APC S2 2025 > L&T > Flashcards

L&T Flashcards

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1
Q

TIP: When answering any questions on rent reviews, always state:

A

That you would read the rent review clause in the lease.

This clause outlines the specific terms and conditions regarding how the rent may be reviewed.

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2
Q

TIP: When answering any questions on lease renewals, always state:

A

That you would check whether the lease is granted inside or outside the Landlord and Tenant Act 1954 by reading the lease.

This determines the rights and obligations of both landlord and tenant during lease renewal.

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3
Q

What are the contents of a rent review memorandum?

A

1.) Name of landlord and tenant

2.) Address of the property

3.) Date of the lease and rent review

4.)Confirmation of new rent agreed

5.) Signed and dated by both parties

6.) It can also include:

It can be recorded by an independent expert’s determination, arbitration award or written acceptance of the Calderbank offer or an open letter (not marked subject to contract).

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4
Q

What does Section 24 of the LTA 1954 Act cover?

A
  1. For tenancies inside the Act, when the fixed term ends, the tenancy doesn’t automatically terminate if the tenant remains in occupation for business purposes—it automatically continues on the same terms until it is terminated in accordance with the Act.
    1. This is known as a continuation tenancy, and the tenant is said to be holding over under the expired lease.

Note: Section 24 only applies if the lease has not been contracted out of the Act (i.e is inside the Act)

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5
Q

What does Section 25 of the Act require for a landlord’s notice?

A
  • Notice must be served not more than 12 months and not less than 6 months before termination
  • State the date for termination
  • Be in the prescribed form

The notice must inform the tenant of their rights regarding the lease.

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6
Q

What must a landlord include in a non-hostile notice?

A

The proposed terms of the new lease, including the new rent

This indicates the landlord’s willingness to grant a new lease.

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7
Q

What happens if a tenant misses the deadline specified in a Section 25 or Section 26 notice?

A

The tenant loses their security of tenure unless certain conditions are met

Conditions include having a new lease in place, applying to court, or agreeing in writing to extend the deadline.

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8
Q

What is the maximum term that can be granted by the County Court?

A

15 years

Parties can agree to a longer term if they choose.

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9
Q

Fill in the blank: A tenant whose protected lease has expired but they have not vacated is said to be _______.

A

holding over

This term describes a tenant’s situation under an expired lease.

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10
Q

True or False: A landlord’s notice can be served before the contractual expiry date specified in the lease.

A

False

The notice must specify a termination date that cannot be before the contractual expiry date.

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11
Q

Does Section 25 apply to all business tenancies?

A

No, Section 25 only applies to tenancies that are inside the Act (i.e. not contracted out of the Landlord and Tenant Act 1954).

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12
Q

What does Section 25 allow a landlord to do?

A

It allows a landlord to end or propose a renewal of a protected business tenancy by serving a formal notice.

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13
Q

What are the time limits for serving the notice under Section 25?

A

The notice must be served not less than 6 months and not more than 12 months before the termination date, which cannot be before the lease’s contractual expiry date.

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14
Q

Who must give the notice and to whom under Section 25?

A

The notice must be given by a competent landlord to the tenant.

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15
Q

What form must the notice take under Section 25?

A

The notice must be in the prescribed form and must inform the tenant of their rights.

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16
Q

What are the types of notice under Section 25?

A

• Non-hostile notice: Landlord proposes a new lease (must include proposed terms and new rent).
• Hostile notice: Landlord opposes renewal (must state grounds for opposition).

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17
Q

Can the parties extend deadlines under Section 25?

A

Yes, the parties can agree to extend time limits by mutual agreement.

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18
Q

What is the maximum lease term the court can grant under Section 25?

A

The County Court can grant a lease for up to 15 years, but the parties can agree to a longer term.

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19
Q

What happens if negotiations pass the notice deadline under Section 25?

A

The tenant loses their security of tenure unless:
1. A new lease is in place,
2. Either party has applied to court, or
3. Both parties agree in writing to extend the deadline to apply to court.

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20
Q

Section 25 - What must the landlord or tenant do if they cannot agree on renewal terms?

A

1.) If the landlord wants to oppose renewal, they must serve a hostile Section 25 notice stating valid grounds of opposition and, if needed, apply to court for possession.

•	If the **tenant wants to renew** and the landlord served a Section 25 notice (hostile or non-hostile), the tenant must **apply to the County Court before the termination date** in the notice to preserve their right to a new lease.

•	If no agreement is reached and no court application is made by the deadline, the tenant loses security of tenure.
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21
Q

Section 25 – What does it cover in general terms?

