LL may require the guarantor of the outgoing tenant to guarantee the outgoing tenant's obligation under the AGA - this indirectly guarantees the incoming tenant until further assignment both need to serve s.17 notice

Answer 257

OLD LEASE: - if the former tenant is the original tenant > privity of contract - likely that each subsequent tenant will have given direct covenant to the landlord to observe the covenants in the lease NEW LEASE: - previous tenant under the AGA both need to serve s.17 notice

Answer 258

- comply with s.17 LT(C)A 1995 - serve default notice ('s.17 notice') - stating they intend to recover a 'fixed charge' - must be served within 6 months of the current tenant's breach - LL does not have to start proceedings > the notice is simply giving notice of the claim - applies to old + new leases

Answer 259

- if they pay the sum claimed under the default notice - they can then call for an 'overriding lease' - makes the former tenant/former tenant's guarantor the immediate landlord of the defaulting tenant

Answer 260

- LL can require rent deposit as security payment - generally 6-12 months rent - the circumstances which entitle the LL to withdraw money from it or repay some of it = set out in rent deposit deed (RDD) - provided no breach of RDD by LL > LL can immediately withdrawn upon breach from T - the RDD will often require the T to then top up the RD - the RD balance returned to the T at end of term or on assignment

Answer 261

forfeiture

Answer 262

- must be a forfeiture clause in the lease - may be called something else 'provisos' + 're-entry' - common law requires a formal demand for payment to be made - but a lease can dispense with this requirement - often the clause will say how long the rent must have been outstanding for - LL has two options for obtaining possession: 1) peaceable re-entry, or if this is not possible... 2) court order - T can apply to court for relief from forfeiture - court has discretion to allow the lease to continue (subject to condition that T pays all arrears + costs) - LL may waive right to forfeit by demonstrating intention to continue L&T relationship - so LL should not demand or accept rent after breach has arisen

Answer 263

- equitable remedy - forces the tenant to comply with the positive covenant - only granted where other remedies not appropriate

Answer 264

- breach of contract - what losses were in the contemplation of the parties? - s.18 LTA 1927 > can only claim for the amount the LLs reversion has diminished in value (this may be less than the cost of the repairs) - leases granted for 7 or more years w. more than 3 left to run > special procedure: i) notice must be served on T ii) T has right to serve counter notice within 28 days iii) if T does so, LL cannot continue with the claim without leave of the court

Answer 265

- must have clause in the lease - allows to recover for cost of repairs as a debt + not as damages (avoid s.18 limitations) - LL allowed to enter property to check compliance with repair covenant - if breached > LL serves notice specifying works needed to remedy - if T fails to start work or is not proceeding diligently > LL enter + carry out works themselves

Answer 266

- follow stat procedure > s.146 LPA 1925 1. service 146 notice - specifies breach - requires breach to be rectified within r. time - require T to pay compensation for breach 2. if no compliance > LL enter via: - peaceable re-entry - court order - T can apply for relief from court 3. where lease is for 7yrs or more + at least 3 years left: - s.146 notice must include notification of T's right to serve counter-notice within 28 days - if T serves counter-notice > can only proceed with forfeiture with leave of court

Answer 267

- similarities include: a) need forfeiture clause in lease b) peaceable re-entry or court order c) T can apply for relief > can only continue with leave of the court - differences re notice requirements: 1) RENT - default notice > can dispense with this requirement in the lease 2) REPAIR - s.146 notice - where 7yr lease + at least 3 left to run > must include Ts ability to file counter notice within 28 days 3) OTHER COVENANTS - s.146 notice - no need to include right to serve counter notice

Answer 268

- surrender - deed could deal with arrears - might be attractive to the T as a way of terminating its obligations - potentially quicker + cheaper than forfeiture - dependent on both parties being willing

Answer 269

LL: 1. quiet enjoyment 2. insurance T: 1. rent 2. contribution to insurance 3. repair 4. alterations 5. alienatio

Answer 270

QUIET ENJOYMENT - not substantially interfered with by acts of LL - res T further protected by: Protection from Eviction Act - prevents LL unlawfully depriving T of their occupation - any acts done with the intent to force the T to give up their occupation = offence FITNESS OF THE PROPERTY - res. property > s.11 LTA obliges LL to keep in repair: a) structure + exterior b) installations for supply of water, gas, electricity, sanitation + heating - only obliged if there is disrepair + they have been notified of this

Answer 271

- includes positive + restrictive covenants - e.g. to pay rent or to use the property in a certain way (i) a ‘touching and concerning’ covenant must benefit only the dominant owner for the time being, so that, if separated from their land, it ceases to be advantageous to them [the land benefits not the owner] (ii) the covenant must affect the nature, quality, mode of user or value of the land of the dominant owner; and (iii) the covenant must not be expressed to be personal (ie must not have been given only to one specific dominant owner). - new lease > all covenants pass regardless of whether they are 'real' - only ones that dont > those expressed to be personal

Answer 272

1. principle in Moule v Garrett - where one person discharges the liability of another, that person may seek to recover the amount they have paid from the person whose liability they have discharged 2. on the basis of an express indemnity covenant given by the assignee - contained in the deed of assignment - note for old leases an indemnity covenant is implied on every assignment

Answer 273

- acquires burden of LL covenants + benefits of T covenants (provided the covenants were not expressed to be personal) - outgoing LL is not automatically released on sale - have to follow stat criteria - get around this by stating in lease that LL only responsible whilst they hold the reversion - otherwise T can pursue current LL and previous

Answer 274

- court may grant relief on terms it sees fit - if asking for relief > must come with clean hands SUB-TENANT - if head lease is forfeited > sub-lease ceases to exist - sub T can apply for relief from forfeiture of head lease (even where T cannot obtain relief) - court would vest the head lease in the sub-lessee on such terms as the court sees fit (ie sub-lessee becomes the only tenant)

Answer 275

1. SPECIFIC PERFORMANCE - equitable + discretionary 2. DAMAGES - ordinary contractual principles apply 3. SELF HELP / JERVIS v HARRIS - doesn't entitle T to withhold rent - may notify LL repair needs doing + if LL fails to do so > T can complete - if T then completes > can withhold rent until cost of repair has been repaid (common law set off) - if T does withhold rent + LL sues > equity may allow tenant to have their sum set off against the liability - only where the two claims are sufficiently connected that it would be manifestly unjust not to allow set off NOTE: most well drafted leases will exclude set off

Answer 276

- bankruptcy (B) or liquidation (L) of a tenant - trustee in B or L can disclaim contracts which give rise to a liability to pay money or perform an onerous act - releases tenant from liability - does not end sub-tenancy - a sub-tenant may seek an order to vest the disclaimed property in themselves

Answer 277

1. if lease contains alienation covenant that requires LLs consent 2. it is reasonable to do so 3. comm. lease > if it is a requirement of the LLs consent

Answer 278

- rent deposit deed - legal document outlining the terms of a rent deposit - T provides a sum of money to the LL as security for the performance of their lease obligations - gives LL some financial security

Property Practice Flashcards

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