A

Section 25 of the Landlord and Tenant Act 1954 allows a landlord of a protected business tenancy to serve notice either to end the tenancy or to propose a new lease.

It sets out the procedural rules, including notice periods, required content, and how the tenant can respond—leading to either lease renewal or termination through the court if no agreement is reached.

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22
Q

What’s the difference between Section 25 and Section 26 of the Landlord and Tenant Act 1954?

A

Section 25 (Landlord’s Notice):
• Used by the landlord to end or propose renewal of a tenancy.
• Must be served 6–12 months before the termination date (not before contractual expiry).
• Can be hostile (oppose renewal) or non-hostile (offer new lease).
• Tenant must apply to court before the date in the notice to protect renewal rights.

Section 26 (Tenant’s Request):
• Used by the tenant to request a new lease.
• Also served 6–12 months before the proposed start date of the new lease.
• Landlord must respond within 2 months if opposing, stating grounds.
• Tenant must apply to court before the proposed start date to preserve rights.

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23
Q

What basic information must be included in a Section 25 notice?

A

Name and address of the landlord and tenant, and address of the property.

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24
Q

What must the Section 25 notice state regarding the tenancy end?

A

The date to end the tenancy and whether it is a ‘hostile’ or ‘friendly’ notice.

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25
What confirmation must be given about the lease in a Section 25 notice?
Whether a new lease is to be opposed or granted.
26
What must the Section 25 notice include regarding court action by the tenant?
The date by which the tenant must ask the court for a new tenancy.
27
What must a ‘friendly’ Section 25 notice include?
The landlord’s proposals for a new tenancy, including proposed rent.
28
What must a ‘hostile’ Section 25 notice include?
The grounds for opposition, which cannot be amended later.
29
What is strongly recommended in a Section 25 notice?
To seek professional advice.
30
Who serves a Section 26 notice?
The tenant.
31
What must the Section 26 notice request?
A new tenancy beginning in not less than 6 months and not more than 12 months.
32
Can the new tenancy start before the contractual expiry date in Section 26?
No, it cannot be before the contractual expiry date.
33
What must be included in the Section 26 notice?
It must be in the prescribed form and include the tenant's proposals (e.g. rent).
34
What happens if the landlord opposes the Section 26 notice?
A counter-notice must be served within 2 months.
35
What are the tenant’s two options if they don’t want the lease to continue beyond the fixed term?
Vacate at the lease expiry or serve a S.27(1) notice at least 3 months before.
36
Is a tenant required to notify the landlord if vacating at lease end?
No, there is no obligation to inform the landlord under S.27(1).
37
What is required if a tenant vacates after holding over post-expiry?
A S.27(2) notice must be served with at least 3 months’ notice.
38
What should be checked to ensure notice validity?
The notice must be valid, in prescribed form, and properly served under the Act.
39
When does a tenant need to serve a Section 27 notice?
If the tenant vacates before or on the contractual expiry date, no notice is required. If vacating after the expiry date (i.e. holding over), the tenant must serve a Section 27(2) notice giving at least 3 months' notice.
40
How many grounds for opposition are there under Section 30 of the 1954 Act?
Seven grounds.
41
What are the 'fault-based' grounds under Section 30 for refusing a new lease?
a) Breach of repairing covenant, b) Persistent delay in paying rent, c) Other substantial breach.
42
What are the 'non-fault' grounds under Section 30 for refusing a new lease?
d) Provide suitable alternative accommodation, e) Uneconomic subdivision, f) Demolition or reconstruction, g) Owner occupation.
43
Which Section 30 grounds are discretionary and decided by the Court?
Grounds a) to e).
44
Which Section 30 grounds are mandatory and cannot be overridden by the Court?
Grounds f) and g).
45
What must a landlord prove for redevelopment under Section 30, ground f)?
Firm intention, funding, planning, substantial work, necessity, and ability to secure vacant possession.
46
What must a landlord prove for owner occupation under Section 30, ground g)?
Ownership of the property for five years and intention to occupy and/or run a business.
47
What should you consider when deciding when to serve a notice?
The market context (rising or falling) and whether you’re acting for a landlord or tenant.
48
How can you tell if a lease is excluded from the 1954 Act?
It will state explicitly in the lease; if silent, the lease is protected under the Act.
49
**CASES:** Dukeminster Ltd v West End Investments (2018)
• Concerned workings of the **Landlord and Tenant Act 1954** • Defective **Section 25** notice: lease term, break clause, rent • Court rejected tenant’s evidence as “**impressionism close to pure guesswork**” • **Landlord’s valuer’s** approach preferred • Highlights the importance of **credibility and expert witnesses**
50
**CASES:** S. Frances Ltd v Cavendish Hotel (2018)
• Concerned landlord’s opposition on **redevelopment grounds** – **Section 30(1)(f)** • Decided in the **Supreme Court** – highly persuasive precedent • Court said landlord would have done same works whether or not tenant left • Underscored importance of **genuine redevelopment intention**
51
**CASES:** Poundland Ltd v Toplain Ltd (2021)
• Tenant sought a **pandemic clause** in lease renewal • Based on **O’May principles**, judgment favoured **landlord** • **No pandemic clause** was awarded
52
**CASES:** HPUT Trustee No1 & No2 Ltd v Boots UK Ltd (2021)
• Concerned **lease duration**, **tenant break**, **rent review**, and valuation • Controversy over **rent-free periods** (Zone A, quantum, width/depth) • Court allowed **rent-free period** despite lease renewal • Shows that **County Court decisions** can conflict and are not binding
53
**CASES:** Old Street Retail Trustee v GB Healthcare (2022)
• Addressed rent at lease renewal vs **hypothetical tenant** rent • Contradicted HPUT v Boots: said **rent-free incentives** should be deducted • 3 months fit-out + 3 months incentive = 6 months total rent-free • Conflict in **County Court rulings**, so still **legally unsettled**
54
55
**CASES:** Clipper Logistics plc v Scottish Equitable plc (2022)
• Concerned **lease length**, **alteration clause**, and **energy regulations** • Emphasised importance of **expert evidence** • Judge criticised expert witness for **lack of impartiality**
56
**CASES:** Gill v Lees News Ltd (2023)
• Landmark **Court of Appeal** case on **Section 30** grounds • Landlord’s appeal dismissed: tenant to be **granted new lease** • Despite **breach of covenant**, Court ruled in tenant’s favour • Significance: Not all breaches justify refusal of a new lease
57
**CASES:** Sainsbury’s Supermarkets Ltd v Medley Assets Ltd (2024)
• Concerned opposition under **Section 30(1)(f)** – redevelopment • Landlord lacked **genuine intention** to carry out works • Works were conceived **after service** of **Section 25** notice • No **realistic access** for machinery = opposition failed
58
**COMPENSATION:** What are the 7 grounds a landlord can use to oppose lease renewal under Section 30 of the LTA 1954?
• (a) Breach of repairing covenant • (b) Persistent delay in paying rent • (c) Other substantial breach of obligations • (d) Suitable alternative accommodation available • (e) Uneconomic subdivision of property • (f) Intention to demolish or reconstruct • (g) Intention to occupy the premises personally
59
**COMPENSATION:** When is compensation payable to a tenant if lease renewal is refused?
• Only where landlord relies on grounds **(e)**, **(f)** or **(g)** • **No compensation** is due if refusal is based on grounds **(a)** to **(d)**
60
**COMPENSATION:** How much compensation is a tenant entitled to when applicable?
• **14+ years** of occupation = **Rateable Value x2** • **Less than 14 years** = **Rateable Value x1**
61
**COMPENSATION:** What date is used to assess the Rateable Value for compensation?
• The **RV in force** at the date of a **hostile Section 25 or Section 26 counter-notice**
62
**COMPENSATION:** Does the tenant need to be in the property to qualify for compensation?
• Yes – the tenant **must be in occupation** at the **end of the tenancy** • If they vacate too early, the right to compensation **may be lost**
63
**COMPENSATION:** Can a tenant receive compensation for improvements made?
• Possibly – under **Part 1 of the Landlord and Tenant Act 1927** • Requires many **strict pre-conditions**, so is **rarely claimed in practice**
64
**NEW LEASE:** What sections of the LTA 1954 govern terms of a new lease?
**Sections 32–35** govern the terms of a new lease.
65
**NEW LEASE:** What is the default lease length post-2004 under the Regulatory Reform Order?
A **15-year maximum term** may be granted by the court, but parties are free to agree to a longer term.
66
**NEW LEASE:** What must the rent be under a new lease?
It must be a **market rent**, disregarding occupation, goodwill, and improvements made with landlord's consent within the last 21 years.
67
**NEW LEASE:** What did O'May v City of London (1982) establish?
• Changes to lease terms must be **fair and reasonable** • Burden is on the party proposing the change • The court won’t accept changes unless **justified by fairness**, e.g. market practices or legal reform
68
**VALUATION:** What is the valuation date for rent in a lease renewal?
The valuation date is usually the **date of hearing/trial** or the date of **expert reports**.
69
**RENT:** What should rent under a new tenancy be based on?
**Section 34**: Rent should reflect what would be agreed or determined **in the open market** between willing parties.
70
**RENT:** What factors must be disregarded when assessing rent under a new lease?
1. Tenant’s **occupation** 2. **Goodwill** attached to the premises 3. Tenant's **improvements**, unless done >21 years ago or under obligation 4. **Licensing value** (for licensed premises)
71
**INTERIM RENT - S.24a:** When is interim rent payable?
Between the end of the lease and completion of renewal, **after a Section 25 or 26 notice**.
72
**INTERIM RENT - S.24a:** Who can apply and when?
Either party may apply. Interim rent is **only triggered after** a valid S.25 or S.26 notice.
73
**INTERIM RENT - S.24a:** How is interim rent calculated if lease terms haven’t changed?
If the same lease terms apply, the interim rent is usually **the same rent as the new lease**.
74
**INTERIM RENT - S.24a:** What if lease terms or market conditions have changed?
The interim rent may differ from the new rent if the **demise or lease terms change**, or if **market values** shifted (e.g. Covid-19).
75
**SECTION 40:** What does a Section 40 notice request?
Details about **either party**, including **name** and **registered address**.
76
**SECTION 40:** When and how often can it be served?
It can be served **any time during tenancy**, more than once, and must be responded to **within one month**.
77
**SECTION 40:** What happens if a party fails to respond?
It can be treated as a **breach of statutory duty**.
78
**COMPETENT LANDLORD:** How is a competent landlord defined under Section 44?
A **freeholder** or **superior tenant** with more than **14 months left** on their interest at the time of notice.
79
**DISPUTE RESOLUTION:** What is the default forum for lease renewal disputes under LTA 1954?
**County Court** is the default unless both parties agree to an alternative like PACT.
80
**DISPUTE RESOLUTION:** What happens once S.25 or S.26 notice is served?
One party must issue proceedings for a new lease. The court then sets a **hearing date** and timetable.
81
**DISPUTE RESOLUTION:** What powers does the County Court judge have?
The judge can decide **lease terms** and whether to grant a new lease. They also decide **who pays the costs**.
82
**PACT:** What is PACT in the lease renewal context?
**Professional Arbitration on Court Terms** – an **alternative dispute resolution** (ADR) to County Court.
83
**PACT:** When can PACT be used?
**Only if both parties agree**. It can apply **before or after** formal court proceedings start.
84
**PACT:** Who can act as the dispute resolver in PACT?
A **chartered surveyor**, **solicitor**, or **independent expert** agreed by the parties.
85
**PACT:** What are the benefits of using PACT over County Court?
• **Faster** • **Cheaper** (avoids court) • More **flexible** • **Surveyor** decides rent terms instead of a judge
86
**OUTSIDE THE ACT (CONTRACTING OUT):** What section governs contracting out of the 1954 Act?
**Section 38A** governs how parties can exclude the security of tenure provisions.
87
**OUTSIDE THE ACT (CONTRACTING OUT):** What are common reasons for excluding a lease from the 1954 Act?
• Head lease restricts subletting under the Act • Landlord wants to **reoccupy** or **redevelop** • Landlord needs **flexibility** or wants to agree a **lower rent**
88
**OUTSIDE THE ACT (CONTRACTING OUT):** What rights does a tenant lose when contracting out?
Tenant loses the **statutory right to remain** in occupation and cannot claim **compensation** at lease end.
89
90
**OUTSIDE THE ACT (CONTRACTING OUT):** What are the notice and declaration steps to contract out?
• Landlord must serve a **‘health warning’** notice • Tenant must respond with a **declaration** confirming they understand and accept
91
**OUTSIDE THE ACT (CONTRACTING OUT):** When must this procedure be completed?
It must be completed **before the lease is signed**. No rent should be accepted early or protection may be implied.
92
**OUTSIDE THE ACT (CONTRACTING OUT):** What are the two types of declaration?
1. **Simple declaration** – if signed **14+ days** before commitment 2. **Statutory declaration** – if **<14 days**, must be made before an **independent solicitor**
93
**LEASE TERMINATION:** What are the main ways a lease can be terminated?
• **Forfeiture** • **Surrender/negotiation** • **Merger** • **Disclaimer (insolvency)** • **Break clauses** • **Lease expiry + LTA 1954 notices**
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